In our exponential world, change is the only constant. For any company, sitting still equals death.
In today’s blog, I want to share the story of Kodak and what you can learn from their failure. The rise and fall of Kodak is a story that captures the cost of ignoring exponential change.
Let’s dive in…
Exponential Growth & The Story of Kodak
In the original book Abundance, Steven Kotler and I spoke about the “6 Ds” of Abundance: a model that underlies the idea that technology is a force transforming scarcity into abundance.
Two of the Ds, Deceptive and Disruptive, described the way we humans perceive exponential growth. Namely, that the doubling of small numbers (0.01, 0.02, 0.04, etc.) seems imperceptible to us and therefore “deceptive,” easy to ignore. That is, until you hit 30 doublings when the “disruption” hits you.
In Abundance we tell one of my favorite stories, that of Steven Sasson, the creator of the first digital camera in Kodak’s labs. (Did you know that Kodak actually created the first digital camera?)
In 1996, Kodak was at the top of its game: it had a market cap of over $28B, 140,000 employees, and was known worldwide.
Few people know that 21 years earlier, in 1975, Steven Sasson had invented the digital camera. Kodak held the patents and had a significant first-mover advantage.
But the first digital camera only captured 0.01-megapixel images, and took 23 seconds to record that image on a tape drive in black and white!
When Sasson showed his discovery to his executives, they ignored the technology and its implications.
Fast forward to 2012, when Kodak filed for bankruptcy—disrupted by the very technology they invented and subsequently ignored.
That same year, a competitor that was in the business of “preserving people’s memories,” a company called Instagram, was acquired by Facebook for $1B with only 13 employees.
Many laughed at this acquisition as massively overvalued.
No one is laughing now. Instagram is worth $100 billion on Facebook/Meta’s balance sheet.
The digital camera is the perfect embodiment of the other 4 Ds of exponential disruption, namely: Digitize, Dematerialize, Demonetize, and Democratize.
When you digitize a product or service, such as Kodak’s camera and film, turning atoms into bits, you are effectively “dematerializing” that product into software, an app on your phone.
Once digitized and dematerialized, the cost of replicating that software, and sharing it with a thousand or a million users is effectively zero, thereby demonetizing it.
And finally, in a world interconnected by fiber, 5G, and Starlink you have the ability to share your product or service with a billion individuals, making it democratized.
Why This Matters
Take a microsecond to appreciate just how extraordinary our world is today.
News travels the globe in an instant. Music, movies, games, communication, and knowledge are always available, instantly, for free on always-connected devices. From AI to biotech, powerful technologies that were once only available to huge organizations, governments, and the most elite, are now accessible and affordable to everyone on their smartphone.
This continuing technological progress creates benefits for every man, woman, and child on Earth.
That’s the essence of increasing global abundance and having an Abundance Mindset.
It’s also the reason why entrepreneurs today, perhaps including you, dare to set a goal of positively impacting the lives of a billion-plus people.
In our next blog, we’ll take a deeper dive into the 4 Ds and explore how you can use them as a roadmap to create more abundance in your business and industry.