Business scares: money mistakes and dreadful deals
Halloween is the holiday of all that is spooky and creepy. But nothing scares most adults quite as much as losing a ton of money. In honour of this year’s day of the dead, we’ve compiled a list of some of the worst business mistakes in history. Not suitable for the fainthearted!
Excite refused to buy Google for less than $1 million.
Back in 1999, Excite was the second most popular search engine worldwide while Google was a mere newcomer with a funny name. When Larry Page offered to sell Google to Excite for the now ridiculous-seeming sum of $750.000, Excite declined, choosing to acquire the site ask.com instead. Ask.com nowadays has less than 2 percent market share. Google’s global market share exceeds 67 percent and the company is now worth 173,333 times the amount that Excite would have paid.
Decca Records passed on The Beatles.
On New Year’s Day 1961, a little-known British band desperate for a record deal auditioned at Decca Records, a then renowned label. But they failed to convince Mike Smith, the company’s A&R representative, who decided to sign another band because, in his opinion, “guitar bands were on their way out.” Well, history of course proved him wrong: The Beatles would become the best-selling band in the world and would revolutionise the music scene forever.
Kodak develops the first digital camera – and discards it.
Usually when there’s a paradigm shift in the technological sector, those who adapt thrive while those who refuse to change fall behind. The downfall of Kodak, however, came about quite differently. Kodak filed a patent for one of the first digital cameras ever back in 1977. But because Kodak at the time made so much money from their film sales, they decided not to release the new technology. Even when it was clear that the market was turning digital, they continued to focus on traditional film. When Kodak finally decided to join the digital movement, its competitors were way ahead of them.
Edwin Drake invents the oil drill – and neglects to patent it.
In 1858, Edwin Drake was hired by an oil company to inspect a drilling site in Pennsylvania. Back in the day, extracting oil was a very tedious process and Drake found it difficult to complete his mission. He finally came up with a pipe-and-drill system that allowed him to dig for oil without contaminating it – effectively inventing the world’s first oil drill. His invention made a lot of people very rich; unfortunately, because he forgot to patent it, Mr Drake wasn’t one of them.
NASA loses millions because of a math mistake.
I remember decimals and fractions giving me headaches in school; little did I know that the genius minds at NASA felt the same way. In 1999, a $125 million Mars orbiter that Lockheed Martin had designed for NASA was lost in space. The reason: the engineers at Lockheed had used English measurements while the NASA team had indicated their measurements using the metric system. Nobody had noticed.
Blockbuster turns down Netflix.
In a mythical time long before Torrents and streaming services existed, there were establishments called video rental stores. Blockbuster dominated the business and, when all the signs pointed toward change, got an offer to collaborate with Netflix to develop an online rental service. But according to former Netflix CFO Barry McCarty, the executives at Blockbuster weren’t particularly open to the proposition: “They just about laughed us out of the office.” 15 years later, Netflix is doing better than ever, even developing its own hit shows such as House of Cards and Orange is the New Black, while Blockbuster became pretty much irrelevant. Talk about bad karma.
Ross Perot passes on Microsoft.
Last but not least, we have another blunder from the IT world. When a 23-year-old Bill Gates approached the CEO of Electronic Data Systems, Ross Perot, in 1979 with a proposition to buy his company, it seemed like a match made in heaven. Electronic Data Systems was looking for a small computer company to invest in and Microsoft wanted to enter the corporate market place. In the end, the deal faltered because of Gates’s $50 million asking price, which Perot thought was too high. He later told the Seattle Times that this decision was “one of the biggest business mistakes I’ve ever made.”
So there you have it – some of the worst financial horror stories that probably still keep their protagonists awake at night. Happy Halloween y’all!
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