Neatorama recently came up with their list of the worst business decisions ever made. At the top of their list was the decision by Decca Records not to sign The Beatles.
Here is the story:
Executives: Mike Smith and Dick Rowe, executives in charge of evaluating new talent for the London office of Decca Records.
Background: On December 13, 1961, Mike Smith traveled to Liverpool to watch a local rock ‘n’ roll band perform. He decided they had talent, and invited them to audition on New Year’s Day 1962. The group made the trip to London and spent two hours playing 15 different songs at the Decca studios. Then they went home and waited for an answer.
They waited for weeks.
Decision: Finally, Rowe told the band’s manager that the label wasn’t interested, because they sounded too much like a popular group called The Shadows. In one of the most famous of all rejection lines, he said: “Not to mince words, Mr. Epstein, but we don’t like your boys’ sound. Groups are out; four-piece groups with guitars particularly are finished.”
Impact: The group was The Beatles, of course. They eventually signed with EMI Records, started a trend back to guitar bands, and ultimately became the most popular band of all time. Ironically, “within two years, EMI’s production facilities became so stretched that Decca helped them out in a reciprocal arrangement, to cope with the unprecedented demand for Beatles records.”
Other top mistakes that made the list are:
- M&M’s owners turning down the rights to produce the movie E.T.
- 20th Century Fox selling the syndication rights to M*A*S*H for peanuts
- William Orton, president of the Western Union Telegraph Company calling the telephone an “electrical toy” and turning down inventor Alexander Graham Bell
- Henry Ford assuming that the Model T would be the only car Ford would ever need to sell
- Ross Perot refusing to buy out Microsoft in 1979 for $6 – $15 million
- ABC-TV turning down “The Cosby Show” saying the show “lacked bite and that viewers wouldn’t watch an unrealistic portrayal of blacks as wealthy, well-educated professionals”
What are your favorite “worst business decisions ever”?
Some of the business decisions around Star Wars probably merit adding to the list.
How about Jonathan Abrams founder of social network Friendster said that “there’s no money on college students”.
My personal favorite would be ABC, NBC and CBS’s decisions to NOT carry American Idol when Simon Cowell pitched it to them years ago. (The show was originally “Pop Idol” in the UK.)