Nobody sets out to become the next Blockbuster.

Nobody wakes up and decides to be the cautionary tale in someone else’s keynote. And yet, it keeps happening. Smart leaders, strong businesses, real momentum, and then a slow fade nobody saw coming until it was too late.

Blockbuster. Kodak. Borders. Sears. The list is long and the lesson is always framed the same way: they didn’t adapt. They didn’t innovate. They didn’t see what was coming.

But that’s not actually the story. The real story is more uncomfortable, and a lot more relevant to the decisions most business leaders are making right now.

 

They Saw It Coming. That’s the Problem.

Blockbuster knew about streaming. They passed on buying Netflix in 2000 for $50 million because their executives decided the risk wasn’t worth it. The DVD business was working. The stores were profitable. Why disrupt something that was generating revenue today for something that was unproven tomorrow?

Kodak invented the digital camera in 1975. Their own engineer built it. They shelved it because they were afraid of what it would do to their film business. They spent the next three decades protecting a revenue model that the market was quietly walking away from.

These weren’t companies that failed to see change coming. They were companies that saw it clearly, calculated the cost of disrupting themselves, and decided the safer bet was to protect what they had.

That decision, made over and over again at the highest levels of both organizations, is what ended them.

The most dangerous moment in any business isn’t when things are going badly. It’s when things are going well enough that doing nothing feels responsible.

 

I’ve Sat in That Same Room.

I’m not going to pretend I was immune to this. I ran a family car wash business for over two decades. There were plenty of moments where the safe play felt like the smart play.

We had a membership program that worked. 216 members per location, steady revenue, nothing to complain about. The obvious move was to leave it alone. Protect the margin. Don’t introduce variables you can’t control.

Instead, we dropped the redemption value. Members could get more value faster, which on paper looked like we were giving up margin. My team was nervous. I was nervous. But we had mapped the decision, defined what success looked like, and committed to testing it at one location before scaling.

Membership went from 216 to over 6,000 per location. Recurring revenue increased by $13 million annually. We grew from 9 to 34 locations in under 18 months.

The risk wasn’t taking the bet. The risk was the version of us that almost didn’t.

 

There’s Also the Risk We Didn’t Take.

Here’s the part I talk about less, but it matters just as much.

In 1998, we sold the business outright. The buyer filed for bankruptcy three years later and we bought it back, but with two partners. When we eventually sold again, we split the proceeds three ways instead of keeping them in the family. The risk we didn’t take in 1998 cost us two-thirds of what the business was ultimately worth.

We also hesitated to add an exterior-only wash option for years. It felt like a risk to the existing model. When we finally added it, we discovered we were reaching a whole new class of customers who had never used us before. The thing we were afraid of turned out to be the growth lever we needed.

Two different kinds of inaction. Two very real costs. Neither of them showed up on a P&L until long after the window had closed.

Risk avoidance isn’t the absence of a bet. It’s just a bet you’re making with your eyes closed.

 

What Blockbuster and Kodak Were Really Protecting

When you look closely at both companies, the pattern is the same. They weren’t protecting their customers. They weren’t protecting their employees. They were protecting the revenue model that had made them successful, even as the world that model depended on was changing underneath them.

Blockbuster’s late fees accounted for 16 percent of their total revenue. That’s the number that made it impossible for them to move. They couldn’t abandon a model that was generating that kind of income, even when it was actively making their customers angry. Netflix didn’t just offer a better product. They offered a product that didn’t punish you for liking movies.

Kodak had 140,000 employees and a film business that generated billions. The executives who decided to shelve digital weren’t stupid. They were protecting real jobs, real revenue, and real shareholders in the near term. The problem is that protecting the near term at the expense of the future isn’t a strategy. It’s a delay.

Both companies eventually tried to adapt. Both did it too late. Not because they lacked resources. Not because they lacked intelligence. Because they had built an identity around protecting what they had, and that identity made it almost impossible to bet on themselves.

 

The Question That Changes Everything

Most leaders are asking the wrong question when they evaluate a growth decision.

They ask: what could we lose if this doesn’t work?

That’s an important question. But it’s only half the equation. The question that Blockbuster and Kodak never seriously asked, the one that would have changed everything, is this:

What are we already losing by not doing this?

The opportunity cost of staying still is real. It just doesn’t show up in a spreadsheet the same way a failed investment does. It shows up slowly, in market share that slips away, in customers who quietly find a better option, in talent that leaves for organizations willing to move.

By the time it shows up on the P&L, the window is usually closed.

 

The Framework That Makes the Difference

The leaders I’ve watched build lasting businesses aren’t the ones who took the most risks. They’re the ones who had a system for evaluating which risks to take.

The B.E.T. Framework I teach, Blueprint, Experiment, Transform, gives leaders a practical way to make those calls without having to choose between protecting what they’ve built and building what comes next.

Blueprint the decision before you make it. Map the upside, the downside, and the cost of doing nothing. Most decisions that feel enormous shrink significantly when you write both sides down on a single page.

Experiment at small scale before you commit fully. Blockbuster could have tested a streaming model in one market. Kodak could have launched a digital line under a separate brand. Small tests don’t require you to bet the whole company on an unproven idea.

Transform based on what you learn. Scale what works. Cut what doesn’t. Move on signal, not on certainty, because certainty is never coming.

That’s the system. It’s not complicated. But it requires a willingness to ask the question that most leaders avoid: not what could we lose, but what are we already losing?

 

The Lesson Nobody Tells You About Blockbuster and Kodak

The real lesson from Blockbuster and Kodak isn’t that they failed to innovate. It’s that they were so successful for so long that protecting their success felt more responsible than evolving it.

That’s the trap. And it’s not a trap that only catches giant corporations. It catches family businesses, local operators, growth-stage companies, and anyone who has built something worth protecting.

The question isn’t whether you’re at risk of becoming the next Blockbuster. The question is whether you’re asking yourself, honestly and regularly, what you’re already losing by not finding out.

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