The Beauty Industry and Missed Opportunities: Lessons from the IT Sector and The Writing on the Wall.
In business, we’ve all played the “if I only knew then what I know now…” game. And yes, most – if not all – of us would lunge at the opportunity to jump into a time machine and emerge at the fabled right place at the right time: say, just before a wild stock market surge, or just as valuably, right before an impending crash.
But of all of the “if I only knew then what I know now” ponderings, the ones that are the most painful – the ones that keep us up at night, lamenting not just what might have been, but what should have been – are the opportunities that we let slip right through our very own fingers.
Those are the opportunities that sting the longest and cut the deepest, because in hindsight we see, with tragic clarity, that they were actually designed for us. Those opportunities came knocking at our door, and all we really needed to do was turn the doorknob, let them in, and reap the life-changing rewards.
But for a variety of reasons – call it destiny, bad luck, or anything else – we missed it. And so the knocking stopped, the door remained closed, and the opportunity went elsewhere.
Top Missed Opportunities (and Blunders) in Tech History
If reflecting on missed opportunities has you feeling pretty lousy, then take heart: at least you didn’t make PC World’s harshly (but accurately!) entitled “The Top 10 Stupidest Tech Company Blunders” list. Indeed, while you may occasionally lie awake in bed at night wondering “what might have been,” the folks on this list are probably knee-deep in therapists by this point. Behold:
• In 2006, Yahoo! CEO Terry Semel reacted to some bad company financial news by pulling back a virtually sealed $1 billion dollar offer for Facebook. The offer was reduced to $600 million, which was too low for Facebook’s CEO Mark Zuckerberg. Just five years later, Facebook is now worth a jaw dropping $80+ billion.
• In 2000, an engineer, Tony Fadell pitched a music player that was an innovation from the current mix of MP3 players. He was shown the door by Real Networks and Philips, but he did capture the interest of some guy named Steve Jobs. Jump ahead a decade and Fadell’s vision – which became the iPod – commands 80% of the digital music market and has transformed the way the music industry produces and delivers its product.
• In the early 2000’s, monoliths Sony and Toshiba waged corporate warfare over who would define the new high definition DVD standard. Sony had a thing called Blu-ray. Toshiba had a thing called HD DVD. The battle waged on until 2008, when Sony finally won – but only after paying Warner Brothers Studios a tidy $400 million to kill HD DVD in favour of Blu-ray. Had they worked together, they would have saved hundreds of millions of dollars and profited hundreds of millions more. Talk about a missed opportunity!
• Folks of a certain age will easily remember the days when MS-DOS ruled the computer operating system world (can I get a dir, please?). But most folks don’t know that before IBM chose Microsoft, it tried to strike a deal with a guy named Gary Kildall of Digital Research. As it turns out, the day that IBM stopped by Gary’s place to forge a deal, he was out delivering a product to a customer – leaving his wife to handle the negotiations. Mrs. Kildall didn’t like some of what IBM was proposing, and sent them on their way. IBM went straight to Bill Gates and Microsoft and the rest is history.
• In 1973, Xerox built something very interesting and called it the Alto. At the time, nobody really knew what the Alto was, because nothing like it had ever existed. All they knew was that it had a windows-based GUI, ethernet networking, and a WYSIWYG text processor. But who in their right minds would want that? There was no personal computer market in 1973, and so the Alto was put on the back burner. However, this wasn’t before that iPod guy Steve Jobs played around with one, went “aha!” and then spun the vision into Apple’s Lisa and Mac computers. By the time Xerox woke up to this, it was too late and they never did catch up.
• In 1999, millions of people basked in front of the warm glow of their monitors and loaded up on digitial music courtesy of Napster. But not everyone was thrilled – including the music industry itself, which went into DefCon 3 mode and attacked Napster and thousands of the “pirates” who were using it to “rip’em off”. That’s when Napster CEO Hank Barry offered this revolutionary solution: license the music and pay royalties to the artists, just like a radio station. To put things mildly, his suggestion was not heeded. Nor was it heeded by the music industry when a similar solution was proposed by MP3.com, or any of the other sites where music loving “pirates” were congregating. Of course, we know how this story ends: today, Barry’s licensing model is worth billions of dollars a year – and growing. The digital music industry could have avoided years of missed sales, legal costs, and the ire of music lovers (especially the 30,000 or so that it sued) if it had simply seen the writing on the wall and READ it.
• Back in the 90’s, the Internet Service Provider landscape was dominated by Compuserve. It had everything that a CEO, investor or shareholder dreams of: massive market share, established customer base, huge resources, little competition, and technical advantages (particularly around data) that functioned in some ways like a natural monopoly. So what happened? Neglecting to fortify its leadership position, re-invest in innovative technologies and services, Compuserve in essence held the door open for AOL to come in and within a few years – kicked Compuserve out of the marketplace altogether.
• For years, Craigslist was seen but not heard by the newspaper industry. Who could imagine anyone turning away from (the very lucrative) newspaper classifieds and putting their truth in some weird ads on some weird website named after some (presumably weird) guy. Instead of understanding Craig Newmark’s business model and exploiting it, the newspaper industry went on whistling, while Craigslist and friends – eBay, Google, and so on – kept growing exponentially. And now, there’s a good chance that the only place future generations will see a newspaper, or at least the classified section of a newspaper, will be in a museum.