My take: depending on the nature of the business, and how the publicity was done, they may only have had one shot at gaining the customers. In 2-3 days time you might have fixed things, but by then the prospects moved on to the site that worked.
I’m not convinced that you need to superscale your infrastructure first. I think it’s normally a waste of time and money. But for the example listed this is a likely benefit.
The competitor didn’t know what he was doing, pretty much. He hacked an MVP together with Rails in Heroku, then when people flooded in, he couldn’t scale up and the site kept crashing. By the end of day two, there were articles and publicity about my friend’s site, and then it became a flywheel. He eventually made it work, of course, but the botched launch gave my friend a HUGE advantage (and paying users). I bet he’s paying a ton of money and still trying to scale on Heroku (I made a considerable amount of money as a consultant fixing cases like that too)
I am sorry but you are really talking about 2 days of time interval and projecting predictions based on that? Unbelievable...
So what's to stop the competitors to do the same thing that your friend did to invest 2-5 hours and catch up on the third day???
I wish I was good at ascii art, then I would draw a nice facepalm here.