We’ve often read the success stories of some of the largest and most influential companies. But what about the other side? What about the blunders? business mistakes missed opportunities and utter disasters that in turn, brought some companies to ruin. Well today, you’re in luck, because here are six of such stories. Let’s get straight into it.
6 – Kodak
Kodak had the first digital camera back in 977. Whenever technology changes the landscape of an industry, there are some businesses that adapt and thrive, And others that continue to do the same old thing, until it’s too late.
For Kodak, who fell behind, due to the advent of the digital camera, the situation was a little different. Kodak actually patented the first digital camera back in 977. It was one that used magnetic cassette to store images of about 100 kilobytes.
However, Over the coming years, Kodak made so much money off of film, That they let the new technology gather dust, not realizing its potential. The company continued to focus on traditional film cameras Even it was clear that the market was moving towards digital.
When Kodak finally went to the digital market, They were selling cameras at a loss and still couldn’t make up enough sales to catch up to those competitors, which have seen the potential of digital cameras early on.
Currently, Kodak is losing over two hundred million dollars a year. The lesson learned: In the world of business, always keep an eye on the market, and be responsive to future trends. if not, it cost you everything.
5 – Excite
Excite could have bought Google for less than one million dollars. The year is 999, and Excite was the number two search engine, behind Yahoo. Google back then was a nobody. The new kid on the block.
It was in this setting, back in ’99, That Larry Page, offered to sell Google to Excite for $750,000 according to Excite’s CEO at the time, George Bell, The $750,000 deal was % of Excite’s worth, So financing wasn’t an issue.
The hiccup came when Larry insisted That if the sale went ahead, Excite was to replace all of its search technology with Google’s. George of Excite thought that this was too much, and refused the offer.
Excite was eventually bought by Ask Jeeves (now Ask.com) in 2004. At the time, Ask had less than 2% search market share. Google, currently now known as Alphabet processes a billion search results every day. They currently have around 47 billion in assets, which is more than 96,000 times what Excite would have paid for them. Ouch.
4 – Blockbuster
Blockbuster Video turns down the opportunity to buy Netflix. The mid-80s to late 90s, where when VHS was king. The problem back then, was that VHS tapes would cost upwards of $97 per movie. For this reason, video rental stores, like Blockbuster came in to fill in that gap.
They were the perfect solution and became a regular part of weekend plans for hundreds of millions around the globe.
Eventually, online video streaming services, like Netflix, Hulu, and even Putlocker destroyed the old video rental, business model. Ironically, In the year 2000, Netflix proposed that it would handle Blockbuster’s online component and Blockbuster could host Netflix as an in-store component, thus eliminating the need to mail DVD’s, which was Netflix’s business model at the time.
According to an interview with former Netflix CEO, Barry McCarthy Blockbuster just laughed Netflix out of their office. But, that’s not the end of their story.
By 2007, Blockbuster was well on the right track. They had an internet movie component, that was steamrolling over Netflix. Netflix was struggling, and its upper management wanted to sell the company to blockbuster to save face. Blockbuster’s growth was very strong at the time, so they turned down the offer.
In a strange twist later that year, there was a boardroom dispute over Blockbuster, that saw a change of CEO. The new CEO was James Keyes (formerly of Seven-Eleven) He came in with the wrong mindset and thought that Blockbuster should be a retail business instead of an entertainment one. Because of this, He didn’t see the value of an online component.
Huge mistake. Within eighteen months, The new CEO had lost Blockbuster 85% of the company’s value. And within three years, Blockbuster was filing for bankruptcy.
Blockbuster went belly-up, and Netflix went on to thrive. Since then, Netflix is behind such original shows such as House of Cards, BoJack Horseman, and Daredevil. With 139 million subscriptions worldwide, Netflix has altered the way many view the entertainment.
3 – NASA
A grade school math error cost NASA 25 million. Before the advent of Google, did you ever get frustrated with the conversions from feet to meters? Inches to centimeters? Did you find it difficult? Well, you’re in good company.
As it turns out, a similar math problem hindered some of the greatest minds in the western world. In 999, A Mars orbiter, that Lockheed-Martin designed for NASA was lost in space due to a simple math error, in where the engineers at Lockheed used Imperial measurements while the NASA employees used metric ones.
The mismatch led to the thrusters not receiving vital navigation information, which caused the 25 million dollar spacecraft to malfunction. The probe was forever lost while trying to get into orbit around Mars after a 286-day journey. There were numerous occasions where the errors should have been caught, but, it wasn’t.
2 – Nokia
Nokia outright refusing to use Android. Nokia. One of the most iconic brands of the 20th century and even up to the first decade of the 21st century. The company had about 51% market share on the mobile phone industry at their peak in 2007. But now, they’re a shell of their former selves. A fond, but a distant memory for many.
The start of the company’s fall from grace can be attributed to one moment in 2010 when Nokia CEO Anssi Vanjoki snubbed his nose up at the idea of using Google’s Android software. You see, at the time, Nokia had its own operating system called Symbian.
After the release of the iPhone in 2007, the software development team at Nokia realized that there was a threat. So they split into two. One team tried to revamp Symbian, and the other team created an entirely new operating system named MeeGo. The problem was, that the two teams were battling for resources from Nokia’s top executives. So in essence, there was an internal struggle within the company.
It was so bad, that whenever Nokia was dealing with outside stakeholders, like chip manufacturers, for example, there was so much squabbling within the company, that it took the better part of the year to make a decision on anything. in the tech world, that’s way too long.
Competitor innovation waits for no one. The logical solution, in hindsight, of course, was Android. Nokia could have used the open software platform, combine it with their in-house hardware, to quickly make up for lost time, at a minimal cost.
Instead, Nokia CEO at the time decided to skip on Android, calling it a short term solution likening the move to, Quote:
“Pissing in your pants in winter to keep warm.”
Nokia kept on working on their own software efforts, throwing $5 billion a year of R&D; at the problem, but no avail. As time went on, The iPhone and Android handsets dominated the market until Nokia’s mobile division was left in the dust.
Not long after this, the Nokia division brand was salvaged by Microsoft for scraps. Microsoft couldn’t make the once legendary company stay afloat either, Wasting $8 billion before killing the Nokia mobile brand. Moral of the story, Move with innovation and don’t let your pride cloud your judgment.
1 – Xerox
Xerox, yes the printer company hand one of the greatest inventions in computing history to Apple. Imagine having one of the greatest inventions of the 20th century in your hands and giving it away because you didn’t understand what you are holding.
Xerox did just that with the Xerox Alto. The Xerox Alto was an experimental computer from 973, created at Xerox’s Research Center. The Alto was way ahead of its time. It was the first modern desktop PC, as we recognize them today. It had a mouse, windows, file managers, and it can copy and paste, delete and move files, It had icons, menus, graphics, and even a Local Area Network, that connected all the computers together.
The idea was to mimic an office desk but on a screen. A paperless office of the future. Absolutely revolutionary for 1973. What the Xerox Alto was demonstrating was the first Graphical User Interface, or GUI, in a desktop computer.
The Xerox upper management did not understand what they had, the managers just couldn’t see, the vision of what the computer of the future will be. But, a man named Steve Jobs did know what the future of the computer could be. And Xerox handed it straight to him.
The deal saw Xerox gain a million shares of Apple’s stock In exchange for Steve Jobs was getting the inside information for everything cool and revolutionary that was going on at the PARC Center. Nobody actually checked with the guys at the research center, but the Apple Business Development Team signed off the deal anyway.
The ideas from the Alto would heavily influence the Apple LISA, whose technology trickles down to the Macintosh, which influenced Microsoft Windows. Both of which, were the eventual ancestors to the manner in which our phones operate today. The sad thing is Xerox never gets a mention for any of this.