Five years ago today Kodak filed for Chapter 11 bankruptcy protection. This was not only an economic tragedy for one of the great companies of the last century, it was devastating for the city of Rochester, New York, where the company was based. Kodak was once a household brand whose dominance in the photographic film business was unparalleled. The phrase “Kodak moment” came to epitomize the cultural relevance of the brand. At its height, Kodak’s market share of the photographic film market was more than 80% in the U.S. and about 50% globally. It employed over 60,000 citizens of Rochester, the majority of whom became unemployed when the company collapsed.
Kodak was a juggernaut of a company; but the tragedy of its collapse runs deeper. It is not that the company could not have saved itself by responding to change. The tragedy is that Kodak invented the change that eventually killed it. A Kodak engineer, Steven J. Sasson, invented the first digital camera in 1975. In an interview with the New York Times, Sasson describes how Kodak’s management reacted to negatively his camera because it was filmless photography, instructing him to tell no one about it.
Steven J. Sasson shows his prototype digital camera he built in 1975 (AP Photo/David Duprey)
At that time, Kodak was focused on maintaining the large profits it was making from its sales of photographic film. However, as digital cameras grew in popularity, Kodachrome, the photographic film that was Kodak’s cash cow, was discontinued in 2006 after 74 years of production. It is not that Kodak had failed to imagine a new future. It had failed to capitalize on the imagination and inventiveness of its scientists.
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