Business is a risky business. And even the most successful entrepreneurs are not immune from failure. We will talk about 4 failed decisions in the history of the largest companies: MySpace, Coca-Cola, Western Union and Kodak.
MySpace
Even before the advent of Facebook and Twitter, MySpace was the most popular social networking site. Just a month after its launch (in 2004), over a million people registered on it. Everyone from rock stars to bored teenagers created pages and began to "friend" each other. A year later MySpace became the most viewed site in the US. In July 2005, Rupert Murdoch bought social network for $ 580 million. He tried to quickly return the invested funds. Perhaps this was the main reason for the loss of popularity of the site. An important factor was the emergence of their main competitor - Facebook, which was not cluttered with advertising and offered similar opportunities completely free of charge. MySpace peaked in 2008. At this time, the number of unique visitors reached 75.9 million people. However, Rupert Murdoch could not cope with the onslaught of Facebook and in 2011 sold the social network for only $35 million. After that, he admitted: “We screwed up a lot, but I learned a lot of valuable lessons.”
Western Union
Today, Western Union is known to us as one of the fastest ways to send money anywhere in the world. But the company first made a fortune back in the 19th century. Initially, she specialized in providing telegraph services. The transmission of telegrams in Morse code at that time was the most fast way send a message to different cities and countries.
When Alexander Bell patented the telephone in 1876, he wanted to cash in and offered to buy his revolutionary invention from Western Union for $100,000. It was a fortune at the time, and they refused. The leadership of Western Union could not imagine a world in which people would trade a convenient telegram for ringing phones. Bell's invention soon became very popular. Western Union hired a team of inventors, including Thomas Edison, to create something similar to the telephone. Bell sued for copyright infringement and won. Telegrams faded into the background, and communications were ruled by the telephone for a long time.
Coca Cola
The taste of Coca-Cola is known to everyone and is already a kind of standard in the world of carbonated drinks. But the original formula, which was invented by John Pemberton in 1886, was almost destroyed with the advent of the main competitor - Pepsi.
The company's management was concerned that consumers were switching to Pepsi. It was decided to experiment with taste.
Within two years, the company created a new recipe. Critics were unanimous: the updated cola is better than the old one.
On April 23, 1985, American consumers tasted the new drink for the first time. Within days, the company was inundated with letters and phone calls asking them to go back to the old recipe. It got to the point that people began to sell the "old" Cola on the black market. Apparently, during these two years of testing a new recipe, it never occurred to anyone to ask the question: “Do people really want something else?”. Three months later, the new cola was replaced by Coca-Cola Classic, which we see today on store shelves. As of May 2014, Coca-Cola is valued at over $180 billion.
Kodak
Smile! For over 100 years, Kodak has been synonymous with photography. Founded in 1880 in New York, the company occupied more than 90% of the entire market. It employed about 60,000 people. In 1975, a Kodak engineer invented the world's first digital camera, which could produce a 100,000-pixel image (0.01 megapixels). The company's management recognized the potential of the device, but was afraid to abandon film and paper products, which brought them untold wealth. By the time Kodak realized their mistake, other companies were already well ahead. In 2012, the company filed for bankruptcy. By that time, the company had accumulated $6.8 billion in debt. 50,000 employees were laid off. Now Kodak specializes in the production of cartridges for printers and films for films.
As promised, I take out from the comments the history of the ruin of entrepreneurs. The brutal statistic says that most start-up businesses go bust - and my experience is that the statistic is completely correct. However, businessmen are usually stubborn and thick-skinned, having gone bankrupt once, they start again, and having gone bankrupt a second time, they take into account mistakes and start again at zero. The third or fourth attempt is usually successful.
The main business for 20 years is logistics, customs, foreign economic activity. By the way, it has also been transformed all the time - at first it was in-line cargo of the same type, container lots, now it is groupage cargo from anywhere in the world.
The first "left" experience - atelier for tailoring shirts by individual measurements. Pros - it was very interesting as we were one of the first. We bought fabrics in Italy from the Albini factory, then from the Turks, buttons (mother-of-pearl) first in Australia, then in China. A manager went to each client: he took measurements, chose the fabric, style, then sewing and embroidering the client's initials.
Pros - it was very interesting, the production was located in the church on the cadet line of the VO right under the dome, there were a lot interesting clients. The process is one continuous creativity, we even came up with a name at random - Cagliari (the capital of Sardinia). Mistakes - did not calculate the limited demand, especially in the early 2000s. If you look at how most men look in Russia and, for example, in Italy even in 2017, everything will become clear.
The mistake was a large number of partners. I had 4 of them - it's prohibitively many. The ideal option is two. There were also problems in management: I appeared at the production site once a month. Once discovered hazing and theft. I can talk for a long time about this business, as it left me with good memories with zero profit.
Number 2. After a pause of 4-5 years, I again drifted into another fornication. The fact is that my main business is a great guide to many businesses - I have had dozens of different clients, from construction companies to sex shops. We sometimes find any goods in different parts of the world for our clients, conclude foreign trade contracts for them, deliver goods to the country, produce customs clearance and certify.
As you can imagine, we have seen the economics of many businesses, and we were constantly tempted to do something else. After analyzing the profitability, we saw that the biggest money is earned on women. That's how I became the exclusive distributor of two American cosmetics brands.
We bought goods in the USA, brought them, cleared customs and went to the Nevsky Berega exhibition. We built a creative crazy stand: we had a corner of California - a hip 1974 California T2 Volkswagen, beach umbrellas, sun loungers, an 80s surfer board, girls in T-shirts and appropriate music. Everyone liked the stand, both the owners of the exhibition and visitors, but it did not achieve its goal. The emphasis was on the show and the entertainment of the audience, not on the products we presented.
Then there were four more exhibitions in Moscow and St. Petersburg. Our mistake was choosing the wrong brand. We took a product of a high price category, high-quality a la natural, while at that time there were already about 100 hair brands on the market. Despite the fact that the consumer liked the products, the price was high, especially after the dollar exchange rate jumped. In order to raise the brand, you need to spend a lot of time, money and get used to the messy business of the beauty industry in Russia.
One of the most problematic moments is that you are forced to give the product for sale, and even if it is sold, it is very difficult to collect money from beauty salons and cosmetics stores - 90% of them keep records in squared notebooks.
Of the pluses, again, a lot of positive emotions from “money thrown away for entertainment”. I became to some extent my own for the participants in this closed business and now I provide them with services: that is, I have acquired new customers for my main business, and today they give me 50% of the turnover.
Summing up, advice - any business should first of all bring pleasure: from the process, from making a profit, from communicating with people, from experience. Ideally, if there are two of you - one partner should complement the other. I'm lucky I found one. Even if you have different interests and lifestyles, this is even good, but you must trust each other and share powers at the very beginning.
Remember, any monetary loss is an invaluable experience. take risks, try different areas.
I'm thinking now, maybe it's time to open a sex shop? There is experience in delivery: from Hastlera itself, they somehow carried a whole container of toys to a client in Novosibirsk (it's cold there in winter - people warm up).
el_marka
My brother was a pawn shop manager. Opened it on shares with two partners. One far from perfect day, these partners came to the pawnshop with the police and presented an order to conduct a survey on operational information about illegal activities at this address.
They took out everything that was in the pawnshop. Three boxes of gold and other valuables, security notes, director's work notes, computers with accounting, all documents, a video recorder that filmed what was happening. 19 sheets of protocol. The next day, the police handed over the seized valuables to the mentioned partners. They "lost" these values.
As a result of the audit, a decision was made to refuse to initiate criminal proceedings against the brother due to the absence of corpus delicti. With regard to police officers, the case has already been dismissed three times for lack of corpus delicti.
The “partners” have not been prosecuted because the police do not see any evidence of their participation in the crime.
epic_slowpoke
All my attempts have always been broken by a lack of traffic (both Internet and live). For example, once we bought things from China and let's sell them. Since there was no money to rent a point, they sold it on the Internet.
It sold poorly. Few people visited the site and yf ads on Avito. Somehow, in two months they managed to recapture the money and even earn 2,000. After that, everything was turned off and they did not do it again.
The rest of my projects suffered the same fate. It is not enough to do something good - you need to tell about it to the widest possible circle stakeholders, but it is really difficult and very expensive.
mari_v_polnoch
Incorrect calculations: the starting amount was 1.5 times higher, since a bunch of nuances were not taken into account when purchasing and paying rent. They also miscalculated the payback period. In general, working capital ran out very quickly and I had to take out a loan. Interest on credit funds was crazy, because the company was new and with low turnover. It ended with the fact that we barely paid off the debt, sold everything that was possible and we are learning math so that next time we don’t trust the numbers in everyone’s business plans.
saintjohnny
There was the first unsuccessful experience, it was the purchase of an allegedly working business. And since this business was the first, there was no experience. Therefore, we bought a deliberately unprofitable business and flew by.
Most main advice, it is never to buy "profitable" businesses, or to buy only physical assets (real estate, equipment, goods) and not pay for an "idea", "passing place", "special dealer agreement", etc.
I worked for several years at the end of the last century (mid-90s) in a small private company that tried to develop and produce mini-automatic telephone exchanges in Moscow. Then it was a novelty, every businessman or entrepreneur wanted his own ATSku, the Soviet ones were condo and huge, and the imported ones were beautiful and expensive.
We (I was in the technical team there - the developer of several blocks) made a mini-ATS, and certified it in the Ministry of Communications (LONIIS - whoever knows in the know) and successfully sold it for more or less a couple of years. We managed to manufacture and sell several hundred pieces with a capacity of 20 to 200 numbers. Our price was very competitive, if not dumping - 4-6 times less per number than all kinds of Siemens and domestic "quanta" - domestic manufacturers with small-capacity automatic telephone exchanges were generally strained.
But then it crashed. Panasonic and LG broke into our market with the inexorable force - those who already led a conscious life in those years remember the most aggressive advertising campaign- "Panasonic-san" and other narrow-eyed commercials that were played on TV around the clock in every commercial break.
Then we learned what real dumping is. The interventionists lowered the price of their ATS for sales on the Russian market by 8-10 times from the selling prices of the same models in Europe and America. The monsters could afford to use the profits in other countries to sponsor the capture of the market by another one.
We "grunt our hearts" lowered the price of our mini-ATS to the minimum survival rate of the company. It turned out only 20-30% cheaper than Panasonic. But this did not help - any buyer would prefer to buy, roughly speaking, for 100 thousand rubles a device with the Panasonic logo instead of an unknown domestic manufacturer for 80 thousand.
After a year and a half of such existence, the company safely fell into poverty and self-liquidated. The interventionists, having captured the market and finally ruined domestic producers (large ones in the first place, we fell under the guise), began to slowly raise prices. Now the price of their ATS per telephone number is about 10-15 times higher (in dollars) than it was at the time of the intervention. Such a classic seizure of the market by dumping, right from the textbook. No bribery is also clearly not done.
And how, tell me, could you survive in such a situation?
I went bankrupt for the first time when, after the collapse of the USSR, I built a business using Japanese technology, an ear on clay feet, without money on a commodity loan, and on my reputation. The accountant made a tax mistake, and I was so busy growing the company that I didn't keep track.
The second time went broke when a lot construction works I did it for the budget on credit, and in 1998 the crisis began, the ruble depreciated greatly, I bought materials for foreign currency - I went bankrupt.
We did a technological scientific startup. They took a state grant for several million, opened a laboratory, went to conferences. The team included a human generator who started and steered it all, a couple of human scientists, a master with hands, a couple of sales people with connections, a couple of people on the hook. Everything you need for this kind of business.
The matter ended with the fact that the man-generator began to slowly raise his salary, and there was not enough money for the rest. The people on the hook left, then only one scientist remained, the salesman began to earn extra money on the hook, the master with his hands found another job, and the generator received more and more.
The grant money ran out, no result was achieved, but the generator repaired itself.
father_gorry
My three in the piggy bank
1. Web studio in the early 2000s in Novosibirsk. At first, everything went fine, almost every office building on Krasny Prospekt had our client. The prices are below average, its chic engine ... it was he who, apparently, ruined us. It became so perfect that we even stopped fighting for every revision on top of the TK, because it was easy and natural to make them. And clients suddenly began to want sites on common, then still buggy engines - PHPNuke, Mamba, Drupal, etc. All in all, regular customers began to fall off. Then, of course, they cursed, but did not return. The new ones were also wary of self-written technologies. I was faced with a choice - either move to a lower level and earn money, or change activities. Chose the second.
2. Whistles (Irish flutes). We studied the demand - it was. I set up production, distributed samples to familiar musicians - everyone was delighted with both the sound and the cost. The partner sent a few pieces to unknown people from an authoritative Internet hangout for Celtic music. And the local guys scolded the flute to smithereens. Verdict: "does not play." Without any construct and details - just "we don't like it". Maybe they just didn’t know how to play or were distinguished by aversion to everything Russian, but there were no other ways in the niche market and the project had to be closed. The moral is that you should be in contact with the focus group that represents effective demand, and work only for them.
3. Indestructible copter. A drone with a camera and other body kit, the same as the others, only it cannot be destroyed in an accident - even against stones, even into water, even against stones into water. Huge money savings and risk reduction. Here I don’t understand at all what’s the matter - but the project did not take off. Among the half-dozen focus groups that have been run, no one has so far been able to elicit interest. While I do not draw conclusions, the project froze, but did not quit.
alexbomboom
In short, I first bought the goods, then I just started to think about how and to whom I would sell it. The first injection was relatively small, about 200,000 rubles. Not to say that he went bankrupt, but he stuffed a little cones.
Time number. Gaming computer club. They took out a loan, agreed to rent a room, made some kind of repair, and made furniture with their own hands. We bought bulk computers, assembled them ourselves, set them up, installed games. Agreed with a local provider on a dedicated Internet line. They made a sign. And away we go... At first we worked with the partner ourselves day after day, then we could afford to hire admins. Raised their game servers, StarCraft, Diablo, LineAge, Contra. And storage servers with content. We signed an agreement with the provider and, under a sublicense, began to connect the residents of the house to the Internet. Joined the Russian eSports League. No one in 2001 could have imagined that high speed internet will come to every apartment and local servers and clubs will become practically useless to anyone. I left the business, my partner gave me my share in iron, which I sold myself. By the way, he is still doing the same thing, but the exhaust is only enough to cover expenses.
Number two. The three of us gathered for a glass of tea, two 1C nicknames and I, like a techie. And they decided to stir up an unprecedented business in our wilderness, a firm for integrated automation and service to businesses. There were no special problems, everyone had an accumulated customer base, certificates and other dregs. It was a blessed year 2005. They rented an office, hired a secretary. We attended to agreements with software companies, organized iron supply channels. We started to work. Things went smoothly: by 2007, the firm had more than a dozen 1C programmers, 6 technicians, a couple of secretaries and an office manager. We even set up our own training and certification assistance. There were more than three dozen enterprises on service.
But then came 2008. Enterprises began to massively jump off contracts, switching to pay-by-call. We worked efficiently, so by inertia everything continued to work without maintenance and did not break. Contracts for ITS were not renegotiated. Procurement of new hardware and software has ceased. People had to be reduced, we could not provide all the staff with work and, accordingly, pay. Then the rattling of one of the partners surfaced, who let fatty orders past the company into his pocket. Swearing and parting finally finished off the firm. Everyone again fled to the sides with their own clients.
Personal experience: a bank with working capital went bust. That's it, end of story. What places need to be strengthened so as not to be knocked down?
zorin_ivan_1982
Tried to start a software development business. It didn't grow. The reason is that I had to create my own software and sell it, and I tried to develop custom software. It doesn't fly.
Yuri Bystrov
They engaged in the production of polystyrene, or rather, they bought equipment and supposedly production technology. Before buying the equipment, we did a market analysis, identified a steady demand for products, purchased equipment, launched advertising, certified a trial batch of products ... but foam plastic of the proper quality did not go into serial production.
The equipment manufacturer merged, shrugging, like it’s like that for you, for others everything works out (in fact, it was not so). As a result, the business, with all the investments in raw materials, in staff training, in the cost of premises, and in the salaries of staff, went down.
cat_shred
Moscow and the region, in chronological order. All examples are after 2005.
1) Pawnshop in the market. After the market closed, the pawnshop also closed “automatically”. They were no longer able to “raise” the business from scratch in a new place.
2) A company selling paint and varnish products. At the height of the season, the company and the management were accused of selling acetone to drug producers, the warehouse was sealed for this case and the computer network was confiscated. A month later, the charges were dropped due to insufficiency, the warehouse and computers were returned. But the season was lost, the firm never recovered.
3) Firm for small wholesale trade in beer. As retailers were forced out by chains, the client base narrowed (it is easier for chains to bend the factory directly). After a period of slow fading, the business was closed, the director left for another area.
4) Pizzeria cheese factory. As milk production declined in the Moscow region, problems began with raw materials (to drive tanks from Krasnodar - not the same volumes).
5) Owner successful business decided to invest free money in the purchase of a restaurant. There was no personal experience and ideas, just maintaining quality and cleanliness in Moscow is not enough. For a while, the business worked by inertia from the old team, but eventually died out.
6) Brokerage firm. After the sudden death of the director, there was no worthy replacement. When all the money was spent, the company closed.
7) Construction company, finishing of apartments and offices. After the license was revoked, the bank's working capital "hung". The business managed to be kept, compensating for the losses by selling the owner's personal apartment and car.
In the early 1990s, he transported products (not to St. Petersburg) for small-scale wholesale trade and chose the wrong storage warehouse. Chased for cheapness and chose a warehouse far away. It didn't make sense for my customers, the food stalls, to come to me because of the discount I could give due to the cheapness of renting a warehouse. It was necessary to choose a warehouse on a promoted wholesale base.
I also noticed that all initial calculations in a new business (we are talking about a small business, where calculations are often done on the knee) can be safely doubled to get closer to the real figure. If the business scheme has already been tested, then the calculations are more or less accurate. It is very useful at the beginning of your “business career” to tune in to hard labour and permanent savings, instead of the expected explosive growth in consumption.
pasha_1980l
A financial advisory firm. The owner organized it at the very end of the 90s and very successfully caught the wave of economic recovery, when this market in 2000-2008. grew at a tremendous pace, essentially created from scratch.
As soon as the first money went in 2000-2001. he immediately pulled away from current affairs and all the time dreamed of finding a good manager who would do everything for him, as well as salespeople who would promote the business. And he himself will be engaged in the type of "strategy".
As a result, what happened was supposed to happen. Salesmen and managers were of two types: either unskilled or smart. The smart ones very quickly realized that it was much more profitable to open their own company, which they did, taking away customers.
At the same time, on the general wave of the market upturn, the company inertially existed (stagnated) until the beginning of 2009, when a decrease in the number of orders led to salary delays, since the working capital was also withdrawn by this owner and there were absolutely no reserves. And these delays also stimulated the remnants of still loyal employees to seek their fortune on the side, taking with them the remnants of customers.
yra22yra
My friend has such a story, though not yet finished, while he is fighting: he created small business, things went well. Signed good contracts and urgent expansion was required. He invested in equipment, in the supply of raw materials, and then bam - there is not enough electricity capacity. A trifle question, I wrote an application for an increase in power in IDGCs by 630 kVA instead of the existing 160 kVA and, having waited for approval from there and new technical conditions, I began to read them with interest.
Having read up to the line 6,400,000 rubles (six million four hundred thousand rubles!) For 630 kVA, I threw out this piece of paper and is now looking for workarounds where you can connect without having any dealings with this unworthy organization. Udmurtia, Izhevsk, if anything.
alhambra13
My first business was in the 90s: I borrowed money and bought multi-colored harvester jackets in Krasnodar in the amount of 20 pieces for 2500 rubles. I gave the brothers a few pieces, they sold them to friends, earned 1,500 rubles from each jacket. Then he gave back the borrowed money and bought a few more jackets from the profit, sold it again, then, when the markets appeared, he rented a point in the market and connected all the brothers again.
We are prem in life together: if someone has an option to earn money, then he will definitely pull up the rest.
There should not be any friends and acquaintances in business, they are needed for buzz and pastime, and for business only family. My friends did not follow my path and started a business with acquaintances. As a result, they quarreled and barely covered their debts.
carbophos
Design and installation departments are often dumped from the multidisciplinary parent organization as a whole team.
There was a wonderful story when the first card turnstiles were introduced in the Moscow metro. After the delivery of the project, one of the directors with all the “metro builders” dumped from the contractor company and sat down on a contract for operation and support new system. For a circle, this was much more money than the project itself, and a new successful integrator grew up on them. And in many ways the same cash flow was not enough for the original integrator to survive the crisis of 1998;
The moral of the story is different. Firstly, the once great integrator had a mess with cash flow. The loss of one reliable payer therefore became critical, and not just a shamefully lost profit.
Secondly, the management simply did not realize the importance of the contract for support (and the clever director of the direction, of course, did not enlighten on this topic) - it lived mainly in the paradigm of selling projects as such. And the moral here is that a service is the best product in terms of cost, and value-added generators are highly mobile.
Thirdly, of course, the same “partner” factor, which is also the factor of a cunning hired top.
Anton Bogatyrev
There are such special people: arbitration managers and auditors are called. We can spend days and nights telling stories about a broken business. In general, there are not so many reasons:
1. Gross marketing mistakes, underestimation of the competitive environment and consumer properties of a product or service.
2. Debt load, both financial and commodity.
3. Underfunding - that is, just a shortage working capital caused by incorrect financial planning(valid for point 2 as well).
4. Negative balance sheet structure - accounts payable overtakes receivables, after which a cash gap, non-payments and bankruptcy inevitably follow. The reason for this is the non-use of accounting, internal control and analysis mechanisms directly prescribed in the laws.
5. Lack of risk management. Gross mistakes and negligence in the conduct of business and paperwork, gross neglect of all types of security, from fire to economic.
6. Corporate theft.
7. Corporate conflict.
8. External fraud, theft, robbery, raiding and other criminal schemes for the forced withdrawal of assets, "forced" mergers and acquisitions.
9. Administrative pressure and corruption burden. At the same time, it must be said that the last point is relevant only for over-margin markets. Corruption exists only where there are superprofits, that is, now it happens, but in a very narrow segment.
All the stories of our oppositionists about corruption are greatly exaggerated. By the way, the criminal component is now rapidly decreasing, it is almost always based on the participation of internal agents - partners of the businessmen themselves, or, alternatively, hired managers and leaders who have decided to deceive partners / owners a little.
In short, the main causes of the collapse are the cash gap and the subsequent default and bankruptcy. But their reasons are, first of all, the lack of planning, analysis, risk management and internal control, and, well, due diligence in doing business and paperwork.
If anyone wants to listen in more detail, then my colleagues and I give lectures at the St. Petersburg RS ISAS - the revision school of the Institute for the Preservation of Shareholder Property. For one thing, I highly recommend the multi-volume work of our institute “Register of Corporate Fraud”, which analyzes in detail by situation all the schemes we have identified over a third of a century.
silverlj
Several times I tried to launch non-standard products for the Russian market in the hope that the absence of competitors would bring fabulous profits - marketing audit, subscription services for HR functionality, and some others.
Almost everything went down the drain, bringing me only losses for advertising. Only one direction quickly shot, which after a couple of years became widely known, and now feeds entire companies of different bastards who stole my idea.
I can advise the following - if you have opened some kind of profitable direction, do not give mass advertising, and even more so shove your vanity away, send journalists to the stump who will offer to write an article about you. Keep everything under wraps.
If your product is really good and exclusive, only the end consumer should know about it, but not a bunch of people who want to quickly get rich on the same one.
Of course, this applies primarily to all kinds of consulting, which is easy to organize for almost any entrepreneur with minimal capital.
prioskolje
1. When renting a room, think about whether the landlord will be tempted by your business and turn you off at some point when everything is going well in order to earn extra money yourself. It happened to me with the production of cabinet furniture, when six months later I had to look for a new premises, the rent of which subsequently ate up all the small incomes.
2. A classic mistake - bringing your second business ( wholesale wallpaper on Russian markets from a warehouse in Ivanovo) to about zero and a small plus, I didn’t pull just my own residence in Moscow. I did not have a part-time job that was convenient for combining with business.
In 2005, he opened a point of sale for men's shirts, socks, underpants and all sorts of crap. Then another one. Then he handed over the second one to print photos, since the clothes didn’t go for something.
As a result, by the summer of 2008, he was driven into the red and closed both points.
I consider the reason for the closure to be the lack of my attention to business, caused by the fact that I myself worked at that time. It was necessary to delve better, and seriously engage in one thing, without spraying.
dr_denim_spb
My wife and I have a small business in common - a veterinary clinic in St. Petersburg. They started not so long ago, but so far they seem to have made one important mistake - they hired too many staff for direct veterinary work, and they themselves took up other work - getting the business on its feet (fire, SES, labor protection, Rospotrebnadzor, Tax, accounting, cash documents, licensing, advertising, reporting, and so on).
When three months passed, the mistake was realized and half of the staff was fired, leaving only the most intelligent. Themselves also stood "to the machine."
On the other hand, it may not have been a mistake - we won these first three months to set up the entire system from scratch to working condition. If we would immediately start working ourselves, we would save on staff, but I feel that the mess in the documents and all sorts of permits would still be the same - there would be no time to fix everything. A mess in documents and accounting often leads to large costs and problems with government agencies.
cergey_p
Pskov region, peasant farming, apiary. Two years in a row low-yielding honey.
juvisuel
1. Trying to build a video design studio with a cool level of work. They did not take into account the fact that delicious orders were distributed among their own, there were no connections to get good projects. They were crushed by crumbs. It was Belarus. They were afraid to raise prices so as not to scare away customers, so there was never a free turnover. For seven years they tried to put everything on their feet, lost the team four times. In 2008, the crisis finally knocked down.
2. The story is not over yet - three years ago I became very interested in creating unusual business cards. For me then it was as strange as it would be strange for a builder of skyscrapers to start sculpting pots. But it really drew me in. Decided it was a hobby. In general, there were no calculations, plans, just did as it was done. Invested in this money from the main work. I bought equipment, took assistants, people admired the work.
Again I fell for the same rake - I was afraid to raise prices, so after doing a bunch of just awesome work, I ended up in the minuses. As a result, the prices had to be raised fivefold. Old customers were scared for a few months. There was nothing to feed the team, they let them go on vacation. Now customers have started knocking at the new prices. It would seem that this is it, but I can not dare to start again. It seems that it didn’t burn out, but it’s as if it came from the war, and you don’t want to go back.
alex_kozlofsky
The story happened to my friends. small network stores with discs (dvd, audio, games) worked and expanded on credit money. At its peak, there were 5 stores in two cities. Everything quickly ended during the crisis of 2008, when sales fell sharply and there was nothing to pay salaries to sellers and loans. Main mistake was that there was no financial cushion in case of a drawdown in income. All the money earned was immediately spent, so at the first drop in sales, the business went bankrupt almost instantly.
Well, some simple advice:
1. Do not do business with friends and relatives.
2. Write a business plan and follow it.
3. All agreements between partners must be recorded in writing.
4. If you can do without partners, then do without them.
5. Cut to a minimum spending on yourself.
6. Keep accurate financial records.
I had an IT firm with 15 employees. I appointed a manager, and he destroyed everything, all the clients left. Curtain.
We tried a manufacturing business with three partners, but it never “wound up”. We had a guaranteed sales, but we were never able to arrange the supply of materials, the main of them was in short supply, as well as a suitable premises.
Conclusions: do not start investing until a complete business chain is built: suppliers, customers, premises, equipment are found. And it’s probably better to start alone, so as not to rely on the others. As an option: choose the main partner who makes decisions and responsible for the entire enterprise.
TekBoris
At the dawn of the Internet, there was a chic business where my buddies and I, in all seriousness, raised 30,000 bucks a year each. They laundered online casino, poker and booker bonuses. They just registered new accounts and scrolled through the bonus loot. It was a bit of a chore to do it, but the returns were fabulous. Especially in the early 2000s, when a good salary in Moscow was 500 dollars, and laundering bonuses brought 2-3 thousand.
It all ended up being large firms with the help of bonuses, they increased the client base and bonuses were practically canceled. But we warmed our hands well on such an attraction of generosity, I personally earned myself an apartment in Moscow in 4 years. And notice all this in between times, without interrupting your studies and the main place of work.
father_gorry
Friends projects.
1. Producing beginner musicians, label, CD publishing house. Started in 2004, burned out in about 2007 due to piracy. Sales were down, but scrobbler last.fm plays were up. Moral - protect the content.
2. Tailoring of curtains, 1998-2008 approx. The firm failed to grow into large enterprise, because the founders systematically hired managers who scammed them, hacked them and scored on customers. Moral - you can not save on the salary of employees.
3. Intelligent algorithm for composing and arranging music. At the time, this was a huge breakthrough. The founder and author of the technology was not only the smartest person, but also a talented organizer - he revived the company several times and produced a product of excellent quality and capabilities. Modern sequencers regularly implement bits and pieces of the features that were in the Onyx Arranger, and musicians willingly use them. The reason for the failure is not entirely clear to me. Perhaps it's a combination of a not very user-friendly interface and a focus on the machine, and not on the user, but this is unlikely, since programs with much less convenience and more complexity are now in use.
Not broke, but almost broke:
1. When he transferred the brigades to time wages instead of piecework. People just stupidly stopped working. Managed to get everything back.
2. Underestimation of costs. Little things can add up to so many costs that they completely gobble up profits. Constant monitoring of overhead costs is required. If you can not buy a chair for an employee - do not buy. Be sure to have a budget for the project and constantly monitor its implementation. If this is not done, for some reason it starts with contractors and employees: but you still need to buy - pay.
3. I ran into a tax - barely fought back. Chemistry with taxes. If I hadn’t chemized, I would have gone bankrupt right away - stupidly within a month.
alexvlad7
His own: a kid flew in from a person with whom he periodically collaborated and did not communicate idle - he seemed to use me unnoticed by the bulk of those around him, then he completely switched to drugs ... a kid - and disappeared for six months. And less than a month later, a government agency arrived with searches and seizures ... More than six months of nerves. It is very difficult to “get up” from scratch and without initial capital in some topics, and in this and so on, it is also a matter of reputation.
From a former partner: at the beginning of the 2000s, employees of a state agency “squeezed” the club from two partners in favor of a third.
Christmas tree
No matter how many businesses I started “with partners”, garbage always came out, and it doesn’t matter if there was a profit or not. Didn't live for more than a couple of years. The last couple solo - all the way through.
The same badass. As soon as there are partners, business is kirdyk. To a size in which one person can not cope until he has grown.
In the 90s, three very chic different businesses opened and closed one by one. The reason is the deception of companions. Simple deception. There were very few means of control then. Invented, developed and implemented a specific network for the distribution of any services. People believed, but a year later, in almost one month, they stole everything, everyone they trusted. All capital has always been mine.
PS. This is the twenty-ninth article in the Reflections on Doing Business in Russia series. Previous articles in the series can be found here.
Real examples of success and failure of real business sharks will help aspiring entrepreneurs to choose the right strategy and option for developing their business.
If you went to business school, you probably looked at examples of doing business in large companies. Real stories help students better understand successful and unsuccessful strategies. There are classic examples, including Apple's decision to change its name and Ryanair's victory over more powerful competitors.
1. Why Apple changed its name
Example: Apple Inc.
The main conclusion: sometimes it is impossible to defeat a competitor head-on without changing yourself.
What happened: Apple changed its name from Apple Computers to Apple Inc. in 2007. The move reflected a fundamental shift in priorities from iconic Macs to groundbreaking iPod and iPhone electronics, which now account for more than half of the US company's profits. The transformation of the company took place on time and extremely successfully.
2. How Lululemon maintained its reputation as a cult company
Example: management, culture and changes in Lululemon.
The main conclusion: instead of enmity, find an opportunity to unite the founders of the company.
What Happened: In mid-2008, the company's management passed from founder Denis Wilson to new president Christina Day. At the same time, Wilson expressed concern about the threat to tradition and the value of the firm in connection with the new leadership. Meanwhile, Day has inherited a host of problems, including poor results for chain cafes, a failed real estate strategy, and poor communication between company divisions. Using her experience and a new strategy, she did everything to expand the presence of Starbucks in the world. Moreover, she convinced the founders of the company to take management courses at Harvard and Stanford in order to better understand the need for change. For 4 years, the value of the company has grown from $350 million to $10.59 billion.
3. How Cisco Became Competitive Again
Example: Cisco Systems - human capital strategy development.
Key takeaway: In-house nurtured talent can help you get through tough times.
What happened: Cisco grew extremely fast during the hi-tech bubble, buying 70 firms during this time and doubling the number of employees of the corporation. After the bubble burst, Cisco had to change its development strategy and, instead of growing rapidly, focus on nurturing its own talents. For the most promising specialists the company created Cisco University. Within three years, the situation in the corporation changed dramatically, which allowed it to once again become a market leader.
4. How USA Today became profitable again
Case Study: Developing a New Strategy at USA Today
Key takeaway: Sometimes old leaders can't successfully lead a company in a new environment.
What Happened: When the paper's circulation plummeted, USA Today President Tom Curly decided to integrate the various divisions of the company, including websites, TV channels, and printed editions, and make better use of news content. At the same time, many of the old leaders in his team opposed the new strategy. As a result, Curly had to replace five of the seven senior managers.
5. How Dreyer survived the disaster
Case Study: Dreyer Ice Cream Shop
Key takeaway: Don't try to mislead employees.
What happened: Numerous problems, including high raw material costs, falling sales, and the end of a contract relationship with Ben & Jerry's, forced the company to undertake an urgent restructuring. During the meeting, managers personally met with each employee and discussed the upcoming action plan, as well as carefully listened to their advice. Strategy of trust, openness and belief in own employees helped the company become profitable again within two years.
6. How Microsoft decided to compete with Google
Example: Microsoft search engine
The main conclusion: there are no miracle methods, it is necessary to involve the entire company and all its resources.
What happened: 10 years after its founding, Google was able to become the leading search engine on the Internet. Microsoft was in third place, behind even Yahoo!. But the company mobilized and decided to radically change the situation by creating in 2009 the search engine Bing!, which was able to seriously challenge the market leader.
7. How Ryanair Beat Bigger Competitors
Example: Ryanair - the fight for the skies of Europe
Key takeaway: A resource-constrained company can mobilize and beat richer competitors.
What happened: In 1986, the two Ryan brothers announced the creation of a new company that would not be afraid to challenge industry giants such as British Airways and Aer Lingus on the London-Dublin route. By offering tickets at record low prices, Ryanair was able to attract passengers who used to travel by train or ferry.
8. Ethical issues are perceived differently in the world
Example: Merck Sharp & Dohme Argentina, Inc.
Key takeaway: Ethical decisions are not always easy.
What happened: The new president of Merck's Argentine subsidiary was tasked with making the company modern and professional. After a while, he had an ethical dilemma. One of the candidates for a prestigious place in the trainee program was the son of a high-ranking official in the Argentine Ministry of Health. The president was made clear that if the student was taken into the company, then Merck drugs would be included in the state program distribution, which will certainly lead to an increase in sales. It was a real conflict between Mosker's desire to reform the company and the reality of doing business in a developing country.
9 Why Cirque du Soleil Decided to Forgo Comfort
Example: Cirque du Soleil – new building leads to new partnership
Key takeaway: Sometimes you have to let go of old growth partners.
What Happened: Cirque du Soleil had a mutually beneficial relationship with the MGM Mirage Casino. The casino has made significant investments in a purpose-built building for the unique circus performances. But emerging opportunities in Asia and the Middle East have prompted Cirque du Soleil President Daniel Lamarr to begin negotiations for new partnerships.
10 Why Airborne Express Lost The Competition
Example: Airborne Express
Key takeaway: Specialization can provide an advantage, but only for a short time.
What Happened: Airborne Express, a small competitor to FedEx and UPS, was able to achieve significant results despite its size. The success is due to the long strike of UPS employees, which Airborne Express skillfully took advantage of. The new company decided to become highly specialized, offering services at low prices only in large cities. However, this strategy was not successful, and the company was eventually acquired by DHL.
11. How Bad Communication Nearly Killed a Manager
Example: Eric Peterson
Key takeaway: sometimes it is difficult to overcome bureaucratic barriers
What Happened: A recent business school graduate was appointed director of a regional subsidiary of a major telephone company in the late 1980s. The Peterson-led firm began a massive mobile service development effort in Vermont and New Hampshire. However new project was behind schedule, and Peterson suggested that management reconsider the dates. But he was unable to contact his superiors quickly and in a timely manner, which eventually led to numerous problems.
12. How William Avery became a legend
Example: Crown Cork & Seal in 1989
Key Takeaway: Don’t Be Afraid to Think About Yourself
What Happened: William Avery became president of Crown in 1989, as new competitors entered the market and the metal division became increasingly unprofitable. The first thing Avery did was to start developing a long-term development strategy for the company, which included buying competitors and mastering the production of new packages. Success was not long in coming: today the company produces one in five cans/bottles for soft drinks worldwide.
13. Why Cisco chose to play big
Case Study: New Cisco Acquisitions
Key takeaway: Companies need different things at different times
What happened: Around 2006, Cisco decided to abandon its strategy of acquiring small, innovative startups, focusing only on rare acquisitions of big players. The old strategy was optimal against the backdrop of the rapid development of the Internet. But the situation on the market has changed, which means that new business models have become necessary.
14. How Lincoln Electric Succeeded with an Unusual Strategy
Example: Lincoln Electric Co.
Key Takeaway: Keep It Simple
What Happened: This is one of the classic examples of American business. The largest manufacturer of arc welding products since 1975 has not been unionized and does not offer additional bonuses employees. At the same time, Lincoln Electric guarantees every employee a lifetime job and the opportunity to become a shareholder of the company. The amount of salary directly depends on the level of profit of the company. Such unusual methods still do not prevent Lincoln Electric from remaining a competitive and profitable company. Lincoln's strategy makes a strong case for the importance of motivating employees.
15. Why Nucor Steel Decided to Take a Risk
Example: Nucor at a crossroads
Key Takeaway: Investment determines new project size
What Happened: In 1986, Nucor president Kenes Iverson faced a tough decision whether or not to accept a new steel casting technology. The technology would allow the company to gain many benefits, including significant cost savings. But its implementation requires significant investments, and the technology has not yet been approved by regulatory authorities. In the end, Nucor decided to build the first plant in 1989 using the new technology. Since then, the company has remained the largest steelmaker in the United States.
Durability could be more important quality for your success than luck. One thing that all of these billionaires have in common is the ability to bounce back from blows.
It is common knowledge that most entrepreneurs fail at some point. Sometimes it is a colossal failure that leads to the closure of a startup. Other times, it's just a slight detour that leads to a great story. Regardless of the severity of failure, many successful businessmen had as many losses as victories. And it has made every entrepreneur a little wiser and stronger.
This does not mean that this pill is easy to swallow. Failure is always hard. But if it's any consolation, even the most successful, powerful, and wealthy people in the US have also experienced failure at some point. Here's a look at how the 25 richest Americans experienced failure.
Note: We excluded the Koch brothers and the Walton and Mars families from the top 25 because they inherited their fortunes.
1. Bill Gates
Have you ever heard of Traf-O-Data? Probably not, but it's the name of Bill Gates' first company. The Traf-O-Data was a device that never worked, and Gates was never able to sell it to anyone. Microsoft co-founder Paul Allen said: "Although Traf-O-Data was not a resounding success, it was a milestone in the preparation of the first Microsoft product, which we made a couple of years later."
Gates' "worth" today is a staggering $77.5 billion, so he must have learned a valuable lesson from that first failure.
2. Warren Buffett
Even the great Warren Buffett has experienced a few fiascos in his storied career. In 1951, Buffett bought a Sinclair Texaco gas station and failed to turn a profit. But by 1962 Buffett was already a millionaire. And even then he learned a few more lessons.
In 1962, Buffett began buying shares in Berkshire Hathaway's textile business, but then they began to fall. Buffett made a deal with Seabury CEO Stanton to sell back his shares. When the paperwork was delivered to Buffett for signing, it turned out that Stanton had changed the terms and made an offer 1/8 point lower. Buffett admitted later that this angered him so much that instead of selling, he bought more shares to take control of the company and fire Stanton. To make matters worse, Buffett continued to support the failed textile business(former Berkshire Hathaway's historic core) for another 20 years before "powering down". Today, he calls this decision his “200 billion mistake.”
3. Larry Ellison
Larry Ellison (along with his former boss, Bob Miner) founded Oracle in 1977. By 1980, Oracle had not yet achieved much success, forcing Ellison to mortgage his house to secure a line of credit.
Allison never gave up. As the company focused on the SQL database programming language, it changed the business software standards that dominated the market in the 1980s. However, Oracle was once again on the brink of disaster in 1990 because software contained errors, and some delivered orders were not paid. Ellison responded by laying off a lot of employees and rewarding salespeople who made real money. In 1995, Oracle earned $2.5 billion in revenue.
In 1999, when he tried to beat Bill Gates with his Network Computer (NC), Ellison suffered another setback. NCs might work today, but in 1999 they were too limited and expensive for consumers who could only go online and store documents, videos, etc. using an Oracle database, much like Google's Chromebook today.
4. Sheldon Adelson
An entrepreneur by nature, Sheldon Adelson began his career at the age of 12 selling newspapers and toiletries on the streets. After serving in the military, he became a mortgage broker and investment advisor. At the age of 38, Adelson was worth $5 million. Stock market crashes and unwise investments caused him to lose his fortune not once, but twice.
Eventually, his love for computers led him to create COMDEX in 1979. COMDEX, one of the largest computer shows in the world until 2003, was the start to Adelson's current fortune of $38 billion.
5. Michael Bloomberg
Michael Bloomberg was fired from the investment bank Salomon Brothers. Bloomberg stated that he went on to start his own company because: “No one offered me a job, and I was probably too proud to look for one. And I said to myself, well, why not start your own company? Over the next three years, Bloomberg developed his company, which was focused on finance, data and media. The firing of the future mayor of New York from the bank may have been for the best.
Big success came to Bloomberg after Merrill Lynch purchased 20 of his terminals. Bloomberg stated, “For the first year, you don't think about problems. The second year is more difficult. In the third year, you see the light at the end of the tunnel."
6. Larry Page
In 1998, Larry Page co-founded a small search engine called Google, from the mathematical term "googol" which represents the number 1 followed by 100 zeros. While Google is one of the most dominant internet services and providers in the world today, it has also made enough mistakes. Do you remember Wave, SearchWiki and Jaiku? Page, who became CEO in 2001, believes Google "probably missed out on too many people," which explains why its social platforms never took off like Facebook.
Don't expect Paige to repeat this mistake again. .
7. Jeff Bezos
In 1994, Jeff Bezos left the comfortable life in New York and moved to Seattle to sell books online. In the early days of Amazon, various glitches arose. At first, the company was supposed to be called Cadabra, but it turned out that this word sounds very similar to Cadaver (“corpse”). Bezos described another huge mistake: “We suddenly found that customers could order a negative amount of books, and we owed them money. And I guess they were still waiting for us to send them the books!”
Over the years, Bezos has continued to make adjustments and take risks, and it has worked. Today Amazon is the world's largest network retail. This success hasn't saved Amazon from several flops, however. For example, bicycle courier delivery service Kozmo.com, question-and-answer site Askville, competitor Groupon LivingSocial, have all been less than successful ventures.
8. Sergey Brin
Google co-founder Sergey Brin once had a "brilliant" idea. He came up with a business that would allow people to order pizza by fax. Reality put everything in its place. It turned out that not far from each pizzeria and potential client had a fax, which created an unsolvable problem for his business.
9. Carl Icahn
Carl Icahn became famous as a corporate raider in the business world. Since buying a seat on the NYSE (New York Stock Exchange) in 1968, Icahn has made his fortune by taking over companies such as RJR Nabisco, Texaco, Marvel Comics, Revlon and Western Union.
Despite all his successes, Icahn experienced a number of setbacks, such as investing in TWA, which later went bankrupt. He also lost deals with companies such as Blockbuster, Time Warner and Motorola.
10. George Soros
George Soros, a Hungarian refugee who moved to New York in 1956, began his career as an arbitrage trader. He showed remarkable enthusiasm and talent as a short-term speculator, which led him to create one of the most profitable Soros hedge funds. fund management in 1970. In 1992, Soros became $1 billion richer in just one day when he bet against the pound on Black Wednesday. However, he continued to lose. $600 million was lost in 1994 after he misjudged the yen against the dollar. To his credit, Soros said, "I'm rich because I know when I'm wrong."
11. Mark Zuckerberg
In 2004, while Mark Zuckerberg and his team were trying to spin Facebook, Zuckerberg was also running a project known as Wirehog (a peer-to-peer (P2P) file sharing service that was connected to Facebook). The idea behind this service was to allow Facebook users to share music, documents, and more. It was great idea on paper, but Facebook has started getting lawsuits from copyright holders. Luckily, Wirehog didn't catch on and was put on hold in 2006.
Today, at 30, Mark Zuckerberg is worth $28.5 billion and is still learning from his mistakes: think of Facebook Lite, Facebook Gifts, Facebook Home and Poke.
12. Steve Ballmer
In 1980, Ballmer became the 30th Microsoft employee. Over the years, he has held numerous positions in the company, including the position of CEO from 2000 to 2014. How CEO Microsoft, Ballmer made a lot of mistakes. Some of his epic mistakes and failures: ridiculing the iPhone, the failed Windows Vista, spending billions fighting Google. He also played important role in the $500 million acquisition of Danger and Zune.
13. Len Blavatnik
Ukrainian-born businessman Leonard "The King" Blavatnik, owner of Access Industries, a holding company, made his fortune in oil and steel companies after the collapse of the Soviet Union. However, the king lost $1.2 billion after entering chemical industry. He borrowed money to buy Dutch manufacturer Basell in 2005 for $5 billion and then borrowed another $20 billion to buy Houston-based Lyondell. After the merger, Blavatnik was unable to repay the debt and declared bankruptcy. Fortunately for Blavatnik, the company soon managed to turn a profit and pay off the debt.
In 2011, Blavatnik acquired Warner Bros. Music for $3.3 billion because: "he likes how this will reflect on his social position."
14. Abigail Johnson
Abigail Johnson has been successful as president of the family business Fidelity Investments, where, by her own admission, she "does everything she can to make things right." Johnson is one of the richest and most powerful businesswomen in America despite some serious setbacks. For example, she lost two important clients, an experience she described as "extremely difficult and painful for me personally and for others."
15. Phil Knight
While studying at Stanford, Philip Knight wrote coursework about the shoe business. In 1962, he traveled to Japan and met the founder of Onitsuka Tiger Co, one of the oldest shoe companies in Japan. After returning home, he teamed up with Bill Bowerman of the University of Oregon to form Blue Ribbon Sports. Knight sold his first Tiger-branded sneakers straight from his green Plymouth Valiant on the roads throughout the Pacific Northwest. Sales soared and the company became Nike in 1978.
While the Air Jordan line was a great success, Nike neglected the growing interest in aerobics shoes in the late 1980s. Reebok took over this niche and Nike's sales fell 18%. In 1990, Knight responded with Nike Air, which restored Nike to its place as the leading footwear brand.
16. Michael Dell
Michael Dell founded Dell Computers in a dorm room at the University of Texas, Austin in 1984. By 1992, the 27-year-old entrepreneur became the youngest CEO to be included in the Forbes 500 list. Dell went on to become one of the world's largest sellers of personal computers.
Unfortunately, Dell also has a long list of failures in its attempts to make smartphones, tablets and MP3 players. The bulky Dell DJ could not compete with the iPod, the Dell Aero smartphone and the Dell Streak tablet failed. In 2013, Michael Dell bought back the shares in order to make his company private again and not depend on the opinion of shareholders.
17. Paul Allen
Paul Allen, worth $15 billion, is relatively wealthy thanks to his co-founding of Microsoft with Bill Gates. However, he missed a huge opportunity by selling his large stake in AOL cheaply in the early 1990s. Now they could be worth $40 billion.
18. Donald Bren
If you are the wealthiest real estate developer in the United States, you have definitely made it. After becoming the sole shareholder of Irvine Co in 1996, Bren controls "50,000 apartments, 40 million square feet of office space, 8 million square feet of retail space in Orange County, San Diego, Los Angeles and Silicon Valley" and is valued at $15.4 billion
Bren's career has been flawless, but his personal life has not. He was divorced three times and was involved in the process of paying alimony. Bren won in court, but continued to toss his dirty laundry to the public. However, Bren continues to make money despite a string of failed marriages and a negative public image.
19. Ronald Perelman
Ronald Perelman learned the basics of business from his father: how to acquire a company, reduce its debt by selling excess divisions, return the company to its original model, and then either own it or sell it. This strategy worked until he ran into a problem with Revlon. His investment company, MacAndrews & Forbes, failed to take Revlon private, resulting in a forfeit and conflict of interest.
20. Ann Cox Chambers
Ann Cox Chambers, ambassador to Belgium under Jimmy Carter, and her sister took over private media conglomerate Cox Enterprises after their father's departure. An heiress who continues to increase wealth, Chambers has also experienced a couple of setbacks. For example, a nearly $5 billion deal fell through between Cox Enterprises and Southwestern Bell. However, even more embarrassing is the fact that her papers often muddy the waters, giving her a not-so-good reputation.
21. Rupert Murdoch
He was born in Melbourne, Australia but considers the United States his home. Murdoch's media conglomerate is probably the largest in the world. It covers some of the top selling TV channels, movies, books and newspapers.
Murdoch is no stranger to failure, but he suffered a devastating blow after buying MySpace in 2005 for $580 million. Six years later, he was forced to sell the once-popular social media platform for just $35 million. Murdoch then simply wrote: "We screwed up completely."
22. Ray Dalio
Ray Dalio, "the king of the hedge fund industry", founded the world's largest hedge fund in his Manhattan apartment in 1975. While recent years have been bumpy, Dalio still has $150 billion in assets.
Dalio's failures lie in his inappropriate behavior. On New Year's Eve 1974, he got drunk and hit his boss. Around the same time, at the California Food and Grain Association's annual convention, he paid an exotic dancer to rip off her clothes in front of a crowd. After being fired for his antics, he still convinced some of his clients to hire him as a consultant and founded Bridgewater. He was twenty six years old.
23. Charles Ergen
In 1980, Charles Ergen was just an ordinary professional gambler, until he was banned from the casino, suspected of cheating. What was the next logical step? Start a business satellite television. After trading satellite dishes straight from a truck in the Denver area, Ergen and a partner finally founded EchoStar and secured a license and space on the satellite in 1992.
After that, he achieved incredible success with television. However, all attempts to develop the company into something more than a supplier of satellite television failed. Ergen acquired Blockbuster in 2011 in an attempt to build a video streaming service to compete with Netflix. This did not happen, and Ergen continues unsuccessful attempts by acquiring other companies, such as Sprint.
24. Harold Hamm
The story of Harold Hamm is amazing. The son of a sharecropper who never attended college, Hamm bought his first oil platform in 1971. For the next 15 years, he sat on this oil rig in Oklahoma. Things were going great in the 1970s, but things got much worse in the 1980s. Hamm nearly went bankrupt after 17 consecutive dry holes. However, Hamm worked on and his company Continental Resources generated $3.6 billion in revenue in 2013.
25. James Simons
You've probably never heard of James Simons, aka "The Quantum King". The former mathematician and codebreaker for the National Security Agency founded the Renaissance Technologies hedge fund in 1982. Since then, Simons and his company have been unstoppable. Renaissance Technologies is one of the most successful hedge funds, employing mathematicians from all over the world and using strategies of their own design.
This does not mean that Simons is perfect. He had losses with mortgage papers in 1997. Simons also helped Bernie Madoff raise money, but then he himself became suspicious, which ultimately led to an investigation into Madoff's activities (Madoff was sentenced to 150 years for organizing a pyramid scheme).
Of course, a good leader knows when to change course. Each of these successful people had to change course at some point. Some may have been a little late, but they were able to start over and fix everything. If you decide to start a company and achieve your dreams, don't forget to evaluate your resilience and constantly check the health of your business. If you need to change course, don't be afraid to. Perhaps this will allow you to become number 26 on this list!
Some entrepreneurs know how to find and promote ideas, earning millions on them. But there is another category of businessmen, to whom money is brought almost “on a silver platter”, but they still manage to miss their chance! We present you 5 unsuccessful business decisions that have become almost classics, on which companies managed to lose millions and even billions of dollars.
Perhaps one of the most famous examples in the field of show business is the refusal of Decca Records from a start-up bands The Beatles. Mike Smith, who is responsible for evaluating new talent at the company's London office, traveled to Liverpool to look for a new band. After listening, Dick Rowe decided that The Beatles would not suit their label, because, in his opinion, the time for guitar quartets had long passed, they were simply not interesting to anyone. In addition, The Beatles were already too similar to The Shadows, which was popular at that time (you know those?). But here EMI Records, adhering to a different opinion, signed a contract with the beginning group and did not fail - The Beatles became popular after the very first performance!
2. "Commercially unprofitable electric toy"
One day, an inventor came to William Orton, president of Western Union's telegraph division, and offered to buy a patent from him for $100,000. For the XIX century, this amount was simply unheard of! Naturally, William refused, calling the invention a "commercially unprofitable electric toy." But Alexander Bell did not get upset and organized his own company AT&T, which later became one of the most profitable in the business!
3. The New-York Times distributes subscriber PINs
The management of The New-York Times decided to cut paper costs. It was decided that bundles of newspapers would be packaged in so-called "backpacks", unnecessary office papers. As a result, press vendors in Worcester, Massachusetts, received a print run bearing the card numbers and pin codes of 240,000 New York Times subscribers!
4. New model Ford
Henry Ford made a revolution in his time, releasing a car with excellent performance and an affordable price for the average American. Over the next 15 years, the automotive industry developed rapidly, new manufacturing companies appeared that produced modern cars. The only exception was the Ford Motor Company, which continued to produce the Model T with the same characteristics and design. As a result, Henry Ford lost his 45% market share.
5 Schlitz vs Budweiser
40 years ago, Schlitz was the second most popular beer brand in America, second only to Budweiser. Robert Uichlein, CEO of the company, decided to take the lead by reducing the cost of ingredients and speeding up the fermentation process in order to brew more beer at a lower price. This technology initially brought him huge profits! And everything would be fine if the beer did not taste terrible and did not spoil, forming a disgusting-looking slime. This was followed by another unsuccessful decision - the company decided not to do anything. Bottom line: sales are close to zero, the company's reputation is almost at zero. The Schlitz company could not rise any more and was bought out by competitors from Stroh Brewery.