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The 4 Biggest Mistakes of the World’s 4 Biggest Entrepreneurs

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I bet you’ve made some pretty big mistakes. But have you ever made a billion-dollar mistake?

If not, then rest easy: the world’s smartest and most successful entrepreneurs have made mistakes far greater than yours. One even made a decision that cost him $45 billion bucks.

Learn from their mistakes today so that you don’t repeat them tomorrow.

#1 Steve Jobs Giving Up Control of Apple


Today, we all know that Steve Jobs was one of the greatest CEO’s of all time. Between 1997 and 2011, Steve led Apple to soaring profits with unparalleled charisma, leadership, and eye for innovation. But in the beginning, even Steve didn’t know that he was destined to be CEO of the company that he founded.

That doubt led Jobs to give up executive control of Apple Inc. in 1977 – a decision that would result in Jobs being fired by the company he founded.

Slipping out of his Grasp

Apple was a partnership owned entirely by Steve Jobs and Steve Wozniak until Jobs lured Mike Markkula out of retirement in 1977. Markkula was a seasoned entrepreneur and angel investor who provided Apple with much needed capital and business expertise.

It was the beginning of Jobs losing control of his own company. By the time Markkula stepped down as CEO in 1983, Jobs wanted control back. He was ready to be CEO. The only problem was that it was no longer Steve’s decision – and the board at Apple Inc. wasn’t too keen on hiring a 28-year-old to run the fast-growing company.

Powerless, Jobs agreed to recruit John Sculley, who was currently the head of Pepsi-Cola. Sculley took the job, but a power struggle between the two strong-willed men ensued.

When the conflict reached a breaking point, Markkula sided with Sculley. Steve Jobs was fired from Apple Inc. in 1985. Sculley had this to say:

Looking back, it was a big mistake that I was ever hired as CEO. I was not the first choice that Steve wanted to be the CEO. He was the first choice…

The reason why I said it was a mistake to have hired me as CEO was Steve always wanted to be CEO. It would have been much more honest if the board had said, “Let’s figure out a way for him to be CEO. You could focus on the stuff that you bring and he focuses on the stuff he brings.”

John Sculley, Former CEO of Apple Inc.

Without Steve’s unique vision, Apple soon began to falter. A string of failures in the early 90’s opened the door wide for the competition, specifically Bill Gates and Microsoft.

Lesson Learned:

Steve Jobs wasn’t the most experienced choice for CEO of Apple, but he loved and understood his company better than anyone on the planet.

If you want your startup company to grow, you have to give up some control. But be careful about how much control you give and who you give it to. You don’t want to be in Jobs position, betrayed by the very person who you put in power.

Note: If you want more on what Jobs has done right, check out this article I wrote called 21 Life Lessons from Steve Jobs.

Honorable Mention: Selling stock in Apple

When Apple went public in 1980, Steve Jobs was awarded 7.5 million in Apple shares. When he was fired from Apple, Jobs sold all but one share. (He would have sold all of his shares, but he didn’t want to stop receiving the company’s annual report.)

As of April 2012, with Apple stock trading for over $600, those 7.5 million shares would be worth over $45 billion dollars. That alone is almost as much as the April 2012 worth of the world’s richest man, Carlos Slim ($49 billion).


#2 Bill Gates Ignoring Search Engines

Gates has proved himself a visionary by founding a computer software company in 1975 (Microsoft), pioneering a graphical user interface in 1985 (Windows 1.0), and by introducing millions of Americans to the Internet in 1995 (Windows 95 came bundled with Internet Explorer).

But by 2005, it was clear that Bill had failed to predict a billion-dollar opportunity: the search engine.

Walking Past a Gold Mine

“Google kicked our butts.”

Bill Gates, former CEO of Microsoft

Microsoft introduced MSN Search in 1998, the same year that Larry Page and Sergey Brin founded Google. Google was fast, innovative, and good at delivering relevant results. MSN Search was none-of-the-above.

Microsoft hadn’t even bothered to develop a search engine of their own. They used results from Inktomi, an existing search engine. Search simply wasn’t a priority. Microsoft was more focused on defeating Netscape Navigator in a battle of the browsers.

Still Searching for Results

By 2002, it was painfully obvious to Gates that search had been a big missed opportunity. Google had earned $348 million in revenue that year. A year later, in 2003, Google almost tripled its revenue to $962 million. Finally, Microsoft started developing a search engine.

The company launched Windows Live Search in 2006 but it failed to compete with Google. In 2009, Microsoft rebranded once again and introduced Bing. Billed as the first “decision engine”, Bing has taken a small bite out of the search market, but it hasn’t been cheap. In the fiscal year ending June 2011, Bing cost Microsoft $2.5 billion more than it earned.

The Lesson:

In 1998, no company had more leverage online than Microsoft. Imagine if Gates had prioritized the development of a great search engine back then: Google would probably be the world’s second biggest search engine.

But since Gates owed all of his success to software, it isn’t surprising that he overestimated the importance of Internet Explorer. Bill said it best himself:

Success is a lousy teacher. It seduces smart people into thinking they can’t lose.

As long as the world is spinning, your industry will keep changing. Just because a strategy worked for your business in the past, don’t count on it being the best method today.

Note: If you want more on what Gates has done right, check out this article I wrote on 10 lessons from Bill Gates.

Honorable Mention: Playing Monopoly

Remember when I told you Bill Gates was determined to defeat Netscape Navigator? He may have been a little bit too determined: in 1998, Microsoft was slapped with a lawsuit alleging that it was in violation of anti-trust laws.

In the case of United States v. Microsoft, the plaintiffs alleged that Microsoft had unfairly restricted the market for competing web browsers by manipulating APIs and bundling Internet Explorer with Windows 95.

The judge initially ruled against Microsoft and ordered that the company be split into two divisions, but after years of litigation Microsoft won an appeal and reached a settlement that allowed the company to continue its operations.


#3 Larry Page Missing Out on Social Networking

Google has done so much right since Larry Page and Sergey Brin founded the search engine in 1998. They’ve monetized carefully, kept things simple, and expanded their services (e.g. Google Maps, YouTube, Gmail).

But just as Bill Gates failed to capitalize on an opportunity to dominate search, Page missed an equally massive opportunity to dominate a coming web revolution: social networking. The worst part is that Page saw the potential of social networks, but he simply didn’t act on it.

Friendster: The Google Network that Wasn’t

Google had offered $30,000,000 to buy the social networking site Friendster in 2003. But Friendster didn’t sell. Larry Page should have used his position as “president of products” to start developing a Google social network right then and there.

But he didn’t. Google didn’t roll out Google Buzz until February 2010. Buzz was discontinued in 2011 to make room for Google Plus, which has also struggled to make a dent in the market.

Looking back on the missed opportunity, Page has expressed regret:

“I clearly knew that I had to do something and I failed to do it.”

Can you imagine if Google had used its team of developers, mountain of resources, and hundreds of millions of users to launch a social network back in 2004? Facebook wouldn’t have stood a chance. Instead, Google’s on the outside looking in.

Lesson Learned:

Page says that he “knew he had to do something” with social networking. But after Friendster declined to be bought out by Google, Page temporarily gave up on Google having a social network.

Don’t make the same mistake. Next time you absolutely know your business is missing out on a big opportunity, stop at nothing to capitalize on it.

Note: If you want more on what Page has done right, check out this article I wrote on the eight simple rules that Google followed on its way to being the world’s biggest website.

Honorable Mention: Google Wave

Page oversaw the development and release of this real-time collaborative editing application. Wave stumbled out of the gate because it was released before it’s time (the software was buggy).


#4 Mark Zuckerberg Deciding to be the Face of Facebook

Nobody can call Mark Zuckerberg stupid. It took great vision for Mark to imagine Facebook in 2004; it took analytical genius to program it into reality.

But nobody can call Mark charismatic either. Mark is a strong-minded individual. He tends to be very blunt and a little bit arrogant. That’s why it’s surprising Zuckerberg chose to be the public face of his company.

Missteps, Miscues, and Misunderstandings

“I just killed a pig and a goat.”

Mark Zuckerberg, CEO of Facebook

The above sentence stirred up a small controversy when Zuckerberg posted it on his personal Facebook page in May 2011. Animal lovers found it offensive – even though Zuckerberg was only killing animals because he wanted to reinforce that “a living being has to die for you to eat meat.”

These types of misunderstandings have marred Zuckerberg’s PR career.

In interviews and presentations, Mark has been underwhelming and uninspiring. The worst example may be this interview at the D8 conference in 2010. When facing scrutiny over Facebook’s privacy policy, Zuckerberg stumbled over his words and began sweating so profusely that Forbes wrote a story about it called ‘Great Perspirations’.

Of course, Zuckerberg’s most memorable (and perhaps most damaging) portrayal in the media was in the 2010 film The Social Network. The fictionalized account of Facebook’s rise to online dominance characterized Zuckerberg as ruthless, callous, and cocky – not exactly qualities you want associated with the face of your company.

Lesson Learned:

“Basically, any mistake that you think you can make I’ve probably made or will make in the next few years.”
Mark Zuckerberg, CEO of Facebook

Zuckerberg is getting better at PR. Lately, he’s been almost charismatic.

And obviously, Facebook is doing just fine with him as the face of the company. People will continue loving Facebook as long as it’s the best way for them to connect with their friends online.

But had Zuckerberg stayed in the shadows and allowed a silver-tongued “Steve Jobs type” in the spotlight, Facebook would have a clearer message and a better brand. The world’s biggest social networks would be more trusted, more loved, and – simply – cooler.

So, as your company grows, remember that you may not always be the best person for the job. Play to your strengths and, in the words of Warren Buffett, stick to your “circle of confidence.”

Note: If you want more on what Zuckerberg has done right, check out this article I wrote on nine ways Zuckerberg has been essential to Facebook’s success.

Honorable Mention: Facebook Beacon

Under Mark’s direction, Facebook has gotten into a lot of hot water for privacy issues. Their strategy seems to be invading their users’ privacy first, asking questions later, and apologizing if necessary.

Facebook Beacon is the most egregious example. Launched in November 2007, Beacon was an aggressive advertisement system that sent information from certain websites back to Facebook.

When users started seeing their online activity automatically posted on their Facebook page, they were surprised and displeased. After a storm of controversy and a class action lawsuit, Facebook shut down the service in September of 2009.


What’s the Common Thread?

Steve Job’s mistake left room for Bill Gates to dominate the personal computer industry. Gates’ mistake left room for Larry Page to dominate the search engine industry. Page’s mistake left room for Zuckerberg to dominate the social networking industry.

Before long, we’ll be talking about the entrepreneur who capitalized on Zuckerberg’s mistakes.

That entrepreneur could be you. Start keeping a close watch on the leaders in your industry with an eye for the opportunities they’re letting slip through the cracks.

If you don’t, then you’re making a big mistake.


Post image courtesy of Opensourceway (


  1. Another nick awesome post! I will remember their mistake 🙂

    • Nick Scheidies says:

      Yes – learning from the mistakes of others is a great way to avoid making them yourself.

  2. Tony Tovar says:

    Great article Nick! That was superb! It’s interesting how I’m more excited about the concept of what you wrote than the material in it. Looking at the mistakes or opportunities others let slip as an entrepreneurial entrance point. Brilliant!

    • Nick Scheidies says:

      I didn’t fully realize that concept until I had finished researching the article. Looking at the complete picture, I saw that one entrepreneur’s mistake was always another entrepreneur’s opportunity.

  3. Amazing….eye-opening! Yea, planning to follow Zuckerberg when it is about Graphics Revolution!

  4. Well, in fact Jobs asked for it. His “management” methods were quite strange and problems of Apple in eighties were partially result of his behaviour. I dont say he was bad guy but he had to learn a lot before becoming real CEO of Apple. His fatal mistakes helped Microsoft to reach no.1 of todays OS.

    Bill Gates was of course great programer and great manager but (unlike Steve Jobs) he was not visionary that much. They both copied graphic interface from Xerox and Microsoft succeeded because of Gates excellent business skills and mistakes of Apple. It has nothing to do with Windows being first or great graphic OS.

    • Nick Scheidies says:

      I mostly agree with you. Jobs was notorious for being a difficult manager, but it’s hard to argue with the results he got from his team. He demanded perfection. Though you’re also right that Jobs borrowed a lot from Xerox’s graphic interface, to say that he was “not visionary that much” ignores all of the other innovations he has been a part of.

  5. Michel this is a wonderful website .. please keep posting stuff like this.. thank you!

  6. Kelvin Wealth says:

    Really nice post Nick… I imagined if the time can be rolled back how the internet will look like if these guys never made these mistakes. It’s really interesting to know that the big guys too make mistakes…

    Thanks for sharing

  7. Edoardo Moreni says:

    I don’t agree with the four mistakes. You are trying to list a few mistakes which haven’t been done. A mistake is when I do something I shouldn’t do, not when I do not consider a business opportunity.

    Mark Zuckerberg Must be the public face of Facebook. For the simple reason that he is the CEO and Founder.

    Larry Page didn’t miss anything.

    Bill Gates is the second richest man on Earth. He created an empire , but he didn’t develop a decent search engine. Is this a mistake?

    I don’t have anything to say about Jobs. When in the board of directors there are many people against you, it is difficult to keep going.

    • Nick Scheidies says:

      I disagree with your premise. Failing to take a particular action can be a huge mistake when it prevents you from reaching your desired goals.

  8. David King says:

    Great title and great points!

    I think Steve Jobs did pretty well at pixar too… everything happens for a reason! we all learn our lessons when we are best mean’t to learn them.

    If we are open to learning them that is.

    Great post!

    David King

    • Nick Scheidies says:

      That’s a good way of looking at this. Jobs said himself that being fired from Apple freed him to enter “one of the most creative periods” of his life.

  9. Dan Sumner says:

    Great stuff thanks Nick. Making mistakes makes you stronger if you can learn by them.

    Great article thanks for sharing.

    • Nick Scheidies says:

      That was my thinking behind this article. As Oscar Wilde said, “Experience is simply the name we give our mistakes.”

  10. Nicholas Tart says:

    Wonderful, Scheidz. I feel like this post was part of a master plan to write about each of them individually before launching the series finale. Very well executed. 5 stars.

  11. Abigail Johnson Akingbade says:

    Very helpful, Nick. I enjoyed it. Concise review! Excellent.

  12. Steve Jobs was completely right about how success is the worst teacher; success boosts your confidence, but it can backfire on you if you find the flip side to it… arrogance.

    • Nick Scheidies says:

      That was Bill Gates who said that. But I’m glad you appreciate the sentiment in any case.

  13. Warren Kuan says:

    I’d always love reading your posts Nick 🙂
    Just as Nick Tart’s said, it’s definately a 5 stars series!

  14. Stephen Paul says:

    The Caonnection is good, however, as for Mark, hmmn. I love the Jobs and Gates part though

  15. Moulinneuf says:

    Actually , Microsoft real mistake was that they diss/missed the Internet entirely , they believed it was to be a small thing like minitel in france.

    You actually had to go to an outside source for internet browsers and softwares and connectivity.

  16. Very inspiring. Thanks Nick for reminding us that even the best in the game stumbles … sometimes. There is hope still for latecomers to shine, shine, shine!

  17. i read your post regularly and this post has taught a great lesson. Mark Zuckerberg seems to be amature in bussinessa dn management. Anyway thank you very much.

  18. Ifham khan says:

    Truly the biggest mistakes they are doing

  19. Mr Weber says:

    I will capitalize on Mr Zuckerberg’s failure and be THE MOST CHARISMATIC CEO IN THE INDUSTRY.

  20. Steve Branson says:

    Google’s executive chairman Eric Schmidt: ‘I clearly knew that I had to do something and I failed to do it. And not Page who expressed regret.! …people might get the wrong info.

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