Kodak: the buried invention

The facts

In 1975, engineer Steve Sasson built the first digital camera prototype in Eastman Kodak's labs. Management's reaction was documented by Sasson himself: "It was filmless photography, so management's reaction was: that's cute, but don't tell anyone about it."

Kodak owned fundamental patents on digital technology. Between 1975 and 2000, the company continued to invest marginally in digital but maintained film as its core business. At its 1996 peak, Kodak generated $16 billion in revenue and employed over 140,000 people.

In 2000, film sales began declining. By 2005 Kodak was already losing money. In January 2012, the company filed for Chapter 11 bankruptcy.

DAMM Analysis

Delimitation (3/10): The decision was never formalized as such. There was no moment when management said "we decide not to invest in digital" — it was a series of non-decisions, deferrals, and status quo protection. The lack of delimitation made it impossible to evaluate what was actually being decided.

Asymmetry (2/10): The risk was radically asymmetric and management ignored it. The downside scenario (digital replaces film, Kodak loses everything) was catastrophic and irreversible. The upside scenario (film continues to dominate) required an entire technological trajectory to stop — an assumption with no historical basis.

Room to Maneuver (4/10): In the '80s and '90s, Kodak still had enormous resources to position itself in digital. The room was there but eroded year after year. When management tried to react (acquiring a photo-sharing site in 2001), it was too late and the move was insufficient.

Minimum Move (2/10): Kodak never seriously tested the digital market with a dedicated, independent line. Every digital initiative was filtered through the film business lens. There was no "minimum move" to validate the market without risking the core business.