History is often the result of small things and minor decisions which snowball into something far bigger. The assassination of Archduke Franz Ferdinand in 1914 led to the First World War. In 1955, Rosa Parks, an African-American, refused to give up her seat for a white passenger, setting into motion a chain of events which led to the birth of the civil rights movement in the US.
Sometimes, however, it’s not what someone does, but what they don’t. Noland Bushnell, the man who founded Atari (once the world’s leading computer gaming system), had hired Steve Jobs in the early 1970s. In 1976, Jobs left to set up Apple Computers and offered Noland a 1/3rd share of his new company for $50,000. Noland turned it down, something he admittedly regrets to this day. Atari is no longer quite the household name that it once was, and Apple Computers is predicted to reach a market value of $1 trillion fairly soon.
History is replete with many other such examples of missed opportunities. The following are among the most famous, the results of which we still live with today.
1. Constantinople Refuses to Buy Orban’s Cannon (1452)
By the 3rd century AD the Roman Empire had grown so big that it could no longer sustain a single capital. So in 285 the Emperor Diocletian divided it into the Western Empire ruled from Rome and the Eastern Empire ruled from Byzantium (later renamed Constantinople and today’s Istanbul). Rome fell in 476 when the Visigoths (a Germanic tribe led by Alaric) breached its walls, sacked the city, and took over. Western Europe collapsed, ushering in the Dark Ages.
Byzantium lived on to the east, but it was under constant attack. By the 15th century, it was a shadow of its former self when the Ottoman Empire invaded. In 1452, Orban, a weapons maker, tried to sell Emperor Constantine XI a cannon for the city’s defenses. The emperor liked it, but the treasury simply couldn’t afford it.
So Orban sold his cannon to the Ottomans, instead. It was 27 feet long, with 8 inch thick walls, and a mouth 30 inches in diameter. On 6 April 1453, Ottoman Sultan Mehmed II aimed his new weapon at Constantinople’s impressively thick defensive walls. For almost 50 days and nights, he pounded the same spot, eventually creating a breach. On May 29, his army poured through, ending the Byzantine Empire and Christian domination of the East.
2. International Car Makers Refused to Buy Volkswagen (1945)
The Volkswagen was developed in Nazi Germany as one of Hitler’s attempts to improve the lives of ordinary German citizens. The car was cheap and therefore affordable to the middle class, hence the meaning of its name: folk’s wagon. After World War II, however, Germany lay devastated as was the Volkswagen factory. Fortunately, the company lay in the American zone. The Americans, however, saw no value in the area, so they handed it over to the British who made it the responsibility of British Army Officer Major Ivan Hirst.
Hirst originally planned to take the factory equipment as part of the post war reparations, but he was also responsible for the surviving Germans in his jurisdiction. To provide for them, he decided to sell a few cars abroad. They were an instant hit, so Hirst offered to sell the Volkswagen company to British, Australian, French, and American firms. Too focused on making luxury cars and refusing to be tainted with Nazi technology, they all refused.
Volkswagen remains one of the best-selling cars today, while many British, French, and American car makers struggle to remain viable.
3. Enzo Ferrari Refused to Listen to Ferruccio Lamborghini (1958)
Feruccio Elio Arturo Lamborghini was a mechanic who had a passion for cars. His original fortune was based on the production of farm tractors, but that in no way mitigated his love for sports cars. His first company, the Lamborghini Trattori, became an important company which helped to rebuild the Italian economy after World War II.
In 1958, he bought his first Ferrari and fell in love with it, but found that it had major flaws. He thought it was too noisy, had a poorly designed clutch system, had a badly built interior, and was a little too crude for the road.
He pointed these out to Enzo Ferrari, the company’s founder, who brushed off the criticisms. As far as Ferrari was concerned, Lamborghini was nothing more than a tractor maker who couldn’t possibly understand how to handle an upscale sports car.
Offended, Lamborghini decided to make his own range of sports cars. In so doing, he forced Ferrari to make the suggested improvements or get out of business. Had Ferrari listened to Lamborghini, the two could have been partners. At the very least, Ferrari could have had one less competitor in the world.
4. Kodak Invents the Digital WiFi Camera But Doesn’t Exploit It (1975)
The Eastman Kodak Company used to be the world’s leader in cameras and was renowned for its innovation. Up until 1976, it had a 90% share of the American market alone for cameras, film, film equipment, and photographic services. So popular was Kodak that the phrase “Kodak moment” has become a popular expression to mean a moment worthy of note.
By the late 1990s, however, digital imaging technology was becoming more popular. With too much at stake in its film paper and related products, Kodak’s success actually dragged it down. As such, it was slow to adapt to the new technology. The interesting thing is that Kodak was actually the first to invent the digital camera. Steve Sasson, an engineer with the company, developed it as early as 1975. Rather than exploit his creation, however, Kodak instead chose to suppress it, understanding the threat it posed to its other core products and services.
Realizing their mistake, Kodak released the first wifi camera in 2005 which allowed people to email pictures to others. Though new, Kodak didn’t develop it further, something its competitors took advantage of. By 2013, Kodak only escaped bankruptcy by selling its patents off for $525 million.
5. Ross Perot Refuses to Buy Into Microsoft for $60 million (1979)
In 1992, Ross Perot ran for the US presidential elections as an independent candidate against George H. W. Bush and Bill Clinton. He later withdrew, only to rejoin it later. That initial exit hurt him, however, something he later admitted to regretting. Another thing he regretted was a business decision he made in 1979.
At that time, he was head of Electronic Data Systems and doing very well. He took a $1,000 investment in 1962, and by 1979 was a well-known leader in the computer industry whose businesses were worth almost $1 billion.
Wanting to expand his empire further, Perot began looking around to buys small IT firms when he discovered Microsoft. At the time, it was run by a 23-year-old Bill Gates. Though Gates was uninterested in selling his company, he was willing to offer majority shares for between $40 million to $60 million. Perot thought the price too high. According to Mary Gates (Bill’s mother), she urged her son to accept a lower offer from Perot, but Bill refused.
In a 1992 interview with The Seattle Times, Perot said, “I consider it one of the biggest business mistakes I’ve ever made.”
6. Marvel Decided Not to Buy Out DC comics (1984)
In the early 1980s, DC Comics (the producers of Superman, Batman, Wonder Woman, and many others), was in financial trouble. Though its share of the comic book market stood at around 18%, it was not enough to keep it viable. Marvel Comics, by contrast, owned about 70% of the comic book market.
In 1984, Bill Sarnoff of Warner Communications (which owned DC), tried to save the comic brand by reaching out to Marvel. His idea was to license DC’s characters to his competitor. At the time, Warner was losing money on the comic side of its business, but did well licensing out DC characters like Superman. Marvel, on the other hand, did well at selling comic books, but was not into licensing.
Jim Shooter, Marvel’s editor at the time, liked the idea. Negotiations went smoothly and Marvel even considered buying Warner’s DC brand. Sarnoff was amenable to the proposal, but First Comics found out and sued for anti-trust violations. It also accused Marvel of trying to develop a monopoly.
The courts found that First Comic’s claims had no merit, but Marvel’s lawyers were scared off from the deal. Though Marvel remains profitable, it could have been even more so had it gone through with the purchase.
7. IBM and Digital Research, Inc. Versus Microsoft (1985)
Up until the late 1970s, computer makers like IBM still did not understand the true potential of computer software. Upper management at these firms was only concerned with selling hardware, which had always been the traditional core of their business. Even Bill Gates at the time failed to see the value in operating systems (OS) for personal computers.
By the early 1980s, the personal computing business was starting to take off. Responding to the demand, IBM approached Digital Research, Inc. to develop an OS for their computers, but the firms failed to reach an agreement. IBM therefore approached a smaller company at the time, a language vendor called Microsoft.
Microsoft had no real operating system of its own back then, but it had a license to sell Seattle Computer Products’ 86-DOS OS. Microsoft polished that language and presented it to IBM as Microsoft Disk Operating System 1.0. IBM liked the system, so Microsoft bought the 86-DOS from SCP. This eventually became the MS-DOS system, and later MS Windows.
Had IBM’s management been more technologically savvy, or had DRI been more amenable to a deal, they could have been where Microsoft is today.
8. George Bell Undervalues Google and Refuses to Buy It (1999)
In 1999, Google was a tiny company run from the garage of Susan Wojcicki’s Menlo Park home in California. It had only two other employees: co-founders Larry Page and Sergey Brin. By contrast, Excite was a major internet portal — one of the pioneers in the business and therefore an industry leader run by its CEO, George Bell.
Vinod Khosla, founder of Khosla Ventures and a partner at Kleiner Perkins (another venture capitalist firm), became interested in Google. At the time, search engines were neither very efficient nor accurate, resulting in as many misses at hits. Khosla was therefore impressed with the algorithm that Google was working on as it seemed very promising.
The venture capitalist had backed Excite, so he got Bell to agree to a meeting. The Google founders offered a selling price of $1 million for their fledgling company, but Bell found it too high. Khosla advised the two hopefuls to go down to $750,000 instead. They did, but Bell still found it too high and called off the negotiations.
Kleiner Perkins ended up backing Google, but Khosla Ventures did not, and the rest is history.
9. Blockbuster Refuses to Buy Netflix for $50 million (2000)
In 2000, Blockbuster Video Entertainment, Inc. was an industry giant with nearly 8,000 stores throughout the US renting out movies and video games. At its peak in 2004, the company had over 9,000 stores and a little more than 60,000 employees.
By contrast, Netflix was a fledgling company that was struggling to stay afloat. It sold DVDs by mail to several thousand subscribers. Realizing the need to change their business model in order to remain viable, they decided to stream their movies to their subscribers, instead. Unfortunately, they lacked the funds to develop their idea further.
So in 2000, Netflix CEO Reed Hastings paid a visit to Blockbuster’s headquarters in Dallas, Texas. He offered John Antioco, then Blockbuster’s head, a chance to buy Netflix for a mere $50 million.
Considering Blockbuster’s domination of the movie and game rental business, Antioco found the proposal ludicrous. He and the other Blockbuster executives still did not understand how the market was changing and just how fast the internet and computers were developing. According to Hastings, he was literally laughed out of that meeting.
When Netflix began to boom in 2007, Blockbuster tried to adapt. By then, however, Netflix already dominated the market and Blockbuster just couldn’t compete on even terms. By 2010, Blockbuster lost $1.1 billion and was worth $24 million, while Netflix was worth $13 billion. In 2013, Blockbuster closed down the last of its stores. As of the first quarter of 2015, Netflix has an estimated market cap value of $19.7 billion dollars.
10. MySpace Rejected Facebook’s Original Purchase Price (2005)
Before 2003, Friendster was the Facebook of its day till it was superseded by MySpace. The latter’s better visuals, more user-friendly options, and aggressive marketing allowed it to blow Friendster out of the water. By late 2003, the experts were saying that everyone would soon be on MySpace.
Realizing the market value of social media sites, other companies jumped in to get their share. In February 2004, Mark Zuckerberg was still a student at Harvard University when he and his colleagues launched TheFaceBook.com onto cyberspace.
Its original appeal was that it was only open to Harvard students, giving it a sense of exclusivity. It became so popular that neighboring universities were soon included. Within a few months, it opened up to everyone else but kept ads to a minimum, unlike MySpace which still inundates members with them. By June, a still unknown venture capitalist offered Zuckerberg $10 million for the site, but he refused.
In early 2005, MySpace CEO Chris DeWolf offered to buy TheFacebook.com, but backpedaled when Zuckerberg demanded $75 million. Later that year, the company simply became Facebook.
In 2008, MySpace owner, Rupert Murdoch, tried to sell the site off for $100 million, but there were no takers. In 2011, he agreed to Specific Media Group’s purchase price of only $35 million. By 2013, Facebook was worth $17.89 billion.