The amazing rise of Kodak was due to innovation after innovation and you’ll never guess why George Eastman called it Kodak.

Subscribe: Apple Podcasts | Google Podcasts | Amazon Music | Blubrry | RSS | More

 

Dave Young:
Hey, welcome back to the Empire Builders podcast. Dave Young here, and Stephen Semple’s right there. Well, you probably can’t see him, but I can see them. How are you doing this morning? Because we record these in the morning. If you’re listening in the evening, I felt the need to say that in case you were confused.

Stephen Semple:
Especially since before we started the recording, you were slurping your coffee.

Dave Young:
Right, in case you’ve never listened to a podcast before, and you didn’t know they weren’t live. So just before we started, yes, I was slurping my coffee, and yes, Stephen whispered into my ear today’s topic. And I tell you, it is funny how words do this. This brand has sort of defined its own… It became the word for its product. It became the word for an industry almost. And when you told me the name, I had a Kodak moment.

Stephen Semple:
There you go. Yes.

Dave Young:
Right? But we’re going to talk about Kodak, Eastman Kodak company, and when you said Kodak, I’m like, “Oh, man.” I remember my first little Instamatic Kodak camera. And the pictures that, I think it was the 110 film that took a picture and-

Stephen Semple:
Oh yeah, the little film? Yeah.

Dave Young:
… when you developed it, you got a four-by-four picture and a little smaller version of the same picture, wallet-sized, right next to it.

Stephen Semple:
Yes.

Dave Young:
I thought that was the coolest thing. I would carry those little photos around. And I had a picture, I don’t know if I still have it. It’s probably tucked away somewhere. It’s probably in a box somewhere. But there was a picture of me on my grandfather’s horse. He had passed away already, and I was like maybe four or five, and I’m on this horse, and the horse’s name was Euchre Bill.

Stephen Semple:
Euchre Bill.

Dave Young:
I can’t explain that. Grandpa was gone.

Stephen Semple:
Card-playing horse, Euchre Bill.

Dave Young:
Maybe. I don’t know. So that was the Kodak moment. Instantly, as soon as you said Kodak, it took me to that picture, which was still attached with its little picture next to it.

Stephen Semple:
I think we forget how big Kodak was. And lots of things led… Well, we even did an episode, back in episode 77, where we actually looked at what we felt was the decline of Kodak that I did with Gary Bernier. At its peak, in 1996, Kodak was two-thirds of the global film market. In ’76, it was 90% of all film sales in the United States, and 85% of camera sales. In ’96, it was the fifth most valuable business in the world, which is really quite remarkable.

Dave Young:
We tell our local clients that, man, if you can get to 35% or 40% market share in your category, you’re a rock star. Here these guys were worldwide.

Stephen Semple:
Worldwide, 66%. Yeah. So today we’re going to talk about what made Kodak amazing, and then the decline. We’ve sort of done this backward. The decline we talked about back in 77. They were founded on May 23rd, 1892 in Rochester, New York by George Eastman. George became the breadwinner of his family at age 14 when his father died, and he took a job as a messenger boy at an insurance company, and he was making three bucks a week. And then he became an office boy at another insurance company. Then he started to write policies, and he was on the rise. And at age 20, he became this junior clerk at the Rochester Savings, and he’s now making 15 bucks a week. He’s now making five times the money he was. And so in 1878, he decides he’s going to go on a holiday in the Dominican to celebrate his rise.

Dave Young:
15 bucks a week, and he can afford a holiday in the Dominican.

Stephen Semple:
Yeah.

Dave Young:
I make more than $15 a week now, and I can’t.

Stephen Semple:
Well, you know, $17.50 a week doesn’t go that far.

Dave Young:
Well, that’s true. That’s true. You wouldn’t believe what this podcast pays. So he goes to the Dominican.

Stephen Semple:
He decides that he’s going to go to the Dominican.

Dave Young:
Oh, okay. He’s not there yet.

Stephen Semple:
He’s not there yet. And to go along with this trip, he decides to purchase a camera. And at the time, it’s what was called wet plates, and it was a camera and a tripod, and the plates, and a tent, and all this… The thing was freaking huge.

Dave Young:
You had to be Ansel Adams to take pictures back then.

Stephen Semple:
Oh, totally. And the vacation ended up being canceled. But he has all this photography stuff, and he started becoming fascinated with photography because he has the camera and the plates and all these things. And there were journals out at the time that discussed how photographers were making their own emulsions, to create the films, and also that this whole dry film plate technology was coming along. And so by 1879, so a year later, George invented a dry plate method along with a machine that could coat several plates in large numbers. And remember, the plates were glass at the time.

Dave Young:
I mean, you had to be a scientist to make photographs before this.

Stephen Semple:
Yeah. So basically, he gets into it, and within a year, he figures out this dry plate method along with a machine. In 1880, he opened a business and rented an office, and the business is called the Eastman Dry Plate Company. We’re not at Kodak. And at this point, he also started to experiment with paper, because what he realized is paper is easier to use, it’s easier to transport, all of those things.

Dave Young:
So they were putting this dry emulsion on glass plates?

Stephen Semple:
Correct.

Dave Young:
Is that right?

Stephen Semple:
Correct. Yeah. So he figured out how to put it onto paper.

Dave Young:
Nothing is as heavy as a glass plate.

Stephen Semple:
Well, and you think about the plates breaking and all this other stuff, right?

Dave Young:
Yeah.

Stephen Semple:
So it’s easier to use, easier to transport, lighter, more durable, all that other stuff. And he completely expects it, how many times have we heard this before? He completely expects professionals would run with it. How many podcasts have we done where there’s been an innovation that made things better, and everyone expected the professionals within the industry to adopt the idea because it’s better, and didn’t?

Dave Young:
They don’t.

Stephen Semple:
We’ve seen this over and over and over again.

Dave Young:
I’ll make my own plates, thank you very much.

Stephen Semple:
Or whatever the innovation is. People go, “Oh, yeah, but the industry will adapt.” I said, “The industry is the slowest to adapt it.” It’s crazy. But I’ve seen this over and over again. So he decides to reach out to consumers. So it’s 1884, and he starts a new business, the Eastman Dry Plate and Film Company. And in 1888, they launched their first camera, and it’s pre-loaded with film. It’s 25 bucks, there’s a hundred pictures, and you send it back, and they’ll be developed, and for $10, the camera’s reloaded and sent to you.

Dave Young:
Oh my gosh, that’s a better deal than the reloadable disposable cameras that came around the end of their…

Stephen Semple:
And here was their marketing slogan, and I thought this was brilliant, especially when you consider the complexity and photography at the time. You press the button, we do the rest.

Isn’t that powerful?

Dave Young:
It really is.

Stephen Semple:
You press the button, we do the rest. Because basically, you take the pictures, you ship the camera back, they develop it, they send you the pictures, they send you the camera back, reloaded with film.

Dave Young:
Yeah. Who doesn’t want that deal?

Stephen Semple:
Crazy, eh? So in 1892, the name was changed to Eastman Kodak.

Dave Young:
Why Kodak?

Stephen Semple:
So here’s what George Eastman said about the name Kodak. The name Kodak is as meaningless as a child’s first goo. It’s terse, abrupt to the point of rudeness, literally bitten off by a firm and unyielding consonant at both ends. It snaps like a camera shutter in your face. What more could someone ask?

Dave Young:
Oh, man. I got to go back to it’s as simple as a child’s first goo.

Stephen Semple:
Goo.

Dave Young:
Is that what you said?

Stephen Semple:
Yeah.

Dave Young:
Goo. Is that a thing, or is that like a “Goo-goo”?

Stephen Semple:
… you know what? All I was able to find was the quote. Haven’t been able to ask him about it. But here’s the part I found interesting. He and his mother made the name up.

Dave Young:
I love that.

Stephen Semple:
They made the name up. But what I had never thought about Kodak, it does sound like the clicking of a shutter. The name of the company is an audible cue to the product, which is the reason why when you said at the beginning almost had chills when you said “a Kodak moment.” And I think that’s the reason why it works, is because click, Kodak.

Dave Young:
What’s the word? Onomatopoeia. It’s a word associated with what’s named. So like a cuckoo bird or sizzle. And so Kodak is an onomatopoeia.

Stephen Semple:
Yeah. Until I read this quote from Eastman, it had never connected in my mind that the name was like a camera shutter. And as soon as it was said, I was like, “Oh man. That’s why that name was so powerful. That’s why it was so powerful. Just a piece of absolute brilliance.” When I was researching this, I went back and found a lot of old Kodak ads, and boy, things like, “You press the button, we do the rest.” One of my favorites was when they came out with, I think it was called the Brownie, which was a smaller camera, is “Put a Kodak in your pocket,” and the ad was a picture of a person wearing a jacket and putting the camera in the pocket, which made me think of one of the early… the first MacBook ad that Apple did.

Dave Young:
iPod put a thousand songs in your pocket.

Stephen Semple:
Well, Apple even did it with their first MacBook Air, where, remember, it was the inner office envelope, and they opened the inner office envelope and pulled out the notebook computer, which was also interesting because it was surprising. But this whole idea of demonstrating it. And so I went back and I took a look at a lot of the… And I recommend people do it, go back and take a look at the old Kodak ads. They were freaking just amazing, just absolutely amazing. But Eastman was an interesting guy, and it was an interesting time in capitalism. You had companies like Hershey’s and whatnot, and there was this movement that they also had, which was called Welfare Capitalism. So for example, Eastman worked with the city of Rochester at the time to put together basically today’s version of welfare for people unemployed, and he funded it.

Dave Young:
Oh, wow.

Stephen Semple:
He was actually quite the philanthropist and things along those lines. But coming back to Kodak, the thing I found really interesting about this is, again, the experience that we’ve seen over and over again, when people create this innovative idea and they go, “The industry will adopt it.” And we’ve seen over and over again, I’m even saying to people when I meet with them, “Go after the consumer.” The consumer is actually more likely to adopt a new idea than the industry, especially if it removes friction. And if you think about what he did with the camera technology he put the camera in somebody’s hands. He made it so easy. You buy this thing, the camera comes with the film, and you just go click, click, click, click, click. You send it back, you get back, develop pictures. How easy was that?

Dave Young:
Yeah. Before that, you’re like, “Oh, we need a family picture. Oh, we’re going to have to find a scientist.” We’d have to find somebody who knows how to mix an emulsion and spread it on glass and then set up his old tent. And it’s like those old-timey photos in the Old West.

Stephen Semple:
Yeah. Where you held the thing up and you had the tent over it. And you had the tripod.

Dave Young:
That was photo-making.

Stephen Semple:
That was photo-making. The plates were glass. So he took it from that to point-and-shoot. The interesting one that’s reviving today is Polaroid. Polaroid kids are running around now in camps and things like that with Polaroid cameras. So to me, this whole idea of going at the consumer, and if you go back and take a look at a lot of the early ads, it was all around this whole idea of simplicity, simplicity, simplicity, simplicity, simplicity. And through much of Kodak’s history, it was around point-and-shoot, family photos, take a picture, which is so sad to me that when the world pivoted to digital, and again, we go into that in the other episode, that they weren’t able to make the pivot, because they actually invented the digital camera, and it was actually in their DNA to do these things and they just lost sight.

They lost sight of what their business was all about, and what their business was all about really was the family photo. That’s what their business was all about. The family photo is about the consumer being able to take it easily, take a picture of their vacation, of their family, or whatever those things are. But they became just a monster in the business for a long time. You think about how long they were dominant. This business started in 1892 and peaked a hundred years later.

Dave Young:
So they peaked just before the bottom fell out.

Stephen Semple:
Ironically, when they went bankrupt, it was like, what, five months later or something like that that Instagram was bought by Facebook for billions of dollars. There’s a nutty timeline there, and I encourage people to go back and listen to episode 77. I think they’d find it interesting after hearing about this part of the story.

Dave Young:
They just innovated for a hundred years.

Stephen Semple:
They did.

Dave Young:
They were selling cameras and film, cameras and film, and then they didn’t care if you bought their camera or not, because they’d still sell you film.

Stephen Semple:
Correct.

Dave Young:
A Pentax camera, a Fuji camera. You’re still buying mostly Kodak film, 90% of you.

Stephen Semple:
They were such a cultural thing. Remember the song Kodachrome, right?

Dave Young:
Oh yeah. Yeah.

Stephen Semple:
For those who don’t know, it was one of their films.

Dave Young:
Yeah. Beautiful story. I love it so much. And I love the fact that Kodak is just the sound of taking a picture. I think that’s so cool. That’s my favorite part of the story, Stephen.

Stephen Semple:
So when people are thinking about naming their companies, naming their businesses, or naming their products, we’re often talking about how names right on the nose are not actually the best, but what I’ve never thought about, ever thought about, is how if we could make the sound of the name somehow synonymous with the product, how powerful that would be, right? And even if it’s the emotional feeling, I just thought that that was so interesting. It snaps like a camera shutter in your face.

Dave Young:
I made a note to myself to add that to my next portals class at Wizard Academy. It belongs to the phoneme discussion and names and things like that.

Stephen Semple:
What a perfect example for that class. What a perfect example. I’ll send you the exact quote so you have the whole thing. But I’m honored, given the fact that I’ve introduced something that Dave Young didn’t know that he was going to be using in the portals class of the Wizard Academy. I feel like I now have a purpose in my life.

Dave Young:
Oh, I’m so glad, Stephen. Thank you for sharing the Kodak story.

Stephen Semple:
All right. Thanks, David.

Dave Young:
Thanks for listening to the podcast. Please share with us, subscribe on your favorite podcast app, and leave us a big fat juicy five-star rating and review. And if you have any questions about this or any other podcast episode, email  questions@theempirebuilderspodcast.com.

Latest posts by Stephen Semple & Dave Young (see all)