A new business that went too big, too fast

MonaLeigh · Jul 31, 2008

I will be querying Entreprenuer Magazine for an article about people starting businesses that take off and get too big too fast. I have one businessman that's willing to be interviewed and I was looking for a few more to get varied opinions.

Thanks,
lisamarie

StephanieFox · Jul 31, 2008

I think that happened to Famous Dave's BBQ restaurants during their first expansion. They had to close several restaurants. They recovered and as far as I know, they're big now and doing OK.

IceCreamEmpress · Jul 31, 2008

Steven Rothschild, who's now CEO of Bulbs.com, was displaced from Furniture.com during its spectacular dot-boom to dot-bomb days. The business started as his efforts to expand his family's furniture business through the then-new Internet, and then it bloated uncontrollably thanks to venture capital, and Rothschild was eventually edged out.

He's a really interesting guy and if he's open to being interviewed, he'd have some great insights.

Silver King · Jul 31, 2008

I've heard it called, "growing broke." The term relates to expanding too rapidly, using capital that should be spent on existing business concerns to expand the company instead. When capital runs out, you've "grown broke."

Some companies fold, while others are capable of scaling back to a more manageable size and remain in business.

WendyNYC · Jul 31, 2008

Krispy Kreme did that as well, if I remember correctly.

Phil DeBlanque · Aug 1, 2008

I think Krispy Kreme's problem is that it lost it uniqueness while growing. It was part of the brand mystique to be something "hard to find". Oftem, it pays to stay small - may I suggest Bo Burlingham's "Small Giants"? It has some interesting cases. You can take a look at the site of Peppers and Rogers, too - they have plenty of cases, with the "before" and "after" they went on and solved the problem.

I think british SilverJet is a case of a company that grew too fast. It's a pretty new airline, with more than 80% of seat ocupation, and already closing its doors.

And, of course, the most out-of-scale, mindblowing fast growth known to man: not a company, but a city/emirate: Dubai.

As a business writer myself, I follow everything Sheik 'Mo does with certain guilty: I am amazed, I want it to works, I pray for it to work.
But the practical guy in me says "It won't".

rtilryarms · Aug 4, 2008

I was a Vice President of one of the most aggressive Dot.coms in the USA.

We were a start-up and we were able to secure venture capital pf $60M the first yeart and an additional $100M by the end of the next year. an added $250M was promised if we met certain goals. One of those goals was to run out of money (the 100M) while meeting certain goals. Meeting the goals was my job and I was ahead of schedule. I also took part in negotiated a $360 million real estate financing vehicle with major utility partners. we were riding high!

Then boom.

I have all the history of that era plus a lot of inside info that could help you out. Personalities and ego were the biggest corporate crushers.

If we stayed with our business plan we would have all been filthy rich. Bit to others.....that was not nearly enough.

Feel free to ask away.

Mike

StephanieFox · Aug 4, 2008

Phil DeBlanque said:
I think Krispy Kreme's problem is that it lost it uniqueness while growing. It was part of the brand mystique to be something "hard to find". Oftem, it pays to stay small - may I suggest Bo Burlingham's "Small Giants"? It has some interesting cases. You can take a look at the site of Peppers and Rogers, too - they have plenty of cases, with the "before" and "after" they went on and solved the problem.

I think british SilverJet is a case of a company that grew too fast. It's a pretty new airline, with more than 80% of seat ocupation, and already closing its doors.

And, of course, the most out-of-scale, mindblowing fast growth known to man: not a company, but a city/emirate: Dubai.

As a business writer myself, I follow everything Sheik 'Mo does with certain guilty: I am amazed, I want it to works, I pray for it to work.
But the practical guy in me says "It won't".

Krispy Kreme closed all their stores in the Twin Cities. It's true about the uniqueness of the product, but also, I've read that cities are either donut eating cities or non-donut eating cities. The Twin Cities is a non-donut place. (If you want to do research on this, I think it's tied to fat vs skinny towns, with the fat towns being donut towns.

Even the cops here don't do in for donuts. They eat pizza instead.

A new business that went too big, too fast

MonaLeigh

Wasting time

StephanieFox

Maybull the Bulldog

IceCreamEmpress

Hapless Virago

Silver King

Megalops Erectus

WendyNYC

fiddle-dee-dee

Phil DeBlanque

rtilryarms

Crossbows and Handgonnes

StephanieFox

Maybull the Bulldog