Every consumer industry has a few huge brand names that are synonymous with it. For fast food burgers, there’s McDonald’s and Burger King. For discount stores, there’s Wal-Mart and Target. The list goes on.
These companies are massive, and they’ve been around so long, it seems like they’ll be around forever. But there are no guarantees in the world of business.
For most of the 1900’s, there were two brand names that dominated consumer photography (and the film market, as well):
Kodak and Polaroid.
These giants created their industry, and yet, at the turn of the millennium, both hit hard times. Polaroid filed for bankruptcy in 2001. Kodak in 2012. While Kodak eventually recovered, Polaroid never did.
At it’s peak, Polaroid employed around 21,000 people and had a annual revenue of over $3 billion. So what exactly happened?
The Company (and the Founder) that Steve Jobs Idolized
Polaroid was the “Apple” of its industry four decades before Apple even existed. It brought cutting edge technology that disrupted the current market and packaged it with a marketing vision that had personality its competitors lacked.
Much like Apple had Steve Jobs, Polaroid had its own larger-than-life mastermind: Edwin Land.
There was one key difference; unlike Jobs, Land actually was an inventor and engineer, developing the technology that brought his company early success in the late 30’s and early 40’s.
According to Steve Jobs himself, Land “saw the intersection of art and science and business and built an organization to reflect that”.
Today, he’s considered the father of instant photography. Land would lead his company for 43 years as CEO, creating attractive and useful products while filing numerous patents that they fiercely defended. Some would say Apple took inspiration from this as well.
A Failed Product and a Lost Founder
In 1977, Polaroid attempted to repeat its success with instant photography in the video camera market. They launched the Polavision, an instant movie camera system. Unlike its previous cameras, however, the Polavision was lacking in both convenience and quality.
Polavision could only be played back on special Polavision viewers. To create a copy, you had to actually break the cartridge that held the film and then run it through an 8mm system.
This might have been worth it if the Polavision produced a quality picture, but recordings were described as flat and murky.
It also couldn’t record sound.
Meanwhile, VHS and Betamax cassettes were on the rise, providing easy storage and playback on modern TVs. Polavision was dead in the water, resulting in an $81 million loss for Polaroid and the resignation of Edwin Land.
The Beginning of the End
In the years following, Polaroid would attempt to reinvent itself and even had a few minor successes such as disposable cameras, not to mention bringing one of the first mainstream digital cameras to market.
But they hit another snag along the way. In an attempt to fight off a hostile takeover in 1988, Polaroid bought back a significant amount of shares, creating an employee stock ownership plan.
This resulted in significant amounts of debt from which it never managed to escape.
Staff grew bloated as well. According to a report by the New York Times, sales tripled between 1972 and 1998 while staff increased five-fold. For every sales representative, there were two back-office workers.
In 1991, it won $925m in a lawsuit against Kodak, but that wasn’t enough. As the market moved away from film, sales took a serious hit and Polaroid’s patents began to either expire or just stopped mattering.
Today, Polaroid exists as a brand name only.
Basic Business Principles We Can Learn from Polaroid
There are a number of smaller lessons that can be learned from Polaroid. Even in a very successful company, one poorly executed idea can set off a devastating chain reaction.
When a market begins shifting quickly, you have to be ready to move even faster, knowing that the main revenue streams you have today might not always be there to bring in money.
And lastly, a company reaches a point it needs to be bigger than its founder. Polaroid never truly recovered after the exit of Land. Even today, with Apple Computers, many would say that it hasn’t shown any true innovation since the passing of Steve Jobs. Yes, they’re still a very successful and healthy company, but the gears have been slowing.
Though Polaroid is gone, it left behind a legacy of innovation. Recently, Polaroid-style instant cameras have made a resurgence, particularly among younger consumers, for their novelty factor and ability to create immediate memories.
When the app Instagram launched, many of its photo filters carried borders and effects that paid homage to classic Polaroid cameras.
And for entrepreneurs, Edwin Land left behind some great quotes. For example:
“If you are able to state a problem…then the problem can be solved.”
“Optimism is a moral duty.”
“If anything is worth doing, it’s worth doing to excess.”