My first camera was a Kodak. It was one of those nifty new “instant film cameras” – I was probably about 10 years old. So amazing – take a picture and the film comes right out the bottom. I loved it. I took pictures of everyone, everywhere. It was my first love of photography, as crazy as that sounds. Something about the instant gratification – you can see what you just snapped. No dark room, no film store drop off (remember those places?). Just a picture in your hand.
What I didn’t know at the time was anything about the camera market. For example, that Polaroid launched the first instant film camera and Kodak copied it and went through what ended up to be a 10 year legal battle over the copyright to the instant film. The sad end to the story was that Kodak was forced to discontinue making the film for my beloved camera because they were late to the game and couldn’t copy the technology without copyright infringement. Maybe it was foreshadowing for the recent news – the king of film files for bankruptcy protection.
In my opinion, the “what happened” is not a story of 35mm film going by the wayside and putting them into bankruptcy. It’s a story of what happens when you:
- drink too much of your own Koolaid
- don’t anticipate what the customer needs
- have blinders on when it comes to the competition
- stop paying attention to how technology and your market are changing
- forget that you can become a commodity (see #1 & #3)
Had Kodak perhaps kept their eye on Fuji and their Japanese competitors, listened and anticipated the trend to digital and put egos and boardrooms and the way it was always done aside, perhaps they would be in a different place today. The wikipedia page mentions
However despite high growth, Kodak failed to anticipate how fast these digital cameras would become commodities, with low profit margins, as more companies entered the market in the mid-2000s. Also, an ever-smaller percentage of digital pictures were being taken on digital cameras, being gradually displaced in the late 2000s by cellphones and tablets‘ cameras. In 2001 Kodak held the No. 2 spot in U.S. digital camera sales behind number one Sony, but Kodak lost $60 USD on every camera sold. The film business, where Kodak had enjoyed high profit margins, fell 18% in 2005. The combination of these two factors resulted in disappointing profits overall.[17] Kodak’s digital cameras soon became undercut by Asian competitors that could produce their offerings more cheaply. In 2007 Kodak was No. 4 in U.S. digital camera sales with a 9.6 percent share but it has lost ground since then, and by 2010 it held 7 percent in seventh place behind Canon, Sony, Nikon and others, according to research firm IDC. [19]
It’s easy to say: we’ve always made this widget, so we’re going to keep making this widget and people will buy it. When suddenly your competition, who you never really paid attention to, starts making your widget even better and sells it for less. Some call that eating your lunch. I call it taking your eye off the ball. You know what happens when you take your eye off the ball…you miss it.
Listen to your customers. Pay attention to your market. Understand price pressure and how it could squeeze your profit margins. Understand this crazy dynamically changing technological world we live in. Eat and breathe it. It’s okay to think your company or your product is all that and a bag of chips. Just be sure that in your passion and love for what you do and what you’re building, you are looking for those indicators that, if missed, could one day put you out of business. RIP Kodak. I miss my instant film and it’s sad to see what was once such a dominant brand be shelved just like my camera.