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Chapter 6. Dumb Kids? > The Learning Failure

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 for strategic planning at Disney. At the time he founded eToys he was in his midthirties and possessed great energy and endurance. One venture investor in eToys told me in mid-1999 how Lenk had flown from San Jose to Los Angeles to deal with a last-minute problem with an acquisition, worked all night, returned to San Jose the next morning and resumed his schedule without sleep. “That's the kind of drive and commitment a successful entrepreneur must have,” the venture capitalist told me with conviction.


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