You’re About to Make a Terrible Mistake! summary

In 1975, two men contacted Elf Aquitaine, a French oil company. The men claimed that they’d developed a revolutionary new technology: a device that could “sniff” oil from the air. All you had to do was put it in a plane and fly around, sniffing out the oil in the terrain below. No guessing. No needless drilling. 

France was in the middle of an oil crisis, so this technology couldn’t have arrived at a better time. What’s more, it seemed to work: the two men offered demonstration flights, eventually convincing multiple scientists and Elf Aquitaine’s CEO of its legitimacy. Both the prime minister and the president of France were also convinced.

Apple. MacBook. iPhone. Which name do these words bring to mind? Well, obviously, Steve Jobs! Jobs’s name has become synonymous with individual genius, groundbreaking design, and world-altering vision.

Why is that? 

Imagine you’re the CEO of Quaker Oats. The year is 1994, and your last major acquisition, Gatorade, has become a tremendous success. So what’s your next step? Well, you think, if a sports drink could become so popular and lucrative, surely iced tea could, too. 

This is exactly how William Smithburg, the former CEO of Quaker Oats, defended his purchase of Snapple for a hefty 1.7 billion dollars. Smithburg’s mistake? Going with his gut instead of with the numbers. Three years later, he ended up reselling Snapple for a fifth of the original buying price. It was such a fiasco that investment bankers now refer to disastrous acquisitions as “a Snapple.” 

Blockbuster Video. Once a household name – now a nostalgic part of the past. Was it just technological change that brought about its demise, or is there more behind the downfall of this former video-rental giant?

In the year 2000, with 300,000 subscribers, Netflix didn’t have enough turnover to make a steady profit. So it approached Blockbuster with a proposition. Blockbuster could buy 49 percent of Netflix if Netflix could serve as Blockbuster’s online branch. In return, Netflix would let Blockbuster rent out DVDs using its trademark subscription service, which sent people movies in the mail. The price: $50 million.

Three! Two! One! Houston, I’m pretty sure we have liftoff. Wait – yes, everything should be fine. OK, just hold on for one second. Look, I don’t know if senior staff are on standby, but should we just go for it? The skies look pretty clear. I mean, what’s the worst that could happen? 

These are not the words you’d want to hear if you were strapped into a spaceship, waiting for launch. And, of course, no astronaut ever would hear them. NASA doesn’t leave shuttle launches up to chance. 

Imagine you’re a chef, and you’re about to open a new restaurant in Greenwich Village, New York. You’ve come up with some new dishes that you’re sure are going to be a hit, but you need to ask some people what they think. As you’re putting together an informal focus group, you start wondering whom to invite. Do you ask your grandmother, who thinks everything you do is amazing? Or do you ask your friend – a food critic who is especially hard to please?

We all need a little grandmotherly validation in our lives. But for the sake of your restaurant, it may be more productive to bring in both the food critic and grandma, plus some people in between.