Business Blooper: The $5 Billion Answer to the Wrong Question

Some business failures are about bad ideas. This one is about a great idea that took thirteen years to build while the world it was designed for disappeared around it.On November 1, 1998, Iridium LLC launched commercial satellite phone service after thirteen years of development and five billion dollars in investment, offering the first truly global two-way voice communication system requiring no ground-based infrastructure. The handset cost $3,000 and calls ran three to eight dollars per minute at a time when pocket-sized cell phones cost $200 and calls were roughly ten cents a minute. By August 1999 Iridium had filed for bankruptcy with approximately 10,000 subscribers against a projection of 500,000. Motorola uploaded deorbit software to the satellite constellation and prepared to burn it up in the atmosphere. In November 2000 a team of investors led by retired Pan American World Airways CEO Dan Colussy purchased the entire constellation for $25 million. Today Iridium is a publicly traded company worth roughly $3 billion, providing critical communications for the US military, maritime operators, and researchers in the most remote locations on earth.bsnsBloopers is part of the bsnsDAILYpodcasts lineup from bsnsBasics, hosted by Ron Trucks.Find more at www.bsnsDAILYpodcasts.com