In most cases, people read the success story of large companies; But what about the biggest fractures? What mistakes have ruined companies? Why have so many companies lost millions of dollars by losing opportunities?
Mistakes, we are going to address 6 of the biggest mistakes companies have made that have failed them.
Pay attention to revenue without looking at market potential
Kodak introduced the first digital camera in 1975. The company has been a leader in the production of photographic equipment for many years. The first images of humans landing on the moon were captured by the company’s cameras. When technology changes the landscape of an industry, some businesses take advantage of this opportunity and succeed; But the rest follow the same old path until it is too late to change.
This happened to Kodak in the production of digital cameras. In fact, Kodak acquired the rights to the first digital camera in 1975. With a magnetic tape, the camera stored photos up to 100 KB in size. But instead of focusing on its new technology, the company tried to sell the same old photographic film tape and made a lot of money.
Kodak spurred photographic technology; But he himself did not realize its potential. Even as the market shifted to digital cameras; The company continued to focus on older cameras and camcorders.
Finally, when Kodak moved to the digital market, it had few sales of digital cameras. Kodak could not sell enough to outperform its competitors; Because they soon realized the potential of digital cameras. Kodak’s mistake caused him to lose more than $ 200 million in one year.
The point of the Kodak story is that in the business world, always be mindful of the market and react to future trends. If you do not do this, everything may be to your detriment.
Losing the opportunity to buy Google for less than a million
Excite could buy Google for less than $ 1 million. In 1999, Exite was the second largest search engine after Yahoo! Google was not famous at that time. Larry Page, the former CEO of Google, offered to sell Google for $ 750,000 to Exite. According to George Bell, then CEO of Excite, $ 750,000 was only 1% of the value of Excite at the time. So the reason for the failure of this deal could not be a financial problem.
If there was a deal, Exite would replace all of Google’s search technologies, and now we hear the name of this company instead of Google. George thought the amount was too high, so he turned it down. The excitement of 2004 was finally acquired by Ask Jeeves, or modern-day Ask.com. At that time, Exite had less than 2% of the search engine market share.
Google is now known as the largest search engine in the world and processes more than 3.5 billion searches daily. The company had a capital of $ 147 billion in 2016, which is more than 196,000 times the price that Exite could pay.
Underestimating competitors in the film and series market
Blockbuster was a video and video game rental company. The company missed the opportunity to buy Netflix. From the mid-1980s to the early 1990s, VHS tapes were very popular. The problem started when the price of Vivachas tapes for each movie increased to $ 97. That’s why movie rental stores like Blockbuster came into being to solve this problem. They offered the best solution at the right time when the market needed it. Millions of people around the world rented vivaches from them over the weekend.
Eventually, online video streaming platforms such as Netflix, Hulu, and even Putlocker took over the market, and people were no longer interested in renting Viochas tapes. In 2000, Netflix offered to manage the online division of Blockbuster, and Blockbuster could own Netflix as part of it. Netflix was focusing on posting DVDs at the time.
According to an interview with Barry McCarthy, the former Netflix CEO, Blockbuster ignored them and even ridiculed them. But this is not the end of their story. In 2007, Blockbuster was on the right track. They dominated the rental video market well and promoted their online video segment, which was the future of the market.
Netflix was still struggling, and its top executives were willing to sell the company to Blockbuster. Blockbuster was growing rapidly at the time, so he turned down Netflix’s offer.
Later, in a strange incident in 2007, the board of directors of Blackbuster disagreed and its CEO was replaced. The new CEO was James Keyes. He had a traditional mindset and thought that blockbuster should be a retail business instead of a hobby. As a result, he ignored the value of the online sector and made a huge mistake. Within 18 months of this decision, 85% of the value of the blockbuster was lost and within 3 years the blockbuster went bankrupt.
Netflix grew to specialize in original series such as House of Cards, BoJack Horseman, and Daredevil. The platform has more than 83 million followers from around the world and has been able to change people’s tastes in entertainment.
Computational error at NASA
A small miscalculation cost NASA $ 125 million with the plains. Before the advent of Google, were you tired of converting feet to meters or inches to centimeters? Do you think it was hard work?
In 1999, a Mars rover designed by Lockheed Martin for NASA was lost due to a simple mathematical error in space. Engineers at Lockheed Martin and NASA staff used different systems.
This mismatch prevented the space navigation information from reaching the spacecraft and caused problems with the $ 125 million spacecraft. While trying to place the probe in orbit around Mars; But after 286 days of travel, it was gone forever. There were many opportunities to eliminate errors; But they were not used.
The legendary Nokia has gone down in history
Nokia has denied using the Android operating system in its handsets. Nokia was one of the most famous brands of the 20th century and even the first decade of the 21st century. In 2007, the company was able to gain 51% market share in the mobile phone industry and become a key player in this industry. Today, however, mentioning the name Nokia only brings to life memories.
Nokia’s crash dates back to 2010; When Nokia CEO Anssi Vanjoki ignored Google’s idea for the Android operating system. Nokia at the time had its own operating system called Symbian. After the release of the first iPhone in 2007, Nokia’s software development team realized that the iPhone was a threat to them. So two teams were selected to work on the software. The first team was trying to upgrade Symbian, and the other team was building a completely new operating system called MeeGo.
The main problem was that the two teams were at war to get the attention of Nokia’s top executives, as they felt the risk of losing their jobs. That’s why there was internal strife within the company.
This caused even their partners to sue, such as the electronics chip factory (Qualcomm).
Because they could not quickly seize the opportunities that were given to them and make decisions at the right time.
In the world of technology, time is of the essence. Innovative competitors do not wait for anyone. The logical solution for Nokia was to use the Android operating system. Nokia could use Android’s Open Source operating system and combine it with its own hardware to make up for lost time in the shortest time and at the lowest cost. The Nokia CEO decided not to choose Android and called it a short-term solution.
Nokia was still working on its own software. They wasted $ 5 billion annually on research and development (R&D) and problem solving; But to no avail.
Over time, iPhone and Android mobile phones conquered the market. To the extent that Nokia’s market share was very low. Then in 2013, the Nokia mobile phone division was acquired by Microsoft.
Microsoft could not grow the legendary company again.
Microsoft spent $ 2.7 billion to save the Nokia phone brand, but to no avail, and Nokia phones went down in history.
The ethical point of the story is to move towards innovation and not let your pride influence your decisions.
Of course, in 2016, HMD Global bought Nokia’s mobile division from Microsoft. The Finnish mobile phone company was founded in 2016 by former Nokia executives. The new executives of Nokia’s mobile division learned from their previous mistakes and started using the Android operating system in mobile phones.
Dual-handing the most revolutionary technology to Apple
Xerox is a printer manufacturer. One of the first prototype PCs was built at Xerox; But later it was Apple that launched the personal computer.
Imagine you have one of the greatest inventions in the history of technology, and because you do not know exactly what you have in your hand, put it aside. Xerox did just that with the Xerox Alto PC. The Xerox Alto was a test computer developed in 1973 by the Xerox Research Center. Alto was very advanced at the time and was the first personal computer we know today.
The Xerox Alto computer had a mouse, Windows, file manager, copy, paste, delete, file transfer, menu, graphic images, and even a LAN that connects computers. The idea of designing the screen of this computer was taken from the paper and folders on the office desk. In other words, the main folders were on the home screen and had to be clicked to open each folder. This was the idea of the Great Revolution of 1973.
Xerox Alto, the first example of a personal computer
What Xerox showed was the first graphical user interface (GUI) on a desktop computer. Before the graphical user interface, users needed to write a command to do anything on the computer; That is, they had to code for every simple task, such as copying. It would be very bad if you forgot to write a command. In that case, the computer would just give you an error and say it did not understand anything. Having a mouse and click in a simple graphical space was a completely new and revolutionary idea that Xerox brought.
Thousands of copies of Xerox Alto computers were built at the Xerox Research Center; But it was never sold. These computers were only used in some Xerox offices and a number of universities. Xerox top executives did not understand what revolutionary technology they had. They did not know that this computer would be a vision of future computers; But a man named Steve Jobs realized this. Xerox easily introduced his technology to him.
Xerox at the time was looking for a way to make experimental technologies like the Xerox Alto cheaper. They saw that Apple was selling its products at a lower price. In 1979, they invited Steve Jobs to a research center to help them reduce product prices.
Under a contract, Xerox acquired one million shares of Apple stock. Instead, Steve Jobs obtained inside Xerox information. The matter was not discussed with members of the Apple Research Center, and Apple Business Development Team signed the contract.
“He looked at everything with curiosity and asked us to show him more,” said Larry Lester, a scientist at the Xerox Research Center about Steve Jobs’ presence at the center.
He was very excited and said what have you done with this technology ?! You are sitting on a gold mine! It was clear to him that we would not do anything with this technology. “We only showed Steve Jobs 1% of what really existed, and that changed everything, and seven months later, I was working for Apple.”
“I quickly realized that all future computers would work this way,” explains Steve Jobs. “Xerox could take over the entire current computer industry.”
The graphic approach to computers refers to the human mind; Because complex computer commands today have been replaced by simple movements. Typing is an old thing today. Idea Alto later launched the Apple LISA personal computer in 1983, which was one of the first computers with a graphical interface.
Apple Lisa formed the Macintosh operating system, and Macintosh had a major influence on Bill Gates building the Microsoft Windows operating system. Both of these operating systems are part of the history of smartphones that we use today.
Xerox currently manufactures printers and printing equipment.
Xerox Market Cap is less than 0.5% of Apple’s market value today, and when it comes to personal computers or smartphones, Xerox has no place among them.