10 Most Embarrassing Corporate Blunders
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How you ever thought about starting a business but were afraid of failing? Depending on the statistics you refer to, anywhere between 65% to 80% of businesses fail after a decade, according to Investopedia. However, this is no reason not to try. As long as you develop a business plan and offer a service or product that serves an existing demographic, try your best. Some companies fail a few times before they succeed because they learn from their mistakes.
Some of the worst business mistakes are embarrassing corporate blunders. 20th Century Fox accidentally gifted George Lucas billions due to shortsightedness about merchandising. As ComicBook.com reported, Sony was offered every Marvel character for film licensing for $25 million and declined. Learn lessons from these 10 embarrassing corporate blunders as you aspire to start a business.
1. M&Ms Refused Product Placement in ET
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1982’s ET generated over $800,000 in 1982, or the equivalent of $2.6 billion in today’s money. Hershey, the parent company of Reese’s Pieces enjoyed wider brand exposure and profits because it allowed the filmmakers to use the candy in the film as product placement. Product placement in films was not new in the 1980s, but the concept was not as normalized as it is now. The filmmakers originally wanted Mars’ M&M candy in the film, but Mars declined. It’s one of the most embarrassing corporate blunders because companies lobby for product placement now.
2. $125M Space Probe Lost Due to Math Error
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In 1999, NASA lost a $125 million space probe destined for Mars because scientists failed to convert calculations from the English systems, pounds, inches, and feet, to the Metric system. The probe was either destroyed on Mars or lost in deep space. NASA was a public laughingstock for years afterward. The public wondered if a bunch of rocket scientists couldn’t spot this problem to prevent it, who could? It’s one of the most embarrassing corporate blunders ever that forced future probes to be relatively smaller to save money.
3. Google Was Almost Bought for $750K
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In 1999, Google was the new kid on the block in a world where the internet and search engines were brand new. Google offered to sell itself to competitor Excite for $750,000 and the right to exchange Excite’s tech with Google’s. Excite declined. Smart devices, social media, and superfast WiFi didn’t exist, so judging this decision in hindsight is easy.
It still ranks as one of the most embarrassing corporate blunders ever. Alphabet, Google’s parent company, is now worth over $832 billion and has a market capitalization of $2 trillion. It is the fourth most valuable company on the planet.
4. The 2014 Sony Hack
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In 2014, Sony was prepping to release the film The Interview, a comedy about talk show hosts recruited to assassinate North Korean dictator Kim Jong Un. The public narrative is that North Korea, outraged by the subject matter, demanded Sony shelve the film or be embarrassed by a data hack. What is known is that days before the film’s release, a hacker group publicly released troves of private, proprietary, and embarrassing Sony emails. Executive Amy Pascal resigned as Sony co-chairperson in embarrassment. It’s one of the most embarrassing corporate blunders because it showed not even billion-dollar corporations are safe from cyber hackers.
5. Sony Could Have Owned the MCU for $25M
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In the 1990s, Marvel Comics went bankrupt and almost closed for good several times. To stay in business, the company licensed its characters to any film studio that would buy them. Sony bought the film rights to Spider-Man in 1999. However, Marvel offered Sony its entire character roster for $25 million. Sony only saw value in Spider-Man and declined.
In fairness, the MCU didn’t exist, the first Iron Man film was a decade away, and superhero films were seen as childish or campy at the time. Still, Sony’s shortsightedness cost it a chance at starting its own MCU. The MCU has made about $30 billion in revenue from 2008 to the present.
6. Toys ‘R Us Breaking Bad Toys
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In 2014, Toys ‘R Us began selling action figures designed after the cast of the acclaimed 2008 series Breaking Bad. Some of the action figures depicted characters like Walter White and Jesse Pinkman in meth lab suits and featured tiny detachable bags of money and meth. Outraged parents and critics protested and signed online petitions. Toys ‘R Us recalled the toys soon afterward.
7. The New Coke Debacle
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In April 1985, Coca-Cola stunned its consumer base by completely changing its soda formula and creating a new and sweeter-tasting product called “New Coke.” The old Coke would be discontinued. Old Coke fans revolted, signed petitions, and staged public protests. Coca-Cola headquarters received hundreds of thousands of complaints. Coca-Cola brought back the Classic Cola-Cola formula by July 1985. It was one of the most embarrassing corporate blunders ever that tainted the company’s reputation for years to come.
8. Frito-Lay’s Laxative-Inducing Potato Chips
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In 1998, Frito-Lay introduced a diet-friendly potato chip called WOW Chips. It contained olestra, an experimental fat substitute. FDA warning labels had to be displayed on the bag. Olestra molecules are too large to be absorbed in the human body and don’t cause weight gain. One ounce of WOW Chips had 0 fat and 75 calories. However, consumers who binged on WOW Chips experienced laxative-like abdominal cramps, uncontrolled bowel evacuation, and “anal leakage.”
Frito-Lay made $347 million during WOW’s debut, but sales plummeted two years later. No consumer was hurt, but Frito-Lay became an industry laughingstock for years. It created one of the most embarrassing corporate blunders ever by betting on experimental ingredients.
9. Kodak Invented the Digital Camera and Shelved it
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A Kodak engineer named Steve Sasson developed the first digital camera prototype in 1975. Kodak was terrified the invention would obsolete its film cameras so they sat on the invention for decades. Meanwhile, other companies developed their own digital cameras. Then, smart devices became ubiquitous in the 2000s. By the time Kodak tried to release its digital cameras it was too late; its competitors saturated the market. Film roll cameras became obsolete overnight. Kodak went bankrupt in 2012. It’s one of the most embarrassing corporate blunders ever. Kodak allowed other companies to obsolete it in 2012 with evolving but derivative technologies Kodak invented in 1975 because Kodak wanted film cameras to survive.
10. Fox Unwittingly Gave George Lucas $4 Billion
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In 1976, George Lucas was finalizing the production of Star Wars. Lucas was ahead of his time, saw the value of merchandising, and understood the long-term appeal of Star Wars. Fox finalized a deal where Lucas was paid $165,000 to write, develop, and direct the film, which was not a lot in this era. Lucas accepted lower pay in exchange for all merchandising rights and creative control of all future sequels.
It was one of the most embarrassing corporate blunders ever for Fox. Still, this was an era when pop culture merchandising and global fan culture were not a thing. Lucas foresaw the potential and made over $4 billion in the coming decades. Lucas was a multi-billionaire decades before Disney bought LucasFilm for $4 billion in 2012.
Embarrassing Corporate Blunders
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Sometimes the best way to learn how to start a business is to learn from the mistakes of others. Make detailed business plans that reflect current market reality and adjust as necessary. Take less money in an up-front investor deal if you can retain more control and profit more later. Get advice from experts. Work with a financial advisor if you can. Remember that your brand image is just as important as your product. There is no shame in failing at business, the only shame is not learning from your mistakes.
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Allen Francis is a full-time writer, prolific comic book investor and author of The Casual’s Guide: Why You Should Get Into Comic Book Investing. Allen holds a BA degree from Marymount Manhattan College. Before becoming a writer Allen was an academic advisor, librarian, and college adjunct for many years. Allen is an advocate of best personal financial practices including saving and investing in your own small business.
