Betting the Farm
Joe Kraus, the founder of Excite (and a fellow Stanford grad--albeit from one year before me), has a great post about how Excite bid three times their cash on hand for the rights to Netscape's "NetSearch" button.
Essentially, Excite bet the company and lost. They bid $3 million, when they had less than $1 million on hand (which in itself is a fascinating lesson). Yet they lost the bidding to MCI.
The story doesn't end there, however. Like their lead VC, Vinod Khosla, Excite didn't give up. They hounded Netscape for almost a month before MCI backed out at the last minute, which resulted in Excite winning the bid.
Sometimes it takes an irrational stubbornness to succeed. I've noticed that many of the CEOs I've worked with are uncommonly stubborn and resistant to reality. The bad ones are simply disconnected from reality, and live in their own world. The good ones are in touch with the real world but don't accept things the way they are. If the rules are against them, they change the rules.