The rise and fall of Kodak: $30B to bankruptcy

The company that invented the digital camera in 1975 — then buried it to protect 80% film margins until bankruptcy.

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By The Numbers

$16B

peak revenue in 1996

80%

profit margins on film

$7B

debt at bankruptcy

What They Nailed Early

Made photography accessible to everyone with the $1 Brownie camera. Sold 10 million in five years. Built a razor-blade model: cheap cameras, high-margin film at 80% profit. By 1976, controlled 90% of U.S. film sales and 85% of cameras.

What Changed

Kodak invented the digital camera in 1975 but shelved it to protect film profits. Every incentive — from middle managers to the board — was tied to short-term film revenue, not long-term survival. They tried digital cameras and diversification, but never bet the company on transformation. Meanwhile, film sales cratered after 2001 and nothing replaced it.

Where it Landed

Chapter 11 bankruptcy in 2012. Stock fell from $90 to under $1. Shed 47,000 jobs and closed 13 manufacturing plants. Assets of $5B, debt over $7B. The empire liquidated.

The Principles

Incentives dictate behavior. When everyone from janitors to CEOs is paid to protect today's cash cow, no one bets on tomorrow.

Ask what you're uniquely good at, not what sounds familiar. Fujifilm pivoted to skincare using gelatin expertise; Kodak bought a drug company because "chemicals are chemicals."

Founder-led companies can make existential bets. Hired executives optimize for their tenure; founders think in decades and risk their legacy.

Builder's Takeaway

3 warning signs your moat is about to dry up:

•

You commission studies on disruption but don't act because it would hurt this year's bonus

•

You enter adjacent markets based on vague similarities, not specific competitive advantages

•

No one at the table has the authority and incentive to bet the company on transformation

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