People Are Sharing Famous Companies That Went Bankrupt Over Bad Decisions, And Now I Finally Know What Happened To RadioShack
Sometimes, companies are so big that it seems impossible for them to fail. But as it turns out, there are countless companies that have failed or nearly bankrupted themselves for ridiculous reasons.
NBCUniversal Television Distribution / Via giphy.com
So, redditor u/WolfgangCaesar asked, "Now that OnlyFans is taking back its ban on sexual content, what other company bankrupted itself (or nearly bankrupted itself) through poorly thought-out or unnecessary decisions?"
People immediately began chiming in with forgotten or humbled companies, so here's the rundown:
1."Friendster shot themselves in the foot with a ton of bad decisions that led to stuff like long login times for basically no reason. It is weird to think that for a short time, Friendster was big and hip enough that I actually had it on one of my business cards around 2000."
2."RadioShack. Those guys just couldn't make their niche happen and never attempted to evolve."
3."One time, Red Lobster offered an unlimited [snow] crab leg deal. They brought the servings out slowly and were like, 'Nobody is going to sit there for six hours and just eat crab legs.' Actually, lots of people did — so many, they lost millions."
4."The Hoover UK free airline ticket disaster. The vacuum company devised a plan to offer free round-trip airline tickets if customers bought at least £100 in Hoover products. They underestimated how focused people would be to get free stuff — so they then made it as difficult as possible to actually claim the tickets. People would buy the cheapest thing they could to qualify, send all the forms off perfectly, then try to take legal action when the free flights didn't happen."
5."MySpace. All it had to do was not change, so people could come back to it after checking out Facebook. Instead, they got rid of everything people liked about the site and didn't make any beneficial changes. When people popped back in looking for a Facebook alternative, they found a weird, new music-focused version."
6."The UK jewelers, Ratners, nearly went under as a result of a cringeworthy speech from their CEO in 1991."
You can check out Ratner's speech here:
7."WeWork was going great right up until the IPO prospectus, and everyone realized that CEO Adam Neumann was a crazy person. Neumann himself managed to personally walk away with $1B in exchange for lighting tens of billions of dollars of investment on fire. Truly epic."
8."Circuit City. It was a major retail chain in the 1980s that collapsed under mismanagement. Its arguably biggest blunder was firing all of their experienced, better-paid workers for cheaper, inexperienced ones. Apparently, selling merchandise and keeping customers happy are important in the retail business. Who knew?"
9."Quiznos. The corporate office decided to buy the vendors and then contract all of the franchises to only buy materials from corporate with a price hike. The margins got way too high, and all of the stores went out of business. They shot themselves straight in the foot."
10."Xerox. They had a research lab, the Palo Alto Research Center (PARC), that invented the personal computer, and a working prototype in 1973. This was a time when the concept of a personal computer didn't exist — everything was mainframes. They also invented laser printers, computer graphical interfaces, WYSIWYG text editor (a precursor to Word, etc.), Ethernet (which much of the internet runs on), and much more. Steve Jobs got a tour of PARC in 1979 after Xerox sat on the invention doing nothing (they made copiers, goshdarnit), and the rest is history. Xerox then almost went bankrupt in 2000 as the world transitioned to email, powered mostly by personal computers and the internet."
Here's the monkey commercial for the Xerox 914:
11."Blackberry. Most popular smartphone in the world — then they were less than 1% of the market share, and their stock value dropped. A couple of years ago, they announced that they would focus more on software and essentially gave up making phones. Lots of BlackBerry executives took advantage of their market share and thought a flat, touchscreen phone wouldn't take off the way it did. How the mighty have fallen."
12."Teledesic. Their goal was to have a global network of low-Earth-orbiting satellites that provided broadband access to pretty much everyone on the planet. They were financed by tech titans in the wireless communications space. It all seemed like a great idea. The only problem was that the technology wasn't there yet. They went bankrupt in 2002. The Teledesic Case Study is taught at Harvard Business School and other MBA programs as a cautionary tale."
13."JCPenney tried to stop bullshitting customers, and it backfired. They said no more sales. They were just going to price everything low because pretty much all sales at department stores are lies, anyway. You’re not really getting 70% off — the retail price was deliberately set stupid high to convince you it was a great deal, but the discount price is the actual value of it. JCPenney’s heart was in the right place, but ultimately, it failed because customers are really that dumb and would rather be lied to."
14."Blockbuster had the chance to buy Netflix, but they were extremely stupid and turned them down. Now, they're gone and just a fond memory of the '90s. They were on their way out even before Netflix with services like Red Box and Game Fly, which mailed movies to you. Man, they were stupid. The writing was on the wall for years."
15."On paper, Sears had everything to be the e-commerce retailer that dominated the globe. By 1985, they had their own credit card, Discover, to rival MasterCard and Visa. They had their own insurance company in Allstate. They partnered with IBM to create 'Prodigy,' one of the first proto-ISPs in 1984, that offered all sorts of online services (except buying stuff from Sears) years before the World Wide Web existed. In theory, they were posed to make e-commerce a thing back in the late '80s and sweep the world in the '90s — with no chance for outsiders like Amazon, who had to build their stuff from the ground up, to catch on."
16."Schlitz. Throughout the '60s, it was one of America's biggest national beers. In 1974, Schlitz's president and chairman, Robert Uihlein, Jr., believed beer drinkers couldn't distinguish their favorite beer from other brands and oversaw the introduction of a slimmer brewing process. It replaced barley with corn syrup and used silica gel as a preservative during the brewing process that was then filtered out, i.e. didn't have to be listed as an ingredient. Instead, the beer spoiled faster, grew cloudy on racks, didn't produce a frothy head when poured, and was flavorless — resulting in a 100-million bottle recall. Schlitz also didn't realize light beer was becoming a thing, so it got its clock cleaned by Bud and Miller. It then ran an ad campaign with some belligerent-sounding guy threatening to kill another guy, who was off-camera, if he took his Schlitz away. By the '80s, it went back to its original brewing process, but the damage was done."
For your viewing pleasure, here's a "Drink Schlitz or I'll kill you" ad:
17."Can we get an honorable mention for Staples and its multiple attempts to merge with Office Depot, despite the fact that they're both on track to die within the decade?"
Do you remember any of these companies? If so, did you realize this is what had happened to them? Tell us that and what other companies you'd add in the comments below!
Updated to clarify how much Adam Neumann received for the sale of his shares after settling with SoftBank and SoftBank's current WeWork shares.