14 Big Blunders By Tech Giants That Every Business Should Learn From

While most businesses can only dream of achieving the success and recognition of tech companies such as Amazon and Facebook, even these giants have made their share of missteps. Some of these mistakes are unique to these companies due to their size and scope, but others provide lessons that businesses of any size can learn from.

Below, 14 Forbes Technology Council members explore some of the biggest (and sometimes, repeated) blunders that have been made by the largest technology companies in the world, as well as what smaller companies can do to avoid making the same mistakes themselves.

Not Listening To Feedback

Whether it’s making questionable decisions with customer data (Facebook) or drawing negative press about employee working conditions (Amazon), history has shown that the integrity and reputation of your company are everything. Businesses thrive—and employees and customers can lose trust and faith—based on feedback and referrals. Loss of reputation is almost always an insurmountable obstacle to overcome that signifies the beginning of the end. – Neil Lampton, TIAG

Not Respecting User Privacy

Respect user privacy! Most free services hide user privacy details behind lengthy terms and conditions; if customers don’t accept these conditions, service is denied. Rather than hiding behind default data-intrusive configurations and deceitful language, companies should clearly and explicitly communicate how they intend to use user information. This transparency builds trust, even though growth may be a bit slower. –Sujeeth Kanuganti, AspectO Technologies

Not Giving Customers Control Of Their Own Data

The most notorious issue that has plagued large tech companies is the fact that they make money from their users’ data. When they learned that, users lost trust in their platforms—and if customers do not trust a platform, it is doomed to fail. I am glad to see that some of these platforms are now allowing users more rights and granular control over which of their data is shared. Small companies can learn from this. –Mercedes Soria, Knightscope

Giving Short Shrift to Customer Service

The biggest blunder? Giving short shrift to actual customer service—forsaking the human touch in favor of reflexive (over) reliance on graphical user interfaces, knowledge bases, artificial intelligence (that isn’t really intelligent) and more. Perhaps understandably, tech companies live by technology, but they can also effectively die by it. –Adam Stern, Infinitely Virtual

Providing Poor Customer Support

I once had a negative experience dealing with a Google rep regarding my faulty Pixel buds (first edition). These were a highly defective entry into the earbud market, and I will think twice about buying Google hardware from now on because of that interaction. Lesson: Don’t enter a new hardware market unless you are willing and able to recall every last piece with a smile on your face. – David Glazer, Kroll

Not Reinventing or Disrupting Your Products

Don’t hesitate to reinvent and disrupt your products. There is always a fear that if you reinvent your products, you will lose revenue, but what we can learn from history is that if you don’t reinvent, someone else will. Kodak is a classic example. They were the first to invent digital cameras, but they didn’t take advantage of them because they feared losing their film business. – Selva Pandian, DemandBlue

Not Understanding Your Target Segments

In my opinion, Microsoft’s attempt to get into the phone/mobile space with the Nokia acquisition and subsequent ventures was a glaring failure. Attempting to get into too many segments without having a depth of understanding of specific target segments is something smaller tech companies need to think through. IBM is another example of a high-profile company that blundered, in its case by being too slow in launching its services business. – Bharath Krishnaswamy, Tech Mahindra

Overlooking Security

There are a good number of examples where Facebook, Amazon, Apple and other, similar tech organizations faltered due to vulnerabilities in security. Security should be diligently built into enterprise architecture, technical architecture and application architecture. – Premal Vyas, Cloud SynApps

Not Developing Zero-Trust Third-Party Security Policies

In 2019, researchers found 540 million Facebook users’ records exposed on public servers. The records were exposed as a result of Facebook’s partnering with two third-party companies with poor data storage and protection measures. This case shows that companies of all sizes must develop zero-trust third-party security policies while also investigating the security measures deployed by partner companies. – Roman Taranov, Ruby Labs

Trying To Force-Fit A Product Into A Lineup

One large-scale marketing misstep that comes to mind is when Apple announced their wireless charger, the AirPower, in 2019. Despite marketing it to consumers, Apple decided to pull the product from its catalog before it ever shipped to stores. I think this lesson shows that sometimes a product simply isn’t right for your business, no matter how badly you want it to fit. – Thomas Griffin, OptinMonster

Losing Focus On The Company’s Core Business

Tech giants often have their hands in multiple pots. For example, well-known search engines are in payments, digital storage, community and many other loosely related businesses, not just search. As a result, they lack focus, become comfortable and develop blind spots. This affects their pace of innovation and their customer sensitivity. In the long term, all giants are prime disruption targets. – Olga V. Mack, Parley Pro

Underestimating Market Challenges

With its iBuying segment, Zillow found out the hard way how difficult it is to use AI to flip houses. How hard is it? The company lost north of $500 million and managed to do so in a real estate market that is on track to reach its highest level in 15 years. It turns out that flipping houses is a localized, boots-on-the-ground business that is tough to scale remotely. – Adi Ekshtain, Amaryllis Payment Solutions

Ignoring Market Trends

Know your space and competition. Yahoo is a perfect example of a big, influential company that didn’t keep up with the pace of changing trends and an evolving market. Hence, it has lost some of its previous standing. – Bhavna Juneja, Infinity, a Stamford Technology Company

Not Balancing Innovation And Market Growth

Balancing innovation and market growth is critical for business expansion. When the success of Facebook’s expensive acquisition of Instagram was overshadowed by the high growth rate of a direct competitor, Snapchat, Instagram was forced to imitate Snapchat’s features to maintain engagement. This had negative consequences for Facebook, including lost timeline potential and decreased customer perception. – Sayandeb Banerjee, TheMathCompany

Previously published on Forbes.