A developer my dad worked with once sold off a beautiful six-acre piece of land next to a river in a highly desirable area. The buyer was another developer, and the first thing he did was cut down every single tree on the property. His reasoning was simple: he wanted to see what he had. What he had turned out to be unstable soil.
Without the trees to hold it in place, the land began sliding into the river, and within a short time it was worthless, ugly, and completely unusable. A radio station I used to listen to decided to change its format from eighty percent music and twenty percent talk to a hundred percent talk. When listeners complained, the station said they could still get the music, but only through their app. That completely missed the point.
People turn on the radio to hear music without having to fiddle with a phone. The station basically told its audience that the thing they tuned in for no longer existed on the platform they were using. I worked for a property management company that handled a lot of student housing and high-rises. Every summer, when students left town, those buildings sat half empty, and it was always a struggle to fill them.
Head office came up with what they thought was a brilliant promotion: anyone who signed a two-year lease would get the four summer months at fifty percent off. On the surface, that made sense. Fifty percent rent is better than zero percent rent. We signed up tons of students, and everyone felt great about it.
But there was a problem in the paperwork. The lease templates head office sent over showed the reduced rate directly on the lease itself instead of adding the discount as a separate addendum. I spotted the discrepancy and reported it. Nobody listened.
That meant every student who signed was legally locked into that reduced rent for the full two years. The company lost hundreds of thousands of dollars in revenue because someone in a corporate office couldn’t be bothered to check the details. A café I worked for decided to fire everyone except the leads and the manager. Then they told the manager she wasn’t getting her salary anymore, but she needed to take on more work anyway.
They assumed people would stay because they loved their jobs. That kind of thinking destroys small businesses all the time. If the owner believes they deserve to get paid first instead of last, they’ll eventually go under the moment things get tough. In my hometown there was an independent fast food and homemade ice cream place that had been around for decades, run by close friends of the family.
It was a gold mine. They decided to sell and retire. The new owners came in and immediately changed everything. They painted the building a wild color, removed some of the attractions on the grounds, replaced the sixty-year-old menu with something trendy, and switched to commercially made ice cream.
They lasted eight months before the place closed for good. I spent years working for a design and printing company. The owner would go from amazing idea to stupid idea on a regular basis. Don’t get me wrong, the guy was a brilliant designer.
He took advantage of new technology every chance he got and made it work. But he was cheap and greedy, and that ruined what could have been lucrative long-term business relationships. One time we did a huge order of promotional supplies for a fairly big online casino. It was a twenty-thousand-dollar order with good margins, and there was a real chance at long-term work with that company.
While the order was being picked up, at the spur of the moment, the boss decided to pad the bill by about two hundred bucks. The guy picking it up was the son of the casino owner, and he literally watched the boss do it while I stood there at the register. The customer looked at me, smiled, and paid the bill with a huge wad of cash. Then he said, in a voice meant to carry, “I know it’s not your fault, but my family is very wealthy.
We didn’t get that way by letting people rip us off. Tell the boss in the corner he just freaked himself out of a lot of money, because we loved the work. ”
My boss did something similar to Google years before that. We sold them something they were hoping to use in their data centers.
He kept giving them the runaround on pricing because he could smell the gold. They basically said, “Forget you, we’re Google,” and walked away. That’s the story of why my bonus checks were garbage for years. This one involves my dad.
Back in the eighties, he decided he wanted to teach people how to use Lotus 1-2-3, Excel, Microsoft Word, and similar programs. He bought a bunch of computers for a classroom and wrote interactive learning programs and printed out manuals and all that. Even without advertising, people were asking to join his classes. But he was never quite ready.
The Lotus program could use more work. The Word tutorial wasn’t quite done. His perfectionism wouldn’t let him expose anything less than perfect to paying students. He turned down actual paying customers because he was afraid the product wasn’t flawless.
Meanwhile, he’d taken out a loan from a friend to finance the whole venture, and he never made a dime. He ended up paying the loan back by selling our cottage, something he regrets to this day. And why? Because he was afraid to be flawed.
That taught me a lesson. Perfect is the enemy of done. He could easily have made money and taught his classes, refining the programs based on student feedback. He could have covered the inefficiencies by teaching in person.
But he was afraid it wasn’t perfect, so it was never done. We don’t talk about it, or about the cottage we built together. We had the foundation and structure put up by professionals, and then the whole family pitched in to build the interior when we were teenagers. It saddens me even more because it was what he wanted to do, and he went for it, but not quite.
My mom is the same way. She can’t move forward on anything unless it’s perfect. It’s infuriating, but it did teach me not to be that way in my own life. I worked at a video store around the time Finding Nemo came out on DVD.
The store got a huge fish tank installed inside. It was so big they had to shrink the game rental section to make room. The tank had clown fish in it. But the tank was locked, and we employees weren’t allowed to feed the fish or clean it.
That was supposed to be done by someone I never once saw come in. So the tank ended up filled with dead clown fish floating in a nasty, filthy tank. Parents were furious. The local paper even did a small article about it, which didn’t help an already struggling store.
I have no idea what they thought an expensive fish tank would do for business. I call that the ninety-five percent method of failing a business. You do everything you need to do. You come up with ideas, secure funding, contact suppliers, hire help.
Then, when everything is nearing completion, you drop the ball hard. It’s very common. I knew a guy who wanted to start his own barbecue and hot sauce line. Here was his process.
Step one, get high with a buddy and decide to go into business together. Step two, argue about who should be financing the business. Step three, get a loan from grandma. Step four, order a bunch of bottles.
Step five, use a Sharpie and some blank labels to put on the bottles. Step six, fill the bottles with bulk barbecue sauce. Step seven, try to sell the sauce to Walmart. Step eight, get upset that Walmart won’t touch your sketchy product.
Step nine, end up with several hundred bottles of unsealed sauce that wasn’t prepared hygienically. Step ten, try to sell some to your extended family. Step eleven, get angry with your family because they don’t believe in your two-week-old dream. Step twelve, beg family for money to pay back grandma.
The people I know usually skip the part where they pretend to try to pay grandma back. There was a taco place I loved in Fairbanks, Alaska. The food wasn’t great, but it was consistent and the prices were fair. Then a new owner came in and decided to revamp it into a fine dining steakhouse.
Thirty dollars was about the cheapest thing on the menu. This was in a neighborhood with a substantial crime rate, right across the street from a bikini barista stand and a marijuana dispensary. I stopped going, and the place went under shortly after. I walked in once before it closed, and it was dreary and empty.
They had tried to bring some of the old classics back to the menu, but it was far too late. I used to work for a company that was bleeding money. To try to save cash, they decided to stop honoring returns and refunds, but they kept advertising that they did. Whenever someone asked for a refund, we were supposed to tell them it would be processed in the next six to eight weeks and then get them off the phone.
Six to eight weeks later, when they called asking where their money was, we were supposed to apologize and say their paperwork got put in the wrong stack, and that it would be moved to the correct stack and processed in another six to eight weeks. If they complained about the length of time, we were told to offer to have a supervisor expedite it, and they should see it in four to six weeks instead. If they threatened legal action after months of this, we were supposed to tell them to contact the company’s legal department. We didn’t have a legal department.
Then we were supposed to hang up and make a note in their account so no one would field calls from that account again. More than half the call center quit in a single week to protest that decision. The company collapsed within a few months. There’s a word for what they were doing.
That word is fraud. Someone I know was putting in a restaurant and kicked the fire marshal out because they didn’t like what he said they had to do. They never opened, and they had already built a brand new building. My late great uncle started a fish and chips restaurant.
He had his own unique recipe for the fish, and it was very popular. Businessmen had offered him thousands in cash for it over the years, but he always declined. After about forty years, he decided to retire and hand the business over to an ambitious recent college graduate. He offered to give her the recipe and even volunteered to come in and help for a while while she got comfortable as the new owner.
She declined both. Within a year, she was forced to sell the restaurant after coming close to declaring bankruptcy. My great uncle died and took the recipe with him to his grave. Take a help desk that has been consistently rated extremely well by its customers for first-call resolution, attitude, and helpfulness.
Now outsource it to a company that’s been rated near the bottom of the list for over a decade, simply because it costs less than the salaries and benefits of your former in-house staff. Then complain when your first-call resolution drops through the floor and customer satisfaction hits an all-time low. My memory on the details is sketchy, but this reminds me of Dell in its early days. They got great ratings for their US-based support, then outsourced most of it overseas and almost instantly had the worst support known to the industry.
There was a shopping plaza near me with a fairly large gift store. Not a museum gift shop, more like an independent Hallmark-style store. It wasn’t exactly bustling, but they apparently did solid business, and a lot of people in the community really appreciated having a place to buy gifts and wrapping paper. The owners of the shopping plaza raised the rent to the point that the shop went out of business.
The reason this was stupid is that the storefront sat vacant for fifteen entire years. The place closed when I was a child, and I’m now twenty-seven. The vacancy was only filled very recently. If their goal in raising the rent was to get a more profitable store into that space, they failed and missed out on decades of rent.
Around this time last year, I knew someone in their early fifties who sold all of their investments at a significant dip from the highs. They decided to start producing and selling hand sanitizer in little bottles out of their garage, seeing it as a big opportunity because of the virus. They spent everything on bottles, labels, plastic drums full of sanitizer bought at a huge markup, hiring local people to fill the bottles and put on the labels, and then building a website. By the time they had inventory, they realized they couldn’t compete on price with places like Walmart or other big box stores that had finally caught up to the shortages by midsummer.
They also didn’t realize that selling on Amazon was gated for that category, so there was no chance of selling through there as a new seller. Now they basically have a garage full of old hand sanitizer and no savings. Circuit City was pretty stupid too. When the recession hit, they decided to stop selling appliances and instead focus on DVDs and televisions.
Appliances are known for being a recession-proof item. People always need refrigerators and microwaves. They don’t need DVDs. They also wanted to cut labor costs, so they fired a lot of managers and assistant managers and left entry-level employees in charge because they were cheaper to pay.
Entry-level employees don’t really know how to fully run a store. Every Circuit City in my area became a dog. A game shop in my area had a great business plan. They ran regular tournaments and had a sweet membership plan.
Ten dollars a month got you a discount on tournaments and a ten-dollar gift card. Essentially, it incentivized everyone who went there for any event to spend a minimum of ten dollars a month. They did great for about two years. Then they changed the membership so you no longer got the gift card, and the store started prioritizing D&D groups over competitive gaming groups.
That isn’t bad in theory, except D&D players weren’t paying for entry and tended to spend less money. So they chased away the customers who spent the most while removing the incentive for anyone to subscribe. The number of customers per day slightly increased, but the average spend dropped significantly, and they went out of business shortly after. I love D&D, but if I ran a store and had to choose between it and something like Magic: The Gathering, D&D would be on the cutting floor.
My old company was internationally known in our industry as one of the ideal places to work. We could hire basically anyone in the world in our space to move and work in our office. It was an awesome place. Then the CEO decided to cash out when a larger company barely related to our industry bought us.
The new company gutted everything that made it great and rushed to go public. Employee stock options were pennies. Benefits were drastically cut. Every complaint was met with, “Maybe you don’t understand our vision,” or, “Well, we’re a public company now.
” They also got rid of our office, which was in one of the hottest neighborhoods in LA that everybody loved. More than half of the original senior members have left, and a large number of others are rumored to be leaving. I was forced to help with hiring, and it was grueling. People would apply believing it was our old company, then find out what was going on and go elsewhere.
The stock is plummeting. I hate that what once was is over. Those people ruined something great. Bad business decisions, Yahoo is a classic.
In 1998, Yahoo refused to buy Google for one million dollars. In 2004, Yahoo tried to buy Google for three billion. Google asked for five billion. Yahoo refused.
In 2008, Yahoo turned down an acquisition offer from Microsoft for forty billion. In 2016, Yahoo sold to Verizon for four point six billion. And let’s not forget they bought Tumblr for way too much and then immediately drove all its users away. There was a Panera Cares location opening less than a mile from my college campus.
For those who don’t know, Panera Cares basically let you order food and listed a suggested donation based on what you ordered. The cashiers would just make change for you. You could put cash in the donation box. If you couldn’t afford a meal, it was fine not to pay, but you were supposed to volunteer to work for two hours to cover it, though that wasn’t actually required.
I think these things are supposed to be for affluent neighborhoods where people donate even more than suggested. But students from my college turned it into a real-life tragedy of the commons experiment. There was almost never bread available because everyone would just take it. The lines were insane, and people would donate about a dollar if anything.
It closed within a year. There was one a block from my university in downtown Boston too. It didn’t last long, but it was extremely helpful to me as a broke college student while it lasted. I worked at Hollywood Video from 2006 to 2009.
At that time, Netflix was growing by leaps and bounds, and our revenue was dwindling year after year. Instead of copying Netflix’s model and using their own recognizable brand to edge them out of business, Hollywood shrugged its shoulders and kept renting single DVDs for four ninety-nine for three days, plus late fees. Where are they now? In my area, there’s a Hollywood liquor store and a Hollywood service station.
Both are former Hollywood Video locations where the new tenants kept the name and the sign. Two members of the band Steppenwolf wanted to break away from founder John Kay and keep using the band’s name. John Kay told them he would allow it only if they signed over their royalties from the songwriting credits they had in the band. These two members were convinced they would be successful on their own, so they agreed.
Steppenwolf without John Kay would be like the Rolling Stones without Mick Jagger, so that version of the band flopped tremendously. Even a five-year-old could tell you that giving up royalties on major hits like Born to Be Wild and Magic Carpet Ride would be stupid. Those guys ended up working regular menial jobs when they could have been getting nice royalty checks in the mail. And now John Kay is touring under the name with a new band.
I saw them for free about three years back. I respected the fact that they closed with The Pusher rather than Magic Carpet Ride. An apartment maintenance employee I know had a hobby of bass fishing. He was pretty good at it and came up with the idea that if he drained his kids’ college fund, he could buy a new bass boat and pay for their college with the money he would win in tournaments.
It didn’t work out like he hoped. I used to work for a small m and pop pet supply store that never got with the times in terms of technology or business choices. They were still using registers where you had to manually punch in prices. They knew nothing about email blasts.
They created a regular email account and had me spend a week sending out newsletters seventy-three at a time because I had to individually click on each of the twelve hundred names on the list. They claimed that using something like Mailchimp would sell their customers’ emails, as if Yahoo, Gmail, and Outlook couldn’t do the same. But when customers complained about how long it took to get the email, they blamed me. They constantly picked products to bring in that were basically the same as products they already had.
Chicken and rice dog food. We already have eight brands of that. What’s one more? They had a large number of small animal customers who would walk out with nothing because they almost never brought in new products.
They would lie to vendors, saying they sold more than they did to get more reimbursements during sales. They struggled financially but expected me to bring in a bunch of new customers on a budget of zero. They never updated anything. They also treated the feeder mice and rats pretty inhumanely.
I understand they’re going to be eaten, but several times one would get injured and they did nothing. One rat got its tooth stuck and its face was ripped up pretty badly. They isolated it in a cage with hard pellets, where it began to starve because it was too painful to eat. Every day when I cleaned the cages, I would put some pellets in a tiny bit of water to make mush and offer it to the rat.
He scarfed it down. He never bit me, and neither did another rat when I secretly disinfected his ear after it was ripped off by a dominant male. I hated that place but stayed for the animals. When they falsely accused me of assaulting someone and apparently waited two months to even mention it, I left.
I still feel bad for the animals who suffer at their incompetent hands. There’s a storefront in my city that opened mid-pandemic. It’s a candy store, simple enough. They advertise as couture luxury candy.
They have a store in the most high-traffic area of the city and therefore pay astounding rental fees. All they have is peach rings and gummy worms repackaged into glass jars with twist-off lids. Whoever decided to open this business must have no family who care enough to take them aside and say, “Aunt Linda, this is a stupid idea. ”
A family decided to open a small takeout shop in my hometown.
It’s a town of less than five thousand people, so options are limited. The family’s brilliant business model was to buy day-old donuts from a chain coffee shop in a nearby city and resell them in town. Of course, there was a mom and pop bakery in the same town that made some of the most delicious donuts I’ve ever had. The day-old secondhand donuts were being sold at a higher price than the local bakery charged for fresh ones.
Kodak refused to push digital cameras and photography, instead focusing on film cameras. I believe Kodak was one of the first companies to create a digital camera, but instead of capitalizing on it, they sat on the technology and focused on film development. The number of technical innovations Kodak made and then abandoned or gave away is astounding. Though actually, I might be thinking of Xerox, which invented the mouse and the first GUI and then gave them away to Apple.
My neighbor bought out his partners in a high-end furniture store. He used his house as collateral. Then the 2008 economic and housing bust happened. Not only did the company start tanking, but his house was no longer worth what it was before.
He ended up losing the house. I remember the day he finally realized it went south. His wife knocked on my door and asked if I’d seen him. He’d left work and disappeared for hours without telling anyone.
I and other neighbors drove all around town looking for him. He eventually came back home, but I imagine he went somewhere and just cried it out for hours. He got a job soon after, but it was a bitter pill to swallow. There may have been shenanigans with the bookkeeping from the business partners, where they cooked the books to make things look better than they were.
Maybe he knew, maybe he didn’t. After watching the movie Chef, my uncle left his job and put all his money into a food truck, only to learn that our city banned food trucks. In the early days of the personal computer, a fairly prominent developer called Osborne went under because they showed off their new model far in advance of when it was actually going to be available. Predictably, dealers immediately cancelled all their orders for the current computer model in preparation for the new improved version.
Inventory stacked up, and they were bankrupt before the new model ever came out. It’s known as the Osborne effect, especially since they were nowhere close to ready on the new system. They were relying on revenue from the existing model to fund development on the new one. Cincinnati’s deal with the Bengals has cost over a billion dollars since 2000.
It has some of the most ridiculous requirements for the city and is widely considered the worst business deal in the history of sports. The city hasn’t come anywhere close to making back that billion by having the team. Arguably, they’ve gained nothing. And all this while the Bengals are perennial stinkers.
They made being terrible a lucrative business model. Digg version four killed the site. Digg was one of the most popular sites on the internet, and in a few short years it was gone. Digg’s loss was Reddit’s gain, depending on how happy you were with the smaller pre-migration Reddit.
And Tumblr banning adult content was a huge mistake. It turned a relevant and highly profitable social platform into a barely known failure. Tumblr was worth more than a billion dollars and got sold for three million. It took only a year for its traffic to disappear and the service to lose ninety-nine point nine percent of its value.
The bot used to identify adult content was a hilarious failure, especially since such content was still everywhere after the ban. It basically recognized flesh tones or long shapes, so basically everything and anything got tagged. The actual announcement post, a text post announcing the ban, was tagged as pornographic. It would be funny if it hadn’t completely destroyed the entire website.
Now for my own story. I used to work at the corporate office of a major water park in my state. If you’ve ever lived in Utah, you know which one. The year before I started, they adopted a new business practice of offering a season pass to the water park and numerous other facilities for a measly twenty dollars a year.
Not a typo. Previously, passes had been a hundred and fifty dollars or more. It gets worse. The year I started, they ran a new promotion where you buy a season pass for twenty-five dollars and get a twenty-dollar gift code back in the mail for Walmart or some other store.
You can see where this is going. Two weeks after I started as a fulfillment specialist dealing with past issues, they fired the entire call center staff of over thirty people, heaping their phone calls and emails onto my fulfillment team of eight. So in addition to all our work creating and shipping passes, we had to take every customer service call and email. And it gets worse.
For some reason, they thought it was prudent to wait until we had some large round number, I think either five hundred or a thousand passes ready to ship, before they would even order the gift cards to send with them. Even though there were thousands of passes purchased and pending with this deal. So not only were there massive delays in people getting their passes, sometimes they just wouldn’t get the gift cards at all because the season was starting and they demanded their passes now instead of waiting. Double whammy.
Customers were furious about how long it took to get the season passes and about not getting the gift cards. After all this and firing the call center, they couldn’t figure out why they were still losing money. I quit, and the rest of the team quit within two weeks of me leaving. Somehow they kept afloat for another year or so, but eventually the water park closed for a year or two and changed hands a few times.
It was recently bought again, renovated, and this new company is offering season passes for thirty dollars. The circle of life, I suppose.