Just a few years ago, the notion of how to create a new-economy business was turned on its head. Suddenly, you were supposed to enter a market before you had finished surveying the competitive landscape, confidently identified the right opportunity, and crafted a compelling strategy; all of that would have to occur once your business was up and running. "You have to act; you can’t afford to think about it," proponents claimed. Even after the collapse of hundreds of start-ups and the meltdown of the NASDAQ index, we would hear colleagues and clients alike affirm their belief in speed—albeit with less vehemence.

Is such advice always sound? Are there times when moving with extreme speed amounts to dangerous risk taking? If so, how does an entrepreneur balance the benefits and risks of moving fast? While these are questions for all strategists and business builders, the Internet’s sheer volume of start-ups, embodying every conceivable business model, makes that medium a logical place to seek answers.

We studied 80 Internet companies, including business-to-consumer (B2C) companies, business-to-business (B2B) companies, and infrastructure providers. We sought to determine the speed with which each of them built its business—and the outcome. Many other factors affect...