Everyone makes mistakes and that includes business leaders. Whilst in hindsight you can carefully evaluate every decision, things are different when you are in the heat of the moment. You can balance the pros and cons up to a certain point, but ultimately you need to go with your gut feeling. Nevertheless, you could end up making some of the worst business decisions of your life.
However, you can feel better about your own worst business decisions by seeing some made by bigger companies. They seem unbelievable now, but at the time made sense to the decision makers. This list is not here to scare you from taking decisions, but to make you aware that not everything which seems promising ends up being that.
5. Microsoft at a discounted price.
$60 million may seem like a lot of money, but if it could buy you Microsoft, then it doesn’t seem like all that much. Back in 1979, when Bill Gates was only 23 years old, he offered this price tag to sell his start-up. He was in negotiations with Ross Perot, who saw this price as being too high.
Whilst Perot’s business at the time was valued at $1 billion, he still didn’t see the amazing way that Gates’ computer business would flourish. Perot himself admitted in a later interview that this was one of his worst business decisions.
4. Western Union misses its calling.
Western Union is one of the oldest companies in the world, founded back in 1851. It found its success in its telegraph business which gave it an absolute monopoly. It was so confident of its success that the company president, William Orton refused to purchase the patent for the telephone for $100,000.
Orton did not think of the telephone as being anything more than a toy. The rest, as they say, is history. It is a prime example of how carrying out market research can help businesses identify new opportunities. Could you imagine what you would have done if you were in his place?
3. New Coke? No, thank you.
Back in 1985 Coca-Cola was already a massive global corporation. The company decided to try and improve its already immense following by developing a new Coke recipe. Trials proved that the consumers like the taste of the new Coke better, and the company decided to move forward with their plans.
The company forgot one important factor, however. Successful brands generate brand loyalty. Although in blind tests people chose the new Coke, when the drink replaced their long time favorite in the stores they protested. The huge decline in sales made Coca-Cola rethink one of the most famous worst business decisions and they returned to the original Coke recipe.
2. Not Excite(d) for Google.
Not many businesses are valued higher than Google. Today it is worth almost $365 billion and continues to grow. However, just like any start-up, there was a time when the search engine could have been bought for peanuts. It was back during the boom of the dot-com period when search engines were competing aggressively for market share.
Excite, then a very popular search engine, was offered Google for $750,000. Just like Ross Perot, Excite’s CEO George Bell saw the price tag as overvalued and refused. Since then Excite saw its value decline steeply and was sold off. You can almost imagine Bell banging his head against the wall for enacting one of the world’s worst business decisions.
1. No smiles for Kodak’s worst business decision.
The younger generations might not know a time before digital cameras. This was a time when you had to be careful how many photos to take because you were limited by your film roll. The film then got developed and you would get individual photos. It was a big global operation, and Kodak owned it almost completely.
Kodak was an innovative company and continued to progress the technology of photography. They created the world’s first digital camera but decided that launching it would go against their existing business. So they forgot about it, but their competitors had a different idea. Today, Kodak only exists in people’s memories, going bankrupt as it could not keep up with photography technology.
After taking some of the worst business decisions in history, these entrepreneurs and business leaders surely did not want to wake up the next morning. However, making bad decisions does not mean that a business will go bankrupt. In fact, many of the companies listed here are still successful today. You can also learn how successful entrepreneurs start their day to help you take the best decisions for your business.