A new business lesson from Kodak
Most of you are familiar with the Kodak’s downfall case. It has been exhaustively debated in business books and articles and is one of the most mentioned examples of how rapidly a company can collapse if it does not keep up with the technological advancements.
However, on January 9th Kodak rose from the ashes and announced KodakCoin - a cryptocurrency for photographers. It seemed quite a comeback and its stock prices increased more than 200% following the announcements, from $3,10 on Jan 8th to $10,70 on Jan 10th.
Nonetheless, as noted by The New York Times, by doing so Kodak joined a number of struggling companies that have reversed their fortunes, at least temporarily, simply by adding “blockchain” to their names/ brands or announcing a new cryptocurrency venture unrelated to their previous line of work.
And it appears that investors have overvalued the novelty. By the time I’m writing this article on June 25th, 2018, the stock price has fallen back and it has been traded by $3.30, almost at the same level as it was just before the Cryptocurrency-hype (Figure 3):
As a result, it seems like Kodak has another business lesson to teach. Whereas in the past it was unable to innovate and missed the digital photography disruption, its cryptocurrency endeavour has shown that innovation is not about merely embracing an emerging technology and applying it to a business. Innovation, in fact, is about solving a real problem in a new way that suits market needs — and apparently KodakCoin does not.