Risk, Biases and Foresight: Why smart people and great companies miss great opportunities

BY DANIEL COLE

In 2004, Blockbuster was a household name, boasting 60,000 employees, 9,000 stores worldwide, and annual revenues of $5.9 billion. At the time, only 4% of American homes had broadband internet. By 2010, that number skyrocketed to 68%, and the game changed forever. The name of the game? Video streaming.

Blockbuster’s downfall didn’t have to happen. In 2000, they had the chance to buy Netflix—a fledgling DVD-by-mail company—for $50 million. To Blockbuster, $50 million seemed like a steep price, but it represented just three days of their revenue. Today, Netflix is valued at over $446 Billion. Blockbuster’s failure to act wasn’t just a missed opportunity; it was a failure of strategic foresight.

History is littered with examples of companies and individuals who failed to recognize transformative opportunities. Yahoo turned down the chance to acquire Google for $1 million in 1998. Friendster passed on buying Facebook. These decisions weren’t just costly—they were catastrophic. The loss of potential gain when an opportunity isn’t seized is staggering, and the collateral damage can be devastating.

The cost of missed opportunities

In 2008, four students set out to revolutionize the eyewear industry by offering stylish, affordable glasses online. Adam Grant, a renowned organizational psychologist, was offered the chance to invest in Warby Parker. He declined, reasoning, “If it was a good idea, it would have already been done. Plus, who would buy prescription glasses online?” Today, Warby Parker is valued at $3 billion. Grant later admitted, “It was the worst financial decision I’ve ever made.” While it didn’t cost him a penny upfront, the opportunity cost was millions.

“The best way to predict the future is to create it.”

Strategic foresight is the ability to see beyond the present and anticipate future trends. It’s about recognizing potential in its infancy and understanding when to pivot or let go of outdated ideas. Consider Alexander Graham Bell’s telephone. In 1876, he offered the patent to Western Union for $100,000. He envisioned telephones in every American city. Western Union dismissed the idea as “idiotic.” In 2014, there were more mobile devices than people on the planet. What seemed “idiotic” became indispensable.

Similarly, there are: Nokia, General Motors, and Kodak. Kodak’s story is a cautionary tale. Once the king of camera film, Kodak invented the digital camera in 1975. Engineer Steven Sasson presented the innovation to his employers, expecting excitement. Instead, they saw it as a threat to their film business and suppressed the technology. By the time digital photography took over, Kodak was too late to adapt. Kodak filed for bankruptcy in 2012.

Why do we miss opportunities?

1. Complacency: Success breeds comfort. Companies like Blockbuster and Kodak were so entrenched in their existing business models that they failed to see disruptive threats—or opportunities.
2. Fear of risk: Investing in unproven ideas feels risky, but as Warby Parker and Netflix show, the bigger risk is inaction.
3. Short-term thinking: Many leaders focus on quarterly earnings rather than long-term innovation. This myopia blinds them to transformative opportunities.
4. Lack of vision: Without strategic foresight, even brilliant ideas can be dismissed as “idiotic” or impractical.

How to cultivate strategic foresight

1. Embrace curiosity: Stay curious about emerging trends and technologies. Ask, “What if?” and “Why not?”
2. Think long-term: Balance short-term goals with long-term vision. What might the world look like in 10, 20, or 50 years?
3. Encourage innovation: Foster a culture where new ideas are welcomed, not feared. Kodak’s suppression of the digital camera is a stark reminder of what happens when innovation is stifled.
4. Learn from failure: Analyze missed opportunities to understand what went wrong. Adam Grant’s reflection on Warby Parker is a great example of turning regret into a learning opportunity.

Blockbuster, Kodak, and others didn’t fail because they lacked resources or talent—they failed because they lacked foresight. As the pace of technological innovation accelerates, the cost of missed opportunities will only grow.