17 companies that (almost) went bankrupt because of foolish decisions


What happened: In 1959 Xerox introduces the Xerox 914, the world’s first plain paper automatic copier. Its innovative advertising campaign featured a monkey doing photocopies to highlight how easy it was to use. The 914 was a huge success, and by the 1960s Xerox was the leading manufacturer of office copiers.

In 1970 Xerox opened the Xerox Palo Alto Research Center (PARC), which invented many modern computer technologies, including the graphical user interface (GUI), laser printing, WYSIWYG text editors, Ethernet, the WIMP system (Window, Icon, Menu, and Pointing device ), mouse and more. Some of these early PARC technologies were seen in the Xerox Alto, released in 1971 and considered the future of computing. The Alto was a minicomputer, similar to a modern PC, and the first computer designed 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 visit to their technology. the the myth goes then that Jobs asked Apple Development to incorporate 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, said later“Jobs was pacing around the room, acting all the time. He was very excited. Then when he started to see the things I could do on the screen, he watched for about a minute and started to jumping around the room yelling, “Why don’t you do anything with that? It’s the best thing. It’s revolutionary!'”

Job’s line of thinking is what many consider the downfall of Xerox: a disability capitalize on market potential and bring products to market despite inventing breakthrough technology. For example, Xerox released the Star, the first commercial system to use technologies now common in PCs, in 1981. However, the Star did not sell well. This costs $16,595 (about $47,240 in 2020), while the IBM PC, released the same year, costs about $1,565 (about $4,455 in 2020). In 1984, Apple released the Macintosh – the first consumer all-in-one personal computer to have an integrated GUI, mouse and monitor – which cost $2,495 ($6,220 in 2020).

The 1980s were “usually roughfor Xerox. He had given up the mainframe and personal computer businesses. By 1985, Xerox held only 40% of the global plain paper copier marketa significant decline from its 85% market share in 1974. The company experienced some resurgence in the 1990s, launching new products (like DocuTech) and renamed “The Document Company”. Despite this, the company restructured in 1998 and cut 9,000 jobs. By the end of 1999, shares had plunged after the company warned against disappointing quarterly earnings.

In 2001, the company was on the verge of chapter 11 bankruptcy with over $17 billion in debt. Xerox’s inability to capitalize on the commercial potential of its innovations was partly due to management. PARC scientists have even condescendingly dubbed the frames “toner heads” due to their inability to think beyond photocopiers. In 2002, PARC broke up of Xerox as an independent wholly owned subsidiary. Since then, Xerox has managed to recover and generated approximately 7 billion dollars worldwide in 2020.