Building a Company on Internet Time: Lessons from Netscape

by David Yoffie, Michael Cusumano



The Internet has created new demands on start-up companies: How do you grow an organization faster than ever before? This article draws lessons from Netscape, the fastest growing software company in history. Netscape executives did four big things right: they crafted a compelling but pragmatic vision; they made experience a top priority in hiring staff; they built big-company resources while maintaining small-company flexibility; and they successfully leveraged external resources in order to compensate for the company's small size. At the same time, company leaders made mistakes: They overestimated the pace of technological change, they failed to develop systematic strategic processes until it was almost too late, and they often sacrificed long-term value in favor of short-term cash. Despite these failings, Netscape built a successful organization that ultimately delivered $10 billion in value to their shareholders after only four years.

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