Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble

The Learning Failure

A serious deficiency of the get-big-fast strategy is that it doesn't allow the trial-and-error method of determining the right business plan, and in a market space as new as the Internet, entrepreneurs' early presumptions about successful business models were often wrong. But growing fast and spending lots of money almost foreclosed a significant shift of model midstream. It was possible for a management team to learn from experience, of course, and to modify certain tactics in the marketplace, but that was about all. An example of this weakness of the get-big-fast approach is eToys.

eToys had a great deal going for it. Its founder, Toby Lenk, was a top graduate of Harvard Business School and had been a corporate vice president ...