Ever pondered a new business idea, wondered if would work, what might happen if it goes wrong? The chances are you have thought about several ideas for your business, you may have implemented some or not done others.
What is certain is that some of these ideas will have worked, some will have failed.
Just don’t dwell on the ideas that failed because they will never fall into the sphere of these bad business decisions.
Kodak, Not Once But Twice
In 1975 Kodak had developed the first digital camera. You may think that digital cameras didn’t come into being until the 1990’s, but no. Kodak decided not to do anything with the digital camera out of fear it would cannibalise their established film business.
OK, so one bad mistake is enough. But in the early 1980’s Fuji entered the US market with lower priced alternatives to Kodak. In response Kodak decided that US consumers would not abandon their own national brand.
Kodak believed this so much that they even passed up the option of being the LA 1984 Olympic official film provider. So Fuji did it instead.
Kodak filed for bankruptcy in 2012.
Jedi Mind Tricks & 20th Century Fox
In 1977 20th Century Fox decided to sell product and merchandising rights for Star Wars to George Lucas for $20k.
The combined revenue of product and merchandising is believed to exceed $3bn, good work by George Lucas, maybe not quite so good from 20th Century Fox.
Go back to 1876 and you will see that Western Union were offered the patent for a new fangled device called the telephone. Given Western Union had the latest technology of the telegraph it did not take them long to realise what they had.
Well, not quite true. The then man in charge of Western Union could not see the benefit in having telephones, I mean will they ever take off? No Chance…
This is believed to by William Orten of Western Union’s quote;
“After careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion that it has no commercial possibilities… What use could this company make of an electrical toy?”
Hoover, Air Miles Galore
In 1992 and with a bulging warehouse, Hoover decided to clear some space by offering a round trip flight to Europe with any purchase over £100. They later expanded this to a round trip flight to the US.
What Hoover failed to realise was that people started buying Hoover’s products solely for the return flight to the US.
Chaos followed and Hoover tried to get out of their promises as they simply could not cope with demand for flights. Court cases rolled on until 1998 when the UK arm of Hoover was sold to Italian manufacturer Candy.
But at least their warehouse was a little clearer…
The Small Business Lesson
It is quite quick. If you get offered the rights to Star Wars, take it. Don’t give away flights for any purchase and don’t underestimate your competition, or think your USP is unassailable.
All in all, don’t worry. Your mistakes will never be this calamitous.
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By Dave Farmer