Hi, my name is Euger, entrepreneur and investor, and today we are going to talk about the case of Kodak. Remember that, as always, at the end we will talk about the main lessons, so I’ll see you when the video ends. As we said, today we will talk about the Kodak case, the company that managed to bring the passion and hobby of photography to many people around the world, making it more comfortable, easy, and accessible. George Eastman, the founder of Kodak, had always lived in a fairly wealthy family, but due to life's circumstances, all that fortune disappeared, and he was forced to start working at just 14 years old. When he turned 24, he went on vacation to Santo Domingo. With the intention of immortalizing those days, he packed a camera in his luggage, but due to its complexity, he was unable to take a single photo. That device was so complicated that he had to pay a professional photographer to teach him how to take pictures. George realized that photography was something exclusive to people with great knowledge on the subject. After a lot of research and experimentation in his mother's kitchen, he found a possible formula that could make all that technology more accessible so that anyone could capture their best moments , culminating in his great invention: the film roll. In 1888, the Kodak company was founded in Rochester. The first camera model the company patented and brought to market, the Kodak 100 Vista, significantly simplified the complex process of capturing images. Its motto was, "You press the button, we do the rest." The device was sold with a circular roll of 100 photographs already loaded. Once used, it was taken to Kodak for development and then returned with a new roll inside. This meant that anyone could take photographs without having knowledge of chemicals or developing. With this, not only did they make this art more accessible to the masses, but they were also inventing a new business model that was quite revolutionary for those times. While other camera manufacturers worried about making profits through the sale of the device itself, Kodak sold its cameras at an affordable price for the time of about $ 25, about $ 1,600 today, leaving a fairly tight profit margin. But by offering a development model in which one depended on the company to obtain the photographs, the firm achieved a high profit margin on the replacement of a new reel that cost $ 10 at the time, about $ 640 today. That was where most of the profits came from. The business model George Eastman created led Kodak to dominate the world of photography for over 100 years. But in the technological world, evolution is increasingly rapid, and sooner or later the company would have to start rebuilding its strategy to adapt to new times. It was Kodak itself that, in 1975, created the first digital camera prototype, which no longer required chemical film or reels, and therefore completely eliminated the developing process. However, the company was not entirely sure that this digital model would dominate the photography market in the future, so Kodak decided to continue betting on the traditional type. In the 90s, it was still leading the market in the United States with a 90%market share. But furthermore, its business model had remained virtually intact for more than 100 years. It continued to obtain the majority of its profits from the sale of supplies. At that time, it was already clear that digital would end up pushing analog out of the market, not just in photography, but in many other markets as well. Kodak believed that a portion of consumers would continue to choose traditional photography, since it was so authentic that it would never disappear completely and digital could never reach the same level. Furthermore , another reason for its resistance to change was that they were fully aware that if they switched to digital cameras, their business model would no longer be sustainable, as in that new world, reels and prints were not needed , and their profitability would be severely harmed. After all, Kodak had been leading the market for over 100 years and, so to speak, was responsible for the birth of amateur photography as we know it today. That gave the company a great name and reputation that new digital camera manufacturers did not have, so they thought they could afford the luxury of remaining comfortable with their traditional business idea. At that time, other companies like Nikon, Canon, or Sony rushed to release their first digital camera models. These three manufacturers had never been leaders in the photography sector, so they had nothing to lose. The world was opening up to a new market and, since the undisputed leader of photography was resting on its laurels, they could not pass up the opportunity. Kodak, for its part, still did not move from its comfort zone, clinging to the idea that its name and reputation secured its place in the market and that consumers would remain loyal to its brand. However, the market adapted very quickly to the new technology, as it made the photographic process even easier. The company was not focusing its strategy on the customer, but rather on its own profitability. The business model that George Eastman had initially devised had worked so well because it focused on making photography easier for people, but due to technological evolution, it was destined to become obsolete. Kodak was acting stubbornly by wanting to continue imposing its traditional photography model just because it was more profitable for them. But that way of taking photographs was no longer the most convenient for the consumer, therefore, it would eventually disappear. Little by little, traditional camera sales fell, with digital cameras gaining more and more momentum. By the time Kodak realized this and began to release its own digital models, it was already too late because all other manufacturers were already leading the market. As a strategy, it began launching its products at very affordable prices, but the quality left much to be desired, which soon caused the brand to lose much of its reputation. Kodak, which had stood as the undisputed leader in photography for over 100 years, being responsible for a great revolution in this art, adapting it and bringing it to the masses, becoming one of the most influential and important companies in the world, and which had achieved this by being innovative and revolutionary, was going bankrupt simply for refusing to change. After the company declared bankruptcy in 2012, it has been trying to rise from its own ashes, reinventing itself and releasing new products for sale such as smartphones or action cameras. This time, however, adapting to the new digital society. But it is still not very clear if it will manage to consolidate itself again as a great company, as it still has a long way to go. Kodak is a clear example that position and seniority are not enough guarantees to stay at the top. If one refuses to change and adapt to the pace of society, one will suffer the consequences. Resistance to change is one of the mistakes made by large established companies that have been in the market too long to realize that adaptation and evolution are necessary to stay afloat. Well, before we start with the main sessions, I have to announce that we have been working these last few months on an incredible entrepreneurship course. It is called Silex and will be released on December 10th. If you are interested, all you have to do is sign up for our free course because we will collect your email there and notify you when it comes out. It's a super powerful course and we are incredibly excited for it to come out because we have interviewed mentors. We have developed a strategic plan so you can set up your company without any difficulty, without wasting time and money. So sign up for the free course and we'll also let you know when the other one comes out. Number one was George Eastman's ability to simplify a value proposition that was only being used by photographers. Sometimes creating a business is nothing more than simplifying something that already exists in the market. At that time, cameras were a super professional thing that was only within reach of those people who really knew how to use them. Simplifying something that already exists in the market is a very good way to create value for a lot of people. Number two was the incredible business model that Kodak created, simplifying the initial product, reducing its price to really make money from consumables. A business model that has been established in many other places, such as Nespresso, razors, or printers with ink, is to take an initial element where the price is really much lower; this way you compete with all the competition and what you manage to generate profit from is long-term with the consumables. In your business, think if this is possible because it is a very good way to have recurring income. In the end, many people obsess over creating an incredible product, but once you have sold it to that entire potential market, you run out of recurrence and your business is not really sustainable in the long term. Instead, with this solution, you manage to increase the time your customer is with your company and they keep buying your products without having to be constantly innovating and launching new products constantly. And lesson number three is change or let them change you. And here we are going to talk about what Kodak really did wrong. When you are in a business, you have to be constantly looking at new market trends . And no matter how much of a romantic you are and you believe that things are not going to change, I assure you that in the end, humans keep innovating and innovating, and your turn will eventually come. Before that happens, you have to be proactive and change your business model yourself before things change around you. Because if not, what happened to Kodak can happen to you; they were very convinced that people would continue using their old photography machines, when in reality, in a very short time, they saw how the market had changed completely. It is super important that you stay up to date with new trends so that the moment you see a possibility for your business model to change, you are the first to adopt it. And that's it, that's another case from Emprenda Aprendiendo. You know, the best business cases every week. Subscribe if you haven't yet, hit like, comment, share it with your entrepreneur friends, and join the free course if you haven't, because we will also let you know when the really important one comes out in December. So that's it, see you in the next one. See you next week. Bye. Aitar because they are really the ones who populariz the number one lesson was George Isman's ability to simplif parrot. A business model that has been used a lot. Parrot.