In business, you will make mistakes.
That’s a pretty incontrovertible fact. Countless books might like to think there is a magic formula for being successful in business, but there are always tough decisions to make.
Certain things are universally acknowledged to be good practice – have a bit of slack in your cash flow calculations, never veer too far from your core competencies, don’t spend money on fussball tables if it means you have to skimp on PCs, etc – but there’s often no obvious choice when taking strategic decisions.
Britain’s largest commercial TV network clearly failed to understand the net
And all business people make misjudgements – from Branson and Fiorina to Jack the chippie owner and Dave the plumber.
The first instalment of some of the worst, and – lets face it, we all feel a bit of schadenfreude when the titans show themselves to be less than superhuman – most amusing mistakes made by businesses and their owners, centres on the internet.
It wasn’t hard to think of examples. The one time military application is still relatively young, and the dizzying, often unexpected developments have caught some of the most assured names in the game off guard.
Anyway, here are just a few examples.
Don’t get on a bandwagon that’s slowing down!
In December 2005 ITV took leave of its senses and bought Friends Reunited for £120m, ignoring the maxim that if you see a bandwagon, you’ve already missed it.
An established name isn’t always a safer bet than looking for a nascent phenomenon, especially when the signs of its imminent decline are there to see for anyone who makes an effort to look. Friends reunited was a revelation when it was launched back in 2000. It paved the way for MySpace, Facebook, Bebo, et al, whose broader scope has now consigned it to obscurity. Now its profiles lie in stasis having not been updated for years. When you navigate round it you’re exploring a relic, and the profiles seem like the ghosts of a bygone age.
Britain’s largest commercial TV network clearly failed to understand the net when it poured money into TV advertisements. The YouTubes, Yahoos and Friends Reunited itself expanded precipitously largely through word of mouth, and will wane when better sites come along regardless of any flashy ad campaign.
The race to catch MySpace
Rupert Murdoch, usually the man with a Midas touch, might have been wrong-footed by the pace of change in cyberspace.
MySpace seemed like a surefire bet when he bought it, and when I heard about a pretender called Facebook I never thought for a minute it could achieve the critical mass to be a major player. But now Murdoch’s $580m acquisition looks shaky, and Facebook has utterly eclipsed MySpace.
Stabbed in the back?
Speaking of Facebook, the site’s founder is currently being sued over allegations it was built using stolen computer code.
Cameron and Tyler Winklevoss and Divya Narinda enlisted the help of Mark Zuckerberg in 2003 to develop their social networking site HarvardConnection, but Zuckerberg soon decamped to found Facebook. The accusers, who eventually set up the Facebook rival ConnectU, claim Zuckerberg stole their code and stalled the development of their site deliberately to get a crucial head start.
Whether the allegations are true or not, the Winklevoss brothers and Divya Narinder will forever rue not forcing Mark Zuckerberg to sign a non-compete clause. While Facebook now has 31 million users worldwide, ConnectU has a comparatively paltry 70,000.
Only time will tell…
Last year Zuckerberg turned down a $1bn offer from Yahoo to buy Facebook. A brave move undoubtedly – but could it ultimately be one the costliest mistakes ever made?
Thus far no social networking sites have found a formula that bestows longevity. True, Facebook seems like an unstoppable juggernaut, with 150,000 people signing up every day. But will people get bored of it?
Zuckerberg thinks that by opening Facebook up to external applications, he will ensure that its users will perpetually reinvigorate it, just as they alone generate the content. However, judging by the inane applications so far, such as superpoking people and elevating people to ‘top friend’ status, that could be a misjudgement that spawns the mother of all misjudgements. Then again, perhaps the applications will improve in time.
