Good business is all about taking what’s impossible to others and making it work. From technological innovations to unconventional pricing models and business plans, the most effective businesses don’t always offer the most investor-friendly product, but the best product and business for consumers.
Unfortunately, sometimes those same investors and consumers just can’t see those products being a success. From breakaway technology advances to bizarre online shoe stores, many ultra-successful products and companies were targets of criticism and projected failure when they first launched.
Call it public stupidity or lack of foresight, but the best products often tend to be those that initially stir up nothing but skepticism. These six business successes certainly did just that, stirring up cynicism and conjecture from major industry players, reporters and journalists, and even the same public that later embraced them.
1. The Apple iPod
Salesmen and entrepreneurs need to get pumped up and motivated to truly be successful, and there are a couple of ways to do it. The first is to watch motivational business movies – Glengarry Glen Ross, Wall Street, and a few others are particularly popular. The second is to watch Steve Jobs introduce a new product.
When the iPod was introduced in 2001, the crowd was surprisingly silent and uninterested. Compared to the fanfare surrounding Apple’s 1999 iMac launch and 2007 iPhone presentation, it’s certainly reserved and rather low-key. Similarly, the iPod’s launch wasn’t so successful either – few units were sold in the first two years, and the market for mp3 players was spread wide and thin until 2003.
Of course, the iPod later became a huge business success, and very few people saw it coming. While tech reporters spent the first two years claiming that Apple had dropped the ball, the results quickly began to speak for everyone. In two years of skepticism and industry conjecture, Apple managed to create a product that not only fought off criticism, but changed the world of music.
2. The George Foreman Grill
Professional wrestling icon Hulk Hogan reportedly passed on the chance to promote this ultra-popular grill in the early 90s. It’s difficult to see how anyone could pass on the opportunity to promote the incredibly popular George Foreman Grill, which went on to sell over 80 million units worldwide. Let’s file this one as a lack of business anticipation, as the promotional deal could have earned Hogan over $150 million – significantly more than his wrestling or TV careers.
3. The Internet
It’s quite incredible that the biggest business development of the century was completely unseen by most major businesses. Rather than investing in scalable and effective internet presences some of the world’s biggest companies – McDonalds, Pepsi, Coca-Cola and hundreds more – invested in ultra-cheap websites, providing them with little more than a static advertisement online.
While most companies have since adapted and learned how valuable the internet can be, a few still haven’t seen the way it’s changed business. A success not just for commerce, but for the world, the internet is one of the most impressive and unexpected business successes of the last century.
4. John Carpenter’s “Halloween”
Produced on a shoestring budget and plagued by production difficulties, John Carpenter’s 1978 film Halloween was a huge success for its indie investors, but unfortunately not for all of them. While most designers and production crew turned down a one-off salary in favor of equity in the film, production designer Tommy Lee Wallace opted for a set salary, unsure of the film’s potential success.
Halloween was a huge success, earning over $60 million from its $300,000 production expenses – an almost 20,000% return on investment for its financial backers. While those on a set salary must have been kicking themselves for not taking equity, most gained their investment back eventually through the film’s many sequels.
5. McDonalds Healthy Meals and McCafe
In response to growing health concerns and new dieting trends, McDonalds decided in the early 2000s to incorporate healthy options into their combo meals and kid’s Happy Meals. While health boards and families were impressed, business analysts weren’t so sure about the move. With worries of McDonalds losing its image – after all, who goes to McDonalds to get apples or a coffee – many investors voiced their concerns to McDonalds executives and board members.
The move towards choice and health turned out to be a massive success for McDonalds, separating them from other fast food chains that were seen as unhealthy. It’s rare for a major business to make such major changes and still remain intact.
Zappos is an online shoe store built on a business model that’s completely foreign to most CEOs and investors. Put the following three characteristics on a Powerpoint slide and try to pitch it to investors, and see how far you get:
1. Free shipping, even on returns.
2. Not a 30-day return policy, a 365-day return policy.
3. 24 hour, 7 day, 12 month customer service.
Most investors would write it off as impossible and impractical, but Zappos.com has made it work. The online shoe store bases its entire operation around customer satisfaction, providing everything from high-end shoes to sandals with instant free shipping. While initially unsuccessful and trash-talked by industry leaders, the company grew to become the largest shoe store in the world, acquired for $1.2 billion by Amazon in 2009.