Eastman Kodak Company
The Company That Invented Digital Photography — Then Buried It
Kodak engineer Steven Sasson invented the digital camera in 1975. Management's response: 'That's cute — but don't tell anyone about it.' Kodak buried the invention to protect its film business. By the time digital photography became inevitable, Kodak was a spectator at its own funeral. The 131-year-old company filed Chapter 11 in 2012.
Key Figures
Timeline
George Eastman founds Kodak. Slogan: 'You press the button, we do the rest.'
Kodak engineer Steven Sasson invents the first digital camera. Weighs 8 lbs, records 0.01 megapixels to cassette tape.
Kodak management buries digital camera R&D. Film margins are 70%+. Digital would cannibalize the golden goose.
Kodak peaks: $16B revenue, 2/3 of global film market. But digital cameras are already appearing in consumer electronics stores.
Film sales peak. Digital camera adoption begins exponential growth. Kodak still spends $2B/year on film R&D.
Digital camera sales surpass film cameras for the first time. Kodak belatedly pivots — but Canon, Sony, Nikon own the market.
Kodak ranked #1 in U.S. digital camera sales — but losing money on every unit. Film profits vanishing.
Kodak files Chapter 11. 131 years after its founding. Exits bankruptcy in 2013 as a commercial printing company — a shadow of itself.
What Caused It
- 1The Innovator's Dilemma in its purest form: film margins were too high to cannibalize with digital
- 2Invented the digital camera in 1975 but actively suppressed it for 15+ years
- 3Treated digital as a threat to film rather than a new business to dominate
- 4Failed to leverage its 1,100 digital imaging patents before they lost value
- 5Culture optimized for chemical manufacturing, not electronics or software
Lessons Learned
- 💡If you're going to be disrupted, disrupt yourself first — someone else will if you don't
- 💡A 70% margin on a dying product is worth less than 20% on a growing one
- 💡Patents without products are trophies, not assets — Kodak sold its patent portfolio for $525M in bankruptcy
- 💡Organizational culture optimized for one era cannot pivot to another without radical restructuring