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
Bill gates and Steve Jobs had a hilarious exchange regarding their use of the Xerox GUI system.
"You're ripping us off!", Steve shouted, raising his voice even higher. "I trusted you, and now you're stealing from us!"
But Bill Gates just stood there coolly, looking Steve directly in the eye, before starting to speak in his squeaky voice.
"Well, Steve, I think there's more than one way of looking at it. I think it's more like we both had this rich neighbor named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it."
http://www.folklore.org/StoryView.py?story=A_Rich_Neighbor_Named_Xerox.txt
Blockbuster video! Wow! What a difference! Blockbuster shot themselves in the foot twice. Amazing blunder.
I wouldn't really call the excite deal a blunder. I would be extremely hesitant to replace a key part of my business model with someone else's technology.
Xerox is still the best example in how businessmen as CEOs of technological companies usually only fuck things up. Any CEO (which means Chief Executive Officer) should have at least basic, preferably advanced or even expert knowledge in the product they are actually selling. Imagine an IT guy, who doesn't know how computers work.
But for some reason the CEOs act like any company is like a bank, were the product is money itself. However that is the field of expertise for the CFO (and thus it is no wonder nobody ever hears of THESE guys).
I think it is shown really well in these multi billion technological companies like Facebook, Google or SpaceX... their CEOs actually understand what it is they are selling, they fucking founded these companies, after all (or in Google's case: were specifically chosen by the founders to teach them how to lead a company).
And this misunderstanding in technology is probably what lead to these blunders. If the CEO of Xerox at the time would have been a computer whiz, he would have understood just how important a GUI would be. Or if the Blockbuster CEO would be a movie fan he would look, as a hobby, for ways to find exotic movies... and would find out on his own how much more convenient online streaming is and the list goes on.
It is just so weird that for every job you need to be an expert in your field to get one nowadays, but if you are a "CEO", then it's "one size fits all". If you've lead one company, then you """can""" lead them all, no matter if they are a completely different field of business.
I foresee a similar future for Apple (sooner or later), ever since Jobs died, the new CEO doubles down on the lifestyle idea of Apple and it works so far (especially in markets like India, China or Russia, were they are rather handled like a fashion accessory than a tool). However their technological progress is lacking and has been rather disappointing in recent years. It's just the matter of time and a big blunder until Apple's style won't be stylish anymore and then they have no technological cutting edge to fall back to, while they find a new style. Apple is not an innovator (in the sense of: taking a niche technology and make it suitable for the mass market) anymore.
My favorite is Ma Bell sitting on magnetic storage tape for 60 years, stifling computer tech by decades out of fears people will stop using phones if you can record a message. This is the same story as kodak and blockbuster. They wanted to preserve the current monopoly, so they did nothing with the innovations available. Imagine if computers came about 50 years sooner!
http://io9.gizmodo.com/5691604/how-ma-bell-shelved-the-future-for-60-years
Google only processes 1 billion search results every day? That's less than I thought.
For me its the sheer idiocy of Gerald Irving Ratner here in the UK.
Its 1991 and Ratner who was Chief Executive of his family business (a widespread jeweller chain) is talking at a conference for directors of companies, during his speech he gets up and says
The company plummeted in the stock market, shedding £500m in value and by 1992 he was fired and the company changed its name.
Tip of the hat to Rochester, NY for being the home to two of those companies. Kodak and Xerox.
Why beat on Excite for not buying Google for 1 million when it was Larry Paige that wanted to SELL google for a 1 million!??? If even Google's founders did not see Google's potential how on earth is Excite supposed to??