Sales Failure: How Ignoring Innovation Led to Bankruptcy
Why Protecting the Status Quo Can Cost You Everything
In 1975, a Kodak engineer named Steve Sasson invented something that should have changed the world the first digital camera. But instead of seizing the opportunity, Kodak’s leadership dismissed it. They feared that digital photography would cannibalize their highly profitable film business.
They shelved the technology and stuck to what they knew best: film. Meanwhile, competitors like Sony and Canon embraced digital photography, shaping the future while Kodak clung to the past. By the time Kodak finally joined the digital revolution, it was too late. The once-dominant giant filed for bankruptcy in 2012, a cautionary tale of what happens when a company refuses to disrupt itself. Today, we will break down three key lessons from Kodak’s failure and what founders can learn about embracing innovation before it is too late.
If You Do not Disrupt Yourself, Someone Else Will
Kodak’s film business was incredibly profitable, and leadership did not want to risk it. They believed digital photography would eat into their core revenue, so they ignored it. But innovation does not stop just because a company refuses to participate. The market wants to change. The market will change, so you have to be ready for that change. You have to learn from companies like Kodak and be ready to adjust before it is too late. So what did Kodak miss?
As mentioned, change was inevitable. The rise of digital photography was only a matter of time. Kodak should have led the transition instead of resisting it.
New competitors emerged. Sony, Canon, and Nikon embraced digital, and by the time Kodak pivoted, it had lost its first-mover advantage.
Consumers drive markets. People wanted digital photos, not film. Kodak tried to protect its existing business instead of adapting to what customers were demanding.
What to consider for your business:
Do not resist innovation because it threatens your current business model embrace it before competitors do.
Know that some competitor in the market will embrace it. Someone will see the opportunity and seize it. So it might as well be you.
Stay ahead of customer needs, even if it means disrupting yourself.
Your current revenue is great, but if you do not disrupt it someone else will so make sure you keep the revenue dollars coming into your company.
Experiment early so you can shape the future rather than react to it too late.
Also, experience with ways to just make the pie bigger. If you can keep the current revenue and add to it, great! Do that.
If not just keep the revenue coming into your door, by experimenting and asking customers what they need and want.
Past Success Can Blind You to Future Opportunities
Kodak had dominated the photography industry for decades. They were the gold standard in film. But past success can create complacency, making it harder to see the shifts happening right in front of you. Sure lots of customers will like the incremental changes that you bring to the market until they see the exponential option that someone else brings. So you have to be looking for those exponential opportunities yourself. There were plenty of things Kodak missed such as:
They were too comfortable. Kodak assumed that because they had ruled the market for so long, they would always be on top.
Keep in mind someone always wants to take down the top dog!
They ignored external trends. Instead of recognizing that digital photography was gaining traction, they convinced themselves that film would remain dominant.
“That’s the way we have always done it” is a concerning moto. When you start to hear that around the office, have some really concerns.
They reacted too late. When Kodak finally entered the digital market, they were playing catch-up rather than leading the charge.
You may not have to be the first mover, but a fast second is really great.
So what should you do:
Challenge your own assumptions, just because something works today does not mean it will tomorrow.
Play the “what if” game some. Do not get lost in these scenarios, but concern alternative paths for the industry.
How can you stay relevant with these changes?
Keep a pulse on industry shifts. Do not assume your past success guarantees future dominance.
If you see other companies trying things keep a pulse on their trials. Ask customers how they like the product or service?
Being second to market is not horrible if you catch on to a trend.
Be willing to pivot before the market forces you to.
Pay attention to smaller companies coming into the space. What is given them the opportunity?
Pay attention to adjacent markets. How are they shifting?
Also, just ask your customers. What problems do they see on the horizon?
Protecting Revenue Over Innovation Leads to Decline
Kodak was focused on protecting its film sales instead of exploring how digital could be a new growth engine. By doing so, they let competitors own the space they should have led. So let us be clear, we want to product our revenue because we need top line growth to fund our projects and pay our salaries. But there is a difference in keeping the revenue coming in your business and keeping it in the same bucket inside your business. You want to keep it coming in the door. Kodak wanted it to stay in the same bucket (the film bucket), so what did they miss?
They saw digital as a threat, not an opportunity. Instead of developing digital technology further, they buried it to protect film sales.
When you stick your head in the sand, you just end up with a headache and sand in your ears. Keep your eyes on the horizon.
They tried to keep the old model alive for too long. While the market moved on, Kodak stayed locked into a declining business.
They failed to monetize digital early. Had they invested in digital photography as aggressively as they had in film, they could have redefined their industry.
So what should you do?
See emerging technologies as opportunities, not threats.
How can this help you grow?
Can you do more with the same headcount?
Can you offer better features or service experiences?
Focus on long-term growth rather than short-term revenue protection.
This is where you keep the revenue coming in the door. If you cannibalize your current product can you stay dominate for longer?
Remember long-term someone will change the market. Just make sure it is you.
Be willing to cannibalize your own business before someone else does it for you.
Just touched on this one, but be willing to change the buckets your revenue is coming in. Look for new opportunities.
Kodak did not fail because of technology they failed because of fear. Kodak had the technology. They had the resources. What they lacked was the willingness to change. They were so focused on protecting what they had instead of leading the industry into new territory. Do not let your business make the same mistake. Pay attention to market shifts, embrace innovation, and be willing to disrupt yourself before it is too late.
Action Step
Take 30 minutes this week to reflect on your own business:
Are you resisting a new technology or trend because it threatens your current business model?
What market shifts are happening right now that you need to prepare for?
Are you prioritizing short-term revenue over long-term innovation?
Write down one step you can take this week to ensure you are leading, not lagging, in your industry.
Additional Reading:
“The Rise and Fall of Kodak: A Case Study in Innovation, Disruption, and the Perils of Complacency” Medium
“Why Big Companies Struggle to Innovate” Forbes
“An Incubent’s Guide to Disruption”McKinsey & Company
Are you looking to improve your sales process or hire your first sales professional?
Are you a technical expert ready to transition into sales and need guidance?
If so, we’re here to help! Reach out to us with your specific challenges, and we’ll schedule a time to discuss how we can develop a customized plan to meet your goals.