7 of the Most Epic Business Fails of All Time
History is full of blunders, missteps, and wacky coincidences. Hilariously bad decision making on the part of politicians, business leaders, and the growing list of Darwin Award-winners leave many people in a constant fit of giggles and, at the more egregious shortcomings, shock and awe. The fact is, bad decisions are simply a part of life. Though some weigh much more heavily than others, in terms of consequences.
The business world is one in which we get to see bad decisions take place, on a very big and public stage, right before our eyes. While sometimes the decisions of business leaders may come off as completely insane, they end up being small acts of genius. Others, on the other hand, come off as completely insane and end up proving their worth as exactly that: small, but costly acts of temporary insanity. Still, there are other times when bad business decisions can be warded off before the damage is actually done. An example of this would be Netflix’s scuttled plan to split itself into two — which was abandoned after analysts and customers collectively went after the company’s leadership.
Still, there have been decisions that have echoed across history and led to big changes that may have otherwise never occurred. Or, on the other hand, if these decisions had gone the other way, it’s hard to imagine that we would still see the same world we live in today. From big purchases to decisions by wealthy individuals to instead fold their hand, history is rife with examples. We’ve put together a list of some of the most impactful, yet egregious business decisions of all time. Read through, and try to imagine how the world could be different had the pendulum swung the other direction.
Read on to see seven of the world’s worst business decisions.
1. The Louisiana Purchase
The Louisiana Purchase, from an American perspective, was a fantastic decision. From the other side, however, it was a pretty big mistake. The purchase itself handed over incredibly vast amounts of territory — filled with untold amounts of natural resources and wealth, ripe for the picking — for an incredible bargain. Although not strictly a business decision, it was a decision made with numbers on the mind. For a bargain of a little more than $11 million, the U.S. came under control of 828,000 square miles from France. This included most of the Great Plains and portions of the west and Midwest, and all of the resources that came with it. Think France wishes they could take that back? Especially when they sold it for less than half of what Kobe Bryant makes in one year?
2. Excite passes on Google
Imagine a world without Google. It’s difficult to picture, but it was almost the case when Google was still just a young company, incubating in Silicon Valley. It turns out that Excite, which has since evolved into Ask.com, had the chance to purchase Google when it was still very small, and for a meager price of only $750,000. To put things in perspective, there are cars that cost more than that. Still, Excite balked at the opportunity, and the rest is history. Today, Google is worth around $365 billion.
3. New Coke
Though the younger folks may not remember this, there was a time when Coca-Cola stepped up to the plate, and struck out in historical fashion. That was when the company’s brass unleashed New Coke onto the market on April 23, 1985. By reformulating Coke’s classic taste for the first time in a century, Coca-Cola created a firestorm that it will probably never live down. New Coke lasted 79 days before the original formula returned to the market, although it did set a precedence for all kinds of new Coke flavors down the line.
“We set out to change the dynamics of sugar colas in the United States, and we did exactly that — albeit not in the way we had planned,” then chairman and chief executive officer Roberto Goizueta said about New Coke in 1995.
4. Kodak opts to do nothing
Though most people really think of Kodak today as a company that sells disposable cameras and film, they were, at one time, an incredible industry juggernaut. In fact, Kodak was the first to develop the technology not only for digital cameras, but for what would ultimately become the cell phone. In the ultimate example of a “squandered opportunity,” instead of taking that technology and running with it, the company’s executives instead decided to sit on the new developments, as they ultimately saw them as a threat to their existing products. If they had done things differently, Kodak could instead have become what Apple, Microsoft, or even Google has evolved into today.
5. Blockbuster Video passes on Netflix
As much as we all love Netflix, and how the company has taken the entertainment industry and turned it on its head, there was a time where that future was almost erased. Yes, before Netflix, home video rentals were king, and Blockbuster Video ruled on high. Apparently not sensing a dramatic shift in coming years, when given the option to purchase the budding Netflix in the early 2000s for $50 million, Blockbuster opted not to. And it ultimately led to the company’s destruction. Netflix, on the other hand, has grown by leaps and bounds, while the home video rental market has since been relegated to on-demand content and Redbox.
6. William Orten passes on the telephone
Turn the clock way back to the 1870s, when Alexander Graham Bell — inventor of the telephone — offered the patent on his new invention to Western Union for $100,000. William Orten, Western Union’s president and owner of a monopoly on the telegraph (the go-to device for communication at the time), refused, not recognizing the commercial possibilities the telephone offered. On this, of course, he was way off, as the telephone quickly became a staple in every household — and pocket, eventually — in the western world.
7. Ross Perot passes on Microsoft
Can you imagine Microsoft under the tutelage of someone other than Bill Gates throughout its large-scale growth in the 1980s and ’90s? It was almost the case, and billionaire (and one-time presidential candidate) Ross Perot was the one who whiffed. Perot negotiated with a 23-year old Gates in 1979 to purchase Microsoft for a price in the $50 million-range, which Perot found to be too high. Instead, he passed on the opportunity, and Microsoft would go on to change the modern world as we know it with modern computing.
“I should’ve just said, ‘Now Bill, you set the price, and I’ll take it,'” Perot said in an interview with The Seattle Times from 1992. “I should’ve just said, ‘Bill, whatever you think is fair.'”
It’s safe to say that Gates definitely got his money’s worth by holding out.
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