Comments on: How Sun Ignored Sunk Costs And Chose a New Strategy http://www.businesspundit.com/how-sun-ignored-sunk-costs-and-chose-a-new-strategy/ Entrepreneurship, Startup Companies and Business Philosophy Fri, 03 Feb 2012 07:09:48 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Davis Freeberg http://www.businesspundit.com/how-sun-ignored-sunk-costs-and-chose-a-new-strategy/comment-page-1/#comment-2386 Davis Freeberg Tue, 19 Jun 2007 20:16:48 +0000 http://www.businesspundit.com.php5-6.websitetestlink.com/?p=3208#comment-2386 It takes a lot of guts to walk away from something after you've dedicated so many resources to it. I'm sure it was a hard decision by Sun, but I'm not so sure that I would have had the discipline to chalk it up as a mistake and move on. You shouldn't let your cost basis determine how you value something, but it's hard to ignore losses and gains even when econ 101 tells up that we need to do this. It takes a lot of guts to walk away from something after you’ve dedicated so many resources to it. I’m sure it was a hard decision by Sun, but I’m not so sure that I would have had the discipline to chalk it up as a mistake and move on. You shouldn’t let your cost basis determine how you value something, but it’s hard to ignore losses and gains even when econ 101 tells up that we need to do this.

]]> By: laurence haughton http://www.businesspundit.com/how-sun-ignored-sunk-costs-and-chose-a-new-strategy/comment-page-1/#comment-2385 laurence haughton Tue, 19 Jun 2007 19:52:19 +0000 http://www.businesspundit.com.php5-6.websitetestlink.com/?p=3208#comment-2385 You wrote that "part of me wonders why it took 5 years of being smacked around by the market before they decided to try something radical." Well it's time to stop wondering a recognize a fact: Most of us need (as Roger von Oech wrote) a "whack on the side of the head" to be more creative. I've learned to accept it and say, "Thank you. May I have another?" You wrote that “part of me wonders why it took 5 years of being smacked around by the market before they decided to try something radical.” Well it’s time to stop wondering a recognize a fact: Most of us need (as Roger von Oech wrote) a “whack on the side of the head” to be more creative. I’ve learned to accept it and say, “Thank you. May I have another?”

]]> By: Jay http://www.businesspundit.com/how-sun-ignored-sunk-costs-and-chose-a-new-strategy/comment-page-1/#comment-2384 Jay Tue, 19 Jun 2007 19:32:17 +0000 http://www.businesspundit.com.php5-6.websitetestlink.com/?p=3208#comment-2384 Harry Browne referred to that as "the previous investment trap" in his old book "How I Found Freedom In An Unfree World." Harry Browne referred to that as “the previous investment trap” in his old book “How I Found Freedom In An Unfree World.”

]]> By: Glenn Gow http://www.businesspundit.com/how-sun-ignored-sunk-costs-and-chose-a-new-strategy/comment-page-1/#comment-2383 Glenn Gow Tue, 19 Jun 2007 19:26:20 +0000 http://www.businesspundit.com.php5-6.websitetestlink.com/?p=3208#comment-2383 Rob, I like your post. I agree that it’s sometimes surprisingly difficult for people to get over the emotional part of an investment and recognize that sunk costs don’t matter. One point I differ with you on is the culture at Sun. Sun is a company that has historically celebrated radical experimentation. This came primarily from Scott McNealy. Sun has come up with many, many radical innovations, and continues to do so. This is one of their key strengths. Sun will also tell you that they have underinvested in understanding market requirements and directing their investments to address those requirements. It’s a strength to be innovative, but it’s better to be innovative within the context of fulfilling customer requirements (whether they are latent or not). Rob, I like your post. I agree that it’s sometimes surprisingly difficult for people to get over the emotional part of an investment and recognize that sunk costs don’t matter.

One point I differ with you on is the culture at Sun. Sun is a company that has historically celebrated radical experimentation. This came primarily from Scott McNealy. Sun has come up with many, many radical innovations, and continues to do so. This is one of their key strengths.

Sun will also tell you that they have underinvested in understanding market requirements and directing their investments to address those requirements. It’s a strength to be innovative, but it’s better to be innovative within the context of fulfilling customer requirements (whether they are latent or not).

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