It seems that almost everyone these days wants to start a business. People are full of "million-dollar" ideas that they hope will get them rich or famous, or maybe even both. However, sometimes it doesn't really work out and you're left with way less than you started out with.
Reddit user Devvint_ asked people, "What is the worst business decision you've ever seen?" and surprisingly, a lot of them delivered interesting stories. Do you have any of your own to share? Feel free to do so in the comment section below!
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In my hometown there was an independent fast food and homemade ice cream place, long established and run by close friends. It was a goldmine. They decided to sell and retire. New owners immediately changed everything. Painted it a wild color, removed some attractions on the grounds, changed the 60 year old menu and switched to commercially made ice cream. They lasted 8 months.
We got an interview with Ulrike Schaede, a professor of Japanese business at the University of California, San Diego. She gave us some amazing answers about business and how to run one. Firstly, we asked what the worst business decision she's ever seen or heard of was: "Any decision that destroys a company is bad, especially if it is the result of a gamble (i.e., the risks were known at the time of decision). Toshiba invested in nuclear power only because their main domestic competitor did, without the ability of running a thorough due diligence of what they were buying.
Another version of this is not doing what is required to save the company's future. For example, Blockbuster rejected overtures from Netflix to merge. They failed to see that Netflix had the future figured out, and they hadn't. Barnes & Noble could have gone online much sooner and launched a 'click & mortar' play. Kodak should have moved to becoming a materials and digital imaging company much sooner (like their competitor Fujifilm did, successfully). And, my favorite: Sears, the largest catalog and retailer in the U.S. and the world in its day, failing to put the catalog online early."
A developer my dad worked with sold off a beautiful piece of land next to a river in a very desirable area, he sold it to another developer. The new developer cut down every tree on the 6 acre site, as he said, "he wanted to see what he had". The land then started to slide into the river, rendering it worthless *and* ugly.
I used to work for a company that was bleeding money. In order to try and save money, they decided to stop honoring returns/refunds, but still advertised that they did.
Whenever someone would ask for a refund, you were supposed to tell the person that it would be processed in the next 6-8 weeks, then get them off the phone.
6-8 weeks later, when they ask where their money is, you were supposed to apologize and say their paperwork got put in the wrong stack, and that it would be put in the correct stack and would then be processed in the next 6-8 weeks.
If they complained about the length of time, you were supposed to tell them you can ask your supervisor to expedite it, and they should see it in 4-6 weeks instead.
If they threatened legal action after months and months, you were supposed to tell them to contact the company legal department ( we didn't have a company legal department) and then hang up on them. Then, make a note in their account. No one should field calls from that account further.
More than half the call center quit in a single week in protest of this decision.
Company collapsed in on itself within a few months.
I quit one job over wanting me to do things that were illegal. And they knew why I quit so the exit interview was a bit awkward but that's on them. Then they falsified a paper regarding why I quit so that I'd be charged a fee (drug test I think - forget) of about $60 instead of them having to pay for it. Petty or what. Could have nailed them but I didn't have the money to pursue it on principle and actual loss was not worth it. Companies are made of human beings and some human beings are trash.
Ulrike Schaede also gave some insight about the main mistakes new business owners make: "To be so much in love with their business idea that they don't see – or hear – possible reasons why it may not work out. This is particularly true for tech inventors, who are so convinced that their technology is the best that they forget that the consumers will have to be sold on the new value proposition. But it applies to non-disruptive businesses as well, like restaurants or coffee shops."
I never understand ads that start off insulting me. There’s one I see on YouTube all the time that starts with “your skin care routine sucks” and goes on to try bullying me into buying their product.... like that’s the best way to get me to avoid your business at all costs even if it might be a good product
The thing that puts me off with ads is that they are ads. Love my ad blocker
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Well, to be fair, washing your face and putting on moisturizer/sunscreen is a routine too. It doesn't have to involve 11 steps and snail mucus, but it's still a good idea to care for your skin!
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And the ones I see all the time that tell me I've been doing "whatever" wrong all my life, and then proceed to tell me how to do it in the most ridiculous way possible.
The ad I hate is that woman telling women to smear her c**p on their privates
There was a shopping plaza near me with a fairly large gift store. Not a gift shop in the museum sense, basically like a Hallmark store but independent. It wasn’t exactly bustling, but they apparently did solid business and a lot of people in the community really appreciated having it there as a place to buy gifts and wrapping paper and such. The owners of the shopping plaza raise rents to the point that the shop goes out of business. The reason this was stupid is that the store front sat vacant for like 15 entire years. Seriously, this place closed when I was a child and I’m now 27 and the vacancy was only taken over very recently. If their goal in raising the rent was to have a more profitable store move in to that space, they certainly failed and missed out on decades of rent as a result.
This happened to a pub where I live. They guy who rented was a DJ and rented when nobody went there. He got the place rocking, burgers, good bands and dance sessions. After 10 years his rent contract was up and they owner tripled it. I left and it's been shut for 15 years.
She also shared some important tips: "To overcome the bias in overestimating the general perception of one's business concept, run all ideas and steps by a trusted, experienced person who is not invested in your business. Ask them to be brutally honest at all times. Then, listen to them, figure out what they are sensing, and shape your strategic responses to address their concerns."
There’s a major ice cream place in my hometown. Big building, tourist attraction sort of thing. Then the owner decided to post up an “all hail trump” sign. And when I say sign, I mean a huge tarp on the front of the store that you could see across town. I live in a liberal minded town. Business immediately went down the shitter.
What was once a bustling store is dead empty on Saturdays.
EDIT: the sign was actually “In Trump we trust.” But both basically mean the same thing. Sign was still a huge a*s tarp.
Cafe I work for decided it wanted to fire everyone except for the leads and the manager. Then told the manager they weren't paying her salary anymore AND she needed to take on more work. Assumed people would do it because they "love their jobs"
Ulrike Schaede shared what the main problems with businesses these days are: "The necessity of speed, caused by the short-term tendencies of markets, has led to too many ideas that are half-cooked. The concept of 'lean startup' was very insightful and useful when it was first conceived some 15 years ago, as it introduced the 'good enough' concept to get companies going. But the pendulum has swung too far in the other direction. If a startup is too lean, it may not have the stamina and support network it takes to run the business marathon."
Property management company I used to work for had a number of student properties and high-rises that were always a struggle to fill in the summer months when students went out of town.
Head office came up with an offer that anyone who signed for two years got the four summer months at 50% off. Sounds like a good deal, 50% rent is much better than zero. We signed tons of students.
However the lease templates that head office sent over showed the reduced rent rate on the lease rather than just adding the discount as a separate addendum. I noticed this discrepancy and reported it - and was subsequently ignored.
Which meant the students were signing a legal document that guaranteed them 50% rent for two years.
The company lost hundreds of thousands in revenue.
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 40 or so years, he decided to retire and hand the business over to an ambitious recent college grad. He offered to give her the recipe and even volunteer his services for a bit while she got comfortable in her new role as owner. She declined both and 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
I feel bad for the uncle, it must have been hard seeing the legacy destroyed
I worked for a video store during the time Finding Nemo came out on DVD. The video store I worked for got a huge fishtank put inside. It was so big they had to shrink the game rental section. The tank had clown fish in it. The tank was also locked and we couldn't feed the fish or clean it. This was supposed to be done by someone who I never saw come in. So the tank ended up filled with a bunch of dead Nemos in a nasty as f**k tank. Needless to say parents were very unhappy about it. The local paper did a small article about it too which didn't help an already dying store. I have no idea what they thought an expensive as Hell fish tank would do for their business.
Take a help desk that has been consistently rated extremely well by its customers for their first-call-resolve, attitude, and helpfulness; outsource it to a company that's been rated towards the bottom of the list for over a decade because it costs less than the salaries/benefits of your former in house help desk. Then complain when your first-call-resolve drops through the floor and your customer satisfaction is at an all time low.
The Service Desk is right up there with Q&A when the head office goes on a 'cost cutting' binge because of they are not considered to be generating any profit. R&D and plant maintenance duke it out for third, while janitorial runs a very close fourth/fifth.
Small company I used to work for hired a guy who had been laid off from a previous job - let's call him Jeff. He had some business management experience, but the company's philosophy was "everyone starts at the bottom" (that alone is a terrible business practice, but not what I'm referring to). Eight months after Jeff is hired, the office manager walks out due to a disagreement with the owner. Owner tasks Jeff with doing the old manager's job and tells him "if you do well enough, we'll give you the job permanently." Jeff absolutely killed it; he handled problematic customers with patience, delegated tasks to people he knew could handle them bets, and implemented a few systems that made the business run more smoothly. The holidays roll around and the owners hire a new person from out of state - we'll call her Janice. Janice has a similar story to Jeff's; thought she had a steady job, got let go unexpectedly, needed anything that could pay the bills. Rather than start Janice from the bottom like they did with every other employee, they had her shadow Jeff in the event Jeff went on vacation or was hit by a truck. Makes sense, I guess. Again, Jeff rolled with it; Janice was pretty slow to learn anything and outright stated there were some parts of his job she would not do under any circumstances, but she'd do in a pinch.
I mentioned that they hired Janice around the holidays because the company always shut down the week between Christmas and New Year. The last working day before the shut down, the company had a small party, and while one of the two owners went with Janice to pick up the pizza, the other owner said "Jeff, you've done an awesome job this year and have been an asset to our company. Take the rest of the day off (after the party, of course), and when you come back in January we'll have a talk about your future here." Everyone was thinking "alright, cool! Jeff's gonna get promoted." Yeah, no. It took a few months for the truth to come out, but here's what happened: The owners decided that while Jeff was a fantastic manager, he didn't have the "face" they wanted for their business - they much preferred a slender blonde woman to be the first person their customers saw instead of the tall burly guy who looked like he just crawled out of the woods behind the place. So despite the fact that Jeff had practically carried the company for eight months, they gave Janice the promotion instead. When Jeff protested and said they had promised him the job, they claimed they never promised him anything and he "should be glad to even have a job in this economy." If that wasn't bad enough, here's where it gets worse: the "talk" the owners had with Jeff was "as a thanks for keeping us going, we're giving you a small raise and changing you from hourly to salary - so while you won't make overtime pay anymore, your paycheck should still match what you were making previously."
Naturally, the owners didn't tell everyone they'd screwed over their best employee - they just told anyone who asked that he turned down their offer and forced them to give it to Janice instead. When Jeff learned they were lying about what happened, he decided to (metaphorically) burn the place down. When he was training Janice, he would save her before she made a big mistake and even though quality control wasn't ever his job, he was really good about catching errors before they went out the door. If Janice couldn't figure something out, he'd tell her he was busy (which was usually true) and for her to get someone else. If she or the owners demanded he drop what he was doing to assist her, he'd do the minimum necessary and often make an offhand comment to the owners about her incapability to do the job unassisted.
After almost two months, Jeff got called into the office where the managers threatened to fire him if he didn't shape up - he asked them to point to what aspect of his job they were unhappy with, and everything they replied was met with "that was my task when I was the acting manager, now that you have a manager, that is no longer my responsibility." They tried to counter that he was the *assistant* manager, but he responded that his official title in their system was still "expert" (i.e. regular employee) and that he hadn't agreed to accept a position as an assistant. They tried to say "fine, you're an assistant manager now", but he declined the position; they replied "you can't refuse this, we're making you the assistant manager". Jeff shot back with "Oh? Well according to the lie you told everyone in the shop, I 'declined' the position you gave Janice. Now you want to tell me I can't refuse a promotion when it suits you? If you do this, I will do two things: I will quit right now, on the spot, and on my way out the door I will tell everyone in the shop every detail about how you stabbed me in the back." The fact you're reading this now should tell you what choice the owners made.
What's funny about this is that Jeff was actually disappointed to quit the way he did - he had a new job lined up and was starting the very next Monday, but he was hoping to drive the owners to the point they tried to pull the "you should feel lucky to have a job" line again. Anyway, Jeff enjoyed a week of unscheduled time off and went on to greater things, and the company realized just how much they relied on him. Janice quit about three weeks later because she "couldn't handle the stress", and the owners actually fired me for putting in my 2 weeks notice when I got a job offer somewhere else. Somehow the owners kept the place going for about two more years before folding, although I hear they moved elsewhere in the state and tried again.
There is a storefront in my city that opened mid pandemic. They are a candy store. Simple enough right? 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 about them to take them aside and be like "Aunt Lynda, this is a f****n stupid idea"
There's a big thing about sweet (candy) shops in places like London, UK at the moment. They're linked to money laundering: https://www.bbc.co.uk/news/uk-england-london-61777445
I would go with Mao's great leap forward. Taking millions of farmers away from farming so they can make s****y steel from any scrap metal they can find and 20-40 million people die in the resulting famine and China ends up with lower annual steel production.
Mao also decided that all sparrows should be killed because he thought sparrows ate too much grain. So hundreds of millions of the birds were killed. But infestation of crop fields soared after the locusts lost their major predator, and they ate everything in their path. Grain production collapsed beginning a massive famine. Human fatalities were 45 to 78 million.
There was a Tex-Mex place I loved in Fairbanks, Alaska. The food wasn't GREAT, but it was consistent, and the prices were fair.
Well, a new owner came in, and they decided to revamp it into a fine dining steak house. $30 was pretty much the lowest cost you could get for an item, and this was in a neighborhood that had a substantial crime rate and was right across the street from the bikini barista and the marijuana dispensary.
I stopped going, and they went under shortly thereafter. I walked in once before the place closed down, and it was dreary and empty and they had tried to bring some of the classics back to the menu, but it was far too late by then.
You were too good for this world, Los Amigos.
This one involves my Dad. Back in the '80s he decided he wanted to teach people how to use Lotus 123, Excel, MS Word, etc. So he bought a bunch of computers for a classroom, and he wrote interactive learning programs, and printed out manuals and such. Even without advertising, he had people asking to join his class BUT ... he was never quite ready. This Lotus 123 program could use more work. He wasn't ready for a class, this MS Word tutorial isn't quite done. The perfectionist in him wouldn't let him expose the less than perfect programs/class to people ... just yet. He turned down paying customers for fear that it wasn't just perfect. He had taken a loan out from a friend to finance this, but never made a dime. He paid 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 though, as the old saying goes "Perfect is the enemy of done". He could easily have made money and taught his classes, refining the programs to student feedback. He could have covered deficiencies by teaching in person. He was afraid it wasn't perfect, so it was never done. We don't talk about it, or the cottage that we built together (we had the foundation and structure built by pros, then the whole family pitched in to build the interior when we were teens).
It saddens me more because it was what he wanted to do, and he went for it ... but not quite.
Around last year this time of year, I know someone in their early 50's that sold all of their investments (at a significant dip from the highs) and decided to start producing and selling hand sanitizer in little bottles out of their garage. Seeing it as a big opportunity with the virus.
They spent everything on the bottles, labels, plastic drums full of sanitizer (at a huge markup), hiring locals people to fill the bottles and put the labels on, and then a website. By the time they had inventory, they realized that they couldn't compete on price with places like Walmart or other big box stores that had finally caught up to the shortages by mid-summer. They also didn't realize that selling on Amazon was gated for that category so you had no chance of selling through there as a new seller. So now they basically have a garage full of old hand sanitizer, and no savings.
So their business plan was to buy big containers of hand santizer, and sell it in little bottles? Not make a new product, just repackage an existing product? And expect that big-box stores will buy it from them, instead of the original manufacturer with a reputation? All because they could start up an entire operation faster than the big boys could upscale production? Just wow.
Circuit City was pretty stupid. When the recession hit, they decided to stop selling appliances and instead focus on DVDs and televisions and such. (Appliances are known as being a recession proof item. People always need refrigerators and microwaves. They don't need DVDs.) They also wanted to cut down on labor costs, so they fired a lot of managers and assistant managers, and just left a lot of entry level employees because they were cheaper to pay. Well, entry level employees don't really know how to fully run a store, so pretty much every Circuit City became dogshit.
There was a lot more to it then that. They quit paying sales people commissions so they just quit caring about helping the customer. CC also tried to create their own proprietary DVD system with DIVX, which was a total failure. I know someone that worked at CC corporate. They were actually handing out DIVX players as Christmas gifts, patting themselves on the back for it but yet knowing full well at that point that the system was already a failure.
I worked for a design/printing place for years, and the owner went from amazing idea to stupid idea on a regular basis. don't get me wrong - guy is a brilliant designer, totally took advantage of new tech every chance he could and made it work.
But - he was cheap and greedy, so, ruined what would have been lucrative long term business relationships.
So - we did this huge order of promo supplies for a fairly big on-line casino. huge, for him. about a 20k order, with good margins, and the chance at long term work with this company.
While it was being picked up, on the spur of the moment, he decides to pad the bill by about 200 bucks. the guy picking it up was the son of the casino owner, and literally watched the boss do this while I stood at teh till.
The customer looks at me, smiles, and pays the bill. With a huge wad of cash. And says "I know it's not your fault, but - my family is very wealthy. We didn't get that way letting people rip us off. Tell the boss over in the corner he just f****d himself out of a lot of money, because we loved the work." in a voice meant to carry.
Edit to clarify who was paying. And padding means he increased the bill over what he had quoted the job to cost.
A radio station i used to listen to recently changed their format from 80% music, 20% talk show to 100% talk show. Then they were like “oh you can still listen to the music but it’s only going to be on our app.”
Our grunge rock station changed to a country station randomly one afternoon. Then at some point later, Christian music. Eventually it came back as a rock station but it was never the same
In the early days of the personal computer, a fairly prominent developer Osborne went tits up because they showed off their new model far in advance of when it was actually going to be available. So predictably dealers immediately cancelled all orders for their current computer model in preparation for the new improved version. Inventory stacked up and they were bankrupt before the new model ever came out.....
Its known as the Osborne Effect.
By far the worst business decision in the history of computers was Commodore. They used to utterly dominate the home-computer industry. Sold more computers than Apple, IBM and all the Microsoft makers combined. Their big hit was the 64-KB Commodore 64. An amazing piece of computer design. After the seemingly unimpressive launch of 128-KB Commodore 128, they moved on to the 128-KB but expandable to 1,0246-KB Commodore 65. 65? It sounded like it was going to be utterly awesome, but there were some harmful rumors that it wouldn't be backwards compatible to run the 64's floppy drives (long-term swappable storage). Then Commodore got ahold of a Spanish computer maker and decided instead to go with the Amiga, which was ready to go, but completely incompatible with anything Commodore made. It compared well to the Apples and Microsoft home computers of the time, but users were livid. In one bad move, Commodore drove off the a user base comparable to I-phone's U.S. market.
Target's expansion into Canada
collapsed in 2 years and cost them Billions
My old company was internationally known in our industry as being one of the ideal places to be. We could hire basically anybody in the world in our space to move and work in our office. It was such a f*****g awesome place to work.
The CEO decided to cash out when a larger company barely related to our industry decided to buy us. The new company basically gutted everything that made it great, then rushed to go public. The employee stock options were pennies and they drastically cut benefits. Every time there was a complaint the answer was "maybe you don't understand our vision" or "well we are a public company now." They also got rid of our office which was located in one of the hottest LA neighborhoods that everybody loved.
More than half of the OG senior members have left and a large number of others are rumored to leave. I was forced to start assisting in hiring and it was grueling. People would apply believing it was our old company, then find out what's up and go elsewhere. Oh, and the stock is plummeting.
I hate the fact that what once was is over. Those f***s ruined something great.
Private equity companies too often make the mistake of buying smaller businesses in industries that they don't understand. They seem to think "just cut costs will increase our profits" ... failing to recognize that getting rid of long-term employees with industry knowledge and relationships with customers (and vendors) will always ruin the acquired business.
**Insert Yahoo bad business decisions**
1998: Yahoo refuses to buy Google for 1 million dollars
2004: Yahoo tries to buy Google for 3 billion dollars. Google asks for 5 billion. Yahoo refuses again.
2008: Yahoo turns down an acquisition offer from Microsoft for 40 billion dollars.
2016: Yahoo sold to Verizon for 4.6 billion
Kodak refusing to push digital cameras / photography, and instead focusing on film cameras. If I recall correctly, I think 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.
Tumblr banning porn was a huge mistake what turned a relevant and highly profiting social platform into a barely known failure.
It was worth more than one billion dollars and got sold for 3 million, it took only a year for its traffic to disappear and the worth of the service to lose 99.9% worth.
Game shop in my area had a great business plan. They had regular tournaments and games and a sweet membership plan.
Ten dollars per month and you get a discount on tournaments as well as a ten dollar gift card. Essentially it just incentivized every single person who went there for any sort of event to spend a minimum of $10 per month.
They did great for about 2 years and then decided to change the membership so that you no longer got the $10 gift card and the store started prioritizing D&D groups over competitive gaming groups. This isn't bad, in theory, aside from the fact that D&D players weren't paying for entry and they tended to spend less money. So they essentially chased away the customers who spent the most while removing the incentive for anyone to subscribe. The number of 'customers' they had per day did slightly increase but the amount they were spending, on average, dropped significantly and they went out of business shortly after.
Table top role playing games (TTRPG) are essentially self-sustaining. Once you buy the books you don't need anything else. Plus TTRPGs like World of Darkness and D&D are published through Wizards of the Coast and they offer discounted pdfs through their websites. Game shops aren't going to make much money off table top gamers unless they are book/miniature collectors. Games like Magic: The Gathering have a constantly evolving inventory and national tournaments, not prioritizing the card/tournament gamer is basically game shop suicide.
Panera Cares opening less than a mile from my college campus.
For those who don't know, Panera Cares basically just let you order food and would list a "suggested donation" based on what you ordered, but ultimately it was honor system. The cashiers would just make change for you so you could put cash in the donation box. If you can't afford a meal it's fine to not pay but you are *supposed* to volunteer to work for two hours to cover it, but this isn't actually required.
I think generally these things are supposed to be for really affluent neighborhoods where people probably donate even more than is "suggested." But students from the college basically 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 like $1 if anything. It closed within a year lol.
If it's successful everywhere but poor neighborhoods that's just a sign how badly the poor need food but can't afford it.
I worked at Hollywood Video from 2006 to 2009. At that time Netflix was growing by leaps and bounds and our revenue was dwindling from year to year.
Instead of copying Netflix's model and using their more recognizable brand name to edge them out of business, Hollywood shrugged their shoulders and continued renting single DVDs for $4.99 for 3 days plus late fees.
Where they at now?
My favorite is Sears. They had little stores in every small town, They were absolutely huge, in business for generations, and somehow they allowed Jeff Bezos to start in his garage, and eventually run them out of business.
The guy who took the decision to refuse The Beatles for his record company must be pretty bummed
Not even sure if it was a conscious decision but Sears passing on being Amazon in the early 90's. Sears was poised and ready to be Amazon, they had most components in place already and the others they had in their arsenal.
First they had name recognition, this was important for the trust factor with the internet exploding like it was. They had the product line, for shits sake you could buy a house from the Sears catalog. Delivery, it was there, they delivered the house that you bought!
Internet portal, they had it. They owned Prodigy, one of the more recognized internet providers of the time. This was a joint venture with IBM, you know, the most well known hardware provider for computers at the time.
So IBM sells a computer with Prodigy installed with free to stupid low cost internet access. When you sign on it drops you to a home page(that was the way it worked back then with software internet) with a link to the ***ONLINE SEARS CATALOG!*** Same great catalog, just on the ***WORLD WIDE WEB!***
No exaggeration. Amazon took a role in U.S. society that Sears had occupied for over a century. Sears would even rebrand entire the product lines of entire industries and had such high customer trust that people would simply buy whatever was sold under the Sears (or Craftsman) brand, knowing this business practice full well; whatever was highest quality would simply be sold in Sears as Sears (or Craftsnam) brand. Tens of millions of kids would sit with their parents in the days before Christmas, and look through the Sears Christmas catalog to decide on what to ask Santa for. Amazon, on the other hand, was only for books for YEARS after it first hit the market. Sears figured they were competition only for Barnes and Noble, infamous for jaw-dropping huge mark-ups on college campuses.
Holy heck my time to shine. Prepare for a number of them.
Used to work at the corporate office of a major water park in my state (if you 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 waterpark (and numerous other facilities) for a measly $20 per year. Not a typo. Previously they had been $150+ per year. Unbelievable right? It gets worse.
The year I started, they ran a new promotion where you buy a season pass for $25, but then also get a $20 giftcard back in the mail to Walmart or some other store. You can see where this is going.
2 weeks after I started as a fulfillment specialist (dealing with pass issues) they fired the entire call center staff of 30+ people, heaping their phone calls and emails onto my fulfillment team of 8. So in addition to all of our work creating and shipping passes, we had to take all customer service calls and emails.
It gets worse.
For some reason, they thought that it was prudent to wait until we had some large round number (I think either 500 or 1000) 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 even get the gift cards either because the season was starting and they demanded their passes now instead of waiting for the gift cards too.
So double whammy there, customers angry about how long it takes to get the season passes, and 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 as well within 2 weeks of me leaving. Somehow they kept afloat for another year or so, but then eventually the waterpark 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.... $30.
The circle of life, I suppose.
TL;DR - Utah waterpark was selling extremely low priced year passes, changed it and bumped it up with a gift card thrown in, thousands bought passes, gift cards weren't even ordered for a long time, people got mad, waterpark went out of business.
An apartment maintenance employee had a hobby of bass fishing. He was pretty good at it, and then came up with the idea that if he drained his children's college fund he could buy a new bass boat, and pay for their college education with the money he would win in bass fishing tournaments. It didn't work out like he hoped it would. .
I worked at JCP before and after 2011 (I think) when they revamped the whole company. They took away coupons, and they took away a lot of departments people (especially older people) loved, like custom window coverings. They also brought in extremely expensive furniture. Like $8,000 dining tables. Trust me.. no one shopping at JCP is looking to buy an $8,000 table.
They paid the CEO who brought about all these changes a massive amount of money and it failed miserably. People HATED the changes and we went from a busy store almost every weekend, to it being dead almost every weekend. It lasted maybe 2 years and then they brought back a lot of the stuff they got rid of, but the damage was done. The people who had been shopping at JCP for years and years who stopped after the changes, didn't come back.
JCP lost an insane amount of money during this whole thing and never recovered. They filed for bankruptcy last year.
My godmother was the very first woman executive for JCP back in their heyday.
20th Century Fox giving George Lucas the merchandising rights and rights to sequels for Star Wars in exchange for a pay cut on his director's fee (from half a million to $150,000).
(https://www.pymnts.com/news/retail/2019/star-wars-disney-movie-merchandise-revenue/)
Two members of the band Steppenwolf wanted to break away from founder John Kay and wanted to tour using the band name. John Kay told them he would allow it....only if they signed over their royalties from the song writing credits they had in the band. These two members were convinced they would be successful on their own so they agreed.
Since Steppenwolf without John Kay would be like the Rolling Stones without Mick Jagger, that version of the band flopped tremendously.
Also, even a five year old could tell you that giving up your royalties on major hits like "Born to Be Wild" and "Magic Carpet Ride" would be a really stupid thing to do, so these guys ended up having to work regular menial jobs when they could have been getting a nice royalty check in the mail instead.
AT&T bought warner media for 80 billions in 2016 just to sell it for 40 billions now
Buy high sell low
A chicken wing place where I lived had a year and a half long promotion where they would send out "free 6 piece boneless wing meal" coupons with no additional purchase necessary .. they included them in every local mailer pack. I would receive 4 or 5 a month, every month, for over a year. AND they had $0.99 pints of craft beer, but if you filled out a survey on the receipt you got another beer for free - and they would let you fill out a survey for every beer you purchased. I would get lunch and 2 pints for $1.07 after tax.
I did this every week for over a year. When they ended the promotion I never went back for food because I was so burnt out on free chicken and fries. We still stop there every once in a while for a cheap pint when riding bikes past the place. But in the 50+ meals I've had there, I've probably only spent about $75 on beer, and probably had over 100 pints.
Edit: Grammar
Cincinnati’s deal with The Bengals.
It has cost over $1B since 2000. It has some of the most ridiculous requires for the city and is widely considered the worst business deal in the history of sports deals.
The city hasn’t remade anywhere close to $1B by having the team. Arguably, they’ve gained nothing.
This is all while the Bengals are perennial stinkers. They’ve made being terrible a lucrative business model.
typical small business from eastern europe:
- get grandiose idea
- get loans from the whole family
- even worse: employ your family, usually via emotional manipulation
- get useless equipment, become perfectionist, spend money on useless stuff
- get advice from people who like to give advice, not from the succesfull ones
- no marketing, PR or any proper type of promotion!!!! even 30 years after revolution, advertising is considered evil trap for simple minded people
- try to sell product - it is usually very, very good, or very weak - no inbetween!
- surprise pikachu face that nobody knows your product
- surprise that you lose money
-get loans from bank to save the whole business
- bankrupt, blame everybody, especially family who gave you money and work and time
- start reading hoaxes, drinking or gambling, get divorced.....
That's sad. Where I live in NW Washington state (USA) the Sikhs do a happier version of this. Apparently there is a large Sikh community just a bit north of the border and we have some down here maybe from there. We are a major berry producer. strawberry raspberry and in more recent years blueberries are big. But starting a farm is expensive. I'm not Sikh but was involved in selling our family farm and this is how I'm told it works. Sikh borrows money from their church. So, effectively the other members are fronting them. Buys farm, family pitches in with work, pays church back, they loan the money to another person. Any interest or whatever would be money for the church instead of paying it to the bank. And they seem to be hard workers. About a mile down the road watched a Sikh family buy a large chunk of land, build a huge house and plant a blueberry farm. Not a fancy wealth flaunting house. Just huge - so can house extended family and everyone saves money on housing.
I worked for a small airline for several years. We did fairly well doing regional flights across the US and Canada.
Our dip s**t CEO decides we should get into the private jet market and lure in a bunch of rich people with more money than they could spend.
This plan hilariously backfired and we went into Chapter 11 bankruptcy for two reasons:
1) anyone that can afford a private jet wants to BUY one for themselves and hire a pilot to fly for them. They're not interested in buying a ticket AND hiring a pilot.
2) idiot CEO invested in outdated prop planes. Because nothing appeals to rich people more than fancy planes that scream through the air like a lawn mower cranked to 11.
So basically instead of chartered jets, the guy tried to invent the chartered prop-plane airline. I mean, #1 doesn't sound like a business killer; it's #2.
Knew this guy who wanted to start his own BBQ and hot sauce line, here was his process:
1. Get high with buddy and make the decision go into business together.
2. Argue about who should be financing the business
3. Get a loan from Grandma
4. Order a bunch of bottles
5. Use a sharpie and some blank labels to put on the bottles
6. Fill the bottles with bulk BBQ sauce.
7. Try and sell these to Walmart
8. Get upset that Walmart won't shelve your sketch sauces
9. Have several hundred bottles of unsealed product that wasn't prepared hygienically.
10. Try and sell some to your extended family.
11. Get angry with extended family that they don't believe in your dreams of the last two weeks.
12. Beg family for money to pay back grandma.
Start a company with no vision, no plan, no strategy.
Hire freshers who are energetic, creative and willing to lead.
Start growing because your team is good and motivated.
Feel insecure about team not working enough.
Refuse to hire experienced folks. Refuse good hikes.
Demotivate your team with your insecurity and drive them out of the company.
See decline in profits and growth.
Hire freshers again. Start over.
^This has been the case at my old workplace for almost a decade now. Everyone I worked with has either quit or been fired for illogical reasons.
My friend started a business with his ex wife while his girlfriend (who became his second wife) was also working in that company (15 employees)
I won't get into the hell he went through but to give you a TL;DR He is single again
My old boss bought a desktop computer in 2011 for 12000 bitcoin. He thought he was a genius because he mined them for free and got a free computer out of it. Then he called bitcoin a fad and never did anything with it.
I remember him bragging about it. "This tower has 2GB of ram!"
Company I worked for decided to stay open instead of closing at the start of covid. The state even said they would pay employees and give businesses money if they closed and didn’t lay people off.
Nope they stayed open and all of their customers closed down. Making no money for 5 months they had to lay off 80% of their employees.
Things started picking up last October. Well they were understaffed and couldn’t meet demands. Causing them to lose most of their big contracts. If it wasn’t supplemented by the mother company in Japan they would be done for now.
I worked there for 13yrs. Seeing how far we grew to have one bad decision cost them everything is eye opening.
Yeah..."Gummint not gonna tell me what to do". But the customers will. I know of a lot of folks who hated shutting down, but did it because they were patriotic(cared about people) and did what was asked of them, they are doing well now. Some stayed open, stuck their middle finger up, and are struggling
Digg version 4. It killed the site. Digg was one of the most popular sites on the internet, and in a few short years it was gone.
Like this site: https://digg.com/? I go there every day. Or am I missing something?
When my boss for a small brewery bought a bottling line without doing any research from the first sale men that contacted him. Was a company that did bottled water before, not carbonated beer. Was a huge disaster that almost sunk the business.
Or maybe it was the "hype vehicle" he bought that spent it's whole life in the shop because he knew nothing about buying used cars. Never got health insurance there either. . .
Don't leave us guessing... (You might say, he couldn't handle the pressure? Couldn't keep it bottled up?) Was there a physical disaster, or just a financial one?
This drunk guy owned an island named Fisher Island. He traded the island to another guy for a yacht
The yacht sank and the drunk guy lost the island, along with the yacht
How about buying a popular social media website and running it into the ground in the space of a few weeks because you're a raging narcissist with the social and technological skills of a dead racoon?
The deal four ABA teams- NY Nets, Indiana Pacers, San Antonio Spurs, Denver Nuggets- made with the owners of the Spirits of St Louis. Only four teams were allowed to merge with the NBA, and St Louis was left out and offered a dissolution fee of a few million bucks. Instead they offered to accept a smaller fee, and proposed each of those four teams would pay them a quarter of their future tv earnings, which wasn't much at all back then. The genius of the deal was the two owners, who were brothers, insisted the deal be *in perpetuity.* Meaning as long as there was an NBA they'd get paid. A few years ago they were bought out of the deal for $500 million, bringing their total earnings to almost a billion bucks. All for a non-existent team they owned for two years and who were about to fold anyway.
I used to work at Verizon and back in the early 2000's they gave me a opportunity to buy shares of Google at pennies to the dollar. I declined... So yea here i am selling used cars!!
Damn. But also don’t beat yourself up. We all could have bought shares in Google, Apple, Twitter… before they became famous. And did we? No! Hindsight is 20/20.
Load More Replies...
Winston Groom, author of Forrest Gump, signed away the screenplay rights to Paramount for 3% of the profits but due to creative accounting the film's commercial success ($678 million gross) was converted into a net loss, and Groom received only $600,000.
*happily kills the sock and prances through the coat showing off her prowess*
Here's one: paying off my low interest student loan instead of using my capital to buy a house or invest in stocks. This was about 20 years ago.
My roommate worked for a septic company. You know, pumping septic tanks, grease traps, etc. also did port-a-potties. Company has been in business for 20+ years and has a good reputation. Company from out of state buys it, has no clue how to work with the potties, jacks up the prices 100%, doesn't listen to employees who have been doing this for a while and thus know what they're doing, mess up scheduling of jobs and routes (receptionist is an idiot) etc etc. Customers and employees leaving in droves including my roommate. 20+ years down the toilet (pun intended). We'll see how much longer they'll be in business. I give them a year at most.
You'd think people would have learned by now, considering how many of these stories have the same formula. I especially don't get why someone buys a restaurant and then changes the entire business' model. If they just wanted the storefront and not the entire business, why not get an empty place somewhere else? You're not going to get customer loyalty following you from a fish and chip place to a fine dining steakhouse. That's not what loyalty MEANS.
In the early days of PCs (Apple and Microsoft-based) I managed a support for 450 Apple desktop PCs, plus printers, scanners and various servers. Well a new manager arrived and decided to get rid of the lot and use Microsoft-based computers etc. Cost a fortune (and the Apple's were almost brand new) then they had to hire three times the number of support staff (Apple's integrated waaay better back then.) and then had to run training courses for all the 450+ staff. Then discovered all the custom-written software didn't work well on the new PCs and they had to go back to Apples. Several managers up the line got the boot over that. Fortunately my old team all had hard copies of our original objections to the changes and we all got our jobs back and most went up a level. Very stressful time though.
The classic story I always remember was a film company approached the people at M&M's, saying "We have the sci-fi movie in the works about a boy and an alien. We'd love to cross-promote with you; You advertise our movie on your candy, and we'll feature M&M's prominently in a crucial scene." M&M's turned them down, saying the script didn't impress them, it wouldn't take off, and they didn't want their brand connected to it. Next stop for the film company was Reese's, who told them "That would be great! We have a new product called Reese's Pieces, this would be a good way to kick them off, get the name out there." And, of course, that movie was E.T.
There used to be a great little Chinese restaurant that had great wonton soup and good small buffet. I always went when I was little with my family. The owners retired and told the new owners everything they do for the items. They didn't listen and made a wonton soup that taste like chicken noodle soup. They last a couple months before they closed. Any food business in that spot doesn't last a long time. Every time we drive by the spot its a completely different restaurant.
How about buying a popular social media website and running it into the ground in the space of a few weeks because you're a raging narcissist with the social and technological skills of a dead racoon?
The deal four ABA teams- NY Nets, Indiana Pacers, San Antonio Spurs, Denver Nuggets- made with the owners of the Spirits of St Louis. Only four teams were allowed to merge with the NBA, and St Louis was left out and offered a dissolution fee of a few million bucks. Instead they offered to accept a smaller fee, and proposed each of those four teams would pay them a quarter of their future tv earnings, which wasn't much at all back then. The genius of the deal was the two owners, who were brothers, insisted the deal be *in perpetuity.* Meaning as long as there was an NBA they'd get paid. A few years ago they were bought out of the deal for $500 million, bringing their total earnings to almost a billion bucks. All for a non-existent team they owned for two years and who were about to fold anyway.
I used to work at Verizon and back in the early 2000's they gave me a opportunity to buy shares of Google at pennies to the dollar. I declined... So yea here i am selling used cars!!
Damn. But also don’t beat yourself up. We all could have bought shares in Google, Apple, Twitter… before they became famous. And did we? No! Hindsight is 20/20.
Load More Replies... Winston Groom, author of Forrest Gump, signed away the screenplay rights to Paramount for 3% of the profits but due to creative accounting the film's commercial success ($678 million gross) was converted into a net loss, and Groom received only $600,000.
*happily kills the sock and prances through the coat showing off her prowess*
Here's one: paying off my low interest student loan instead of using my capital to buy a house or invest in stocks. This was about 20 years ago.
My roommate worked for a septic company. You know, pumping septic tanks, grease traps, etc. also did port-a-potties. Company has been in business for 20+ years and has a good reputation. Company from out of state buys it, has no clue how to work with the potties, jacks up the prices 100%, doesn't listen to employees who have been doing this for a while and thus know what they're doing, mess up scheduling of jobs and routes (receptionist is an idiot) etc etc. Customers and employees leaving in droves including my roommate. 20+ years down the toilet (pun intended). We'll see how much longer they'll be in business. I give them a year at most.
You'd think people would have learned by now, considering how many of these stories have the same formula. I especially don't get why someone buys a restaurant and then changes the entire business' model. If they just wanted the storefront and not the entire business, why not get an empty place somewhere else? You're not going to get customer loyalty following you from a fish and chip place to a fine dining steakhouse. That's not what loyalty MEANS.
In the early days of PCs (Apple and Microsoft-based) I managed a support for 450 Apple desktop PCs, plus printers, scanners and various servers. Well a new manager arrived and decided to get rid of the lot and use Microsoft-based computers etc. Cost a fortune (and the Apple's were almost brand new) then they had to hire three times the number of support staff (Apple's integrated waaay better back then.) and then had to run training courses for all the 450+ staff. Then discovered all the custom-written software didn't work well on the new PCs and they had to go back to Apples. Several managers up the line got the boot over that. Fortunately my old team all had hard copies of our original objections to the changes and we all got our jobs back and most went up a level. Very stressful time though.
The classic story I always remember was a film company approached the people at M&M's, saying "We have the sci-fi movie in the works about a boy and an alien. We'd love to cross-promote with you; You advertise our movie on your candy, and we'll feature M&M's prominently in a crucial scene." M&M's turned them down, saying the script didn't impress them, it wouldn't take off, and they didn't want their brand connected to it. Next stop for the film company was Reese's, who told them "That would be great! We have a new product called Reese's Pieces, this would be a good way to kick them off, get the name out there." And, of course, that movie was E.T.
There used to be a great little Chinese restaurant that had great wonton soup and good small buffet. I always went when I was little with my family. The owners retired and told the new owners everything they do for the items. They didn't listen and made a wonton soup that taste like chicken noodle soup. They last a couple months before they closed. Any food business in that spot doesn't last a long time. Every time we drive by the spot its a completely different restaurant.
