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Six epic business fails – and how they can make your business stronger

Six epic business fails – and how they can make your business stronger

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Multiple business owner and advisor Peter Dickinson picks out some monumental mistakes and the lessons we can learn from them

1. Apple copies Xerox and makes a fortune

A 4MB Macintosh Plus, complete with mouse. Photograph © Blake Patterson on Flickr

A 4MB Macintosh Plus, complete with mouse. Photograph © Blake Patterson on Flickr

In 1979 a young entrepreneur with a computer start up business made a trip to the Xerox research centre.
While he was there, Steve Jobs – boss of Apple – was shown Xerox’s personal computer, where the cursor on the screen was moved about by using a new device called a “mouse”.
Xerox didn’t do anything with its invention. But Jobs copied it to create the Macintosh. And Apple is now worth more than the entire global coffee industry.

What business owners can learn

✓ Always be alert for side products that could prove to be more profitable than your core business
✓ Don’t be afraid to “borrow” and improve other people’s ideas – within the law, of course…

2. Betamax loses to VHS

Gone and almost forgotten: The Sony Betamax video format. Photograph © Bettenburg on Wikipedia

Lost the fight: the Sony Betamax video format. Photograph © Bettenburg on Wikipedia

There was a time before iPlayer and Netflix when we had to tape TV on… well, tape. Remember video cassettes?
Sony came up with the Betamax format which it proudly unveiled to electronics manufacturers expecting them to back it as the industry standard.
But JVC went off and invented its own format, the VHS.
Betamax tape was slightly higher quality, but the cassettes and the machines to use them were a lot more expensive.
Sony kept Beta in house, while JVC licenced the VHS technology to any video recorder manufacturer that was interested. The result: more competition and lower prices.

VHS ended up trouncing Betamax, which limped off and died.

What business owners can learn

✓ Sometimes it’s better to share your discoveries like JVC than keep them secret like Sony
✓ And get your price right. People wanted affordable video machines, rather than expensive ones of a slightly higher quality

3. Jo Malone’s name nightmare

The Jo Loves range by Jo Malone

The Jo Loves range by Jo Malone

Fragrance maker Jo Malone launched a new luxury brand called Jo Loves.
They spent a small fortune on the intellectual property rights for the name – but hadn’t done a thorough internet search.
Jo told the BBC that another business called Jo Loves topped the Google results page – one which sold adult products…

What business owners can learn

✓ Do your research thoroughly before decided on a name or brand

4. Gerald Ratner disses his own business

Gerald Ratner. Photograph © EG Focus on Flickr

Gerald Ratner. Photograph © EG Focus on Flickr

This is perhaps Britain’s most infamous business fail.
In 1991 Gerald Ratner, chief executive of the jewellery retailer the Ratner Group, gave a speech to the Institute Of Directors.
He decided to throw in a couple of jokes. Big mistake.
One gag compared 99p Ratner earrings to M&S sandwiches which cost the same but would “last longer”. A second explained that a £4.99 sherry decanter was so cheap because it was “crap”.
Customers boycotted his shops – who wants to buy crap? – and a business he had spent 20 years building was in tatters.
It took him seven years to get back on his feet.

What business owners can learn

✓ Never talk down your own products or insult your customers
✓ And when something does go wrong, pick yourself up and start again

5. Microsoft re-invents the wheel

zune

Zune forgotten. Photograph © Bkwparadox on Wikipedia

Apple invented the iPod, which was a brilliant new way to consume music.
In response Microsoft cobbled together its own digital music player, the Zune. But its bulky size, brown colour and software problems meant it was considered a joke by most tech-savvy consumers.
Eventually Microsoft did perfect the Zune, but far too late to make an impact on Apple’s dominance.
Many tech observers think that Microsoft is repeating the mistake with its rival to the iPad, the Surface tablet. When they paid Oprah Winfrey to endorse it, she did so via Twitter – on an iPad…

What business owners can learn

✓ If your product or service is in a crowded marketplace make sure it as a USP and is better, faster, cheaper or more convenient than existing rivals
✓ And when something does go wrong, pick yourself up and start again

6. Coke changes its recipe

Not the real thing… ‘New’ Coke was quickly replaced by ‘Classic Coke’. Photograph © Mike Licht on Flickr

Not the real thing… ‘New’ Coke was quickly replaced by ‘Classic Coke’. Photograph © Mike Licht on Flickr

One of the best known brands on the planet, Coca-Cola was shifting millions of units – but rival Pepsi was gaining ground.
So bosses decided to tinker. They changed the recipe that had made Coke so popular, in order to make it taste more like Pepsi.
New Coke was launched in 1985. Cue a major backlash, with some traditionalists comparing the decision to trampling on the American flag.
Within weeks the new product was pulled and the old one reinstated under the name Coca-Cola Classic. That boosted sales and helped the drink overhaul Pepsi and regain its position as market leader.

What business owners can learn

✓ If you’ve created a well-loved product or service, think very carefully before changing it
✓ And if you do make a mistake, a swift apology and a quick U-turn can work wonders

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