Errors, faux pas, mishaps; it’s only natural to expect them in our everyday lives. In the business world, however, these incidences make a much larger splash. The ripple effect is often devastating — and unforgettable. This post examines six mistakes that famous tech companies made and the lessons we can learn from their blunders.
1. Uber’s Issues
With ride-hailing service in 73 countries, Uber is now a behemoth. It has 18,000 employees, and investors place its value at $72 billion. After a game-changing CEO switch in 2017 from Travis Kalanick (Uber’s co-founder) to Dara Khosrowshahi, the company made several mentions of an initial public offering (IPO) in 2019. But it had massive messes to clean up before going public.
For starters, hackers stole 57 million drivers’ data in 2016 — but former CEO Kalanick never said a peep to the public about it. Shortly after becoming CEO, Khrosrowshahi disclosed the hack and subsequent Uber payout of $100,000 for the cybercriminals to delete the information.
Along with multiple issues with Softbank, Uber’s most notorious and largest shareholder, the company’s IPO was a disaster. Uber went public at $45 a share in 2019 but dropped to around $41, landing uber’s market capitalization at $69 billion — far below the initial hopes of a $120 billion valuation. According to The New York Times, Uber “lost more in dollar terms than any other American initial public offering since 1975.”
2. WeWork’s Attempt to Go Public
Some blunders are too goliath to chalk them up to fate. Unfortunately, WeWork’s mess falls into that category. That said, most people point fingers at WeWork’s former CEO and founder, Adam Neumann. But let’s back up.
Everyone looked forward to WeWork’s IPO. After all, it’s a unicorn company that we can’t take our eyes off of. However, this fast-growing startup had one too many “bad apple” qualities that made investors cautious — and halted a much-anticipated IPO.
Beginning the list of offenses is Neumann’s previous voting rights and his “ultimate power” approach. Naturally, his “work hard, party hard,” ethos has created a unique company culture. Plus, it’s been pegged as an undesirable work environment for women — and lamentably has the lawsuits to prove it. To make matters worse, the company is regrettably buried in debt because of numerous mishaps.
Sadly, many experts view WeWork as a scattershot company with no clear direction with distractions from the left and right. Some believe it’s another sinking Softbank investment — but only time will tell.
3. Google’s Project Graveyard
You likely know the saying; there’s no such thing as a bad idea. Evidently, according to Google’s project graveyard, this saying is a bust. More than most companies, Google has mounds of ideas — but some have had epic flops. Most of us adore Google for it’s never-ending enthusiasm. Nevertheless, here are a few fails:
- Nexus Q: Aside from being expensive — priced at $299, with $399 for speakers and $49 for cables — this streaming device ended up being shelved without so much as a launch date.
- Reader: Unlike other Google products, this one was beloved by consumers. So, it comes as no surprise that Google’s decision to kill off the RSS reader was protested.
- Google+: Many reviewers claim this particular product as a Facebook look-alike. However, Google kept it alive until 2018, when a massive data breach ultimately shut it down.
- Tango: Although this product offered a new approach to AR, Google only found two firms to partner with. Google pulled the plug on Tango shortly after.
4. Apple’s Rare Mistakes
Apple has a reputation for innovation, especially with Steve Jobs at the head for so many years. Sometimes, though, even dynamic tech companies make mistakes and lean a bit too far over the edge of innovation.
Take, for example, Apple’s $10,000 smartwatch that only Beyoncé and a handful of other celebrities could afford. It was supposed to be an 18-karat gold “Edition” model watch to dazzle high-end consumers. But Jony Ive’s passion project ended up being a sales failure. Apple reluctantly decreased the price dramatically by switching to a ceramic casing.
AirPower was another one of Apple’s uncharacteristic product flops. It was so horrible that it never even shipped at all. The product was built to charge several devices at once, except that Apple didn’t realize how challenging it would be to get all that tech to work together — and they never did become friends, unfortunately.
5. Facebook’s FTC Fine
Recently, the FTC made history in a $5 billion civil penalty suit against Facebook. After being charged with eight separate violations — all related to the user’s privacy — Facebook chalked up the money.
Keep in mind that $5 billion is the largest penalty imposed on a company for such violations. However, for a tech company that made over $16 billion in revenue last year, the fine was a mere drop in the bucket. More than anything, Facebook likely reaped the publicity rewards, albeit negative attention.
Strangely enough, investors were relieved that the fine was only $5 billion (and not more). The fact that Facebook’s value shot up says something. Even though this rule-breaking behavior isn’t condoned, this interesting plot turned in Facebook’s favor in the end.
6. Samsung’s Phone Fails
For a company who stakes its reputation on delivering state-of-the-art tech products, Samsung had to tuck its tail on a few notorious phone failures. Let’s start with Samsung’s screen-bending Galaxy Fold, which Samsung’s CEO DJ Koh, has pegged as “embarrassing.” Lamentably, Koh admits to pushing the product through before it was ready for launch.
The Galaxy Note 7 caused a fuss when it hit stores in late August of 2017. However, by September 1st, over 35 phones had burst into flames. Samsung responded by sending consumers replacement phones — but they also burst into flames! The fiery mishap resulted in a product recall that likely saved the company’s reputation.
Lastly, where Apple has Siri, and Amazon has Alexa, Samsung’s Bixby proved to be an inadequate voice-activated helper. Even the Galaxy Home, Samsung’s flagship Bixby hardware, hasn’t shipped yet — and probably won’t.
Although we each earn the right to laugh at our own mistakes, the fall feels harder and painful when it’s an entire company crashing down instead of just one personal blip. It shows how vital it is to have a safety net and essential support in your corner. There’s no doubt that these particular tech companies leaned on general liability insurance and other critical policies, such as:
- Errors and omissions (E&O): Also known as professional liability insurance, E&O steps in to protect you from lawsuits claiming that your product or service didn’t perform as expected according to the customer and industry standards.
- Directors and officers (D&O): One of the most vital policies, D&O coverage, protects a company and its executives from specific claims made against them.
- Cyber and media liability: This policy works to protect tech companies against third-party lawsuits that arise from digital activity. Cyber insurance also helps to cover fines and penalties from regulators.
- Product liability: If a customer alleges they were hurt or experienced property damage because of your product, product liability would respond to cover the legal fees and damages.
- Property liability: For any company that owns or rents property, property liability insurance works to protect your company by reimbursing you for any direct losses you experience on the property.
Understanding the details of what coverage your tech company needs can be a confusing process. Founder Shield specializes in knowing the risks your industry faces to make sure you have adequate protection. Feel free to reach out to us, and we’ll walk you through the process of finding the right policy for you.
Want to know more about business insurance? Talk to us! You can contact us at firstname.lastname@example.org or create an account here to get started on a quote.