Throughout history, humans have made some pretty big mistakes which have cost time, money and huge resources.
And mistakes happens every day by millions of people, including you!
When something happens at work and you make a mistake, it can feel like the world is falling apart around you, but the truth is, bigger mistakes have been made.
Here are some of the worst business and financial decisions made in recent history (just to make you feel better about yourself).
- Blockbuster turns down Netflix
- Excite passes up chance to buy Google for Peanuts
- Mercedes looses $20 billion
- Kodak misses the digital boat
- Myspace goes caput
It wasn’t long ago that Blockbuster was as common as McDonalds, Halifax, Tesco or Costa Coffee on the high street.
For many people, it was part of the Friday or Saturday night routine, to go out and grab a movie for the whole family to watch on VHS or DVD.
At the height of its powers, Blockbuster employed 84,300 people worldwide, including about 58,500 in the United States and about 25,800 in other countries, and had 9,094 stores in total, with more than 4,500 of these in the US.
In 2000, Netflix offered to handle the online component of the business but CFO, Barry McCarthy said;
“They just about laughed us out of the office.”
It was a big mistake.
Blockbuster went….bust, and Netflix is now worth an estimated $3.7 billion!
Ever heard of the search engine Excite?
No, we hadn’t either before researching this article.
But, back in 1999, it was the second biggest business of its kind in the world and Google was nothing more than a tiny start-up fresh off the block.
Larry Page, the founder of Google, offered Excite the chance to buy his company for a measly $750,000 but was turned down, which turned out to be a pretty big mistake.
Almost 20 years later, Excite doesn’t exist and Google has over $130 billion in assets, meaning it’s now worth more than 173,333 times what Excite would have paid to buy it.
Chrysler was considered as one of the big three automakers in the U.S in the 90’s, however it had trouble establishing an international presence.
So the team at Mercedes thought there was an opportunity to leverage their international experience to expand the Chrysler brand globally and merged with Chrysler at a cost of $30.7 billion in 1998.
This didn’t work out as planned.
Though it was a theoretical 50/50 split, Chrysler sales made up less than a third of revenue for the merged company in 2006. In the end, Mercedes decided it was better off without Chrysler and sold 80 percent of its stake in 2007 for $7.4 billion.
This unhappy trip down merger lane cost Mercedes over $20 billion.
As is the case in nature, if a business fails to adapt to the environment and consumer behaviour, it will go extinct.
Kodak, one of the biggest names in the camera industry, used to make millions worldwide, selling film and film-using cameras.
The business was so successful that the top brass didn’t think that digital cameras would ever pose a threat to their operation…how wrong they were!
While other companies invested in the technology and gradually increased picture quality and memory capabilities, Kodak continued to produce film cameras, which were not being bought.
When it finally got into the digital market, Kodak was selling cameras at a loss and still couldn’t make strong gains against other manufacturers who had been producing digital cameras for years, losing billions in market share in the process.
In a world dominated by social media, it’s strange that Myspace, one of the granddaddies of all social media sites, is hardly on the radar.
To just say that it got beat by Facebook is oversimplifying the issue, since many platforms currently co-exist with Facebook.
While MySpace was still on the rise in 2005, News Corp bought it, paying $580 million for the social media site.
But News Corp managed it badly.
The first few years were good and the value of Myspace was estimated at $12 billion in 2008.
Three years later, Myspace declined dramatically as it failed to adapt and change with the times.
In 2011, News Corp sold MySpace for just $35 million at a loss of $545 million.
If you would like to know about some of the best business and financial decisions ever made, click here to read our new article!