The floppy disk orphaned by Linux

To the best of my knowledge, Iomega's big mistakes were skimping on quality control, which led to the infamous "click of death" scandal that killed the Zip disk's reputation; and trying to build on the early success of Zip by rolling out multiple new products in a rush like the Jaz and Clik drives, none of which were the slightest bit compatible with any of the others (including Zip).

It probably didn't help matters that Iomega also became an early case study in how the entry of individual investors in the market could have disorienting effects, as Iomega stock became extremely hot in online communities focused on the then-quite-new individual-investor market, particularly The Motley Fool (see https://www.deseretnews.com/article/491232/FOOLS-RUSH-IN-SEN...). The Fool's founders tapped Iomega as one of their highly recommended "Rule Breakers," and there were people on the Motley Fool message boards who were so convinced that Iomega was The Next Big Thing that they called themselves "Iomegans" (!), preaching the Gospel of Iomega with quasi-religious fervor. All that hype drove the price of Iomega stock to dizzying, unsustainable heights.

All of which makes me wonder in retrospect how connected the bad management decisions and the stock pumping were; it's not hard to imagine managers, confronted by staff with big internal problems, pointing at the stock and saying "if we're doing so badly, why does it keep going up?"

(The Fools sort of apologized for their role in all that in a book they published in 2000, after the Iomega bubble had popped; see https://books.google.com/books?id=3TDjULa4nO4C&lpg=PA148&ots.... But it couldn't have comforted their readers much to learn in that same passage that they had cashed out half their position in Iomega in 1997, earning a 650 percent return.)

The 'click of death' thing happened with their later drives; I assume they tried to cut corners either on the design or QA and things suffered as a result. The original SCSI drives didn't have that issue, that I ever saw. It was the later USB and parallel-port drives that weren't especially reliable.

My feeling is that Iomega couldn't figure out if they wanted to do a razors-and-blades business model by selling the drives cheap and then charging for the media, or if they wanted to let the price of media fall, so that it became a widespread standard that they would 'own'. At first they didn't allow anyone else to make Zip disks; eventually they let Fuji and a few others manufacture them and sell them under their own brands. (I still have a few NIB Fuji Zip disks!)

If they'd licensed disks at say $1, and the drives at $10, and let other companies build compatible products, it would have lived a lot longer and they may have even influenced the transition to USB thumb drives.

I worked in 2nd level phone support at one time, but had no insight into anything the company did. Aside: the Jazz drive was effectively a detachable internal drive, where the disks came out. A damaged drive could damage the disks, and damaged disks could damage the drive. When an RMA happened, I'd usually do both.

In the end they had some really good engineering, and a lot of missed opportunities.

If they'd never embarked on that ill-fated idea, and instead continue to put all of their wood behind zip drives (and maintaining compatibility), they could've done better. I agree that licensing would've helped a lot. The zip disks were simply too expensive, and they always felt like a proprietary format in a way that 3.5" floppies did not. I was only a teenager at the time but even I was thinking "So wait, this one company is the only manufacturer? Seems niche, not the guaranteed next thing."

Well we will see what happens I suppose.