I confess I haven't read Steve's book (and probably should), but in the context of this post that flow-chart is misleading if it doesn't accurately represent his position.
Once you have product/market fit, you have the semblance of a business. You transition towards growth from there.
I just don't like the idea of hiring "managers" before profitability is reached. Seems crazy to me.
My interpretation of this process for a Web startup is getting to transition using just the founders (plus advisors).
It is different than the stereotypical valley mindset because the dotcom companies scaled before they knew that they had found a real problem, created the right solution, and sorted out a business model that could scale with more manpower behind it.