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A Strategy's Limitations

For a start-up, the get-big-fast strategy has its place; there are circumstances in which it makes sense. They have recently been defined with admirable clarity by Thomas Eisenmann of the Harvard Business School in two books.[35] The appropriate setting for such a strategy is one in which large up-front investments are required, there is the likelihood of network economics (meaning that the customer prefers one provider to several, usually because when all customers are using the same provider, they can communicate with one another—the most dramatic current example is the preference for a Microsoft operating system by most personal computer users—perhaps some people would say today that customers now have little choice), and where there are not well-established competitors to contest the market. These conditions create a winner-take-all dynamic in which a start-up can be the winner if it can get-big-fast enough.

Incidentally, America Online (AOL) has been another widely watched example of the successful application of a get-big-fast strategy. AOL acquired more than 20 million subscribers by the fall of 2000 after “carpet bombing” the United States for years with disks containing free software for installing AOL.


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