In this fast-changing world, innovation has become more than just a buzzword. It’s
a survival skill. And companies who get left behind are bound to bite the dust.
Man: The reason I as brought into this company is that I understand young
people. I know what’s hip, I know what’s on. I know what’s lit. I know what’s fleek.
These days, it’s either you disrupt, or you get disrupted.
And these companies unfortunately became victims of their own complacency. Today,
we’re counting down the 8 Companies That Failed to Innovate and Died!
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Our top one brand used to synonymous with
photography. But now they’ve become as obsolete as, well… rotary phones!
#8: Nokia
Before Apple and Samsung dominated the smartphone market, in the late 90s to early 2000s,
there was this Finnish phonemaker that led the mobile phone revolution,
constantly churning out cool-looking phones with batteries that could virtually last a lifetime!
In fact, at its peak in 2007, the company enjoyed a massive a 51%
share in the global phone market. Their products were applauded for
their exceptional hardware – which gave birth to memes of Nokia phones being
indestructible -- but this was also the very thing that led to the company’s downfall.
Man: Never before in history has the competitive environment
changed as much it did in the converging industry of mobile communication, internet, computers, etc.
Nokia paid too much attention in perfecting their hardware that they
overlooked another essential aspect– the phone’s software. Unlike Apple and Google
that both worked on improving their operating systems, Nokia was reluctant to change their OS.
And when they did decide to take the leap in 2011--albeit quite late in the game--instead
of partnering with Android, Nokia made the bold choice to use Windows Phone OS
with their Lumia series. And we all know how the Windows Phone OS ended up.
Nokia was also a classic example of a company that rested on its laurels. Just as the smartphone
trend was emerging, they preferred to stick to their guns and continue to make traditional brick
phones instead of using their resources to keep up with the evolving demands of mobile phone users.
Watch until the end to know more about the company
killed by a technological innovation… which ironically, they invented themselves!
#7: Pan Am
Pan American Airways took off with flying colors after it was founded in 1927.
Some of its milestones include being the first American airline to operate
a permanent international service, and completing a round-the-world
flight! In 1970 alone, they transported 11 million passengers to more than 80 countries!
Man: They launched this international service that
really helped define what we have to today as just regular air travel.
Back in its heyday, Pan Am also operated seaplanes, so they made their pilots wear
uniforms that resembled those of naval officers –and this aviation fashion carried on up to this
day! Pan Am was definitely the trailblazer -- or “influencer,” as one might say -- of their time.
However, in 1973, the Organization of Arab Petroleum Exporting Countries declared an
oil embargo against the US for supporting the Israeli military in the ongoing war.
Oil prices hiked up by over four times. This caused a bump in Pan Am’s financial situation,
especially since they exclusively flew long-haul international routes.
man: it wasn’t the most efficient, it was flying routes that
really weren’t selling that well because demand for travel was going down.
At one point, Pan Am nosedived into a reported debt of 1 billion dollars! But the final nail
in the coffin was when Pan Am got targeted by terrorist attacks. In December of 1988, a
planted bomb caused Pan Am’s Clipper flight 103 to explode mid-air, killing 259 people onboard. The
plane’s massive debris fell on a residential area in Scotland, killing 11 more people on the ground.
Pan Am’s business crashed and burned after that incident,
forcing them to file for bankruptcy in 1991 and shut down their services for good.
#6: Borders
Borders was a book and music retail store that had humble beginnings in Michigan.
Years after its establishment in 1971, Borders’ territories expanded,
with over 600 physical stores and nearly 20,000 employees across the US during its peak.
But after four decades, in 2011, the final chapter of the all-American bookstore came to an end.
Man: I think it’s very regrettable, I myself like the physical touch, the ability to turn pages.
Pundits attribute Borders’ collapse to the company’s focus on opening more brick-and-mortar
stores rather than investing in online shops. When Borders explored the online-selling option,
it outsourced its sales to Amazon, weakening the company’s branding strategy and
highlighting Amazon’s instead. Borders also failed to ride the rising wave of
e-books, which Amazon and Barnes & Noble did with the Kindle and Nook.
Woman: They were very slow to come around to e-readers, that combined with some
other strategic mistakes, having too many stores, having those stores be too expensive,
ended up really hurting their business.
By the time Borders launched their first online e-book store, it was too little, too
late. The 2008 to 2009 recession also aggravated Borders’ growing debt. In 2011, Borders filed for
bankruptcy, and its rival Barnes & Noble purchased all of Borders’ trademarks and customer lists.
#5: Yahoo!
Remember this iconic yodel?
The has-been tech giant is one of the internet pioneers back in the 90s.
At its peak, it clocked in 95 million views per day,
and was even valued at over 100 billion dollars! But the tech company had a weakness – it initially
didn’t develop its own search engine and used Google’s services instead.
This helped Google gain popularity,
especially since they were developing better and faster services. In 2002,
the Yahoo! management refused to buy Google for 3 billion dollars, saying it was overvalued.
In 2008, Microsoft offered to buy Yahoo! for 44.6 billion dollars, but the acquisition
didn’t push through because the founders thought it severely undervalued their beloved company.
A security breach in Yahoo!’s platform in 2014 pushed the company further down,
and their services like Yahoo Mail, Yahoo Messenger were
overshadowed by competitors that just did them way better and more securely.
The more the internet users veered away from Yahoo, the less revenue the company earned.
That the company went through 4 CEOs in a span of
6 years didn’t help Yahoo either in refocusing their direction.
Marissa: I think it as a matter of, we needed to rebuild some of the talent base, we had at the
time 50 engineers in a company of 14,000. Today we have more than 500 engineers working on mobile.
Until in 2017, Yahoo was acquired by Verizon for a measly 4.48 billion.
#4: Polaroid
Man: You can take a picture of somebody an then hand it to them, and it’s a gift.
When it comes to analog photography, Polaroid was the brand to beat. And in 1977,
the company even gained two-thirds of the instant camera market!
“Shake it like a polaroid picture”
But when digital cameras started popping up,
Polaroid was too slow to zoom in and focus on the opportunity at hand.
Polaroid’s R&D was apparently tinkering with digital photography as early as the 1960s.
Still, the big bosses placed their bets on hard copy prints or instant films
rather than adapting to digital imaging.
man: The picture came out and developed slowly, and that was described as magic.
In 1977, when Polaroid launched Polavision, a color home video system,
there were already similar products on the shelves. The Polavision failed and cost the
company about 15 million dollars, instilling this fear of innovation among the company’s execs.
man: Since 2001, Polaroid has declared bankruptcy twice,
and been sold 3 times. And one of those interim owners went to jail for fraud.
In recent years, Polaroid photography has made a soft comeback for its vintage appeal,
much like how vinyl records found a niche market again. But other than catering to a
specific group of enthusiasts and serving as the inspiration of the Instagram logo,
Polaroid has a lot of catching up to do in order to become the big shot it once was.
#3: Blockbuster
In the age of Netflix and Amazon Prime, Blockbuster had the potential
to be a box-office hit, Instead, it bombed in the innovation game big time.
For the uninitiated millennials, Blockbuster was a movie and video game rental service
which, during its heyday in the late 90s,
had more than 9,000 stores spread across the US! It’s also reported to have earned
800 mil in a single year, just from late fees! Man: Blockbuster had an innovative new barcode
system which meant that they could track up to 10,000 VHS per store to each registered customer,
which also meant that they could keep an eye on those lucrative late fees.
During the 1990s, Blockbuster was busy putting its money on physical stores.
But the late fees proved to be both the company’s cash cow, and its ticking time bomb.
In 1997, Reed Hastings created Netflix in part due to his frustration over his 40-dollar
late fee from Blockbuster. Back then,
when Netflix was a DVD-by-mail rental service that promised zero late fees.
Woman: In about 1 business day, you’ll get 3 delivered to your house.
Keep them as long as you want, without late fees.
Blockbuster actually had an opportunity to buy the Netflix for 50 million dollars,
but they ultimately said no. Blockbuster partnered instead with Enron for their
video-on-demand service, but they still prioritized their brick and mortars. In
an attempt to quash their competition, they even took out their late fees too!
Fast forward to a few years later and Netflix steadily grew its streaming service innovation,
and devoured Blockbuster’s market share. By 2009, Netflix earned 116 million dollars,
while Blockbuster lost 518 million dollars! When it ventured into video-on-demand,
it was already too late. One by one, their stores closed,
until only one remained… this Blockbuster store in Bend, Oregon which remains open to this day!
Woman: I think the social interaction that you get from face to face talking to people, not having
your nose in your phones, I think that’s what you find when you come to a blockbuster store.
#2: BlackBerry
As Nokia was slowly fading away into mobile phone oblivion, the baton was unofficially
passed on to BlackBerry during the 2000s, at the onset of the smartphone revolution.
Blackberry, which is owned by the company Research in Motion or RIM,
became the go-to phone of business professionals, with its sleek design and full keyboard that
allowed people to work remotely from anywhere. The BlackBerry Messenger,
or BBM, also attracted consumers by offering a fast and unlimited way of communicating.
Woman: At that point in time, Blackberry had all these government contracts and big business deals,
and those deals in return spurred more consumer adoption.
But just like Nokia, BlackBerry was blinded by their success that they
refused to adapt to the changing demands of mobile phone users.
When the iPhone was born and touch screens were on the rise, Blackberry’s mother company RIM stuck to
their guns and put all their proverbial eggs on the physical keyboard basket.
man: Say goodbye to autocorrect and make your own mistakes,
because productivity is a pleasure when you press the Blackberry button.
It worked out well for the company for a while… until it didn’t. More and more business
professionals preferred the touch screen form factor, and Blackberry started playing catch-up.
Woman: Blackberry was slow to change. Its company ethos was built around
designing a great product that worked and just iterating on it very slowly.
When they released a touch screen unit in 2008, the BlackBerry Storm was met with
poor user reviews. Blackberry’s app store also paled in comparison to Apple’s and Android’s.
Ultimately, BlackBerry lost in the battle of smartphones.
The brand was kept alive after Chinese multinational electronics company TCL,
started carrying the BlackBerry name on its mobile devices in 2017. However,
in August 2020, TCL announced they would halt the production of Blackberry phones altogether.
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#1: Kodak
The camera company used to own 80 percent of the American photographic
film industry’s market share. Make no mistake,
Kodak used to the disruptor and innovator back then, when its founder, George Eastman,
invented the film roll and basically revolutionized photography as we know it today.
It was also a Kodak engineer, Steve Sasson, who invented the first digital camera in 1975.
But instead of investing in it, the management told him not to tell anyone about it,
as they were afraid that it might affect their bread and butter-- the camera film.
man: if you have this great cash cow which is the film camera business and
you’re one of the dominant players there, you’re reluctant to disrupt it yourself.
But as Amazon CEO Jeff Bezos once said,
“It is far better to cannibalize yourself than have someone else do it.”
And that’s exactly what happened to Kodak. Digital cameras ate film-based devices alive.
Kodak lost its market share and was forced to file for bankruptcy protection in 2012.
The company still exists today, not as an industry leader but as a software
and commercial printing technology provider.
So, which of these companies did you think was the biggest failure?
Let us know in the comments section below!
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‘Til then, always be ahead of the curve, fact-natics! And see you in the next video!