Worst Company Disasters! | Top 6 Blunders

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16:25   |   Sep 02, 2016


Worst Company Disasters! | Top 6 Blunders
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  • You are watching ColdFusion TV.
  • Hi. Welcome to another ColdFusion video.
  • In previous ColdFusion videos, we've often seen the success stories
  • of some of the largest and most influential companies.
  • But what about the other side?
  • What about the blunders?
  • missed opportunities,
  • and utter disasters that in turn,
  • brought some companies to ruin.
  • Well today, you're in luck,
  • because here are six of such stories.
  • let's get straight into it.
  • Number six:
  • Kodak had the first digital camera back in 1977.
  • Whenever technology changes the landscape of an industry,
  • there are some businesses that adapt and thrive,
  • And others that continue to do the same old thing, until it's too late.
  • For Kodak,
  • who fell behind, due to the advent of the digital camera,
  • the situation was a little different.
  • Kodak actually patented the first digital camera back in 1977.
  • It was one that used magnetic cassette
  • to store images of about 100 kilobytes.
  • However,
  • Over the coming years,
  • Kodak made so much money off of film,
  • That they let the new technology gather dust, not realizing its potential.
  • The company continued to focus on traditional film cameras
  • Even it was clear that the market was moving towards digital.
  • When Kodak finally gone to the digital market,
  • They were selling cameras at a loss
  • and still couldn't make up enough sales to catch up to those competitors,
  • which have seen the potential of digital cameras early on.
  • Currently,
  • Kodak is losing over two hundred million dollars a year.
  • The lesson learned:
  • In the world of business,
  • always keep an eye on the market,
  • and be responsive to future trends.
  • if not,
  • it cost you everything.
  • Number five:
  • Excite could have bought Google for less than one million dollars.
  • The year is 1999,
  • and Excite was the number two search engine, behind Yahoo.
  • Google back then was a nobody.
  • The new kid on the block.
  • It was in this setting, back in '99,
  • That Larry Page,
  • offered to sell Google to Excite for $750,000
  • according to Excite's CEO at the time, George Bell,
  • The $750,000 deal was 1% of Excite's worth,
  • So financing wasn't an issue.
  • The hiccup came when Larry insisted
  • That if the sale went ahead,
  • Excite was to replace all of its search technology with Google's.
  • George of Excite, thought that this was too much, and refused the offer.
  • Excite was eventually bought by Ask Jeeves (now Ask.com) in 2004.
  • At the time,
  • Ask had less than 2% search market share.
  • Google, currently now known as Alphabet
  • processes a billion search results everyday.
  • They currently have around $147 billion in assets,
  • which is more than 196,000 times what Excite would have payed for them.
  • Ouch.
  • Number four:
  • Blockbuster Video turns down the opportunity to buy Netflix.
  • The mid-80s to late 90s, where when VHS was king.
  • The problem back then,
  • was that VHS tapes would cost upwards of $97 per movie.
  • For this reason,
  • video rental stores, like Blockbuster
  • came in to fill in that gap.
  • They were the perfect solution,
  • and became a regular part of weekend plans
  • for hundreds of millions around the globe.
  • [Blockbuster Commercial]
  • Eventually,
  • online video streaming services, like Netflix, Hulu and even Putlocker
  • destroyed the old video rental business model.
  • Ironically,
  • In the year 2000,
  • Netflix proposed that it would handle Blockbuster's online component
  • and Blockbuster could host Netflix as an in-store component,
  • thus eliminating the need to mail DVD's,
  • which was Netflix's business model at the time.
  • According to an interview with former Netflix CEO, Barry McCarthy
  • Blockbuster just laughed Netflix out of their office.
  • But, that's not the end of their story.
  • By 2007,
  • Blockbuster was well on the right track.
  • They had an internet movie component,
  • that was steamrolling over Netflix.
  • Netflix was struggling,
  • and their upper management wanted to sell the company to blockbuster to save face.
  • Blockbuster's growth was very strong at the time, so they turned down the offer.
  • In a strange twist later that year,
  • there was a boardroom dispute over Blockbuster,
  • that saw a change of CEO.
  • The new CEO was James Keyes (formerly of Seven-Eleven)
  • He came in with the wrong mindset,
  • and thought that Blockbuster should be a retail business instead of an entertainment one.
  • Because of this,
  • He didn't see the value of an online component.
  • Huge mistake.
  • Within eighteen months,
  • The new CEO had lost Blockbuster 85% of the company's value.
  • And within three years, Blockbuster was filing for bankruptcy.
  • Blockbuster went belly-up, and Netflix went on to thrive.
  • Since then,
  • Netflix is behind such original shows such as: House of Cards, BoJack Horseman, and Daredevil.
  • With 83 million subscriptions worldwide,
  • Netflix has altered the way many view the entertainment.
  • Number three:
  • A grade school math error cost NASA $125 million.
  • Before the advent of Google,
  • did you ever get frustrated with the conversions from feet to meters?
  • Inches to centimeters?
  • Did you find it difficult?
  • Well, you're in good company.
  • As it turns out,
  • a similar math problem hindered some of the greatest minds in the western world.
  • In 1999,
  • A Mars orbiter, that Lockheed-Martin designed for NASA
  • was lost in space due to a simple math error,
  • in where the engineers at Lockheed used Imperial measurements while the NASA employees used metric ones.
  • The mismatch led to the thrusters not recieving vital navigation information,
  • which caused the 125 million dollar spacecraft to malfunction.
  • The probe was forever lost while trying to get into orbit around Mars
  • after a 286-day journey.
  • There were numerous occasions where the errors should have been caught,
  • but, it wasn't.
  • Number two:
  • Nokia outright refusing to use Android.
  • Nokia.
  • One of the most iconic brands of the 20th century
  • and even up to the first decade of the 21st century.
  • The company had about 51% market share on the mobile phone industry
  • at their peak in 2007.
  • But now, they're a shell of their former selves.
  • A fond, but distant memory for many.
  • The start of the company's fall from grace can be attributed to one moment in 2010,
  • when Nokia CEO Anssi Vanjoki snobbed his nose up at the idea of using Google's Android software.
  • You see, at the time, Nokia had their own operating system called Symbian.
  • After the release of the iPhone in 2007,
  • the software development team at Nokia realized that there was a threat.
  • So they split into two.
  • One team tried to revamp Symbian,
  • and the other team created an entirely new operating system named MeeGo.
  • The problem was,
  • that the two teams were battling for resources from Nokia's top executives.
  • So in essence,
  • there was an internal struggle within the company.
  • It was so bad, that whenever Nokia was dealing with outside stakeholders,
  • like chip manufacturers for example,
  • there was so much squabbling within the company,
  • that it took the better part of the year to make a decision on anything.
  • in the tech world, that's way too long.
  • Competitor innovation waits for no one.
  • The logical solution, in hindsight of course, was Android.
  • Nokia could have used the open software platform, combine it with their in-house hardware,
  • to quickly make up for lost time, at minimal cost.
  • Instead,
  • Nokia CEO at the time decided to skip on Android,
  • calling it a short term solution likening the move to, Quote:
  • "Pissing in your pants in winter to keep warm."
  • Nokia kept on working on their own software efforts,
  • throwing $5 billion a year of R&D at the problem, but no avail.
  • As time went on,
  • The iPhone and Android handsets dominated the market until Nokia's mobile division was left in the dust.
  • not long after this, in 2013,
  • the Nokia division brand was salvaged by Microsoft for scraps.
  • Microsoft couldn't make the once legendary company stay afloat either,
  • Wasting $8 billion before killing the Nokia mobile brand.
  • Moral of the story,
  • Move with innovation, and don't let your pride cloud your judgement.
  • But wait a second, there is a twist here.
  • Nokia, the company from Finland,
  • is said to be returning in 2016, after signing an exclusive agreement with HMD Global.
  • HMD Global is a new company, also based in Finland.
  • The deal will see the creation of Nokia brand mobile phones and tablets for the next 10 years.
  • So, I'll see how this one plays out.
  • Number One:
  • Xerox, yes the printer company
  • hand one of the greatest inventions in computing history to Apple.
  • Imagine having one of the greatest inventions of the 20th century in your hands
  • and giving it away because you didn't understand what you are holding.
  • Xerox did just that with the Xerox Alto.
  • The Xerox Alto was an experimental computer from 1973,
  • created at Xerox's Research Center.
  • The Alto was way ahead of it's time.
  • It was the first modern desktop PC, as we recognize them today.
  • It had a mouse, windows, file managers, and
  • it can copy and paste, delete and move files,
  • It had icons, menus, graphics,
  • and even a Local Area Network, that connected all the computers together.
  • The idea was to mimic an office desk, but on a screen.
  • A paperless office of the future.
  • Absolutely revolutionary for 1973.
  • What the Xerox Alto was demonstrating
  • was the first Graphical User Interface, or GUI, in a desktop computer.
  • For those of you not familiar with this time in computing technology,
  • This is how a typical computer from the late 1970s looked and functioned.
  • Before GUI's, to do absolutely anything to a computer
  • you needed to type commands in lines of text.
  • If you mistyped anything, that was too bad.
  • The computer would just spit out an error, saying that it didn't understand.
  • Pointing and clicking on a graphical object was a foreign idea.
  • Thousands of Xerox Alto's were built at the Research Center, but never sold.
  • Only used heavily in Xerox's offices and at a few universities.
  • The Xerox upper management did not understand what they had,
  • the managers just couldn't see, the vision of what the computer of the future will be.
  • But, a man named Steve Jobs did know what the future of the computer could be.
  • And Xerox handed it straight to him.
  • Here's how it went down:
  • Xerox at the time, needed a way to make their experimental technologies, like the Alto cheaper.
  • They saw Apple pumping out their Apple II's for a cheap price.
  • So in 1979, they invited Steve Jobs over to their research institute, to see if they could help reduce the cost of production.
  • The deal saw Xerox gain a million shares of Apple's stock
  • In exchange for Steve Jobs was getting the inside information
  • for everything cool and revolutionary that was going on at the PARC Center.
  • Nobody actually checked with the guys at the research center, but the Apple Business Development Team signed off the deal anyway.
  • The following is from Larry Lester, a Xerox Research Center scientist, and an eyewitness to when Steve Jobs was handed everything.
  • Lester: So, during that demo... uh,
  • Steve again got very excited, he was pacing around the room and
  • occasionally looked at the screen. He was mostly just looking and then reacting, and taking it all in and trying to process it.
  • And uh,
  • and one point, he said you still not showing us everything.
  • And the meeting paused, and there was some phone calls, and okay, we gonna show you more.
  • But, Jobs was there going:
  • "What is going on here? You're sitting on a goldmine!"
  • "Why aren't you doing something with this technology?"
  • "You could change the world!"
  • And,
  • There were his buddies, who would trying to, you know arrange a negotiation of some kind.
  • We're tying to quiet him down
  • [audience laughs]
  • Don't be so excited.
  • But he was, he was really clear to him that we were never really gonna do anything with this.
  • Ah, the irony was when they left, we'd still showed them like 1% of what PARC was doing.
  • But it was enough, that it got really excited and decided that they were gonna retarget the LISA to be something like what they seen in terms of GUI,
  • they fell in love with the mouse,
  • and uh, that changed everything.
  • And 7 months after that, I was working at Apple.
  • Jobs: And,
  • within
  • you know, ten minutes,
  • It was obvious to me that all computers would work like this, someday.
  • Basically, they were copier heads, and just had no clue about, uh a computer, what it can do.
  • And so they just grabbed the feet from the greatest victory in the computer industry.
  • Xerox could have owned the entire computer industry today.
  • The graphical approach to the computer appealed to the human mind
  • because commands were now replaced with movements and objects.
  • So, it felt natural,
  • Typing lines of text was now a thing of the past.
  • The ideas from the Alto would heavily influence the Apple LISA,
  • whose technology trickles down to the Macintosh,
  • which influenced Microsoft Windows.
  • Both of which, were the eventual ancestors to the manner in which our phones operate today.
  • An the sad thing is Xerox never gets mention for any of this.
  • Anyway, that's the end of the video.
  • Those were 6 huge blunders by some top companies.
  • I hoped you liked it, give it a thumbs up if you did,
  • subscribe if you are new to this channel,
  • and this video was a lot of work, so i would appreciate it if you'd share this video with someone who would be interested.
  • Also, as another point,
  • If you guys would like to suggest videos, I've opened up the floor on my Patreon,
  • So, if you are a Patreon, you can take part and suggesting what the next video's gonna be.
  • Thanks again guys, This has been Dagogo, you have been watching ColdFusion, and I'll see you again soon next video.
  • Cheers and have a good one.
  • ColdFusion. It's new thinking.
  • - Captions mostly done by 81wsk

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