The world often looks clearer in hindsight. But that truth shouldn't keep one from mining some lessons from Ford Motor Co.'s decision to pull the plug on its telematics joint venture called Wingcast.
For perspective, it helps to remember the promise of telematics. Much of the glitter stemmed from the paper-thin margins on the sale of new vehicles. If automakers built voice mail, Internet connections, route guidance and lots of other two-way communication services into their vehicles, consumers would come. In a short time, the car as "personalized portal" -- as former Ford CEO Jacques Nasser put it -- would be drawing a nice stream of revenue, month after month.
So two years ago Ford hooked up with Qualcomm Inc. to create Wingcast. The hope was that by the end of this year, Wingcast would be installed on 1 million vehicles. By the end of next year the figure would be closer to 3 million.
It didn't happen.
Now, with Ford's auto business in a tailspin, the company has bailed out of Wingcast and its $100 million investment. Yes, telematics has a future, Ford says - albeit a much less rosy one than previously imagined. But we don't need to own a telematics company.
So what lessons can be learned? How can companies avoid such costly temptations in the future?
Some old sayings might help. "Stick to your knitting," for example. And, "If it seems too good to be true, it probably is."
Or, put in automotive terms, this might be another good question: Will this new venture survive should we ever have to get back to the basics of what we're all about?
Even if the answer is yes, a company should think long and hard - and then think again - before taking the plunge.