The 5 Dumbest Ways Big Companies Tried To Stay In Business
When a business starts to take a nosedive and can't see any profitable light at the end of the fiscal tunnel, the people in charge can take one of a few routes. One option is to calmly liquidate the assets and move on to another venture. Another is to flip the conference table, wave your arms around, strip naked, and sprint down a crowded freeway screeching for money. The latter is pretty much what happened when ...
Kodak Pivoted Into A Shady Cryptocurrency Company
Kodak famously failed to anticipate the rise of digital cameras, even though they were invented at Kodak. The ensuing desperate scramble to catch up saw them become the leading U.S. retailer of digital cameras, but only by losing $60 on every camera they sold. Then smartphones emerged and cratered the digital camera market too, at which point it really started to seem like an exec at Kodak had angered some kind of leprechaun. The company emerged from bankruptcy in 2013, having sold most of its profitable assets and stolen leprechaun gold.
So what's Kodak's plan to turn things around? Cryptocurrency! Yes, Kodak's launched two crypto schemes this year, which is a worrying thing to hear from a 19-year-old katana enthusiast, much less a former corporate behemoth. The first is Kodak KashMiner, a Kodak-branded Bitcoin miner that you can pay $3,400 to rent for two years. In return you get half the Bitcoins it produces. Kodak claims you'll earn $375 a month over that time, even though a) the price of Bitcoin fluctuates wildly, b) Bitcoin mining gets more difficult over time and output drops every month, and c) Kodak has no business being involved in any of this. Also, experts say it's nothing but a rebranded version of a machine you can buy outright for less than $3,400. It's been called a borderline scam.
The second scheme is KodakCoin, a baffling "photo-centric cryptocurrency" which supposedly allows photographers to control their image rights ... except you're currently only allowed to participate if you have a net worth over $1 million. As few freelance photographers are often seen making it rain in the club, it's not clear exactly who this service benefits, besides the coke-addled mind that came up with it. Even the company doesn't seem sure how it's supposed to work, responding to the question "Why would photographers want this?" with a 40-page white paper that The Times called a "mishmash of marketing buzzwords and vague diagrams." Which, to be fair, are the two pillars of the entire cryptocurrency industry.
Borders UK Tried To Launch A Last-Ditch Online Dating Service
For those of you who are probably too young to be reading this website, the Borders Group used to be a leading international book retailer. In 2012, Borders U.S. closed for business, but not before they and their overseas counterparts hatched a whole bunch of harebrained schemes in a desperate bid to keep up with Amazon. In 2009, Borders UK decided to bring in some extra cash by introducing an online dating service for book lovers, Happily Ever After.
Five months later, Borders UK shut down. It turns out that people who are really into books aren't so much into other people.
It was probably for the best. Had the company survived, its prospective Romeos and Juliets would have encountered a number of issues. The service was a collaboration with WhiteLabelDating.com, a subsidiary of Global Personals Ltd., which had made headlines for duping its clients. They were found to be using fake profiles, coercing users into paying for subscriptions, and making their personal information available on other sites in the network -- sites the clients hadn't signed up for. If you're looking for someone who shares your love of Jane Austen, you're definitely better off hanging around the library. Those won't be closing anytime soon, right?
Lycos Will Grab Onto Literally Any Tech Trend
Remember Lycos? It was one of the first big search engines, and sold for a whopping $12.2 billion back in 2000. Four years later, it was sold again for 2 percent of that after being basically obliterated by the rising titans of Yahoo! and Ask Jeeves. Since its search business collapsed, Lycos has been crawling from trend to trend in a desperate attempt to keep afloat. In 2006, internet calling services were hot, so Lycos announced plans to compete with Skype by launching Lycos Phone, a "voice over IP" service that offered free calls to phones if you signed up for a credit card or agreed to watch ads. It wasn't exactly a hit, possibly because people didn't want to sit through a trailer for Ice Age: The Meltdown before every call.
They later tried to merge the hot markets of social networking and video streaming with Lycos Cinema, which allowed you to simultaneously stream a movie on different computers so you could watch at the same time as your friends and discuss it using the chat function. It didn't catch on either, and shut down in 2009, partly because Lycos had a terrible selection of movies. The biggest studio to sign up was National Lampoon, currently not huge with the teens.
In 2015, Lycos -- now owned by an Indian e-card company -- hopped on the Internet of Things and launched two wearables. The Lycos Life Band is a Fitbit-style fitness tracker that's also supposed to replace passwords by automatically unlocking your phone. The Lycos Ring, on the other hand, just does the phone unlocking thing. They were described as "unfinished and buggy," and the app required to use them has between 1,000 and 5,000 downloads total. But don't worry, Lycos is the company that literally will not die, so we can all sit tight and wait for their inevitable Uber knockoff, or Fortnite clone, or virtual reality headset that only allows you to explore the set of National Lampoon's Christmas Vacation.
MiniScribe Packaged Bricks And Pretended They Were Disk Drives
Back in the '80s, a Colorado company called MiniScribe made disk drives for big corporations like IBM. Unfortunately, that didn't quite translate into the fistfuls of '80s tech cash they'd hoped, thanks to a period of poor sales that caused the founder to pack up and skedaddle. However, MiniScribe was saved when a venture capital firm agreed to give them a sizable cash infusion, as they could install their own CEO: a "Dr. Fix-It" named Quentin Thomas "QT" Wiles.
That wily QT brought with him a management style that The Wall Street Journal referred to as "abusive," and everyone from management on down began to panic like squirrels in a bubble wrap factory. Ruthlessly demanding that unreachable sales goals be met, senior managers began cooking the books and padding their stats for fear of being unceremoniously canned. Wiles himself was involved in manipulating financial data, and the pressure to perform became so intense that, according to a report by the SEC, MiniScribe employees started packaging bricks to look like disk drives. They would then ship the packages off to a Los Angeles location, recall them, and count the transaction as a successful sale. The cruel irony is that in a couple decades, their product would actually be worth less than a brick.
Anyone with a keen legal mind may recognize this as fraud. The authorities agreed with this assessment, and while Wiles denied any knowledge of the many schemes being perpetrated, senior executives gleefully testified to the contrary. He was convicted of both fraud and insider trading. The bricks were presumably repurposed and sold as Atari Jaguars.
Pandora Asked Their Employees To Work For Free For Two Years
In the year 2000, Pandora convinced investors to give them $2 million so they could take the radio and cram it onto the internet. Just one year later, they'd spent all their money, Pandora still hadn't launched yet, and at the rate they were going, they'd never convince even the limpest of Bizkits to license their catalog.
Founder Tim Westergren still believed in a world in which the Bizkit could blast from every internet-connected device on the planet, but he needed a way to convince his team of 50+ people to stick to the mission. So he simply asked his employees if they'd be willing to "defer" their salary for two weeks. Then, after two weeks, he asked if they'd be willing to maybe defer for another two weeks until they got another round of funding. Then, in two weeks, he had some good news -- if everybody would defer their salary for just another two weeks. Westergren kept this fortnightly tradition going for two fucking years before he could actually pay anybody.
To his credit, Westergren himself wasn't making any money either. He dug himself into enormous debt, borrowing money from everybody he could and pouring it back into the business. Eventually, in 2004, financiers decided to give Pandora a little more money -- most likely out of pity -- so employees could finally afford funerals for their internet radio brothers who'd died of starvation months ago. To be fair, at a certain point, it's on the employees for not wising up to such an obvious scheme. We'd have bailed after 18 months, tops.
Inexplicably, this strategy worked, and Pandora is still alive today. They did lose a bit of money recently, but if things get too bad, they can always just not pay their employees again. Honestly, why has no other company thought of this?
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