💀 The Kodak Moment: The firm who invented digital photography but failed to capitalise 🎞️
Why a ‘Kodak Moment’ went from meaning a moment worth photographing, to a business's failure to adapt to changes ahead
The classic business cautionary tale: despite inventing digital photography back in the 70s, Kodak made major blunders and was ultimately destroyed by the very technology it invented, leading this iconic camera company to declare bankruptcy in 2012. What went wrong for the business that was once photography’s king?
Developing market dominance
In 1888, George Eastman founded Kodak in Rochester USA, pioneering key advancements in consumer cameras and flexible film; before long the firm soon became leaders in both product categories.
The firm’s vertical integration allowed them to have full control over the entire photographic process, from film manufacturing to camera production and photo development services. This integration ensured high-quality products and a seamless customer experience.
Also key to the firm’s early success was their strong brand image, developed through effective marketing campaigns and widespread distribution, quickly becoming synonymous with photography and trusted by consumers worldwide.
Lesson 1: look at the bigger picture
Kodak was successful in the early years by taking a view across all parts of the customer journey, offering great products and services at each step. Break down silos between teams so employees are clear on the end-to-end experience, not just their section of it.
Missed opportunities: digital delay
In 1975, Kodak engineer Steven Sasson invented the first portable digital camera while working for Kodak. But Kodak didn’t want to cannibalise their lucrative film sales, so they effectively buried the technology.
Much like BlackBerry’s reluctance to ditch their popular physical keyboard, Kodak’s failure to embrace digital allowed rivals to swoop in.
Lesson 2: kill your darlings
Companies must be prepared to take the difficult step of "killing your darlings": be willing to launch products which may kill existing lucrative products to adapt to new technologies and innovations. Often if you don’t, a competitor eventually will.
An aside: companies who made the right decision to cannibalise their successful products:
Apple: Letting go of the iPod for the iPhone - by integrating music capabilities into a multifunctional device, Apple essentially rendered the standalone iPod, and a huge revenue-earner, obsolete.
Netflix: Embracing streaming and saying farewell to DVDs - shifted its focus to online content and boldly killed its own successful DVD rental service. Surprisingly it actually only killed DVD by mail in 2023!
Amazon: Kindle vs. Print Books - cannibalised their own sales of physical books by introducing the Kindle e-reader.
Digital photo sharing - another opportunity out of focus
Despite the digital photography revolution underway, by the 1990s, Kodak was valued at $31 billion with over 145,000 employees - it owned 50% of the global photography market and was the 5th most valuable brand in the world, giving it lots of capital to invest and acquire.
In 2001 Kodak acquired Ofoto, a website providing online photo storage, print ordering service, image sharing and viewing on a mobiles. Despite this strong digital play, which it soon renamed Kodak Gallery, Kodak focused on the printing functionality, rather than the social side of photo-sharing features or cloud-storage (images were deleted after 90 days). It neglected what could have been a valuable new business allowing alternatives like MySpace and later, Facebook and Instagram to dominate.
Lesson 3: disruption can come from outside your industry
Look outside the lanes of your business, what related industries and products offer opportunity to expand into adjacent categories (and pose a threat to your offerings)
When Kodak finally shifted focus to digital cameras in the early 2000s, the company had already fallen far behind. Canon, Nikon and other competitors had made earlier bets on digital and won significant market share that Kodak struggled to claw back.
Overexposed
Following bankruptcy in 2012, a smaller Kodak emerged and lives on today, focusing on commercial print and advanced materials and chemicals. Their missed digital opportunities marked the end of an era in photography’s history with little hope this old film giant can revive itself in the digital age it helped start.
TLDR
Kodak, once a film and camera leader, failed to quickly adapt to digital and lost big. Despite creating the first digital camera in 1975, Kodak clung to film and print too long, allowing rivals to dominate digital photography.
Further reading/watching/listening
This great 15 minute Bloomberg Original on The Rise and Fall...and Rise of Kodak: