17 Companies That (Nearly) Went Bankrupted Over Foolish Decisions

New Facebook Page: https://www.facebook.com/OsmaniTheOttoman/

—u/Thrug

What Happened: In 1959, Xerox introduced the Xerox 914, the world’s first automatic, plain-paper copier. Its innovative ad campaign featured a monkey making photocopies to highlight how simple it was to use. The 914 was a huge success, and by the 1960s, Xerox was the dominant manufacturer of office copiers. 

In 1970, Xerox opened the Xerox Palo Alto Research Center (PARC), which invented many modern computing technologies, including graphical user interface (GUI), laser printing, WYSIWYG text editors, Ethernet, WIMP (Window, Icon, Menu, and Pointing device) system, mouse, and much more. Some of these early PARC technologies were seen in the Xerox Alto, released in 1971 and believed to be the future of computing. The Alto was a minicomputer, similar to a modern PC, and the first computer designed to support an operating system based on GUI.

In 1979, Steve Jobs visited PARC after a deal with Xerox’s venture capital division: Xerox could invest $1 million in Apple in exchange for a tour of their technology. The myth then goes that Jobs had Apple Development incorporate what he saw at PARC into Apple computers and invited some key researchers to join Apple. Engineer Larry Tesler, who gave Jobs a demonstration of the Alto, later said, “Jobs was pacing around the room, acting up the whole time. He was very excited. Then, when he began seeing the things I could do onscreen, he watched for about a minute and started jumping around the room, shouting, ‘Why aren’t you doing anything with this? This is the greatest thing. This is revolutionary!'”

Job’s line of thinking is what many consider to be Xerox’s downfall: An inability to capitalize on market potential and commercialize products despite inventing revolutionary tech. For instance, Xerox released the Star, the first commercial system to use technologies now common in PCs, in 1981. However, the Star failed to sell well. It cost $16,595 (around $47,240 in 2020), while the IBM PC, released the same year, cost around $1,565 (roughly $4,455 in 2020). In 1984, Apple released the Macintosh — the first successful mass-market, all-in-one personal computer to have a GUI, mouse, and built-in screen — which cost $2,495 ($6,220 in 2020). 

The 1980s were “generally rough” for Xerox. It had dropped out of the mainframe and personal computer businesses. By 1985, Xerox only held 40% of the worldwide plain-paper copier market, a significant drop from its 85% market share in 1974. The company experienced somewhat of a resurgence in the 1990s, releasing new products (like DocuTech) and rebranding as “The Document Company.” In spite of this, the company restructured in 1998 and cut 9,000 jobs. By the end of 1999, shares had plunged after the company warned of disappointing quarterly profits. 

By 2001, the company was on the verge of Chapter 11 bankruptcy with more than $17 billion in debt. Xerox’s inability to capitalize on the commercial potential of its innovations was in part due to management. PARC scientists even condescendingly dubbed executives “toner heads” due to their inability to think beyond photocopiers. In 2002, PARC broke away from Xerox as an independent, wholly-owned subsidiary. Xerox has since managed to turn itself around and generated approximately $7 billion globally in 2020. 

Source: https://www.buzzfeed.com/victoriavouloumanos/people-are-sharing-famous-companies-that-went-bankrupt

New Facebook Page: https://www.facebook.com/OsmaniTheOttoman/