This paper examines the emergence and early growth of four entrepreneurial firms created at the same time in the same industry. These firms pioneered a new type of product: free electronic messaging service. Their development in a shared industrial environment enables us to identify sources of diversity in their growth paths attributable to internal factors and to their co-evolution. The study draws on the work of Penrose in explaining these growth paths. It is shown that the firms' choice of distinctive business models affected resource requirements and thus the diversity of their development. Resource creation in which the firms were engaged was stimulated by the need to remedy incongruence among elements of their activity. The firms influenced each other and the new industry environment in which they pursued their novel business conjectures.