Top 25 Worst Business Decisions

In 2000, Reed Hastings and Marc Randolph flew to Dallas to pitch Blockbuster CEO John Antioco on acquiring Netflix for $50 million. Antioco reportedly laughed them out of the room. Blockbuster had 9,000 stores, $6 billion in revenue, and thought DVDs-by-mail was a joke. By 2010, Blockbuster filed for bankruptcy. Netflix is now worth over $300 billion and has 260+ million subscribers. The remaining Blockbuster store in Bend, Oregon is a tourist attraction.

In 1975, Kodak engineer Steven Sasson invented the first digital camera. He showed it to executives who told him to hide it. Kodak's entire business model was built on selling film, and digital photography eliminated the need for film. So they sat on the most transformative technology in photography history for two decades. By the time they pivoted to digital in the 2000s, Canon, Nikon, and Sony had eaten their lunch. Kodak filed for bankruptcy in 2012, holding the patent on the very technology that destroyed them.

In 1998, Larry Page and Sergey Brin offered to sell Google to Yahoo for $1 million. Yahoo said no. In 2002, Yahoo CEO Terry Semel tried to buy Google for $3 billion. Larry Page demanded $5 billion. Semel walked away over the $2 billion gap. Yahoo then spent the next decade declining into irrelevance while Google became the most dominant company on the internet. Yahoo was eventually sold to Verizon in 2017 for $4.48 billion -- less than what Google asked for in 2002.

When Apple announced the iPhone in 2007, Nokia had 49.4% of the global smartphone market. Nokia executives dismissed it -- no physical keyboard, too expensive, too fragile. Nokia's internal memos show engineers begging management to pivot to touchscreens. Management refused, insisting that 'the keyboard is our competitive advantage.' By 2013, Nokia's phone division was sold to Microsoft for $7.2 billion. Microsoft wrote the entire acquisition down to zero two years later.

In 1999, Google co-founders offered to sell their search engine to Excite CEO George Bell for $750,000. Bell turned it down. Vinod Khosla of Kleiner Perkins negotiated the price down to $750K from $1 million, and Bell still said no. Excite was acquired by Ask Jeeves in 2004 for a fraction of its peak value. Today, 'excite.com' redirects to a generic news portal. Google processes 8.5 billion searches per day.

On January 1, 1962, The Beatles auditioned for Decca Records executive Dick Rowe. He rejected them, allegedly saying 'guitar groups are on the way out' and 'the Beatles have no future in show business.' Rowe chose Brian Poole and the Tremeloes instead. George Martin at EMI's Parlophone label signed them months later. The Beatles became the best-selling music act in history with over 600 million records sold. Decca's decision became the textbook example of catastrophic talent evaluation failure.

Steven Spielberg's team approached Mars Inc. to feature M&Ms in E.T. the Extra-Terrestrial. Mars said no, reportedly worried the alien would scare children. Hershey's jumped at the chance and placed Reese's Pieces instead. E.T. became the highest-grossing film of 1982. Reese's Pieces sales exploded by 65% within two weeks of the film's release. It became the most famous product placement in movie history and created the entire modern product placement industry.

In 1979, Bill Gates approached Ross Perot about investing in or acquiring a stake in Microsoft. Perot's team at EDS evaluated the deal and passed -- they thought the asking price was too high for a small software company with uncertain prospects. Perot later called it 'one of the biggest mistakes I ever made.' He had a net worth of $4 billion when he died in 2019. A major Microsoft stake could have made him the richest person in the world.

In 1876, Alexander Graham Bell offered to sell his telephone patent to Western Union for $100,000. An internal committee at Western Union concluded: 'This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.' Two years later, Western Union president William Orton admitted it was the biggest mistake he'd ever seen. AT&T, built on Bell's patent, became the most valuable company in the world.

In 1979, Xerox invited Steve Jobs to tour their Palo Alto Research Center. PARC researchers showed him the graphical user interface, the computer mouse, object-oriented programming, and networked computing. Jobs later said, 'Within ten minutes, it was obvious that all computers would work this way someday.' Apple built the Macintosh around these concepts. Xerox never successfully commercialized any of them. The researchers at PARC had invented the future, and Xerox management literally gave it away for a small Apple stock investment.

In 1985, Coca-Cola replaced its 99-year-old formula with 'New Coke' after blind taste tests showed people preferred a sweeter flavor. What they failed to test was whether people wanted Coke to change at all. The backlash was instant and volcanic. Coca-Cola's switchboard received 40,000 complaint calls. People hoarded original Coke. Psychiatrists reported callers going through genuine grief. After 79 days, Coca-Cola brought back the original as 'Coca-Cola Classic.' Some conspiracy theorists believe it was planned to generate publicity.

Hollywood mogul Jeffrey Katzenberg and former HP CEO Meg Whitman raised $1.75 billion to launch Quibi -- short-form video content exclusively for mobile phones. The concept: premium 10-minute episodes you'd watch during your commute. It launched in April 2020, right when a pandemic eliminated commutes. But even without COVID, the fundamental problem was that YouTube, TikTok, and Instagram already owned short-form video -- for free. Quibi shut down after six months, having burned through almost all the capital. Roku bought the content library for less than $100 million.

In January 2000, AOL acquired Time Warner for $164 billion -- the largest merger in history at the time. AOL was a dial-up internet company valued at peak dot-com prices. Time Warner had HBO, CNN, Warner Bros., and actual revenue. Within two years, the combined company wrote down $99 billion in value -- the largest corporate write-down in history. The merger destroyed Time Warner's culture, gutted its balance sheet, and became the gold standard for catastrophic M&A. Jeff Bewkes, who later became Time Warner CEO, called it 'the biggest mistake in corporate history.'

In 2011, HP CEO Leo Apotheker paid $11.1 billion for British software company Autonomy -- a 64% premium to its market price. Just 13 months later, HP wrote down $8.8 billion, claiming Autonomy had inflated its revenue through accounting fraud. Autonomy's founder Mike Lynch disputed the allegations (he was later found not liable in a UK civil case but faced US fraud charges). The deal became a masterclass in failed due diligence. HP's board fired Apotheker after just 11 months as CEO -- one of the shortest tenures in Fortune 500 history.

In August 2019, WeWork filed its S-1 to go public at a $47 billion valuation. The filing was a comedy of red flags: $1.9 billion in losses on $1.8 billion in revenue, founder Adam Neumann's self-dealing (he trademarked 'We' and charged WeWork $5.9 million to use it), a corporate structure that gave Neumann 20-to-1 voting power, and the revelation that WeWork was essentially a real estate subletting company calling itself a tech platform. The IPO was pulled. SoftBank's Masayoshi Son wrote down $9.2 billion. Neumann was ousted with a $1.7 billion exit package that rewarded spectacular failure.

Elizabeth Holmes founded Theranos at 19 with a promise to revolutionize blood testing -- hundreds of tests from a single drop of blood. She raised $700+ million from investors including Rupert Murdoch, the Walton family, and Betsy DeVos. The company reached a $9 billion valuation. One problem: the technology never worked. Theranos secretly ran most tests on conventional machines from Siemens and used its own device only for a handful of inaccurate tests. A 2015 Wall Street Journal investigation by John Carreyrou blew it open. Holmes was convicted of fraud in 2022 and sentenced to 11+ years in prison.

Pets.com became the mascot of dot-com excess. The company sold pet supplies online at prices below what it paid for them, subsidizing every transaction with venture capital. Its famous sock puppet mascot starred in a $1.2 million Super Bowl ad in January 2000. The company IPO'd in February 2000 at $11 per share and was shut down by November of the same year, with shares at $0.19. Investors lost over $300 million. Amazon, which owned 30% of Pets.com, eventually built a successful pet supplies business -- proving the idea was right but the execution was catastrophic.

Enron was named 'America's Most Innovative Company' by Fortune magazine for six consecutive years. It was all a lie. CFO Andrew Fastow created hundreds of special-purpose entities to hide debt and inflate profits. The company reported revenue of $101 billion in 2000 while actually drowning in hidden losses. When the fraud unraveled in late 2001, Enron went from $90 per share to $0.26 in weeks. 20,000 employees lost their jobs and retirement savings (which were locked in Enron stock). Arthur Andersen, one of the Big Five accounting firms, was destroyed for enabling the fraud.

By 2007, Lehman Brothers had a leverage ratio of over 30:1 -- meaning a 3-4% decline in asset values would wipe out all their equity. They bet the entire firm on mortgage-backed securities and CDOs at the peak of the housing bubble. CEO Dick Fuld refused to raise capital or find a buyer until it was too late. When the housing market cracked, Lehman's assets became toxic. On September 15, 2008, Lehman filed for bankruptcy -- $691 billion in assets, the largest bankruptcy filing in American history. It triggered a global financial panic that nearly destroyed the world economy.

In 1996, GM launched the EV1, the first mass-produced electric vehicle from a major automaker. Drivers loved it. It had a cult following. Then in 1999, GM began recalling every single EV1 and crushing them -- literally. They claimed there was no consumer demand, despite a waiting list. The real reason: the oil and auto parts industries pressured GM because EVs required almost no maintenance. The 2006 documentary 'Who Killed the Electric Car?' made GM's decision infamous. A decade later, Tesla proved the market existed. GM has been playing catch-up ever since.

RadioShack had 7,300 stores and was the go-to retailer for electronics components, batteries, cables, and gadgets. They had the brand, the locations, and the customer base to become a physical-digital hybrid retailer. Instead, they ignored e-commerce entirely, failed to adapt their stores, and clung to a model of selling overpriced cables and cell phone plans. They filed for bankruptcy in 2015. The brand was eventually sold and exists only as a shell. Meanwhile, Best Buy -- which faced identical pressures -- successfully pivoted and thrived.

In 2012, new CEO Ron Johnson -- the genius behind Apple's retail stores -- decided JCPenney should stop doing sales and coupons and instead offer 'everyday low prices.' The problem: JCPenney's entire customer base were coupon hunters who needed the psychological thrill of a deal. Removing sales was like removing the engine from a car. Revenue dropped 25% in one year. Johnson also removed cash registers and replaced brands customers loved with boutique shops nobody asked for. He was fired after 17 months. JCPenney never recovered and filed for bankruptcy in 2020.

Sears invented the mail-order catalog in the 1890s. For over a century, they delivered products to every home in America. They had the logistics network, the supplier relationships, the brand trust, and the customer data. They were literally Amazon before the internet existed. When e-commerce arrived, Sears did nothing. CEO Eddie Lampert spent a decade stripping assets, cutting investment, and merging with Kmart in a deal that only accelerated the decline. Sears filed for bankruptcy in 2018. Amazon is now worth $2 trillion doing exactly what Sears used to do.

In 2007, BlackBerry (then Research In Motion) owned the smartphone market. The BlackBerry keyboard was iconic -- Barack Obama's staff had to pry his from his hands. When the iPhone launched, BlackBerry co-CEO Jim Balsillie dismissed it: 'It's OK -- we'll be fine.' They weren't fine. BlackBerry kept making phones with keyboards while the world moved to touchscreens and app ecosystems. By 2016, BlackBerry had 0.0% smartphone market share. They eventually pivoted to enterprise software, but the phone business was a $80 billion corpse.

In 2005, MySpace was the most visited website in the United States -- bigger than Google. Rupert Murdoch's News Corp acquired it for $580 million. What followed was a masterclass in how corporate ownership kills a social network. News Corp prioritized advertising revenue over user experience, plastered the site with intrusive ads, and failed to innovate while Facebook built a cleaner, faster product. By 2008, Facebook passed MySpace in users. In 2011, News Corp sold MySpace for $35 million -- a 94% loss. The $580 million purchase was Murdoch's 'worst investment,' by his own admission.