[xenotux]

Not many people remember, but it wasn't that long ago that Kodak was "pivoting to crypto": https://en.wikipedia.org/wiki/KodakCoin

At that point, it was pretty clear that they're on borrowed time. I'm surprised they had enough runway / credit to make it to 2025.

[cowsandmilk]

I would hardly describe a brand licensing agreement as a pivot of the company.

A true pivot of Kodak was moving from just doing chemicals for film to doing chemicals for the pharmaceutical industry. That actually involved employees changing what they do, changing factory equipment, etc.

[ryao]

They did do more than just chemicals for film, but then decided to spin off the business so that they could focus on the film business:

https://en.wikipedia.org/wiki/Eastman_Chemical_Company

One really must admire their determination to throw all of the life boats overboard to go down with the film ship. Every time they have a chance to save themselves if they move away from a single minded focus on film, they discard the opportunity. They just needed to mimic Nikon and Canon to stay in business, but refused to do even that.

The only way I see Kodak having a happy ending would be if Eastman Chemical purchases their former parent company to put it under sane management.

[actionfromafar]

That's way too simplified. There's no "just" mimic Nikon and Canon and every other company which tried that died or pivoted away from the try.

[LudwigNagasena]

It makes sense to spin off a successful subsidiary into a separate company and bankrupt the unsuccessful parent company. ECC net income is four times Nikon's and one third of Canon's, so it fits right in the middle. Seems like a happy end for Kodak stockholders beyond the sentimental value of continuity of brand.

[vkou]

Survivorship bias. There's no shortage of dead companies who did try to pivot, and, as it turns out, it's harder to become successful in a new field than just saying 'We're trying something new, boys!'

[rubidium]

Fujifilm succeeded at it (before Kodak tried). Interesting case study between the two companies.

[bravesoul2]

Interesting idea. Rather than the tired "they missed digital photography"... they could have seen it coming and pivoted to something where the experience transfers.

[dotancohen]

Kodak _invented_ digital photography.

[SturgeonsLaw]

And then shelved it, fearing that it would cannibalise their film sales

[actionfromafar]

And then was a leader in digital sensors. But film sales collapsed basically overnight, not in a slower slope as projected.

Kodak mgmt wasn't crazy or anything like that.

[tejtm]

They thought people wanted to have pictures. Instead, we just wanted to take pictures.

[exasperaited]

Film sales didn't collapse "overnight" in any way -- it should have been easily predictable and their sales of crappy, creaky plastic digital compacts and printers should have told them. If that rubbish was selling, film was doomed.

More to the point, the sales of Kodak Photo CD many years earlier should have tipped them off to what would happen once a small, cheap-enough digital camera met the broad quality of the lowest resolution photo CD scan (or even approached it, given how bad most people's photos are and how digital cameras made better photography easier for everyone). And given how they were doing the R&D, they should have known what was coming. Not just people not buying film, but people not really paying for prints, which is a double-whammy.

Kodak management wasn't crazy but it was entitled, boorish, inept and lazy. A classic late-stage US company. They were overconfident about their reputation and their essential status (just like Intel). At best, perhaps they were just too self-absorbed to be able to dispassionately react to what was happening.

The problem is that digital required a different approach to profit because the revenue and profit was lumpier.

As a result Kodak's biggest problem is that they could not possibly have pivoted even late on, because their line of digital products was a total pile of exploitative shit over the long term, that offered intermediate, semi-pro and pro users nothing at all of value and was already reviewing rather badly.

People outside the USA simply didn't buy Kodak digital cameras because we didn't hold Kodak in the same regard, and there were so many other choices.

Kodak also overstretched itself repeatedly in international markets, including a hilariously stupid late-era buyout of a competitor's high street lab chain in the UK so there were times when really small towns had two tiny, lacklustre Kodak stores when they barely needed one.

Fujifilm did better (by planning both good digital cameras and a transition to the well-marketed Instax and digital Crystal Archive printing as well as building ancilliary businesses). Heck, even Ilford hung on for longer, to the extent that their business produced better consumer inkjet materials than anyone else. When they were finally restructured in administration they had made the film business lean enough to survive into a management buyout.

[bravesoul2]

And they missed it!

[chris_wot]

Bravo

[pfdietz]

Didn't Kodak sell off Eastman Chemical long before the first bankruptcy?

[vintermann]

When the brand is your main asset, licensing it to a scam is pretty bad.

[cm2187]

My first digital camera was a Kodak camera in 2001. Not saying that crypto was the right decision, but digital cameras definitely were. It seems they were self-conscious, but incapable of executing.

[brianwawok]

Is that a surprise? A chemical company doesn't have the in house chops to build a tech hardware?

Same things happens all over. Ford (a car company) completely failing to make a reasonable UI / App / Interface for their infotainment systems (something a tech company would do). Pivoting away from what you are good at is hard for a 3 person startup, but nearly impossible for a giant corporation.

[cm2187]

Well they had a good start, I don't think the early Kodak digital cameras were particularly bad, and they were rather cheap. But it looks like they didn't build on it.

[BLKNSLVR]

Given that bitcoin just hit another all time high, I'm not sure how apt your analysis is.

Having said that, more of the cryptocurrency industry is scams than not - but then that also wouldn't necessarily exclude them from profitability...

[bawolff]

KodakCoin is still a stupid idea no matter how well bitcoin might be doing.

The price of bitcoin being high does not mean your weird altcoin is a good investment. That would be like saying that because USD exchange rate is up it means every usa business is a good investment.

[mont_tag]

Crypto did pretty well during that timeframe. Likely, they didn't pivot hard enough to offset losses to the core business.

[BoorishBears]

Cryptocurrency did well, anyone who built things assuming crypto-related tech would do well lost their shirt.

[hoppp]

Crypto is pretty much just about buying btc or now eth

But the projects built on it are all questionable and only make money for the builders who slowly rug them

[canucker2016]

worked well for Microstrategy (MSTR). Look at the 5 year or all-time chart for MSTR - https://finance.yahoo.com/quote/MSTR/

Not sure how they realize all those gains tho, or what happens to the stock price when they try to exit in a substantial manner.

[greiskul]

And what projects do they have besides buying BTC like the parent comment mentioned? What tech have they built?

And yeah, BTC went up huge amounts, but certainly they were a large part of the buying pressure to get it there. But like you asked, how do they realize anything? Unless they get US government to start buying and shift their bags to the US tax payer, how do they do anything with their BTC? Besides using it as collateral to borrow even more money to inflate a even higher bubble?

[DANmode]

Decent framing of the issue, here.

[lenkite]

Why didn't Kodak pivot to making smartphones ? As soon as the iPhone reveal happened, any sane executive would have realized that this is what they would need to do.

[vasco]

Yeah, and why not spaceships too.

[lenkite]

Spaceships do not form the critical part of a functional smartphone. Cameras do.

[pjerem]

Kodak had no specialization into cameras, only into camera films, let alone digital cameras. There are actually few good digital camera manufacturers in the world. Most high end camera in smartphone are from Sony or Samsung who were already specialized in electronics way before the digital camera / smartphone era.

[devnullbrain]

Red tried the same without success. I'm not convinced the differentiators for photography consumers are the same as the differentiators of cameras for smartphone consumers.

[triceratops]

They should've started in the late-90s for that. And it wasn't obvious then that cameras and phones would go together so well.

[Finnucane]

The problem was that they were fundamentally a chemical and imaging company, not a consumer electronics company. That would have been a hard shift. When they tried to do consumer electronics, it was crap. Now, if they had merged with an actual consumer electronics company (see: Sony buying Konica) they might have done better.

[jamal-kumar]

Not only that, they really dropped the ball on photolithography for making chips

https://en.wikipedia.org/wiki/KPR

[sgt101]

There's quite a lot of interesting literature on this. Unfortunately the best work looks at Polaroid [1] rather than Kodak so I'm on slightly shaky ground, on the other hand I think that if Clay Christensen can point at Kodak as a exemplar of the same processes [2] it's all ok.

Anyway the issue seems to be that Polaroid (also Kodak) had what's called a razor blade business model. In Polaroids case they actually sold the cameras for the film, but they sold them cheap cheap cheap so as to encourage the use of the high margin product that they really wanted to shift - the film. Kodak went one better (sorta) by becoming a category killer in film so everyone who wanted to use a non-polaroid camera probably ended up buying Kodak film (razor blades).

There isn't really an equivalent consumable in digital, the action is in the camera (which ended up being connected to the smart phone). Now, Polaroid had consumer goods experience and consumer product R&D capability from making instamatics, and they had a management culture of investing big to create the next big thing - but even they just couldn't get past the "I'm telling you there is no business case for this" conversation in the C-suite. And here comes Clay with the Innovators Dilemma. The Polariod and Kodak executives both struggled to see past the investment cases which said things like "invest $100m to get $40m a year from efficiency savings in film manufacture, 100% for sure for ever here is proof that can't be discussed" to see "invest $20m to get $5m next year, growing 200% a year for the next 10 years maybe, I promise, honest that's what the future looks like fellas". Worse than that - investment in the digital industry would clearly kill the film industry, and the future for a digital Kodak looked radically different to the future for a film based Kodak and therefore there was a big constituency that didn't want to see their lovely chemical factories and lab based R&D shuttered in favour of a basement filled with computer geeks, also a bunch of people saw that their million $$ sales commissions for selling to corner store processors would go out of the window.

The turkeys... they do not vote for Christmas.

So the innovation cases that could have saved both companies didn't get the bucks and the rest is history. Sucks to be the shareholder left holding that stock when the veil of corporate propaganda masking the collapse finally fell. I remember a presentation from a Kodak team in about 2009 that would have convinced you that the future was indeed filled with Kodak moments spilling through everyone's life forever. Unless you actually knew what a digital camera was and how good they were then.

In the last few years a new thread of work [3] that unifies these kind of insights into a theory of innovation processes has emerged. I am a big fan but it hasn't got the kind of profile I think it should, probably because of Quantum AI Crypto flaps. It's quite instructive to use it to understand the Quantum AI Crypto stuff as well, but no one likes to hear about that because it's more fun to look at the pretty pictures I guess.

[1] Tripsas, M., & Gavetti, G. 2000. Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic Management Journal, 21: 1147–1161.

[2] Christensen, C., Raynor, M.E. and McDonald, R., 2013. Disruptive innovation (pp. 20151-20111). Brighton, MA, USA: Harvard Business Review.

[3] Grondal, S., Krabbe, A.D. Chang-Zunio, M. THE EVOLUTION OF TECHNOLOGY. Academy of Management Annals 2023, Vol. 17, No. 1, 141–180. https://doi.org/10.5465/annals.2021.0086