GOOGLE WHO?
Remember New Coke? Neither do we… 10 of the worst business decisions ever
Published on September 12, 2024
Credit: Peggy_Marco
Everyone makes bad decisions, and that is not necessarily a terrible thing. Mistakes serve a purpose as valuable lessons that show us where and what needs improvement. But not all mistakes are the same. When it comes to business decisions, analyzing things in hindsight can make intelligent people seem dumb because they failed to recognize the potential behind what, at the moment, was nothing but promises.
Listed below, you will find ten of those decisions that cost millions and even billions of dollars to its makers. In the way of a black swan event, those decisions seem terrible now but, at the time of their making, were perfectly reasonable. Faced with these choices, what would you have done differently?
When VHS ruled the world
Credit: Delaney Van
Back in the day when Blockbuster was a huge behemoth company synonymous with video entertainment, the idea of paying for a subscription to choose a limited number of movies on your TV seemed ludicrous, at least for the Blockbuster people.
In the late 1990s, an Internet upstart named Netflix began offering this exact service. And when Netflix executives flew down to Texas to make an offer to Blockbuster CEO in which, for $50 million, Netflix would join forces with Blockbuster and help it launch its own online service, the big suit laughed Netflix out of the office. Who's laughing now?
M&Ms and E.T.
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Passing an offer to showcase your product in one of the most legendary movies of all time does not seem like the most intelligent business decision. But, let’s face it, not everybody thought E.T. was going to be the huge blockbuster it ended up being.
And maybe that's what Mars candy executives were thinking back in 1980 when they passed on the offer to feature M&Ms in a new movie. Steven Spielberg was directing — he had already received Oscar nominations for both "Jaws" and "Close Encounters of the Third Kind" — but his latest film, "1941," had been a flop. So, that was a no-go for the candy makers.
Kodak sticks with film
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A brand so huge that is very much remembered even when most of us haven’t used a single one of its products in decades, Kodak has been synonymous with photographs for over 100 years.
In 1975, one of its engineers successfully built the world's first digital camera, but the company stalled its release, afraid to abandon the film-and-paper product line that had brought it success. By the time Kodak finally shifted to digital in the late 1990s, the megapixel revolution had long passed by, and the company filed for Chapter 11 bankruptcy protection in 2012.
Do you remember 'New Coke'?
Credit: James Yarema
Attempting to rewrite the recipe for success does not seem like the most sound business decision ever, right? Well, maybe if things had turned otherwise, we might be praising the courage of those same marketing executives who worried that kids were drawn to the syrupy-sweet kick of Pepsi and began tinkering with the original Coke recipe.
After two years of experimental batches, New Coke came out. On April 23, 1985, American consumers popped open their first cans of New Coke. Within days, hundreds of letters and phone calls poured into Coke's headquarters demanding a return to the old formula. On July 11, less than three months after its debut, New Coke was pulled from the shelves and replaced with Coca-Cola Classic.
Those huge SALES might not be such a thing after all
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Being honest in the clothing retailer business is not always the best marketing strategy, apparently. In 2012, a newly hired J.C. Penney CEO admitted that stores attract customers with "fake prices." If J.C. Penney wants to sell a shirt for $10, it tags it at $20 and then marks it down 50 percent during a weekend blowout sale. Sweet deal, right?
His strategy was to stop the promotions and replace them with "everyday low prices." But the loyal shoppers missed their coupons and sales and hit the Internet to complain. The CEO was fired after only 17 months on the job, and J.C. Penney quickly brought back the sales and phony jacked-up prices.
Why telephone when you can telegram?
Credit: Chris Boyer
Western Union is a big company known as a fast way to send money around the world. But that wasn’t always the case. In the 19th century, the company got big with its telegram service. Before telephones, a telegram — transmitted by telegraphs using Morse code — was the fastest way to send a message across cities, states, and even countries.
When Alexander Graham Bell patented the first telephone in 1876, he wanted to sell it to Western Union, but the executives at the telegram giant didn’t like it. After the telephone caught up with the public, WU tried to copy the design but Graham Bell sued, won, and went on to rule American telecommunications for a century.
Buying Google for $750K? No thanks!
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The bargain of the century is a tag that has been attached to quite a few events in history, but this one could very well take the prize home. In 1999, Google co-founders Larry Page and Sergey Brin offered to sell their search technology to Excite for $1 million but dropped the price further when Excite showed no interest.
As we have said before, the benefit of hindsight makes us believe that the people at Excite didn’t have a clue about anything in life. But, to that company's credit, Google was just an unproven bundle of algorithms back in 1999, not the world-dominating technology goliath it is today.
Remember MySpace?
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Before all the social networks we have today, there was MySpace. Back in 2004, everybody had a MySpace profile and befriended everybody else. By 2005, MySpace was the fifth most-viewed Internet domain in America.
And then, News Corp billionaire Rupert Murdoch came along and bought MySpace's parent company in 2005 for $580 million. Mr. Murdoch promised huge revenues to Wall Street and filled the site with ads that alienated users, who flocked to Facebook.
The Beatwho?
Credit: Minha Baek
Quite probably, there is no bigger mistake in the history of record label mistakes than this one here. In 1962, Decca Records had the opportunity to sign a little-known band called The Beatles. Ring any bells?
After a lackluster audition, Decca decided to pass, famously declaring that "guitar groups are on the way out." The Beatles went on to become the best-selling music act of all time. As for Decca Records, they’ll be forever remembered for making perhaps the worst decision in the history of music.
Maybe Edsel is not the best name for a car
Credit: Peter Secan
Imagine naming a car after the founder’s son and then having that same car fail miserably on the market. Well, that happened. In the late 1950s, Ford introduced the Edsel, a new car named after Henry Ford’s son.
Despite the huge marketing campaign, the Edsel was a commercial disaster, being overpriced, overhyped, and overall underwhelming in design. The whole thing lost $250 million of Ford’s money on the Edsel, a massive fortune even for a car company back then.
