Outcome Bias and the Seductive Rearview Mirror of Decision Making

Blockbuster missed the future when it laughed Netflix out of the room in September 2000. Ten years later they were bankrupt. Twenty years after its IPO Netflix was worth $150B. Seems cut and dry, right? Blockbuster made a bad decision.

But are we analysing that with the benefit of hindsight, knowing that against odds, Netflix grew into a behemoth? Outcome bias clouds judgment. And the popular narrative is prime example.

There were many decisions that led to Blockbuster’s demise and a healthy dose of luck that led to Netflix’s rise.