BC Business
Kodak Bankruptcy | BCBusinessFounded in 1880, Kodak's once-great business model can no longer compete with 21st-century innovations.
As the recent announcement of Kodak's impending flight into bankruptcy protection proves, great innovators often have an expiry date. It's a law of nature that even the most innovative companies eventually lose their spark. In 1932 George Eastman – philanthropist, inventor of photographic film and cameras, and founder of the iconic photography firm Eastman Kodak Co. – committed suicide, reportedly saying in a letter, “To my friends, my work is done. Why wait?”
Kodak Bankruptcy | BCBusinessFounded in 1880, Kodak’s once-great business model can no longer compete with 21st-century innovations.
In 1932 George Eastman – philanthropist, inventor of photographic film and cameras, and founder of the iconic photography firm Eastman Kodak Co. – committed suicide, reportedly saying in a letter, “To my friends, my work is done. Why wait?”
Now it appears that his company, founded more than a century ago in 1880, may be considering the same thing.
Kodak, which anyone in the Vancouver tech community knows quite well after it took over Creo (one of the region’s biggest tech firms) in 2005, is apparently lurching toward bankruptcy protection, and is reportedly trying to sell off its storehouse of patents to raise operating cash.
In a way, it’s the ironic story of the innovation life-cycle: Kodak was the Apple of its time – an innovation hothouse led by a visionary which grew rich and powerful by out-creating any other company of its day.
But now, it appears Kodak’s creative energy has been spent. It has never been able to recover from foreign competition in its core film business and the creation of the digital camera, which didn’t require film, as well as the smartphone, which put a digital camera in everybody’s pocket.
It desperately tried other business models, most notably in the printing field, but none worked. The last such attempt – to conquer the consumer and commercial inkjet printing market – died because the competition there was even harsher than Kodak witnessed in the days before it stopped producing film.
If it does seek bankruptcy protection, which appears likely, Kodak will follow other well-known companies that have been disrupted by technology advancements. Polaroid Corp. filed for bankruptcy protection twice, the last in 2008. The bookseller Borders Group Inc. died last year. Video retailer Blockbuster Inc. filed for bankruptcy protection in 2010 and was bought by Dish Network Corp. (a digital television network).
The death of any company is cause for sadness, and a failure by Kodak will certainly be felt in Burnaby, where it has a large plant. Several hundred employees will be affected – although that is far fewer than the hundreds that worked for Creo.
But, unfortunately, that is the law of fang and claw, as Victorian writers liked to describe the inevitable change that happens in the universe.
Kodak, which once had a brilliant business model that no one could match, in its dotage ran afoul of that law.