26
Blockbuster – In 2000 when Netflix was still a niche DVD postal rental company , they offered Blockbuster the chance to buy them for $ 50 million .
Blockbuster laughed at Netflix ’ s CEO and what they thought of as his ridiculous offer . After all , they were making good money with their stores and late fees – why change ?
It wasn ’ t long before Blockbuster was chasing Netflix , copying their DVD rental by mail plan and failing miserably .
Blockbuster filed for bankruptcy in 2010 . And Netflix is now worth $ 30 billion .
Lesson learned ? Always keep an open mind when presented with new opportunities . You never know when that crazy idea someone just pitched you could be the next Netflix .
Ayds – In the 1970 ’ s and early 80 ’ s , Ayds candies enjoyed brisk sales as a diet aid that helped suppress appetite .
But along came the Aids epidemic in the mid 80 ’ s , and it ’ s no surprise that all of a sudden people didn ’ t want to buy Ayds . As of 1988 , sales had dropped off by half and were continuing to plummet .
Now , most manufacturers would rebrand at this point , but not Ayds . They added the word ‘ diet ’ in front of Ayds , but it was too little , too late and the product was withdrawn from the market .
Lesson for online marketers ? Unexpected things can and will happen . It wasn ’ t the manufacturer ’ s fault that an epidemic carried practically the same name as their candy , but it did . Had they bit the bullet and rebranded , they could have saved their product .
If you find for whatever reason that you need to make a change in your business , it ’ s best to do it quickly before it ’ s too late .
Telegraph to Telephone – there was a time when the telegraph was the most advanced communication system on the planet . Then in 1876 a fellow named Alexander Graham Bell invented a little gadget he called the telephone , and was ready to bring that invention to market .
But first he contacted Western Union , the most important communications company at the time , and offered to sell his patent for just $ 100,000 . William Orton , the president of Western Union , turned him down and instead set up his own phone company in secret in an attempt to compete with Bell .
Bell successfully sued Western Union for infringing on his patent . In 1879 , Orton was legally forced to pull out of the telephone business altogether , and of course Bell went on to build a business empire .
Lesson learned ? Whenever possible , work with your competitors rather than against them . That $ 100,000 Orton ‘ saved ’ literally cost him a fortune and spelled the eventual demise of the communications portion of his company .
MySpace - In 2005 when MySpace had more users than Facebook , Rupert Murdoch ’ s News Corp decided to buy the super popular social media site for $ 580 million .
MySpace had 300 million registered users and was valued at an estimated $ 12 billion . So he got a good deal , right ?
No matter how good the deal , if you try hard enough you can really muck things up .
Facebook was threatening their number # 1 status , so to immediately make MySpace profitable , they filled the site with tons of garish ads .
Next , they instituted the same corporate policies as News Corp , thereby preventing MySpace from adapting quickly to its competition .
After 6 years , News Corp sold the site for just 6 % of what they had paid for it .
Lessons learned ? First , if it isn ’ t broken , don ’ t ‘ fix ’ it . By plastering MySpace with ads and banners , they drove away their users .
Second , have patience . If they ’ d spent a little time thinking about their strategy to monetize the site , they could have come up with much better solutions than tons of garish ads .
Third , be flexible . Shackling your company with corporate policies that make progress slower than a snail ’ s pace is not going to win the day on the Internet .
One last note : It ’ s really easy to play ‘ Monday morning quarterback ’ and talk about what these companies ‘ should ’ have done . It ’ s a lot more difficult when you ’ re in the day-to-day grind trying to find your way .
Something all of these companies and business people had in common is this : They did what they thought was best at the time . And sometimes that ’ s all you can do .