4 Times Corporations Invested in the Exact Wrong Thing
Making decisions has to be one of my absolute least favorite things to do. That’s why I try to avoid it at all costs. Unless consequences are lurching above me like a wave of gravel and dirt, ready to bury me in an untimely grave, I would rather “sleep on it” for the 26th consecutive night. I have, more than once, done the emotional equivalent of driving a car directly into a tree marking a fork in the road.
And the more decisions matter, the more they suck. Picking a cereal to start your day with is a decision, but given the general futility of life, who really cares? Realizing halfway through a bowl of Cap’n Crunch that you really would have preferred Froot Loops is just another thin cut delivered by the blade of life. It’s when you’re faced with decisions that really influence the future of your life or business that you get to experience the full cocktail of stress and anxiety. Getting something like a merger wrong (whether emotional, financial or both) can be a one-way ticket to daily torture.
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Here are four businesses that made exactly that kind of mistake…
Sony Backing Betamax
Given that plenty of people under 30 probably don’t even remember VHS tapes, I’m going to wager that Betamax rings even less bells. It’s an old, cursed technology, that barely made the cut for my 33-year-old brain, much less Zoomers’. They’re too busy buying Celsius energy drinks with Fortnite V-Bucks and using all that energy to not learn cursive! My hip!
But for a long time, VHS tapes were the go-to media should you have wanted to watch any form of home video. And boy, oh boy, were they dogshit. Fast-forwarding and rewinding was a constant chore, longer movies needed multiple cassettes, and every once in a while your VHS player would make a sound like a nauseous jeans zipper and you’d pull out an exploded tape that looked like that big baby from Akira.
Somehow, this was the better option. Something Sony probably wishes they’d realized before pushing all their chips behind the main competitor, Betamax. It offered better picture quality, something they erroneously thought would give them a big advantage. Unfortunately, consumers don’t actually care about quality above a certain baseline. What they do care about is things being cheap and convenient. So much so that we’re currently burning down our own planet in service of that point. VHS was cheaper, it was more accessible due to creator JVC’s decision not to patent the technology and the tapes themselves were capable of longer recordings, two hours versus Betamax’s one hour at launch.
Borders Gives Amazon Its Business
Another staple of my young life was the book, magazine and music megalith that was Borders. Should you want to burn some time after school by reading an Electronic Gaming Monthly cover-to-cover on the toilet and then putting it right back on the shelf like it was still fine, Borders was your destination. For a time, they were riding high, a massive business built on three pillars: in-person book sales, music CDs and DVD movies. In retrospect, not ideal. You might as well be sitting in a financial dunk tank.
At this point, I probably don’t need to belabor exactly why they’re no longer around. The companies that run our current world, like Apple and Amazon, basically took turns curb-stomping Borders’ balance sheet until they went out of business. The existence of Barnes & Noble, though, does show that they could have had a chance to limp along successfully. The biggest mistakes they made? First was not investing in or offering e-books, and the second was outsourcing all their online book sales to a little company called Amazon. It’s like the tale of the scorpion and the frog, except with a scorpion that can swim anyways, so why the fuck did you let it on your back to begin with?
Kodak Doesn’t Go Digital
It’s the nature of business, especially the tech business, that when a huge new leap forward is found, companies based on now obsolete technology will be left in the dust. Be the company that discovers that new leap, though, and you’re suddenly vaulted out to the front of your industry, the one setting the tone and deciding the fate of not only your business, but those who are now along for the ride. At least, if you don’t just toss a massive technological advancement into the trash because you’d rather not get involved in all that.
Which is how Kodak achieved the incredible feat of being a company that was almost destroyed by their refusal to adopt a piece of technology that they invented. In 1975, a Kodak engineer named Steve Sasson invented an early digital camera that could record images electronically onto tape and display them on a TV screen. He showed it to executives, who gave it a resounding thumbs down, because it would ruin their ability to sell film, a big part of their business. Their mistake here, I guess, was assuming that no one else would ever come up with it. They did, and Kodak was laughably unprepared for a machine they’d had in a back room for years.
JCPenney Respects Its Customers’ Intelligence
In case you’re feeling particularly high-and-mighty over those dumb corporations after reading the above entries, let’s take a look at the sad tale of JCPenney, a famous department store whose most devastating mistake was a decision to treat its customers like rational adults. JCPenney, at one time, was famous for exercising a common punchline of a sales strategy: having every item perpetually on sale.
It’s probably something you’ve heard discussed by your parents or peers with humor or derision: fake “retail” prices that aren’t anything more than brain candy to tell you that a thoroughly regular deal is, in fact, a steal. When he took over JCPenney, Ron Johnson decided to cease the facade, and just set the prices at what they actually were, minus the red ink and exclamation points. People fucking hated it. It turns out that they do not want a $40 waffle maker, they want a $40 waffle maker they can tell people was worth $80, and if they don’t get it, they will figuratively burn your store to the ground. Sales dropped 20 percent, and one ex-customer with a real peach of a brain explained, “If I don’t get a special discount, it’s not worth the trip.”
Maybe she can spend the rest of the jail sentence I assume she’s serving for breaching the Capitol on January 6th to figure out the math there.
Eli Yudin is a stand-up comedian in Brooklyn. You can follow him on Twitter and Instagram at @eliyudin and listen to his podcast, What A Time to Be Alive, about the five weirdest news stories of the week, on Apple Podcasts, Spotify or wherever else you get your podcasts.