In 1946, after almost twenty years in operation, Polaroid stood at the brink of failure: revenues had plummeted year after year as military contracts evaporated and Polaroid’s line of polarized glasses and filters proved insufficient to sustain the company. As the pressure began to mount, Polaroid’s founder, Edward Land, began looking for a way to save the company. Fortunately, Land was someone characterized by a desire to learn, and so he had been listening when one Christmas morning a few years earlier his daughter asked why she couldn’t see their family pictures right away. Curious about the possibilities, Land launched a research project while at the same time asking customers about the potential appeal of such a product. When Polaroid later began to slide toward disaster, Land knew from experience that he already had the silver bullet to save the company. Land boldly announced the launch of the new product - the instant camera - which led to explosive revenue growth, broke Kodak’s monopoly in the photography industry, and created an iconic brand name that would symbolize instant photography for decades.
Fast forward a little over fifty years when digital photography has begun to transform the photography industry. A small team inside Polaroid, having seen the transformation coming, began to develop digital imaging products. As one of the early movers in digital imaging development, the team developed market-leading digital imaging capability and the most advanced digital camera prototype of the era. But Polaroid’s top management decided to shelve the digital camera and focus on their traditional business model of selling film for cameras. When in a few years digital photography all but displaced film photography, Polaroid had fallen so far behind that they couldn’t catch up. Within the year, Polaroid failed, and their assets were sold in bankruptcy.
Why did Polaroid’s managers make such an ill-fated decision to stick with the status quo when fifty years earlier Edward Land had not? Were the managers of Polaroid simply fools? Not necessarily. As a matter of fact, the executives at Polaroid were capable managers with impressive pedigrees and deep experience in business. Why then were the managers at Polaroid unable to recognize the coming tsunami that would wipe out the company? The real answer is that the executives weren’t able to recognize the need to change - they weren’t able to learn in an unbiased way about the reality they faced. But why were they unable to learn when Edward Land was so willing those many years ago? The reason the executives and so many entrepreneurs fail is that they fall into common learning traps, whereas Land was willing to engage in intellectually honest learning that allowed him to see the need to change.
Such intellectually honest learning makes up a fundamental principle that applies throughout the Nail It Then Scale It process. To develop this style of learning, the initial step is to understand the learning traps that blind us. In day-to-day life, such learning traps may be relatively benign, but in a business setting, such as was the case with Polaroid, they can be deadly. To save you from the same fate, we are going to review the three most dangerous learning traps: the confirmation trap, the motivation trap, and the overconfidence trap. Once you are aware of how these traps operate, we will then share some lessons about how to overcome these traps and develop the style of learning necessary to run the Nail It Then Scale It process successfully.
(See Nail It Then Scale It, pgs. 43-51)