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Chapter 7. How Some VCs and Bankers Led ... > Get-It-Right Instead of Get-Big-Fast

Get-It-Right Instead of Get-Big-Fast

A few start-ups bucked the trend by trying to get-it-right before they tried to get-big-fast. A key example is Streamline, another start-up in the online grocery, or home-delivered grocery, market. Seeing that it made no sense economically to send pickers into the crowded aisles of grocery stores, and less to try to take an unproven concept across all demographic segments and areas of the country, Streamline's executives refined their business model in Boston's well-heeled suburbs before trying to expand rapidly. When it worked, they decided it was time to get-big-fast. But they had taken too long. The company expanded rapidly out of the Boston area, but the taste of investors for get-big-fast had evaporated with the bursting of the stock market bubble. Streamline had discovered the right business model for building economic value, in part by taking more time than its competitors like Webvan, but the capital markets had lost interest.

The bubble period involved a disconnection between economic value built by firms and financial value created by the Financial Value Chain. Many start-ups that were not creating economic value were given huge financial value by the capital markets. Streamline was an example of the opposite: a firm that was creating economic value, but which was given almost no financial value by the Financial Value Chain.


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