When things are going well, business ideas move at the speed of light. However, when terrible business ideas are implemented, the effects ripple at slow-motion speed and become fodder for the next generation’s business school textbooks. To avoid making the same errors, it’s wise to understand what has failed in the past.
5. The 20th Century Fox Executives’ Galaxy-Shattering Star Wars Mistake
To play devil’s advocate, the thought behind the decision to sign away product merchandising rights to Star Wars director George Lucas to save $20,000 in wages due probably seemed like a good idea at the time. Seeking to cut costs on what the studio most likely thought of as a second-rate science fiction flick made solid sense in the middle 70s. Few experts in the film industry at the time would have hesitated to make the trade. However, those dated business ideas didn’t take into account how popular the film series was destined to become.
4. Would You Eat Toothpaste for Lunch?
In business school, students have been taught that company branding is everything. What Colgate didn’t understand was that their brand recognition was so strong that when consumers saw the Colgate name, they had no choice but to think of toothpaste. The food line with the Colgate name was one of the top unsuccessful business ideas of its time. Consumers avoided the product line in droves, and the company was forced to brush the problem aside, and this was one of the worst business ideas for the company.
3. Small Changes In Response to Massive Upheaval Left Firestone Tired Out
For decades, the Firestone Tire Company had dominated the US auto market. Closely tied to the big automakers in Detroit, they captured a lion’s share of the market. However, when radial tires from France’s Michelin Company hit America’s shores, Firestone’s business ideas fell far short of what was necessary. While the US-based company was ready to start manufacturing the radial tires that had already taken Europe by storm, executives failed to change their old production and were slow to close the factories producing the increasingly outdated belted tires. As a result, they took a hit and lost market share. The company continually lost value until it was finally acquired by Bridgestone, a Japanese company. Business ideas work best when they take multiple factors into account and aren’t restricted by outdated plans and ideas.
2. Take a Picture: Polaroid’s Business Ideas Promoted Research And Development at the Expense of Business Basics
In its early days, Polaroid scooped up new ideas and molded them into great new products at an astonishing rate. The company was spear-headed by the leaders in the R&D department whose business ideas didn’t include paying attention to market research or finance spreadsheets. With their stellar track record, Polaroid’s R&D managers thought that they could keep pulling the rabbit out of the hat by creating products that would push the envelope and capture the attention of consumers. Unfortunately, business ideas without a strong basis in customer preferences ultimately fail. The company’s value has been in decline for years.
1. Not So Bad: The Rockiest Business Ideas Provide Opportunities Beyond Belief
There are business ideas that seem destined to die a quick death, but that somehow manage to catch hold and work. In 1975, US culture was still recovering from the Vietnam War and Nixon’s resignation. Gas prices were at an all-time high following the Arab Oil Embargo of the previous year. Austerity was the order of the day, and most business entrepreneurs were cautious. Not Gary Dahl. The owner of one of the craziest business ideas of the 20th century; he banked millions by selling Pet Rocks to customers enchanted by the whimsy inherent in his design. With little more than a healthy dose of bravado, the Pet Rock swept the nation and entered the legion of the little business ideas that could.
While there are a lot of bad business ideas out there, there have been plenty of successful ones. It’s crucial to realize what works and what fails. That way, when looking for solid ideas, you can avoid the common pitfall’s others make. For good business ideas, continue checking out our blog posts and interview series!