The world of business is full of risks and possible gains. And as much as one might think there are secrets to learning what to do and what not to do, a lot of it is all trial and error. You must learn from the mistakes you and others make while understanding that hindsight is 20/20.
There are many former executives currently sitting out in the world wondering “what-if” they would’ve made the deal. Others are wondering “what if I would have just let it go?”
Unfortunately, some mistakes are unavoidable and can be corrected. Others, turn out to be disasters or gigantic missed opportunities. Here are our top 7 worst business decisions of all time.
Kodak Not Going Digital. Even Though They Invented It
This one is a real head-scratcher. As just about every adult in the U.S. has a digital camera on them at all times, it is hard to believe that there was a time when all photography was done with film. The technology of taking images digitally did not exist. That is until 1975 when the Kodak company invented the technology. However, instead of seeing this as a game-changing opportunity, Kodak decided to shelf the ideas of digital photography.
Why, you ask? Because they thought it would ruin their film business. The company enjoyed a 90% market share until 1984. That was when a Japanese camera company called Fuji broke into the U.S. market after becoming the official sponsor of the 1984 Olympics.
Things started going downhill for Kodak from there. By the time Kodak made the move to digital, customers were no longer enamored with the brand. While there are companies that fail due to lack of innovation, Kodak is the case of being innovative but not capitalizing on it. The company never fully recovered from these and other poor decisions. Eventually, in 2012, the company filed for Chapter 11 bankruptcy.
Excite.com Not Buying Google for $750,000
We all know what Google is today. But back in 1999, it was nothing but a highly-improbably dream. Excite.com is currently a web portal but was once one of the most popular search engines during the early days of the internet. In 1997 Sergey Brin and Larry Page attempted to sell their research project, Backrub (later named Google) to Excite for $1 million. The reason being the project was taking time away from their school studies.
CEO George Bell didn’t feel it was a good idea. The original offer of $1 million was brought down to $750,000. But Bell still wouldn’t budge. He felt that he wanted to keep Excite’s current company culture over what he could get with Google taking over. Brin and Page wanted to use Google’s technology but Bell thought that Excite.com’s tech was better. Although buying a young upstart startup is not the type of business decision that one should take likely, it seems that Bell had his mind made up about Google.
Most people today have never heard of the brand Excite. But, we all know they are familiar with Google. You may have found this article using it. The company is now worth over $1.22 trillion.
Blockbuster Not Purchasing Netflix
Blockbuster, at one time, was at the top of the movie rental game and out there living its best life. It’s no wonder that when a little startup called Netflix was looking for some investors that they would approach the massively successful company.
In 2000 the Netflix administrative team approached Blockbuster asking for $50 million in investment. Even though the company was beginning to spiral downward in income. Blockbuster CEO John Antioco struggled not to laugh according to co-founder Marc Randolph after hearing the offer. He didn’t take it seriously enough to try and counter. Instead, he closed negotiations and shut the door on what was an opportunity of a lifetime.
That decision, as well as the brand’s failure to innovate, sealed its fate. Blockbuster ended up filing for bankruptcy in 2010. The company was slow to move into streaming and amassed disgruntled customers who were tired of paying late fees. Netflix is now worth over $154.96 billion.
Atari Not Purchasing Apple
Nolan Bushnell, CEO of Atari, was asked by one of his employees for $50,000. In return, Atari would own the company he started with his friend. That employee was Steve Jobs and that company was Apple Computers. Steve worked with his future co-founder of what would later become their own company and built the first Apple computer out of spare Atari parts
Although Bushnell knew that Jobs was a highly intelligent, highly motivated person, the CEO declined the offer. Even though Apple is now worth more than $1 trillion, Bushnell says he has no regrets about the decision. He states that he has a great life and family and doesn’t know if he would enjoy that if he were “uber, uber-rich”.
Yahoo Turns Down an Offer from Microsoft
Yahoo is an interesting company when it comes to bad business decisions. In 1998, the company turned down the opportunity to purchase Google for $1 million. 4 years later, Google was worth more than Yahoo. Yahoo tried again to purchase Google. This time for $1 billion. However, Google wanted $5 billion. Yahoo declined once more.
However, to selection 2008, Yahoo had a chance to redeem itself as it continued to lose market share to Google. Microsoft approached Yahoo and offered to buy the search engine for $44.6 billion. Founder Jerry Yang turned down the offer citing that the offer was too low. Yang was highly criticized for the decision and he was forced to step down from his company in 2009.
At its peak, Yahoo was worth more than $125 billion. However, the company was sold to Verizon in 2016 for just $4.48 billion.
The AOL-Time Warner Merger
Everyone expected the year 2000 to be the year internet companies would completely take over the market. However, the opposite began to happen as many technology companies became overvalued in what we now call “The Dotcom Bubble”.
The AOL and Time Warner merger was one of the first ones, going into effect on January 10, 2000. With a deal that was valued at $350 billion (one of the largest in America at the time), they put a lot into hoping that the internet bubble wouldn’t burst and hopefully reap the benefits. Instead, what they received was record-breaking losses by 2001. They also experienced a huge fallout in their administrative sectors as everyone tried to figure out what in the world went wrong.
Both brands are technically still going. However, under different names. This merger is seen as one of the worst of all time. It is also often used as a case study for business school students on what not to do.
NBC and CBS Turning Down Monday Night Football
In the late 1960s, the Commissioner of the NFL, Pete Rozelle, approached the television networks NBC and CBS. He had a revolutionary idea; football on Monday nights. He struck a deal prior with the networks before these meetings. The deal was to air 2 football games per year on a weeknight. This encouraged him to pursue the vision of broadcasting a game per week on Monday nights. However, the heads of the networks didn’t share the same passion for his vision. They were more interested in keeping the popular shows in those time slots. Programs like the Doris Day Show, for example.
Rozelle would eventually strike a deal with ABC for Monday Night Football. The rest is history. Monday Night Football is one of the longest-running and highest-rated shows ever. The program now airs on ESPN. Football on weekdays has also expanded to include Thursday Night Football which is still widely popular. But, it has yet to reach the heights of Monday Night Football.
As you can see, when the stakes are high, the ability to make the right decisions can be tough to say the least. However, in all of these bad business decisions, there were many lessons learned. Some decision makers would still stand behind their decisions today if presented with the same information they had before.
In business, you will live and learn through trial and error. And that’s ok. Just take a lesson from these mistakes so you don’t make someone’s worst business decision of all time list the next time it comes around. If you want to know more about the other side of the decision making coin, check out our article The 6 Best Business Decisions of All Time.
Co-writer: Katie Budd