How did Kodak, which invented the digital camera, hide its own technology for 20 years and end up bankrupt?
The episode begins by highlighting Kodak's iconic status and dramatic decline, posing questions about its hidden failures. Host Damian Olszewski introduces the educational series Bizon, focusing on business and finance case studies. He details Kodak's founding by George Eastman, who started from scratch and patented paper photographic film in 1885. Eastman's 1888 Kodak camera, sold with pre-loaded film and a development service, made photography accessible to the masses. Kodak's business model relied on selling cheap cameras like the $1 Brownie to drive recurring revenue from film and chemistry, similar to modern printers. The company grew rapidly, investing in factories and research, and by the mid-1970s, it held 95% of the US film market and 85% of the camera market. Kodak faced early challenges, including the Great Depression and Eastman's suicide in 1932, but continued innovating with products like Kodachrome film in 1935. Post-World War II, Kodak dominated photography, supplying films for Hollywood and cameras for NASA's Apollo missions. In the 1980s, Japanese competitor Fujifilm entered the US market, winning the 1984 Olympics contract and eroding Kodak's monopoly through aggressive pricing. Despite record revenues in the 1990s, Kodak's profits dwindled due to price wars and the looming digital shift. The episode reveals that Kodak engineer Steven Sasson built the first portable digital camera in 1975, but management hid the invention to protect film profits. Kodak's leadership, facing the innovator's dilemma, delayed full digital transformation, instead pursuing half-measures like the ADVANTIX system, which failed. By the 2000s, Kodak underwent brutal restructuring, closing factories and laying off thousands, while attempting to pivot to digital printing. Financial struggles culminated in a 2012 bankruptcy filing, after which Kodak emerged as a smaller company focused on digital printing and analog film production. Today, Kodak licenses its brand for products like smartphones and supplies film for directors such as Christopher Nolan and Martin Scorsese, capitalizing on an analog revival. The episode concludes by framing Kodak's story as a classic case of the innovator's dilemma, where success blinded the company to disruptive change.
