Stuff You Should Know – 10ish Worst Business Decisions Ever

Intro

In this episode of the “Stuff You Should Know” podcast, the hosts discuss the top 10 worst business decisions ever made. They explore the consequences of these decisions and the lessons we can learn from them. From missed opportunities to misguided strategies, these stories serve as cautionary tales for entrepreneurs and business leaders.

Main Takeaways

Missed Opportunities

• Alexander Graham Bell’s offer to sell his telephone invention to Western Union for $100,000 was rejected, leading him to create his own phone company and receive the most valuable patents ever issued in the US.
• Excite, a search engine and web portal, did not buy Google when they had the chance.
• Kodak invented the digital camera but didn’t invest in it due to conservative forces who believed their money was in print photographs and regular cameras.
• Netflix offered to merge with Blockbuster for $50 million, but Blockbuster declined the offer.

Misguided Strategies

• Excite’s search engine was purposefully not super good to keep users on their site for longer and generate more ad revenue.
• Kodak wasted billions of dollars on their digital camera division that never got a good start.
• Ron Johnson, former CEO of JC Penney, attempted to eliminate deceptive pricing tactics but ultimately failed.
• The New Coke debacle showed that changing an American institution like Coca-Cola without consulting customers can lead to anger and backlash.

Lessons Learned

• Making bad business decisions is common, but it’s important to learn from them and move forward.
• Hindsight is 2020, and it’s important to remember that circumstances can exacerbate bad business decisions.
• It pays to wait a little bit on new technology to figure itself out.
• Going against the vein of Americans who love deals and sales can result in failure.

Summary

Alexander Graham Bell and Western Union

Alexander Graham Bell’s offer to sell his telephone invention to Western Union for $100,000 was rejected, leading him to create his own phone company and receive the most valuable patents ever issued in the US. This story serves as a teachable moment about the importance of taking risks and not dismissing new ideas.

Excite and Google

Excite, a search engine and web portal, had the opportunity to buy Google but passed it up. They believed their own search engine was sufficient and didn’t see the potential of Google. This decision proved to be a huge missed opportunity as Google became one of the most successful companies in the world.

Kodak and the Digital Camera

Kodak invented the digital camera but failed to invest in it due to conservative forces within the company. They believed their money was in print photographs and regular cameras. This decision cost Kodak billions of dollars and ultimately led to their downfall as they missed the digital camera revolution.

Ron Johnson and JC Penney

Ron Johnson, former CEO of JC Penney, attempted to eliminate deceptive pricing tactics in the clothing retail industry. However, his strategy failed as customers preferred sales and deals. This serves as a reminder that understanding your customers’ preferences and behaviors is crucial for success.

The New Coke Debacle

Coca-Cola’s decision to change the recipe and introduce New Coke without consulting customers led to anger and backlash. People were passionate about their beloved Coke and didn’t like the change. This story highlights the importance of understanding the emotional connection consumers have with a brand.

Conclusion

From missed opportunities to misguided strategies, the worst business decisions often stem from a lack of foresight or a failure to understand customer preferences. Entrepreneurs and business leaders can learn valuable lessons from these stories, reminding them to take risks, adapt to changing technologies, and always prioritize the needs and desires of their customers.