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Why Waiting Until A New Business Model Is Proven Doesn't Work

from the it's-why-you-need-to-start-early dept

One of the criticisms of our business model discussions here is something along the lines of "but how will this replace the $x billion already made." Or, alternatively "well, how can you expect anyone to switch until you show that it will replace what they already are doing?" The answer, of course, is that by the time you know that a new business model will work well enough, it's too late. It means one of two things have happened: either a competitor has figured it out and taken over the market or your existing business model is too decimated to have enough left to make the switch. This is the nature of so-called "Creative Destruction."

This point is highlighted in a recent NY Times article about how Netflix tries to avoid creative destruction by experimenting with new models well before they need to, and well before the old model has lost steam. The article compares Netflix to Blockbuster, which highlights this perfectly. Even though Blockbuster did see the success of Netflix and how the market was changing, it was very slow in embracing it, and never did so whole-heartedly. And even though it has a service quite similar to Netflix's, it has a lot fewer users and is struggling financially.

The article highlights this with Kodak as well:
Kodak saw digital photography coming. It even invented some of the earliest such technology, in 1975. Kodak just misjudged how fast consumers would give up on film and start snapping up digital cameras. And it misjudged its ability to outrun both trends.
Indeed. In 1997, I did work with a professor who was consulting for Kodak, and we did a detailed report on why Kodak needed to embrace digital now. The response? Kodak told us "yes, yes, digital is important, and we'll be ready to switch, but right now, chemical processing of photos is so much cheaper, there's no reason to change yet." And, they were right that it was a lot cheaper, but they were wrong about the time to start switching.

There are a few reasons for this:
  1. Companies always misjudge the speed of trends, especially the rate of change. Things like digital revolutions start out slowly, and the quality seems bad. So companies in legacy businesses figure they have a long time to make the change. But the rate of change increases rapidly, especially once it "tips" and reaches a critical threshold. At that point, if you're not fully invested in the new business, you're, way, way, way behind.
  2. It's difficult to really understand the new technology/market unless you're playing deeply in the space. This is the same thing we noted with people who claim that patents are necessary because once a good idea comes along others will just copy it. In many cases, that's not possible. That's because the truly innovative ideas require some real hands-on experience. Watching others do it is not the same thing.
  3. It's very difficult, culturally, to build up businesses that cannibalize your existing cash cows. The skill sets may be different, and people begin to recognize that these "new" people may be working on projects that replace the "old" people. That leads to a lot of resentment and makes it really difficult to actually hire the good new people -- since they recognize they're going to face those kinds of institutional restrictions. For them, it's just easier to go to a "native" company that has bet entirely on the new offering.
All of this impacted Kodak:
Even when Kodak wanted to change, it couldn't, said Mr. Lucas, who has studied the company. "It was so large and had been so successful for so long that it was difficult to bring in people with a digital background."

Kodak has had to take draconian steps to survive. It closed labs and factories and laid off 60 percent of its staff of 60,000.
Indeed, Kodak is impressive in that it actually has been able to shift... even if it took a lot longer than necessary, and even now it's considered to remain behind other players in the space.

This is, of course, the typical Innovator's Dilemma, but it helps explain why so few companies are able to survive the innovator's dilemma. Even if they know about it, they think they can wait. They think that they shouldn't invest heavily in those new technologies and new markets until there's a clear path to profitability, or a clear plan for how it "replaces" what's already there. The problem is that by the time they have the answers to those questions, it's too late.


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  1.  
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    Anonymous Coward, Aug 13th, 2010 @ 7:53pm

    Awesome, now if we can just figure out how to change inherent human nature, we'll have this problem licked! How's that coming along?

     

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    Greevar (profile), Aug 13th, 2010 @ 8:00pm

    Strike while the iron is hot.

    Sometimes the only way to keep up with a trend in technology is to set it yourself.

     

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    Anonymous Coward, Aug 13th, 2010 @ 8:48pm

    That is good news, it means those old dinosaurs will die a horrible agonizing financial death which is cool.

    The sad part is a government trying to stop that from happening, it goes against the very much needed renewal in the ranks, it makes new things harder to appear and bla bla bla.

    This harms people because when those companies go out there is no safety net in place the government made sure those other companies who could have pick up the slack are gone and so are the prosperity of people.

     

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  4.  
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    Anonymous Coward, Aug 13th, 2010 @ 9:54pm

    Re:

    Are you saying it's human nature to run businesses into the ground through shortsightedness and ossification? Just what are you saying? The article is talking about economics, not human nature.

     

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    darryl, Aug 13th, 2010 @ 10:04pm

    Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    David D. Busch

    Worked for Eastman Kodak for 25 years, he wrote the book.

    Mastering Digital SLR Photography and is a professional photographer. And photography consultant.

    You entire argument is about being slow to embrace now technologies, like Kodak right ?

    OK...

    Quotes from David D. Busch.
    From his book Mastering Digital SLR photography, and not he no longer works or has any attachment with Kodak.

    Indeed, in this condensed version I’m going to skip right over the first digital/electronic imaging
    devices (introduced in the 1950s), past NASA’s conversion from analog imaging to digital
    imaging to avoid signal loss during their space missions, and provide nothing more than a brief
    mention of the first film-free electronic camera patented by Texas Instruments in 1972.

    No, the real first digital camera was created by a guy named Steve J. Sasson, who slaved away in Kodak’s Research Labs in the mid-1970s (and is still there by last report). Sasson built the first known digital camera, roughly the size of two shoeboxes and weighing 8.5 pounds. It contained
    16 AA batteries, a bunch of circuit boards, a new Fairchild black-and-white 10 kilopixel sensor (a 100 × 100-pixel array), and had a lens sticking out the front. It took 23 seconds to record a single image onto a cassette tape. I checked out the patent application for this remarkable device. You can too, at http://www.uspto.gov/. Search for Patent #4,131,919.


    *********************************

    Kodak driven out of film technolog ?

    "One of the big myths of digital photography is that film/camera behemoth Eastman Kodak Company is
    slowly being pushed out of the film business by digital technology. In truth, if you look at history,
    Kodak has been a driving force behind the scenes of digital imaging for decades, dating way before Steve
    Sasson’s first digital camera.
    Kodak scientists invented the modern scanner back in the mid-20th century, coined the term megapixel sensor for the first CCD capable of capturing more than a million pixels of information, and created the first Photo CD for digital pictures at a time when very few computer owners had a CD-ROM drive with which to view them.
    By the early 1990s, professional photographers had 55 pound, $30,000, 1.3 megapixel cameras (from Kodak, based on a Nikon F3 body), and amateurs could pick up an Apple QuickTake 100, which offered 640 × 480 pixel resolution, and was actually designed by Kodak and built by Chinon Industries (which is now a Kodak subsidiary). Kodak later offered the DC40 and DC50, built from refined versions of the original design. Although Kodak milked its film and film camera cash cows for well over 100 years, the company has seen the coming digital imaging changes. It has led the charge with products that, while often not the best in their class, have always been appealing to amateurs and photo enthusiasts."

     

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    Anonymous Coward, Aug 13th, 2010 @ 10:21pm

    Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    It's almost like you don't even bother to read the whole posts anymore.

     

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    Modplan (profile), Aug 13th, 2010 @ 10:37pm

    Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    Kodak phrased it as a technology problem, not a business model/competition problem.

    They thought of digital film making like any other advance in photography, and so waited and invested (with little return) until digital was as good or better than film.

    The problem being the competition had already found uses for it in other areas, and people didn't mind not having super high quality pictures if it had other advantages, like convenience.

     

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    Anonymous Coward, Aug 13th, 2010 @ 10:38pm

    Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    My recollection is that Kodak was one of the leaders in the research and development of key componentry needed to make digital photography a reality, with much of its work having started back in the early 70's.

    Obviously it did not begin to offer digital cameras at the outset, but then again many of the early producers of digital cameras owe much gratitude to Kodak for its development and sale of sensors.

    Even now after Kodak has entered the consumer market (it has not as yet entered the prosumer and pro market...and I doubt it ever will), its componentry serves as the backbone for some of the finest cameras on the market. For example, Leica is now offering its M9 that contains a full size sensor (i.e., 35mm in size) that was developed and is manufactured to its specs by Kodak. It is likewise the developer and manufacturer of the 50MP sensor used in the newest generation of Hasselblad medium format digital cameras.

    To suggest Kodak may have "missed the boat" is in my view inaccurate. I believe it went one better...it saw that the real money to be had was in components and not consumer cameras, and in this regard it has been a leader in the digital camera market.

     

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    Eric Reasons, Aug 14th, 2010 @ 6:07am

    Creative Destruction

    Mike-

    Honest question to you (and your readers):

    Can you think of any instances of this kind of creative destruction where the new business model was not smaller in capitalization than the model it replaced?

    I.E. Digital photography has all but replaced film-based photography, and by all measures is wildly successful; however, do we think it made as much money or employed as many people as film-based photography? (Ancillary businesses, like fotomats, etc. count.)

    This is not a loaded question, I'm honestly looking for counterexamples.

     

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    Anonymous Coward, Aug 14th, 2010 @ 9:42am

    Re:

    "The sad part is a government trying to stop that from happening,"

    Not sad, just part of the ecosystem of economies. It is also doomed to failure, as the government is negatively impacted (as we see with how the U.S. economy is essentially bankrupt, and running on fumes.)

     

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    Heironimous Broward, Aug 14th, 2010 @ 9:43am

    Re: Creative Destruction

    Cars

     

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    Mike Masnick (profile), Aug 14th, 2010 @ 10:52am

    Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    Darryl, did you even read the post? It said, quite clearly, that Kodak was ahead of the game technologically. But they were behind in making the *business* shift. It went from being a leader to a follower on the business side.

    And, yes, it has eventually pulled through, but it did so in a very painful manner, which it needed to do to catch up with others who beat it to the digital side in terms of successfully bringing those products to market.

     

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    Anonymous Coward, Aug 14th, 2010 @ 10:56am

    Re: Creative Destruction

    I'm having trouble seeing where the size/scale/scope of the resultant capitalization of the new businesses is relevant to the argument for the value of creative destruction. However, if film development shops count, then do the advancements made in, say, printer hardware, storage media, device interoperability, and to a degree even steganography also count?

     

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    Mike Masnick (profile), Aug 14th, 2010 @ 10:56am

    Re: Creative Destruction

    Can you think of any instances of this kind of creative destruction where the new business model was not smaller in capitalization than the model it replaced?

    Hmm. I can't think of an instance where the new business model was not *larger* in capitalization than the model it replaced. Every single case of creative destruction I can think of resulted in a larger overall economic pie to slice from.

    Automobiles. Telephone. Mobile phones. Computers. All have resulted in greater market size.

    I.E. Digital photography has all but replaced film-based photography, and by all measures is wildly successful; however, do we think it made as much money or employed as many people as film-based photography? (Ancillary businesses, like fotomats, etc. count.)


    I think if you look at ancillary businesses, it's also true that digital photography is leading to a greater economic pie as well, though some of it's still being sorted out. Look at some of the new businesses that digital photography is enabling, including video, hosting, information services... things that weren't possible before.

     

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    Anonymous Coward, Aug 14th, 2010 @ 11:06am

    Re: Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    I don't see it as painful to lay off mass staff to increase your profit margins/revenue. Just part of doing business. It is inconceivable that Kodak would keep all that staff during a massive transition to digital.

     

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    Anonymous Coward, Aug 14th, 2010 @ 11:25am

    Re: Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    Up until about the early 50's film cameras were just one of Kodak's businesses. Even then, however, it was largely a producer of low to mid-range consumer cameras that were eventually overtaken by film camera offerings from Europe and Japan that were directed to the entire spectrum of photographers, from the snapshooter to the pro. This was due in no small part to the fact that "glass" was also a key portion of these other companies' product portfolios, something that Kodak had largely abandoned many years earlier.

    When talking about Kodak and cameras, I submit it is important to keep in mind that the company has always been involved in a myriad of products, and the fact it chose to pursue a different path regarding the transition to digital is should not be used as a basis for suggesting that Kodak lost its position in the camera market because it was slow to adapt. Quite the contrary. It did adapt, but in a way that did much more to promote the conversion to digital by the public. Why sell low and mid-range cameras when you can instead pursue the role of supplier to digital camera manufacturers? After all, the most important components of such cameras are the electronic piece parts that do all the work.

     

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    irv, Aug 14th, 2010 @ 11:38am

    Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    ROTFLMAO!!!

    So you're saying Kodak laid off tens of thousands of people, sold off whole business units and closed buildings all over Rochester (where I was born, so I have some familiarity with the subject) because they did such a good job of responding to the digital revolution?

    I haven't laughed this much in months. Thanks!

     

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    Anonymous Coward, Aug 14th, 2010 @ 12:35pm

    Re: Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    Well, to be fair, part of the digital revolution is no longer needing to use as much human labor or to maintain as many physical locations for conducting business. So it could be.

     

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    vastrightwing, Aug 14th, 2010 @ 12:46pm

    Why I don't protect my intellectual property

    I do not "protect" my intellectual property for the very reason mentioned in the article: change happens so fast, that my protection is change itself. For example, I write code and publish some software. Part of my plan is that I will be copied by a competitor (the irony is that so far, my competition has not been that much. I actually embrace it.) I develop a new product, market it only after it's nearly complete, sell it and by the time anyone decides to copy my product, I'm off to the next thing. Go ahead and copy me. That's fine, because by the time you copy my stuff, you're late.

    On the other hand, I do copy other people's concepts: not their product or designs. I look for concepts that I like in other people's product and include those concepts that I like. This is called evolution and it's fair game. I know some compnies would like to patent certain concepts, but that will only serve to stop progress.

     

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    kyle clements (profile), Aug 14th, 2010 @ 1:38pm

    Re: Creative Destruction

    I don't know about overall numbers, but digital has opened up a few new opportunities to profit where film had little potential.

    One such area is cameras themselves.
    With film based photography, the actual camera is little more than a 'film box', something that holds the lens and the film, and that's it. And they cost a few hundred. The money was in the glass, not the cameras.

    Digital cameras on the other hand, are expensive, and every year something new comes out to replace the old ones.

    In the film days, a pro could spend $500 on a body, and $3000 on a lens. Now a pro has to spend $7000 + $3000, 7k for a high-end DSLR, and 3k for a good lens.

    And don't forget about camera batteries and memory cards. Newer cameras make bigger files, requiring newer and bigger memory cards.
    My old SLR has one tiny watch battery for the light meter, and it's still going strong, and I bought it used in the late 90's. I could still use that camera today. My DSLR's battery has had to be replaced after a few years, and these are proprietary designs per camera, not standard watch batteries. And the DSLR is so old, some of it's limitations are now clearly apparent. I kinda need to upgrade. and I've only had this one for a few years now.

     

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    Gene Cavanaugh, Aug 14th, 2010 @ 1:46pm

    Kodak

    Good article. One thing that Kodak did that they shouldn't have - they introduced "EasyShare" in the digital world, then "manipulated" EasyShare to encourage people to buy more Kodak; in the process I lost some photos I REALLY wanted (try, 50th wedding anniversary pictures!).
    Now when I see Kodak, I RUN, not walk, from the area.

     

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    Mike Masnick (profile), Aug 14th, 2010 @ 1:53pm

    Re: Re: Re: Again !! Article based on false premise.. Ie Kodak was slow to change... FACTUALLY WRONG..

    When talking about Kodak and cameras, I submit it is important to keep in mind that the company has always been involved in a myriad of products, and the fact it chose to pursue a different path regarding the transition to digital is should not be used as a basis for suggesting that Kodak lost its position in the camera market because it was slow to adapt.

    Not just looking at how it lost its position in the camera market. It lost almost everything for a while there.

    Pretending Kodak didn't struggle in the transition is ridiculous. You should go see Jeff Hayzlett talk about this stuff.

     

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    darryl, Aug 14th, 2010 @ 5:13pm

    what companies dont struggle with transitions ? IBM ?

    Its clear the Kodak was an industry leader in the field, and like any industry, when new technology makes something easier people who used to do those jobs lose those jobs.

    How many people do you think lost their job from "typing pools" when computers and wordprocessors were introducted, do you see lots of people complaining that they dont have a job, type all day, with 100 other people ?

    What about Kodak, do you think the big factories producing chemical film products was viable or environmentally safe?

    No, instead Kodak, like all companies moved with the times, no slower or faster than anyone else.

    And its clear Kodak, compared to say IBM or Novell has been able to maintain a very strong market in the industry.

    No the mention, that they are the backbone of the technology, apart from the digital camera development they did, they also have huge skills in lens design, and camera case design.

    In fact in the 1990's the kodak digital cameras were about the best you could get, the "265" for example, there was little on the market that was better or more advanced.

    So just like we dont have vast number of bank tellers manually processing transactions, or just like we dont have typing pools of hundreds of drones typing away. Does not mean that you can claim that one company or another is fast or slow to adopt new technologies.

    Just because you do not see the advancements from Kodak (and it appears you do not want to look). DOES NOT mean they did not occur, and that behind the scenes, they are developing and producing compenents and technologies that are employed by OTHER COMPANIES, and industry in general.

    Its clear by history digital photography would be far less advanced today if it was not for Kodak.

    Certainly a more convincing case argument would have been to relate this entire story to IBM and not Kodak, IBM dropped the ball, several times. And lost the momentum of the IBM-PC and the entire personal computer industry.

    To focused on cash registers and calculators, they never recovered, IBM is a shaddow of its former self, and they did not even have to endure a significant technology change, (ie from film to digital).

    IBM was into computing all the time, they were once big, very very big, now they well,,, they are not big..

    And as has been stated, Kodak make far more than just cameras. And are major suppliers to industry, they are market leaders, IBM is not a market leader.

    As for just randomly adopting business model, or claiming if you wait to see if it works someone else will take your prize, is not right, every business model is based on real world data, market studies and facts, they are not 'just an idea that you try'. To say that is what a business model is is wrong and misleading, and shows that mabey you have never created a business plan.

    You think people just think of an idea and go out and do it!!..

    Something you would have never done, or do you think those with the money would spend some time to see if that plan will actually work.

    ALL companies do this, so the chance of someone else jumping in before you is slim. Business does not work on trying to always be the first, they try to be the best and most desirable for customers.

    If I want to purchase something, I do not consider if it was the 'first' that would make me take that purchase.

    NO, I choose to consider many other factors, including what it does for me, and if I want it.

    I do not say "oh, I wont buy that Kodak camera, because they were not the first to market in that industry".

    NO.. I buy a product that I wont because it meets my needs and requirements.

    I dont know if you only base your purchasing decisions on who was first to market, but most dont.

    So do you Mike, think that ANY company does not 'struggle' during transitions ?

    Did IBM struggle with any transitions ? what about Novell ?

    You think the banking industry did not struggle with the introduction of technology?

    Do you think the car industry, or the aviation industry did not struggle with the intruduction of technology ?

    What industries do you think DID NOT struggle in the transition between technologies and markets ?

    If fact kodak was the agent for change more than the lagging follower. And they still are.

    So they dropped old technology, so what, so did IBM so did everyone else.. Whats your point..

    And again, its clear Kodak is a terrible example of your claim of this article. And the guy you quote seems to hold the same misconceptions as you do..

    Ofcourse, if they are not producing tonnes of film stock they do not have to employ factory workers to do that.

    Just like when business closed typing pools, alot of jobs were lost, but better jobs because available.

    The photography market today is massive, far larger than the 'film' era. That huge market was largely due to Kodak.

    So I still state that this entire article is based on false or misleading claims, and poorly researched idea's.

    And a very poor choice of subject matter, being Kodak.

    Again, you claim expertise in business, law and everything copyright, I am led to wonder what businesses you have started or run, how successful they were. If you have been required to create and submit a business plan for proposal by a lending group or investor ?

    Ever created content of value? Even designed anything that you value as a "great design" ?

    Even gained a patent ? Either for yourself or for a company you worked for?

    Ever designed something new and unique ? ever built it ?

    Have you ever been in private industry, and worked extensively with the local university in developing new technologies ? To gain an understanding of the level of cooperation between industry and acadamia ?

    Ever written a unique and novel computer program to do something no one else has thought of ?

    I can make an assumption that you have done little or none of those things.

    There are 'doers' and 'talkers', which are you ?

    You seem constantly critical of those who are successful, and who are in the industry and making a go of it, you sit in your armchair and make comment.

    Your happy to tell them all how they are doing it wrong, and that your way is the best way. But you do not lead by example. So you think someone is Kodak is going to agree with you, or are they going to ask "and what have you achieved "?

    Your quick to be critical, but you are a talker not a doer, that lack of real world experience shines through with every statement you make.

    If you honestly believe in what you say, PUT THEM INTO PRACTICE,,, ACT ON THOSE GOOD IDEA's.

    Have the conviction of your statements, be a doer not a talker !

    If your plan is so good, adopt it yourself !!!

    Why just talk about it, and bag out those that are actually doing it ?

    What do you provide that a laywer does not provide?

    You generate words, you talk and talk but what do you DO ?

    The most convincing argument you could produce for your ideas of markets is to ENTER THE MARKET YOURSELF.

    Show us in real terms how your plans were in the REAL WORLD, and not the hypothetical world of techdirt.

    Ive spent my entire career as an engineer, in electronics, communications and computers. At least I walk the walk, I have not spent years trolling hundreds of blogs trying to cobble up a utopian world what you see from your office.

    there is a world beyond your PC, and mabey you should go out and experience it a bit, find out what the real world people do, and what they care (and DONT care about).

    Sub-prime loans, US Debt, Enron, Madoff, BP Oil Spill, greace financial crisis. US car industry, global warming...

    And all you can do if find an ancient myth that Kodak was slow to adapt as an example of how being slow to market is a killer.

    Why not use the Enron "mark to market" scheme, and pre-emp the business model alltogether ? It worked for Enron for awile.. !!!!!...


    No, its just so much easier to go after Kodak, and sit there typing your idea of Utopia, without even giving concrete examples, or actually DOING IT YOURSELF...

    Just like you idea that you think big artists got big by winning some lottery, WHAT A JOKE. Mike do you believe that ?

    Or might you think they are the ones who worked hardest, practiced, had the telent, and got the breaks.

    Do you think they were born any more advantaged they the ones who do not make it.

    Dont you think the same applies to CEO's, only a very small group of people get to the top, they have got there by hard work and dedication and talent. Not by a lottery.

    You dont get to pick and choose who people like or what they want to buy..

    So again, you appear to completely miss the real world, for some utopian idea. Of everyone being equal as a right.

    So personal ability, skill, talent or appeal has nothing to do with it anymore.

    So please, Mike, put your words into actions, show us all how it is done. You appear to have all the idea's. You must be rich.

     

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    Mike Masnick (profile), Aug 14th, 2010 @ 8:58pm

    Re: what companies dont struggle with transitions ? IBM ?

    Again, you claim expertise in business, law and everything copyright, I am led to wonder what businesses you have started or run, how successful they were. If you have been required to create and submit a business plan for proposal by a lending group or investor ?

    Bizarre. You asked this same question a few weeks ago, and I answered it. I honestly don't know why you are asking it again.

    Yes, I have started and run a rather successful business (the one that produces this blog), and I have raised over 7 figures in investment money from a variety of investors.

    Ever created content of value? Even designed anything that you value as a "great design" ?


    Yes.

    Even gained a patent ? Either for yourself or for a company you worked for?


    No, because I don't believe patents are a good use of money. However, we have designed multiple offerings for which our lawyers suggested we get a patent. We chose not to on principle.

    Ever designed something new and unique ? ever built it ?


    Yes.

    Have you ever been in private industry, and worked extensively with the local university in developing new technologies ? To gain an understanding of the level of cooperation between industry and acadamia ?

    Yes, on both of those.

    Ever written a unique and novel computer program to do something no one else has thought of ?


    I did not write the code, but I have written the product spec for multiple pieces of software that I came up with which was then designed, built and successfully brought to market by teams I lead. The software we built today is currently in use by some of the largest companies on the planet.

    I can make an assumption that you have done little or none of those things.


    You would assume incorrectly.

    If you honestly believe in what you say, PUT THEM INTO PRACTICE,,, ACT ON THOSE GOOD IDEA's.


    I have and continue to do so.

    If your plan is so good, adopt it yourself !!!


    I have and continue to do so.

    Why just talk about it, and bag out those that are actually doing it ?


    I have adopted it and continue to do so.

    What do you provide that a laywer does not provide?


    I have no idea what this means.

    You generate words, you talk and talk but what do you DO ?


    I've built a rather successful company that works with lots of the largest companies on the world, supports a decent staff and is profitable. You?

    The most convincing argument you could produce for your ideas of markets is to ENTER THE MARKET YOURSELF.


    I have. Why do you keep pretending I have not.

    Show us in real terms how your plans were in the REAL WORLD, and not the hypothetical world of techdirt.


    I have and continue to do so, and they seem to work great.

    Ive spent my entire career as an engineer, in electronics, communications and computers. At least I walk the walk, I have not spent years trolling hundreds of blogs trying to cobble up a utopian world what you see from your office.

    Interesting. Considering you've spent the last few months attacking me for not understanding business and economics -- and now you point out that you've never worked in business or economics yourself. I don't have a problem with people not having worked in a field understanding it, but it does seem rather hypocritical of you in this very post to say i can't comment on business models without having started and run a business... and then you yourself admit that you are an engineer not a business person. Funny.

    there is a world beyond your PC, and mabey you should go out and experience it a bit, find out what the real world people do, and what they care (and DONT care about).

    I'm doing fine out there in the real world, Darryl.

    Sub-prime loans, US Debt, Enron, Madoff, BP Oil Spill, greace financial crisis. US car industry, global warming...


    Quite familiar with all. Not sure what this has to do with anything.

    And all you can do if find an ancient myth that Kodak was slow to adapt as an example of how being slow to market is a killer.

    Actually, it was the NY Times that reported on that, and it did so correctly. You still don't appear to have actually read my post, but I worked with Kodak as a consultant in the 90s. I was there. I know what happened.

    Why not use the Enron "mark to market" scheme, and pre-emp the business model alltogether ? It worked for Enron for awile.. !!!!!...

    Do you even know what mark to market means?

    No, its just so much easier to go after Kodak, and sit there typing your idea of Utopia, without even giving concrete examples, or actually DOING IT YOURSELF...

    Again, Darryl, I have gone out and done it myself.

    Just like you idea that you think big artists got big by winning some lottery, WHAT A JOKE. Mike do you believe that ?

    You seem to read headlines, but don't deal well with the details.

    Or might you think they are the ones who worked hardest, practiced, had the telent, and got the breaks.


    I don't deny that they have talent. But there are tons of talented, incredibly hard working musicians who don't become huge successes.

    Do you think they were born any more advantaged they the ones who do not make it.


    Perhaps in some cases, but I know plenty of unsuccessful musicians who come from good backgrounds.

    Dont you think the same applies to CEO's, only a very small group of people get to the top, they have got there by hard work and dedication and talent. Not by a lottery.

    Quite different, actually. The ability to become a CEO did not, in the past, depend on 5 gatekeepers. The ability to be a rockstar did. It no longer does. That's the point.

    You dont get to pick and choose who people like or what they want to buy..


    Nor have I ever said I did. Kind of a non sequitur there Darryl.

    So again, you appear to completely miss the real world, for some utopian idea. Of everyone being equal as a right.


    Again, I have never said any such thing. Where have I ever said that Darryl? Answer or admit you were wrong.

    So please, Mike, put your words into actions, show us all how it is done. You appear to have all the idea's. You must be rich.

    I'm doing alright. You seem to make a lot of really, really bad assumptions. Almost every assumption you made in this comment is wrong.

    Let's see if you will admit you were wrong. Somehow I doubt it.

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Anonymous Coward, Aug 14th, 2010 @ 10:39pm

    Re: what companies dont struggle with transitions ? IBM ?

    Is the absurd use of spacing in your posts meant to represent the massive gaps in your logic and arguments, Darryl?

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    Anonymous Coward, Aug 14th, 2010 @ 11:14pm

    Re: what companies dont struggle with transitions ? IBM ?

    Wow! 140 lines!

    Document Statistics:

    Lines ________________________ 140
    Words ________________________ 1610
    Characters (with spaces) _____ 8876
    Characters (no spaces) _______ 7181
    Bytes ________________________ 8876

    Useful sentences _____________ none
    Useful ideas _________________ none

     

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  27.  
    identicon
    Anonymous Coward, Aug 15th, 2010 @ 2:54am

    This is a very succinct piece of analysis. Nice!

     

    reply to this | link to this | view in thread ]

  28.  
    icon
    Griff (profile), Aug 15th, 2010 @ 3:05am

    Re: Creative Destruction

    -- Can you think of any instances of this kind of creative destruction where the new business model was not smaller in capitalization than the model it replaced? --

    Duh !

    You mean can I think of an area where a new technology came out that was as good as the existing technology but cost more so it won the day ??

    Clearly, item for item, the new technology is probably cheaper.
    But in many cases that widens the appeal & grows the overall market.


    A modern digital camera might be cheaper than an old style camera, and we may spend less on buying film, but we spend definitly more on colour printing than we used to. And with so many cameras (on phones, for example) there are so many more images out there to print.

    And I seem to recall reading here that overall the music business is growing. It's only from narrow viewpoint of the old style players that it seems to have shrunk.


    So, you might ask, would Kodak be cutting their own throats to hasten the arrival of digital cameras ?
    Yes, if that is all they ever sold. But if they grabbed a slice of the new larger pie that was coming next, probably not.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Eric Reasons, Aug 15th, 2010 @ 6:04am

    Re: Re: Creative Destruction

    Mike-

    Thanks for your insight. When it comes to new technology in general, I think you're absolutely correct--they tend to increase the pie. I was thinking specifically of the Internet's effect on photography more than the digital camera' (which was enabled by the move to digital).

    http://blog.ericreasons.com/2010/04/amateur-ascendant-compromise-of.html.

    The effects of the digital camera may enable greater capitalization if it was the only innovation in photography, but it also enabled photography to make the jump to the Internet, whose benefits I don't think are as black-and-white as the technologies you listed above.

    Do you think of The Internet like the technologies you listed, or do you see it as something different? While the Internet's disruption has made many a billionaire, it's certainly well on it's way to destroying some entire industries. And it seems to me, many of the institutions that are popping up to replace them don't have the same capitalization, if they have capitalization at all.

    I know the Internet is adding Value, I just don't know if it's adding Value in a place where Capital can capture it.

    :-)

    I guess I'd like to find a way to see the balance sheet.

     

    reply to this | link to this | view in thread ]

  30.  
    icon
    Eric Reasons (profile), Aug 15th, 2010 @ 6:15am

    Re: Re: Creative Destruction

    Griff-

    Thanks for the reply. You may want to see my response to Mike above.

    I think the music industry is a very good example of what I was questioning. The industry is expanding, but capitalization is definitely shrinking.

    There are more players than ever getting their slice of the pie, but that pie is certainly shrinking (if the pie is measured in capital only). Lucky for them it was a really really big pie when it started to shrink.

    The Internet added Value to the music industry, but it added it in a way that Capital couldn't capture it. I see this a lot when the Internet disrupts some legacy industry.

     

    reply to this | link to this | view in thread ]

  31.  
    icon
    ChrisB (profile), Aug 15th, 2010 @ 7:51am

    Re: Kodak

    > Now when I see Kodak, I RUN, not walk, from the area.

    My second digital camera was a Kodak. Absolute garbage. In their haste to cash-in on their name during the digital revolution, they destroyed it. I will never buy anything from Kodak again.

     

    reply to this | link to this | view in thread ]

  32.  
    identicon
    stever, Aug 15th, 2010 @ 5:36pm

    Risk is the issue not fear of change

    Most seem to focus on Kodak here when the article really was about transforming your comapny.
    I have worked for two kinds of companies. Those that wanted to change and did so badly and those that didnt want to change and went out backwards. The answer to changing is all about money and managing the risk. Kodak held off too long, but they are still here that is the point. They made it.
    The lesson is when you are small you can follow and maybe not suffer to much. When you are large you have to keep investing in new technologies and ideas.
    That is not a new concept in fact it has been with us since the 1800's. I hate to use a pun here but nothing really changes does it? lol.

     

    reply to this | link to this | view in thread ]

  33.  
    icon
    Mike Masnick (profile), Aug 15th, 2010 @ 11:00pm

    Re: Re: Re: Creative Destruction

    Do you think of The Internet like the technologies you listed, or do you see it as something different? While the Internet's disruption has made many a billionaire, it's certainly well on it's way to destroying some entire industries. And it seems to me, many of the institutions that are popping up to replace them don't have the same capitalization, if they have capitalization at all.

    Every new technology ends up destroying some industries in the process, but it's usually because they were based on artificial limitations or inefficiencies. The market for photography may be just such a market. But I disagree with the idea that there is less capitalization when it comes to photography these days. It's just that it's shifted. It's shifted to things like iStockPhoto and Flickr and print-on-demand services.

    And I'd especially watch out for the next generation of services built on things like camera phones and location-based services that will take photography to the next level.

    I know the Internet is adding Value, I just don't know if it's adding Value in a place where Capital can capture it.


    There are ALWAYS places where capital can capture it. That's where it gets fun.

     

    reply to this | link to this | view in thread ]

  34.  
    icon
    ken (profile), Aug 16th, 2010 @ 12:12pm

    business plan

    8 hot dog rolls to a package as hot dogs are sold in 8's; why there are only 6 rolls to a package is beyond my comprehension. Let's get some VC and make this happen.

     

    reply to this | link to this | view in thread ]

  35.  
    icon
    nasch (profile), Aug 16th, 2010 @ 3:32pm

    Re:

    Please tell me this is just missing a sarcasm tag. It's getting hard to tell anymore.

     

    reply to this | link to this | view in thread ]

  36.  
    identicon
    marcus, Aug 16th, 2010 @ 8:40pm

    Mike, I have a challenge for you. Try to go one week without quoting an article and then saying "Indeed."

    I doubt you can manage it.

     

    reply to this | link to this | view in thread ]

  37.  
    icon
    Mike Masnick (profile), Aug 16th, 2010 @ 10:00pm

    Re:

    Mike, I have a challenge for you. Try to go one week without quoting an article and then saying "Indeed."

    No thanks.

     

    reply to this | link to this | view in thread ]

  38.  
    identicon
    eworldcall, Sep 10th, 2010 @ 7:46pm

    Story

    I find this to be a very interesting story

     

    reply to this | link to this | view in thread ]

  39.  
    identicon
    Theresa Trompke, Jul 26th, 2011 @ 5:21pm

    MOMS HELPING MOMS WORK FROM HOME

    MOMS HELPING MOMS WORK FROM HOME!
    Would you like to work from home in the Health and Wellness Industry?
    We will provide you with world class one on one training and support so you can learn how to open up wholesale shopping accounts for people who desire safer, more affordable every day essentails in their homes. WE don't sell anything or touch any kind of inventory.
    To request FREE information, please visit www.mommyathome.awugreen.com The start up cost is 29.00 and completely refudable. Must have internet and phone to do this job.

     

    reply to this | link to this | view in thread ]


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