Editor’s note: This article was first published in October 2014, before Donald Trump’s political career; “this year 2014” refers to Trump Entertainment Resorts’ latest bankruptcy, and the lawsuits mentioned were ongoing at the time.
Donald Trump became a multimillionaire and very famous thanks to the real estate business and his rather peculiar, vibrant personality. But Donald Trump’s business career hasn’t been free of big failures, even to the point of losing everything at his peak and ending up billions in debt.
He managed to get out of that situation stoically, thanks to the “art of the deal” he likes to preach. Mr “think big” also gave us his 10 particular commandments for entrepreneurs, and he may have broken one of them in recent years, because it seems that Trump has lost focus, to the point that I personally think there is a before and an after for this business tycoon.
Donald Trump’s business life, speaking always from my own personal point of view, has one part of his career we can learn from and should listen to, and a second part we should no longer listen to, in which he contradicts his earlier business vision and even tries to steer you towards his “products”, for which he is even starting to be sued.
(Read: Trump and Kiyosaki: at what point do your idols stop inspiring you and start using you?)
As an example from a successful business career, let’s look at the companies Donald Trump once created thinking they would be a cure-all, and which ended in resounding failure. We’ll find a very common pattern in most of his failed business ideas: he tried to build these companies by playing only the “personal image” card. Trump himself had to discover that the Trump name or image isn’t profitable on its own if it doesn’t bring some other kind of value.
These are the 10 businesses that one day went bust or simply ceased to exist.
1. Trump Mortgage (opened in 2006 and closed in 2007)
Donald Trump launched his own mortgage company. His son, who also thought big, said this company would be the number 1 lender in the whole United States. And they might have succeeded at another time, but in 2007 the housing market collapsed, ushering in one of the biggest financial (mortgage) crises in history.
Ironically, Trump had predicted that it was the best time to start a mortgage company, because the housing market was at its peak.
2. Trump steaks (closed almost as soon as it opened)
Trump launched his own steak company in 2007. A pack of 12 “Trump burgers” cost 199 dollars, and a selection of top-quality steaks cost 999 dollars.
Simply putting his photo on the steaks wasn’t enough to sell something that was much cheaper elsewhere on the market. And as if that weren’t enough, health inspectors found as many as 51 violations of the US health code, including out-of-date yogurt and spoiled caviar. Trump failed big with this idea.
3. Trump Vodka
The business tycoon also believed he could create a “super VIP” vodka brand, which he also said would be the best-selling vodka brand in the United States. But after 4 years in existence, the company never saw the results it hoped for, and today there is no more Trump vodka.
4. The Trump game
He also wanted to dethrone Monopoly by launching his own game, as Robert Kiyosaki had already done. After a year, in 1989, the game stopped being made because it was gathering dust on store shelves.
But when Trump started appearing on television and became enormously famous as a celebrity, in 2005 he relaunched his game, in which you could show off your negotiating skills. Sales of the game never took off, although, admittedly, at some retailers and even online you can buy a pair of socks or the Trump game.
5. Trump Airlines
If Richard Branson could break victoriously into the airline business, so could Trump. That’s what he must have thought in 1988 when he bought a short-haul airline (Boston, New York and DC). What’s more, Trump would aim it at the luxury market, taking advantage of his image of wealth and grandeur.
But he didn’t count on the fact that on short routes people don’t care about luxury or comfort, but about what is most convenient and cheapest. Trump put his foot in it completely with his strategy and approach to this business.
6. Trump Entertainment Resorts (4 bankruptcies)
Trump Entertainment has filed for bankruptcy 4 times. The first was in 2004, and the most recent was this very year, 2014.
This company was the one that helped him get out of his financial crisis in 1988, although since then he hasn’t managed to make it profitable. The company’s shares fell from 4.00 dollars to 0.23 dollars.
7. Trump University
Trump University has been a business failure.
At this university, Trump teaches you to get rich in a few months by investing in real estate. Mind you, that’s by paying for an advanced course whose cost can reach 35,000 dollars.
Donald Trump knows better than anyone that wealth is built slowly, and that quick windfalls aren’t very common in the business world.
By creating this company, Trump has not only considerably damaged his image with late-night infomercials, but the New York attorney general has also opened an investigation into the company for allegedly defrauding its students.
Trump has risen very high in business, but with this behaviour he has sunk far too low.
But there’s more
Donald Trump also tried to use his image to sell “Trump water“: bottled water with his name on it at a “Trump price”. He also tried it with his own brand of ice. And he created his own magazine, which was successful for the first few months, until it ended up as a magazine for selling yachts and other luxury assets aimed at its supposedly millionaire readers.
And he tried the luxury travel search engine GoTrump.com, which never got off the ground and closed in less than 12 months.
This article is inspired by the original Business Insider piece, adapted and substantially modified.
See also: Donald Trump for entrepreneurs: the secret of business
Featured image: Aero Icarus, CC BY-SA 2.0, via Flickr.
