Failure 07 · Business failures
The company that invented the digital camera, then kept selling film
A Kodak engineer built one of the first digital cameras in 1975, but the company stayed tied to film profits and filed for bankruptcy in 2012.
- Eastman Kodak
- Rochester, New York, United States
- 2012
- 3 min read
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Before you readWhat would you do?
Your print shop earns most of its money from printed brochures. Customers keep asking whether you can make them short videos for social media instead, and a new AI tool makes that cheap. Your manager says videos would hurt brochure sales. What is the wisest step?
Pick an answer now. The file tells you whether you were right.
01The file in one minute
1Early to the idea
Kodak engineer Steven Sasson built a prototype digital camera in 1975 that saved each image to cassette tape.
2Tied to film
Most of Kodak's profit came from film, chemicals and prints, so digital looked like a threat to its best business.
3The bill
Kodak filed for Chapter 11 bankruptcy protection on 19 January 2012 and came out in 2013 much smaller.
4The lesson for AI
Judge a new tool by what customers will want, and try it on your own work early instead of only fearing it.
02Timeline
1975
Steven Sasson builds a prototype digital camera at Kodak.
2000s
Phones and cheap digital cameras make film far less needed, and Kodak's film sales shrink fast.
19 January 2012
Kodak files for Chapter 11 bankruptcy protection.
2013
Kodak leaves bankruptcy as a smaller company focused on commercial printing.
03What happened
For most of the 20th century, Kodak was photography for millions of families. It earned most of its money on film, chemicals and printing, a little every time someone took a picture.
In 1975 a young Kodak engineer, Steven Sasson, built a prototype digital camera. It was about the size of a toaster, recorded black-and-white images of about 10,000 pixels onto a cassette tape, and took roughly 23 seconds to save each one. Kodak patented digital camera technology and later sold digital cameras itself.
Kodak did not stand still. But the business it protected was film, and when phones and cheap digital cameras made film almost unnecessary in the 2000s, that business shrank very fast. On 19 January 2012 Kodak filed for Chapter 11 bankruptcy protection in the United States. It came out of bankruptcy in 2013 as a much smaller company focused on commercial printing.
04Why it failed
Kodak saw the technology early. The harder problem was that digital photos threatened the very thing that paid the bills. Each print and roll of film carried a healthy margin, while a digital photo costs nothing to take. Managers judged new ideas by how they would affect film sales, and on that measure digital always looked like a threat to delay.
The AI angle: when a new tool can do part of your work, it is tempting to measure it only by what it might take away. Teams that try it early, on their own work, learn where it helps and where it fails while there is still time to adjust.
The idea behind this caseLesson: How to keep up without burning out →
05Lessons for anyone deploying AI
- Judge a new technology by what your customers will want in five years, not only by what it does to this year's best product.
- Give a small team permission to build the thing that could replace your main business, and measure it separately.
- Watch what your customers already do with new tools, since they usually move before the company does.
- Try new tools such as AI on your own real tasks early, so your view of them comes from experience instead of fear or hype.
07 — Sources
- Eastman Kodak files for bankruptcy protection · BBC News · 2012-01-19
- Kodak's First Digital Moment · The New York Times (Lens blog) · 2015-08-12