Nine Big Companies That Let Their Business Get Away From Them

Remember Flickr?

There's an annoying term in the tech world called "disrupting", when a single breakthrough turns an entire industry on its ear. Typically it's a startup company that does the disrupting: think of Uber and AirBnB changing the way we obtain transportation and accommodation. But for every great innovation, there's a staid corporation too slow or skeptical to believe in it. This goes back to Western Union turning down Alexander Graham Bell's patent for the telephone. Here are nine other brands that blew it:

  1. MTV. By 2000, countless startups were seeking to conquer the Internet's video space, even though connection speeds were still too slow and video compression technology still too inadequate. They're partly why the dot-com bubble burst. By 2005, speeds were up and file sizes were down, and YouTube (among other sites) capitalized on this holy union. MTV had long lost interest in music videos at this point, yet they could have easily transitioned their blah website into a YouTube-like destination. They had the name, the money, the vast library of videos. But there was one thing they didn't have: foresight.
  2. MySpace. When the underwhelming Google+ was introduced in 2011, many claimed it would supplant Facebook, the argument being that Facebook supplanted MySpace, and MySpace supplanted Friendster. That's how the Internet works, right? Wrong: nothing has supplanted Amazon, eBay, or IMDb because these sites give us what we want. And although Facebook was new to the general public in 2007, as MySpace still reigned supreme, it gave us what we wanted from a social network. MySpace didn't. But with their massive user base, they could have. They only had to incorporate newsfeeds and comments threads, which is what made Facebook so useful. Instead, they offered user-designed layouts (bad idea!) and dead-end "testimonials". By the time they tried to catch up to Facebook's functionality, it was too late.
  3. Flickr. Flickr was the perfect place to store and share photos online – in fact, the first major site to offer these services. It was popular and easy to use. Then Yahoo bought them, ignored the potentially huge social aspects of the site, forced everyone on Flickr to join Yahoo, bungled the mobile app, and finally ruled that Flickr wouldn't make them any money. Facebook and Instagram laughed all the way to the bank.
  4. Tower Records. The beloved record store chain could have been iTunes. Instead, in 1999-2000, while raking in a billion dollars a year, they opted to stop selling singles, forcing customers to pay more money for entire albums. This greedy decision came at exactly the wrong time: when Napster's free file-sharing service debuted. Not everybody wants to buy full albums, so hordes flocked to Napster to illegally download singles. Apple's iTunes – and threats from law enforcement – brought Napster to heel and proved that people are in fact happy to pay 99 cents for a song. Tower's own founder admitted that, had they kept the focus on selling singles as they had for decades (from 45s to cassingles to CD singles), they would have had the cash to set up a digital marketplace. But they didn't, and went out of business in 2006.
  5. Blockbuster Video. Instead of beating upstart Netflix at their own game, they dragged their heels. By the time Blockbuster's online subscription system went online, Netflix was already the go-to company for DVDs by mail. Meanwhile, Blockbuster's brick and mortar stores were hemorrhaging money. Adding insult to injury, the company had turned down Netflix's partnership offer in 2000 because they didn't want to pony up $50 million (which they easily could have afforded). Whoops.
  6. General Motors. I speak specifically of the EV1, the auto giant's all-electric car, introduced in 1996 to great acclaim. There are several reasons why GM dropped the ball on this new technology, summed up in the documentary Who Killed the Electric Car? At the root was the company's policy of only letting drivers lease the EV1, not purchase it, which allowed the unconfident GM to reclaim every single EV1 in 2003... the same year Tesla was founded. Some argue that GM may ultimately win the electric car race, thanks to their ballyhooed Chevrolet Bolt – time will tell – but they could have been at this point twenty years ago.
  7. Nokia. In 2007, the Finnish communications company was the largest mobile phone vendor in the world. What happened? A lot of things, but mainly this: Nokia's phones were still running on the outdated Symbian operating system while app developers – and thus app customers – had moved on to Apple's iOS and Google's Android systems. Instead of getting smart, Nokia got in bed with Microsoft, who wanted Nokia's phones to run on Windows. In 2013, Microsoft bought Nokia's mobile phone business outright – for over $7 billion. Why? You got me.
  8. Kodak. Consider this: in 1996, this venerable film and camera company was America's fourth most valuable brand, bested only by Disney, Coke, and McDonald's. In 2012, they filed for bankruptcy. You can guess how Kodak spiraled down so fast: digital cameras became affordable, the company was late to the game, and then smartphones made digital cameras obsolete anyway (excluding high-end cameras). Does Kodak deserve any blame for their downfall? Well, they did literally invent the digital camera in 1975, but never believed in it, so there's that.
  9. Zipcar. Sometimes the disruptor gets disrupted. Zipcar, introduced in 2000, was a nifty idea: if you need a car, but not for the whole day, why not borrow one for an hour or two? However, you still had to find your way to a Zipcar to drive it – easy on college campuses, where the company first flourished; not so easy in urban areas, where the nearest Zipcar might be a 10-block walk away in the rain. Before they could sort out the situation, along came Uber (founded 2009) and Lyft (founded 2012) with a more convenient ridesharing alternative. Zipcar, now an Avis subsidiary, recently inked a deal with Uber in a bid to put their cars to use. Both await the biggest disruptor of all: the driverless car.