4 Top Tech Companies That Failed, Survived (and Even Thrived)


Failure sucks. But since it's inevitable, consider it an opportunity to learn, learn to fail less often and, ultimately, succeed.

Everybody dreams about hitting that big jackpot: an immensely popular app, a game that is so addictive that kids and parents fight over playing time, a blog with thousands of regular followers, or a website that gets millions of visitors each and every day. People look at Angry Birds and Pinterest now and assume that the people behind them were overnight successes, catapulted from obscurity to tech superstardom.

But whether you’re talking about programmers who get noticed by venture capitalists or Internet startup superstars, here’s the truth: There are no overnight success stories.

Let’s just be clear about one thing: Failure sucks. But since it’s inevitable, consider it an opportunity to learn, learn to fail less often and, ultimately, succeed. Check out these lessons from some of the tech world’s biggest companies. They learned these lessons the hard way, so maybe you won’t have to.

Rovio: Try, Try Again

A lot of people mistakenly assume that Rovio Entertainment, a Finish video game developer and the creator of "Angry Birds," was an overnight success. In reality, Angry Birds was the 52nd game launched by the software maker. In fact, the company spent more than eight years working on other games – and not one of them made it big. You may have heard about or even played with "Need for Speed Carbon", "Collapse Chaos" and the "Darkest Fear" series, but even these were not big winners.

Even when "Angry Birds" was released, the first three months were excruciatingly slow for Rovio. But the company kept working until this goofy game finally caught on – big time. In March 2011, Rovio announced that it received funding to the tune of $42 million. The company also rolled out "Angry Birds" merchandise including t-shirts and stuffed toys. In 2012, "Angry Birds Space" became the fastest-selling mobile game of all time when it was reportedly downloaded more than 50 million times in the first 35 days following its launch.

The Lesson: Developing a hit product involves a combination of brilliance and dumb luck. Chances are that Rovio learned a few things in developing the 51 other games it released before "Angry Birds" -lessons that eventually helped the company develop a game that was the right combination of funny, weird and just plain addictive. (Learn more about the combination of factors that makes video games successful in 5 Psychological Tricks That Video Games Use to Keep You Playing.)


YouTube: Popular Isn’t the Same as Profitable

More than six years ago, YouTube made headlines when it was bought out by search giant Google for an astounding $1.65 billion in stock. It became apparent, however, that even with Google at the helm, YouTube just wasn’t making money.

At that point, Google tried almost everything to take advantage of YouTube’s high traffic. As it turns out, it’s a good thing Google didn’t stop exploring alternatives until it found a system that worked.

Premium partners, or those that upload commercial videos, soon started appearing on YouTube. For instance, Warner Music and Sony pay YouTube to host their music videos

According to Fool.com, premium partners can upload longer videos without upload restrictions, making it possible for them to upload full-length movies.

Because of the influx of user-generated and commercial content, advertisers soon came knocking at the door. Google revealed that as of 2012, 98 of Ad Age’s Top 100 advertisers had run ad campaigns on YouTube.

The Lesson: When it comes to the Internet, it helps to be popular, but that isn’t always enough to ensure profitability. In YouTube’s case, persistence and ingenuity brought the site to the next level. (One of YouTube’s key strengths is viral videos. Learn more about this in A Beginner’s Guide to Internet Memes.)

Atari: Don’t Rest on Your Laurels

Atari was founded in 1972 and soon became very successful. The pinnacle of its success was the launch of the Atari 2600 gaming console, boosted by now classic games, such as "Pac Man","Space Invaders" and "Missile Command", among others. But the company soon made one misstep after another. Why? It basically rode on the wings of its popularity and produced lackluster products.

First on the list was a game called "E.T.:The Extra Terrestrial". Atari hoped that the success of the movie and its own reputation would help sell the game. Unfortunately, it didn’t live up to the hype – It was one of the biggest commercial video game failures in history (and players at the time called it the worst game ever).

Atari also floundered when it came to getting new consoles out to the market, and infamously released two very lackluster consoles – the Atari 5200 and Atari 7800. This misstep was magnified by some stiff competition from Sega and Nintendo.

Although Atari never regained its former position at the head of the video game industry, it’s still alive today and is owned by Atari Interactive, a wholly owned subsidiary of the French publisher Atari, SA .

The Lesson: Treat success not just as a one-time event but as a process. In the fast-changing tech world, a company is only as good as its last product.

Apple: Step Away from Your Comfort Zone

In 1996, it seemed that Apple was on the way out. Without a marketing plan or a good leader at the helm, all the company had were expensive computers that failed to perform as well as their less-pricey competition.

Today, however, Apple is one of the highest valued companies in the world.

What happened?

There are two things that marked the company’s turnaround from being an abject failure to becoming one of the world’s most successful companies. One was the return of Steve Jobs, its founder, who had unceremoniously resigned in 1985. Jobs led Apple into its return to profitability by employing the same passion he showed during the company’s early years.

The other aspect to the company’s turnaround was its move into the personal digital device market. While Apple did not abandon making computers, it realized that it couldn’t go head-to-head with Microsoft. Instead, it decided to tackle a relatively undeveloped front by stepping into the personal digital devices that eventually made the company famous: iPhone, iPod, iPad.

Take note that this was a risky move for Apple because this was not the company’s first non-computer venture; that honor is held by an electric automobile codenamed Gravenstein. Lucky for Apple, this is one groundbreaking idea the world was more than ready to buy into.

Perhaps Steve Jobs’ greatest legacy isn’t just the technological feat in producing something as popular as Apple’s many devices, but how Apple has continued to take risks. Knowing that someone would put an MP3 player on a phone, Apple essentially destroyed its iPod business when it gave the same capabilities to the iPhone. As a result of its ability to stay on the cutting edge, in any given day, more iPhones are sold than babies born.

The Lesson: Take a look at what works and do more of it. Then consider what does not work and look for solutions, even if it means destroying past achievements. (Learn more about Apple in Creating the iWorld: A History of Apple.)

On Failure

We can guarantee that none of these companies reveled in its failure. Yes, they inevitably learned from their mistakes, but unfortunately, there’s no way around the fact that the business world presents a treacherous and painful learning curve. The point is, the best companies failed – often many times – and still succeeded at surviving, or even thriving. So take a page from their book and learn not just from their mistakes – but your own as well.


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Michael Gabriel Sumastre

Michael Gabriel Sumastre is a skilled technical blogger and writer with more than seven years of professional experience in Web content creation, SEO and research paper writing. He has written more than a thousand articles related to tech and gadgets, cloud computing, IT management, SEO, SEM and software solutions. He ghostwrites books / e-books and has a Bachelor of Science degree in computer science. Michael is also an expert in webmastering and loves to ride his sportsbike.