Expensive (and Embarrassing) Business Mistakes
Running a business can be a tricky endeavor for anyone. After all, it’s not easy to make the right decisions for business growth and effective competition without ever missing the mark. Not surprisingly, the complexity of some decisions can lead to occasional mistakes, but most missteps can be overcome with minimal damage.
Unfortunately, some mistakes are in a whole different class and result in devastating financial consequences along with a lot of public embarrassment. Let’s take a look at some of the most expensive business blunders in history.
NASA's Martian Miscalculation
NASA is synonymous with space and literal rocket scientists, but an elementary-level mistake in 1999 caused some to wonder about the validity of those impressive degrees. Lockheed Martin designed a Mars orbiter that ended up lost in space. Why? The design used English measurements, and NASA normally used the metric system.
The Tech Company Who Refused to Upgrade
When you consider the many decades that Radio Shack stayed in business, you know they had to undergo many changes and learn to roll with the punches. The company wouldn’t have survived as long as it did without adapting, so it was a mystery when the executives running the show refused to enter the world of online sales.
EA Sports and Illegal Weaponry
EA Sports is well known for numerous American video games. With the introduction of its video game Godfather II, however, it became known for something else. As part of its promotion, the company gave away brass knuckles. "Knuckle dusters" are actually relevant to the game, but there was a big problem with the promo: Brass knuckles happen to be illegal in most of the U.S.
Fraudulent Bank Account, Anyone?
A few years ago, some Wells Fargo employees noticed something suspicious about some customer accounts. The problem? Some dishonest employees had opened accounts in customers’ names without their knowledge. When the honest employees alerted upper management, nothing was done to investigate or rectify the situation.
No “Excite-ment” for Google
In the 1990s, Google was nowhere near the giant it is today, but its popularity was on the rise. Founders Larry Page and Sergey Brin approached the more popular Excite with an offer to sell for $1 million. The CEO of Excite turned down the offer, prompting Page and Brin to lower the price to only $750,000. Unbelievable, right?
Ignoring a Game-Changing Invention
Would it surprise you to learn that digital cameras were actually patented in 1977? That’s right — Kodak invented the first digital camera and filed a patent on it. While the early prototype wouldn’t compare to today's technology, it was definitely a concept ahead of its time. So, what happened to it?
Tearing Up the Future
You probably know some people who are "stuck in their ways." Henry Ford embodied that behavior. After his beautiful Model T was introduced to the public and became popular, he wanted to leave well enough alone, even when others encouraged him to redesign it and make improvements.
Passing on the Best-Selling Band of All Time
It’s hard to imagine someone turning down the Beatles for a record deal, but that’s exactly what Decca Records did. The group performed in front of Decca's A&R executive, Mike Smith, on New Year's Day. Although nerves might have made the performance a little less than awe-inspiring, that had nothing to do with the rejection.
Are You Ready for Some Football?
What would Americans' lives be like without Monday Night Football? It may seem unimaginable, but football-free Mondays were almost a reality. In the 1960s, the NFL approached both CBS and NBC about broadcasting Monday night football games. Both networks refused, clearly not seeing any reason to change their Monday night lineups.
Tech That’s Too Hot to Handle
Samsung's Galaxy Note is a very popular smartphone, rivaling some of the extremely popular iPhone models. Not surprisingly, consumers want the newest models as soon as they come out, and they expect greatness in return for outrageously high prices. What they never expected was for their new phones to burst into flames.
Banned Laptops and Exploding Batteries
Speaking of heat and fire hazards, Apple recently recalled a line of 15-inch MacBook Pros produced and sold between September 2015 and February 2017. Apparently, the laptops contain batteries that could catch on fire or even explode. The risk was deemed great enough to ban these particular laptops on airplanes.
No Movie Roles for M&M's
If you’ve seen E.T., you know that Elliott uses candy to coax E.T. out of hiding. Reese’s Pieces were the alien’s candy of choice, and the popularity of the tasty treat soared due to its use in the film. How shocking would it be to learn the peanut butter candy wasn’t the first choice? Amblin Productions first approached Mars, Inc., to discuss using M&M’s in the movie.
Final Nail in a Blockbuster-Sized Coffin
Remember the days of video rentals? With on-demand television and Netflix available with a few clicks, Blockbuster Video quickly became obsolete a number of years ago. Interestingly, Netflix approached Blockbuster in 2000 with an offer to sell the then-mail-order company for $50 million — Blockbuster declined.
The Mega-Merger Mega-Disaster
Combining two industry giants to form one powerhouse company can be a wise move with the right planning and execution. In 2001, AOL — a leading internet giant at the time — and Time Warner agreed to merge in hopes of achieving even greater success. Unfortunately, the exact opposite happened.
Taking Advantage of Employees
Some companies seem to forget that employees are on the front lines, interacting with customers far more often than executives. They are also the ones who handle the inner workings of the business each day. If a company wants its employees to care about the business, it must care about its employees.
Never Try to Fix What Isn't Broken
While innovation is a good and necessary practice, the phrase "If it ain't broke, don't fix it" exists for a reason. Coca-Cola had thrived producing its delicious original formula for nearly a century. Despite the soda’s unquestionable success, Coke irrationally decided to change the formula in 1985 and introduced a poor replacement: "New Coke."
The Cost of Resisting Change
To succeed, you sometimes have to let others make important changes. This is especially true when it comes to trusting leadership. When the book industry began to change, Borders bookstores decided the way to stay competitive was to hire a new CEO. This idea might have worked, but the board wouldn’t allow the new CEO to make changes that could have saved the business.
Missing a Golden Microsoft Opportunity
About 40 years ago, Bill Gates attempted to sell Microsoft to Electronic Data Systems, but Ross Perot felt the $40 to $60 million price tag was too high. A young Bill Gates was trying to keep the company afloat in tough financial times, and it wouldn’t have been surprising if the company had failed after failing to make the sale.
Rejection of the World’s Greatest Wizard
With the overwhelming popularity of the Harry Potter book series, it’s hard to imagine a publisher ever could have rejected the books. In truth, two prominent London publishing companies — HarperCollins and Penguin — turned down the first book, Harry Potter and the Philosopher's Stone (British title) without giving it much consideration.
Falling Off a Razr’s Edge
Motorola created its extremely popular Razr cell phone and became the market leader in 2006. The public loved the phone, and Motorola continued to expand and improve the model. It’s important for companies to continue working toward the next big thing, even when a product is successful, but Motorola apparently didn’t get that memo.
Allergy Sufferers — Beware!
Most people don't expect prices to stay the same, of course, but they don’t expect prices to abruptly increase by 10 times the original amount. Pharmaceutical prices have steadily risen over the years to ridiculous levels, causing less-than-favorable criticism and outlooks for pharmaceutical companies.
Show Me the Money!
Remember when Vine was a fun way to create and share short video content? In the beginning, it was a very unique platform with unique content, and content creators utilized its capabilities nonstop. However, that all changed once Instagram made it possible to post short videos.
The Importance of the Right Business Plan
Zellers, a Canada clothing store chain, was once a booming business that offered low prices on thousands of items for the family. Maybe it would have remained on top if Walmart hadn’t crossed the border into Canada. Walmart is called the "low price leader" for a reason, and the company quickly began to steal Zellers' customers.
A Careless Patent Oversight
In 1858, Edwin Drake took a hard look at an oil spring in Pennsylvania. After encountering some obstruction, he pondered ideas for how to reach the oil without contaminating it. This led to his innovative pipe-and-drill invention.
Turning Down a (Former) Television Icon
In 1984, Bill Cosby pitched The Cosby Show to ABC, and they promptly turned him down. At the time, the network assumed that a television show about a wealthy, educated black family wouldn’t hold any appeal, so they passed on the deal.
An Expensive Price Misprint
The importance of proofreading your work before submitting it is a common lesson that begins in elementary school. In 2006, Alitalia Airlines’ executives found out they should have paid attention in class. Thanks to a simple mistake, the airline sold 2,000 tickets for $39 instead of the real price of $3,900.
The Psychology of Pricing
In the retail world, there’s a psychology to effective pricing. Certain aspects of a sales tag trigger particular feelings in consumers. For instance, charging $3.99 for an item instead of $4.00 intrigues customers more. Also, customers love to catch things on sale. It makes them feel like they are getting a great deal.
Copying from a Copy Master
In today's world, it seems like every digital product imaginable is brought to market. In the past, new inventions didn’t appear as often. In some cases, inventions were set aside and not introduced to the market for various reasons. In the ‘70s, Xerox had quite a few digital products just laying around the office.
Epic Failure in Management
When companies are left to fend for themselves, they could find themselves constantly pouring money into ideas that ultimately fail. Internet giant Yahoo was once worth $125 billion, but it fell from grace rather quickly. Was it due to pressure from competition or the poor choices of upper management? Regardless, the company stopped producing quality content.
Never Get Too Complacent
Remember MySpace? What was once considered "the" social networking site is now basically nonexistent. Although it paved the way for other social networks, MySpace was far too complacent about its position at the top of the industry. It wasn’t long before Facebook eradicated MySpace's popularity — without much effort.