ColdFusion - Worst Company Disasters! | Top 6 Blunders

Starting point is 00:00:00 You are watching Cold Fusion TV. Hi, welcome to another Cold Fusion video. In previous Cold Fusion 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.

Starting point is 00:00:34 Let's get straight into it. Number 6. Kodak had the first digital camera back in 1977. Whenever technology changes as the landscape of an industry, there are some businesses that adapt and thrive and others that continue doing 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 cameras back in 1977. It was one that used a magnetic cassette to store images of about 100-kilts and a little bit of about 100,000. 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.

Starting point is 00:01:17 The company continued to focus on traditional film cameras, even when it was clear that the market was moving towards digital. When Kodak finally got into the digital market, they were selling cameras at a loss and still couldn't make up enough sales to catch up for those competitors, which had seen the potential of digital cameras early on. Currently, Kodak is losing over $200 million a year. 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 could cost you everything. Number five, Exite could have bought Google for less than $1 million. The year is 1999 and Exite was the number two search engine behind Yahoo. Google back then was a nobody, the new kid on the block. It was in the setting back in 99 that Larry Page offered to sell Google to Exite for $750,000.

Starting point is 00:02:13 According to Exite CEO at the time, George Bell, the $750,000 deal was 1% of Exite's worth, so financing wasn't an issue. The hiccup came when Larry insisted that if the sale went ahead, Exite was to replace all of its search technology with Google's. George of Exite thought that this was too much and refused the offer. Exite was eventually bought by AskG's, now called 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 every day. They currently have around $147 billion in assets, which is more than 196,000 times what Exite would have paid for them.

Starting point is 00:03:00 Ouch. Number four. Blockbuster video turns down the opportunity to buy Netflix. The mid-1980s to late 90s were 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. Imagine the perfect video store.

Starting point is 00:03:32 It would have a great selection, right? Right, over 10,000 videos, three evening rounds, so no rush, no hassle. Facts checkout, 24-hour quick-drop return, open late every night. Well, the perfect video store, Welcome to Blockbuster Video! Is popping up all over the country. There's one near you. Eventually, online video streaming services like Netflix, Hulu, and even Pat Locker,

Starting point is 00:04:04 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 for male DVDs, 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.

Starting point is 00:04:28 But that's not the end of the story. By 2007, Blockbuster was well on the right track. They had an internet movie component that was steam rolling 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 at Blockbuster that saw a change of CEO. The new CEO was Jim Keys, formerly of 7-11. He came in with the wrong mindset and thought that Blockbuster should be a retail business instead of an entertainment one.

Starting point is 00:05:02 Because of this, he didn't see the value of an online component. Huge mistake. Within 18 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 their entertainment. Number 3.

Starting point is 00:05:34 A grade school math error costs NASA $125 million. Before the advent of Google, did you ever get frustrated with the conversions of 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 end Engineers at Lockheed used imperial measurements while the NASA employees use metric ones. The mismatch led to the thrusters not receiving vital navigation information which caused

Starting point is 00:06:13 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, though on numerous occasions where the error should have been caught, but it wasn't. Number 2. 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 of the mobile phone industry at their peak in 2007.

Starting point is 00:06:47 But now there are 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 Ansi 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 Symbion. 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 Symbion and the other team created an entirely new operating

Starting point is 00:07:21 system named Migo. 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 a 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.

Starting point is 00:07:54 Nokia could have used the open software platform, combined it with their in-house hardware, to quickly make up for lost time at minimal cost. Instead, Nokia's 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 the winter to keep warm, end quote. Nokia kept on working on their own software efforts, throwing $5 billion a year of R&D at the problem, but to no avail. As time went on, the iPhone and Android handsets dominated the market until Nokia's mobile division was left in the dust.

Starting point is 00:08:29 Not long after this in 2013, the Nokia Mobile 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 pride cloud your judgment. 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. D-Global is a new company also based in Finland.

Starting point is 00:09:03 The deal will see the creation of Nokia branded mobile phones and tablets for the next 10 years. So I guess we'll see how this one plays out. Xerox, yes the printer company, hands 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 were holding. Xerox did just that with the Xerox Alto. The Xerox Auto was an experimental computer from 1973, created at Xerox's Research Center.

Starting point is 00:09:40 The Alto was way ahead of its time. It was the first modern desktop PC, as we recognize them today. It had a mouse, windows, file managers, and could 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 the office desk but on a screen. A paperless office of the future, absolutely revolutionary for 1973. Good morning. You come into your office, grab a cup of coffee.

Starting point is 00:10:13 Morning, Brett. And a Xerox machine presents your morning mail on a screen. What's the mail this morning? This one looks interesting. Let's take a look at this. I'm going to need a couple of copies of this. Push a button, and the words and images you see on the screen appear on paper. Oh, thank you.

Starting point is 00:10:30 Thank you, Fred. No, Fred, I think everybody on the routing list should see this. Push another button and the information is sent electronically to similar units around the corner or around the world. This is an experimental office system. It's in use now at the Xerox Research Center in Palo Alto, California. Soon, Xerox systems like this will help you manage your most precious resource information. Anything else? Flowers? Well, what flowers?

Starting point is 00:10:57 My anniversary. I forgot. What the Xerox Alto was demonstrating was the 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. So do I press play? Not yet.

Starting point is 00:11:21 First you have to tell the computer to copy the program that's on the cassette into its own storage area or memory. How do I do that? Just type load, LOAD. You've now finished your message, so you need to say over to you to the computer by pressing the return key. On other computers you'll see a key marked enter and that also means over to you. Oh here it is. Return means over to you.

Starting point is 00:11:55 Before GEYs, to do absolutely anything on 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 it didn't understand. Pointing and clicking on a graphical object was a foreign idea. Thousands of Xerox altos were built at the research center but never sold, only used heavily in Xerox 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 could be.

Starting point is 00:12:29 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 up their Apple twos for a cheap price, so in 1979 they invited Steve Jobs over to their research institute to see if you could help them reduce the cost of production. The deal saw Xerox gain a million shares of Apple's stock in exchange for Steve Jobs getting the inside information of everything cool and revolutionary that was going on at the park centre. Nobody actually checked with the guys at the research center, but the upper business development team signed off on the deal anyway. The following is from Larry Lester, the Xerox Research Center scientist, and an eyewitness to when Steve Jobs was handed everything.

Starting point is 00:13:18 So, during that demo, Steve again got very excited. He was pacing around the room and occasionally looking at the screen. He was mostly just looking and then reacting and taking it all in and trying to process it, process it. process it. And at one point, he said, you're still not showing us everything. And the meeting paused and there were some phone calls and, okay, we're going to show you more. But Jobs was there going, what is going on here? You're sitting on a gold mine. Why aren't you doing something with this technology? You could change the world. And his buddies who were trying to, you know, arrange a negotiation of some kind were trying to quiet him down.

Starting point is 00:14:03 Don't be so excited. But it was really clear to him that we were never really going to do anything with this. The irony was when they left, we'd still shown them only like 1% of what Park was doing. But it was enough that they got really excited and decided they were going to retarget the Lisa to be something like what they had seen in terms of graphical user interface. They fell in love with the mouse, and that changed everything. And seven months after that, I was working at Apple. And within, you know, 10 minutes, it was obvious to me that all computers would work like this someday.

Starting point is 00:14:40 Basically, they were copier hands that just had no clue about a computer or what it could do. And so they just grabbed defeat 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 obviously. 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,

Starting point is 00:15:11 whose technology trickled down to the Macintosh, which influenced Microsoft Windows, both of which were the eventual ancestors to the manner in which our phones operate today. And a sad thing is Xerox never gets mentioned for any of this. Anyway, that's the end of the video. Those were six huge blunders by some top companies. I hope you liked it. Give this video a thumbs up if you did.

Starting point is 00:15:35 Subscribe if you knew to this channel. And this video was a lot of work, so I would appreciate it if you would 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're a Patreon,

Starting point is 00:15:49 you can take part in suggesting what the next videos can be. Thanks again, guys. This has been DeGogo. I've been watching Cold Fusion, and I'll see you again soon for the next video. Cheers and have a good one. It's me thinking.

ColdFusion - Worst Company Disasters! | Top 6 Blunders

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