Kodak’s Multi-billion $ mistake.
To survive and thrive you must ask yourself "What's Next?"
In 1973, Kodak asked one of its engineers, 24 year old Steven Sasson to find a practical use for this new thing called a C.C.D. that could convert light to electrical signals. To Steve, this sounded like an electronic version of film. He wondered if he could use it to take an electronic photograph.
The problem was that once you take an electronic photograph where do you put it? Fortunately there was a new process called digitalization that turned electronic signals into something that can be recorded on to a magnetic tape. It was the same way music was recorded onto cassettes and that is exactly what Steven used, a music cassette.
After months of soldered circuit boards and piecing together the electronics, Steven had created the world’s first digital camera. No film, no paper, just still images displayed on a TV screen. In a world that was still two years away from Star Wars, this was revolutionary.
He pulled together all the suits at Kodak and demonstrated his new invention. There, he took a digital photograph of the group, waited about 30 seconds for the picture to record to the tape and then waited another 30 seconds for the playback system to put it up on the screen. There it was, the future of photography in a tiny little black and white 100 x 100 pixel image (For comparison your phone shoots a 2000 x 3000 pixel image).
What he got back from the executives was not cheers and adulation but a collective, “Meh.” Their response was, “Who would want to look at pictures on a television set?” They didn’t see what it COULD be only what it was. Photos as film and paper had been around for over 100 years. No one was asking for anything new so why should they give it to them?
Also, Kodak’s income was based on the current process. From cameras to film to photographic paper, Kodak made money all the way through. Putting out an electronic camera seemed like they would be building their own gallows and sticking their head in the noose. So the executives did what executives do and they made an executive decision to bury the idea. In the years that followed, film and paper photography dwindled while the digital camera revolution took over. Kodak fought it all the way.
Eventually they did create their own digital cameras but it was too late. The Kodak brand had come to represent the past while Canon, Panasonic and Samsung took over. Kodak’s earnings plummeted.
In 2012, the company whose name had been synonymous with photography for over 120 years filed for bankruptcy. Kodak, like so many others didn’t know what business they were in. They were in the photograpy business when actally they were in the memories business. Photos don’t capture images of stuff, they capture moments in time. These are the special human experiences we want to remember like a child’s first steps or a daughter’s wedding day. Steven Sassoon had given them another way to capture memories but they couldn’t see it.
Instead they became afraid of what was new. They couldn’t visualize a world where film and paper photography didn’t exist. They thought that digital photography would bankrupt the company. Ironically it did but only because they failed to embrace it.
They tried to surpress evolution. Just like the cab companies trying to suppress Uber, the hotels trying to keep AirB&B down and Blockbuster turning their nose up at Netflix. It never works. We are a species with a life force that makes us determined to evolve. We always want to know what’s next. Sailing ships to the New World wasn’t enough so we landed men on the moon and we have not stopped there.
The future of your business depends on you embracing evolutionary thinking. Not for the distant future and not for the future a decade away. The future is right now and tomorrow. In 1975 an invention took 30 years to sink Kodak. In 2007 an invention took just two years to sink Blockbuster. To compete, survive and thrive you must be constantly asking yourself, “What’s next?”