Every company goes through cycles of ups and downs, and the downs are more pronounced for the 10 companies that failed to innovate and change. Because innovation is one of the most crucial things that separate continuously successful companies from flash-in-the-pan, declining ones.
For an example on how innovation transforms and grows a company, look at Netflix, Inc. (NASDAQ:NFLX). The company started in 1997 and initially made money by selling and renting DVDs by mail. It took Netflix until 2003 to post a profit. When DVD sales started to fall in 2006, Netflix could have doubled down on its core business, but instead it shifted its focus to developing a video-on-demand internet platform in 2007. By 2010, it had become the largest source of internet streaming traffic in the U.S. And when the media companies it partners with for movies and TV shows started to plan their own online video businesses to compete with Netflix, the company then started creating its own exclusive series and films, starting with the debut of “House of Cards” in 2013. This wisdom to constantly stay ahead of potential troubles has enabled Netflix to continue growing, to the point that it operates its internet streaming platform in almost every country in the world and has over 90 million subscribers.
Innovation is capable of not just saving companies from irrelevance, but also of solving global problems no matter how big they are. Be sure to check our list of the 10 biggest problems in the world that can be solved with inventions for more on that topic.
But not all tech companies (and corporations in general) are capable of innovating enough to thrive or even survive. For instance, remember Myspace? You used to have an account there, but you’ve since shifted to Facebook Inc (NASDAQ:FB), right? Surprisingly, Myspace is still an active website! But more on that later. Well, back in 2005, when Myspace was rapidly rising as one of the world’s leading websites, it offered to buy Facebook, but balked at Mark Zuckerberg’s $75 million price tag. No harm there in the beginning, because when Myspace started adding millions of users, it attracted a bidding war between media titans Sumner Redstone and Rupert Murdoch, with the latter securing the winning $580 million bid. In 2007, at the height of its powers, Myspace was valued at $12 billion. However, Myspace became stagnant, failing to create quality features or coming up with a cleaner web design, while rivals such as Facebook introduced better features. As a result, Myspace shed users at an alarming rate, and Murdoch ended up selling Myspace for just $35 million in 2011. The website now has only 36 million users, while Facebook is well past 1 billion.
Myspace aside (and forgotten), here is a list of 10 companies that failed to innovate and change, with short explanations on how those failures harmed the companies.