The largest brands have leaned from past failures. Here are a few major brands that did it and came out on top.
If you are a casual consumer of the news, the near-collapse of major brands might not get your attention, unless it is a service or product that you use regularly.
You might look at these news headlines differently if you are a small business owner. In this case, the news of a giant that almost failed makes you ask what happened and what can be learned that you can apply to your own business.
In this video, we will share 6 beloved companies that almost didn’t make it and what can be learned from their failures.
Almost everyone knows the story of Apple’s birth and rise to fame that ushered in the ability for personal computers to become a part of our daily lives.
Less known is the story of its near failure, rebranding, and recovery. Apple gained its early momentum through its innovative products.
It was the first to market and gave customers what they wanted.
Over the course of 12 years, it failed to produce new products that were innovative and had the same popularity as those in its early beginnings.
New competition came onto the market that offered customers new alternatives and solved some of the issues with Apple products.
In 1985, Steve Jobs left the company, but in 1997, he was rehired. When he returned, the company was operating at a loss and creeping closer to bankruptcy.
Jobs launched a bold rebranding campaign to jump-start the idea once again that Apple meant innovation and exciting new products.
His biggest challenge was reinvigorating the brand in the minds of the customer.
Fortunately, this rebranding strategy worked, and Apple was able to turn itself around to become one of the biggest companies in the world.
This great success only came on the heels of a downward spiral over the last 12 years.
This is a lesson that as a business you cannot expect to have success based on early products and innovation, and you need a strategy that will sustain you for the long haul.
Business means a continual need to develop new products and strategies to keep the brand fresh and keep ahead of the competition. Innovation and improvement are a never-ending process.
In the consumers’ minds, Airbnb is a multi-million dollar company that seemed to rise into the ranks out of nowhere.
What many people do not know is that this giant was not an overnight success. In fact, the early years of the company were filled with struggle and failure.
The company began in 2008. In the beginning, investors were not willing to back the idea because they did not think that it would be a success.
The team did not give up, and they even resorted to some innovative advertising ideas, like creating customer cereal boxes, to make ends meet.
They were willing to do anything to give the company what it needed to grow and succeed.
This persistence eventually paid off, and Airbnb was able to find the investments that they needed and build the company that is now a part of everyday language.
The lesson in this near failure is to never give up, and if you are a startup, be willing to do whatever it takes to make your business a success.
If the founders of Airbnb were not willing to keep going even when everyone else told them it wouldn’t work and would not back their plans, the world would not know of this service and would be stuck with high-priced hotels and chains.
Blockbuster was once a name that everybody recognized back in the days when movie rentals were the best way to watch your favorite shows.
When it was first introduced, the ability to go to a store and rent a movie was a much better option than going to the theater or being stuck with what was on the mass media channels.
It gave customers a choice that they did not have before. This was their initial strategy and eventual demise.
This national chain was able to dominate the market and outcompete many smaller movie rental businesses, but Blockbuster’s days were numbered.
Along comes mail-order video rental, and then, Netflix that offered an even more convenient way to rent movies.
Suddenly, blockbuster’s way of doing business was obsolete. This happens in many industries, but it was Blockbuster’s response that led to bankruptcy court.
Netflix offered movies at a much lower price, and you did not have to get in a car and spend the time in the store selecting them and returning them.
Instead of acknowledging the new way that customers wanted their entertainment, Blockbuster remained attached to their original business model, even though it was going the way of the dinosaurs.
If Blockbuster had embraced the new business model and offered a way to stream movies, it could have used its branding and reputation in the industry to leverage a foothold that would have been difficult for Netflix to compete with, but they didn’t, and it is rare to see a blockbuster video anywhere these days.
This is a lesson of how important it is to stay relevant to your customers and how they want to consume your products.
You have to be able to adapt to a changing market. Holding on to a dying business model will never bring you success. If your core business model is working, keep doing it. If it is not, let it go.
#4. Berkshire Hathaway
The last business case of Blockbuster is a case where the company was unwilling to change its business model, even when the wishes and needs of its customers changed.
This story contrasts with the story of Berkshire Hathaway and the story of Warren Buffett. It is hard to believe that even Warren Buffett has a business failure behind him.
Warren Buffett began buying shares in the Berkshire Hathaway textile company at a time when it was starting to fail due to the ability of its competition to buy cheap raw materials and labor from overseas. He did not think the company would fail and believed it was undervalued.
He planned to sell the shares back to the company after the price increased. He would make money when the company recovered and became profitable again.
This time, he missed the mark.
At his first attempt to sell shares, the company President offered Buffett a price for the stock that he believed was too low.
Buffett became angry and ended up buying more stock instead of renegotiating with the company CEO for a higher price.
His anger led him to pour more money into the company and eventually became its owner. He bought the company just when the company was on the verge of bankruptcy.
Warren Buffett reimagined the Berkshire Hathaway Company and decided to turn it into a holding company rather than a textile manufacturer.
He began acquiring companies in various industries. Today, Berkshire Hathaway is one of the biggest companies in the world and owns businesses in diverse industries.
Berkshire Hathaway holds portions of Coca-Cola, Apple, and Goldman Sachs.
The Berkshire Hathaway textile mill was a failure, but Warren Buffett’s creativity turned it into a multi-billion-dollar empire. In the beginning, Warren Buffet made this mistake because he let his own arrogance get in the way of a good business decision.
#5. Amazon’s Failed Venture
By 1998, Amazon was one of the biggest retailers of books, movies, and music online. This was its core business.
However, Jeff Bezos had ambitions to compete with eBay and turn Amazon into a retailer where you could find nearly anything that you could imagine.
Amazon launched Amazon Auctions. Amazon Auctions failed for several reasons. First, it had no competitive advantage and offered nothing better than eBay.
Also, eBay was already established as a place to go for online auctions. EBay had a first-to-market advantage, and even though Amazon had an established name in its own core business, it did not have an established name in the world of online auctions. It was a newcomer in this new marketplace.
If Amazon Auctions had been able to offer something such as no listing fees or some type of advantage that eBay did not have, then it might have been able to offer some competition.
Because Amazon did not do its homework and offer something that its competitor did not, Amazon Auctions barely got off the ground and was dead in the water almost as soon as it began.
Bezos also invested heavily in Homegrocery.com, Pets.com, and Drugstore.com, all of which resulted in nearly 1 billion in total losses.
After the failure of Amazon Auctions and these other venture failures, Amazon launched Zshops which allowed sellers on Amazon to have their own shop inside of the platform.
This too eventually failed, but they were able to restart and rebranded it as Amazon Marketplace, which became an eventual success.
By the year 2000, Bezos had learned his lesson and went back to Amazon’s core business and basic rules for success.
They went back to a business model that worked, and they were eventually built up to sell nearly everything.
This time, they did it more slowly and allowed it to happen organically while concentrating on their core business.
Amazon’s biggest misstep was that they deviated from something that made them successful.
When they went back to their core business model, they were able to turn it all around and achieved the success they desired.
FedEx has been a lifesaver over the past year as online shopping became one of the only ways to get certain items.
They are one of the most trusted brands in the world when it comes to delivering your packages on time and safely. FedEx, as we know them today, almost did not exist.
Founder Frederick Smith built an impressive business, but operating expenses continued to rise, and he soon found himself unable to pay his bills.
The price of gasoline, truck repairs, taxes, and other overhead costs outpaced what customers were willing to pay for package delivery.
As it goes, FedEx was down to the last $5000 before it would have to close its doors.
Frederick Smith did something unconventional. He took the $5,000 to Las Vegas and started playing Blackjack.
He won $27,000, which was enough to cover the company’s costs and give it enough time to raise capital using more traditional methods.
This capital gave him enough to cover his operating costs, and he was able to save the company and build it to where it is today.
We would certainly not recommend playing Blackjack to keep your business afloat, but this shows the value of innovation and how grit and determination are what it takes to bring a business back from the brink of failure and build it into a global company.
Sometimes, as a business owner, you do have to think outside of the box to become a success.
So What’s Next?
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