17 companies that (almost) went bankrupt because of stupid decisions
What happened: In 1959, Xerox introduced the Xerox 914, the world’s first automatic plain paper copier. His innovative ad campaign featured a monkey making photocopies to highlight how easy it was to use. The 914 was a huge success and by the 1960s Xerox was the dominant maker of office copiers.
In 1970, Xerox opened the Xerox Palo Alto Research Center (PARC), which invented many modern computing technologies including graphical user interfaces (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 billed as the future of computing. The Alto was a minicomputer, similar to a modern PC, and the first computer to support a GUI-based operating system.
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 build what he saw at PARC into Apple computers and invited some key researchers to join Apple. Engineer Larry Tesler, who demonstrated the Alto to Jobs, later said, “Job was pacing the room all the time. He was very excited for about a minute and started jumping around the room yelling, ‘Why don’t you do this? That’s the biggest thing. This is revolutionary!’”
Jobs thinks what many think is Xerox’s downfall: the inability to capitalize on market potential and commercialize products even as revolutionary technologies have been invented. In 1981, Xerox released the Star, the first commercial system to use technology commonly found in personal computers today. However, the star did not sell well. It cost $16,595 (around $47,240 in 2020 dollars), while the IBM PC released the same year cost around $1,565 (around $4,455 in 2020 dollars). In 1984, Apple released the Macintosh — the first successful mass-market all-in-one personal computer with a GUI, mouse, and built-in display — which cost $2,495 ($6,220 in 2020 dollars).
The 1980s were “generally tough” for Xerox. It had exited the mainframe and PC business. By 1985, Xerox held only 40% of the global plain paper copier market, a significant drop from its 85% market share in 1974. The company enjoyed some resurgence in the 1990s, with new products (like DocuTech) coming to market and rebranded itself as “The Document Company.” Despite this, the company restructured in 1998 and cut 9,000 jobs. By the end of 1999, shares had fallen after the company warned of disappointing quarterly earnings.
By 2001, the company was on the verge of Chapter 11 bankruptcy with more than $17 billion in debt. Xerox’s inability to realize the commercial potential of its innovations was due in part to management. PARC scientists even condescendingly called executives “toner heads” for their inability to think beyond photocopiers. In 2002, PARC separated from Xerox as an independent, wholly owned subsidiary. Xerox has since managed to turn around, generating about $7 billion worldwide in 2020.