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Comment by agumonkey | Hacker News Reader

Reminds me of Kodak. They had the future, but it didn't have meaning in the mind of the company. Large thriving systems seem to lack enough schizophrenia to understand what they need to do to survive.

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I was at Kodak when the terminal decision was made. Among other factors... Film sales were driven by retailers/drugstores, which were hooked on the model of customers visiting to buy a roll, another visit to drop off the roll, and a third visit to get the prints - and odds were that they'd buy something on each trip. When digital photography started catching on, those stores made clear that if Kodak did anything to disrupt that pattern, they'd drop Kodak products fast and destroy the company. Ergo, Kodak was reluctant to dive into digital. Yeah, there was a long-term plan to cope, but nowhere near as fast a transition as customers made.

I tried to push the idea of a cell-phone-equipped camera which would immediately upload images and mail you prints, but was a mere peon so that went nowhere.

Don't lose sight of who your REAL customers are. Bulk buyers who resell product aren't.

lack enough schizophrenia

Great line.

Pretty amazing comment too. Did companies spin start up children that explore the current trends, being small => quicker moves, while benefiting the mother-ship with their discoveries so to have a faster transition.

It reminds me of Clayton Christiansen's books on disruptive innovation, where he describes the mechanism by which companies are disrupted as them "being held hostage by their customers". Basically, what makes an innovation disruptive is that it is unappealing or threatening to your most valuable customers; thus, you always have a strong incentive to ignore it, even if you know strategically that it's important. Doing anything else would punish your revenues and stock price, basically assuring that you're removed as CEO.

Those are good insights. You could probably add to that the fact that exhortations to avoid "marketing myopia"[1] aside, it's not all that clear what distinctive capabilities Kodak brought to the digital photo game. It certainly wasn't their chemical supply chain (though they sold off Eastman Chemical a long time ago). Nor was it especially their distribution channels many of which, as you suggest, were actually negatives in the context of a digital shift.

Furthermore, consumables businesses--especially one as rich as the film business--are hard to replace. Printing had some of the same characteristics for a while and Kodak was somewhat in there. They did the online photo service too. But nothing like film sales and processing. Kodak could have done better but it would have been a tough navigation. Fujifilm seems to have dome OK but by a very circuitous route taken by a smaller company.

[1] http://en.wikipedia.org/wiki/Marketing_myopia

it's not all that clear what distinctive capabilities Kodak brought to the digital photo game

At one end, they had hands-down the best & fastest imagers. 13 years ago they had a fantastic camera in a manageable size & price which could have been, in time with effort, worked into a consumer product. They had a great start into dominance as a digital capital company.

At the other end, at core Kodak was a very large scale chemical consumables company.

Alas, it's very hard for a company to transition from a core competence to its polar opposite.

13 years ago they had a fantastic camera ... What model ?

A documentary said Eastman/Kodak was a strong influence on Apple, now its successors as extremely successful company, using similar philosophy, simple and focused products + distribution scheme, albeit virtual now.

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