In 1975, a Kodak engineer called Steve Sasson built the world’s first digital camera. It weighed eight pounds, took twenty-three seconds to capture one grainy black-and-white image, and recorded it to a cassette tape. Kodak’s executives looked at it, patented the idea, and quietly told him not to talk about it. Twenty-five years later, digital photography ended the film industry Kodak had built its empire on, using technology Kodak invented first.
In 2000, two young founders walked into Blockbuster’s head office and offered to sell their fledgling DVD-by-mail company for fifty million dollars. Blockbuster passed. The company was Netflix. Blockbuster doesn’t exist anymore, apart from one store in Oregon that’s now a tourist attraction.
Josh Cote brings these two stories up often, because they get misread almost every time. People hear them and assume those companies were slow, or blind, or badly led. They weren’t. Kodak’s engineers were some of the best imaging scientists on the planet. Blockbuster had built genuine retail dominance through real operational skill. Both companies had exactly the insight they needed, sitting right in front of them. Neither was short on intelligence. What they were short on was the willingness to act against the thing that had made them successful and make the changes to adapt to where the market was going.
That’s the trap. Not ignorance but relying on what you have always done with your perceived expertise.
Why Being Right Once Makes You Slower the Second Time
A business gets built on a hundred small decisions made correctly, and the business rewards the founder for it. Over time, those decisions stop feeling like decisions. They become instinct. “This is how we do it here” stops being a working hypothesis and starts being an identity.
That’s a problem, because identity doesn’t update easily. A working hypothesis gets revised the moment new evidence shows up. An identity gets defended. Kodak didn’t fail to see digital photography coming. Their own engineer showed it to them in 1975. They failed to treat their film business as a hypothesis rather than a fact about who they were.
The uncomfortable truth is that expertise and flexibility move in opposite directions unless someone actively fights for both. The more you know, the more confident you get. The more confident you get, the less you question the model that made you confident in the first place. It is not a character flaw. It’s just what happens to competence over time if nobody interrupts it.
What Got You Here Won’t Automatically Get You Further
The instincts that were right in year one can be wrong by year five. The habits that built the business can become the habits that cap it. Holding on to “this is how we’ve always done it” isn’t loyalty to past success. It’s often just comfort.
Josh Cote has watched two founders hit the identical setback and come out with wildly different outcomes, and the split almost always traces back to this. One treats the setback as new information and updates. The other treats it as an attack on a system that’s “always worked” and digs in. Six months later, one business has adapted and the other is still explaining why the market is wrong.
As a consultant, this is genuinely the hardest part of the job. It’s much easier to fix a business that doesn’t know what it’s doing than one that’s certain it already does. However, a team that’s still learning will follow you into a new approach. A team that’s spent a decade being right will fight you for the old one, sometimes politely, sometimes not.
Spotting the Trap Inside Your Own Business
There’s no warning when this happens to a business. Nobody wakes up and decides, “today I’ll protect the old model instead of the evidence.” Here are a few signs to look for:
The team has stopped bringing bad news to the founder or leadership team, because the last three times someone did, the response was an explanation of why they were wrong instead of a question about what they’d seen. Decisions get justified with “that’s not how we do it” rather than “here’s the data.” Nobody in the room has permission to argue with the founder, including the founder arguing with a past version of themselves.
None of these show up on a P&L. They show up in how a business responds when it’s handed the one piece of information that contradicts its own story. Kodak’s version of this was a camera in a drawer. Blockbuster’s version was a meeting its own former CEO still disputes happened the way the Netflix founders remember it. Either way, the outcome was the same: the evidence existed, and nobody with the authority to act on it did.
Kodak’s Own Rival Proves It Wasn’t Inevitable
Kodak’s closest competitor, Fujifilm, faced the exact same collapse in film demand and didn’t go under. It used the same core chemical expertise that made photographic film to move into cosmetics, pharmaceuticals, and optical equipment, and it’s still a large, profitable company today.
Same industry. Wildly different outcome, because one company treated its core competency as a set of transferable skills and the other treated it as a fixed identity to protect. That’s the part worth sitting with. The trap was never the disruption itself. It was the decision about what to do the moment the disruption arrived.
The Fix Isn’t Talent. It’s a Habit
The businesses that avoid this trap don’t have smarter founders. They have founders who’ve built a deliberate habit of treating their own certainty as a risk factor, not a badge.
At EAW Consulting, this is one of the first things the team works on with a business owner, often before strategy.. The team asks the boring question on purpose: what does this business believe that hasn’t actually been tested recently? Most founders can’t answer immediately. That hesitation is usually the sign something worth digging into has been found.
It’s also why EAW Consulting treats recruiting and leadership development as part of the same conversation as strategy, not a separate one. A founder surrounded by people who only ever agree with them will get exactly one perspective, repeated back at full volume. The businesses that catch their own blind spots early are almost always the ones where someone junior felt safe enough to say “I don’t think that’s right anymore,” and got taken seriously when they did.
Kodak had the camera. Blockbuster had the meeting. The knowledge was never the problem in either case. Acting on it, against everything that had made them successful, was.
That’s the real risk of expertise. It doesn’t make you stupid. It makes you certain. And certainty is what stops a business moving the moment the evidence is already telling it to.
Josh Cote is an entrepreneur, business consultant, and investor, and the founder of EAW Consulting, working with business owners and leadership teams across the UK and US on strategy, growth, and the harder work of staying honest about what’s actually working.
FAQS
What is the expertise trap in business?
The expertise trap happens when past success makes a founder or leadership team less willing to question established ways of working. Experience becomes a problem when proven methods are treated as permanent rules rather than assumptions that should be tested as markets, customers, and technology change.
How can founders recognise when experience is limiting growth?
Common warning signs include decisions being defended with phrases such as “this is how we have always done it,” employees becoming reluctant to share bad news, and evidence being dismissed because it challenges the founder’s instincts. A lack of disagreement within the leadership team can also indicate that expertise has turned into certainty.
Why did Kodak struggle to respond to digital photography?
Kodak understood digital photography and developed an early digital camera, but its identity and revenue model were closely tied to photographic film. Acting on digital technology would have threatened the business that had made Kodak successful, making it difficult for the company to adapt quickly enough.
How can businesses avoid becoming trapped by past success?
Businesses can regularly review their assumptions, test whether established processes still work, and create an environment where employees can challenge senior leaders. Founders should also treat certainty as a potential risk and actively seek evidence that contradicts their current strategy.
How can a business consultant help challenge founder blind spots?
A business consultant can provide an external perspective that is not influenced by internal habits, company politics, or attachment to past decisions. At EAW Consulting, Josh Cote works with founders and leadership teams to examine untested assumptions, identify barriers to growth, and build strategies based on current evidence rather than historical success.
