Please, have a seat. I want to give you a free ride in my time machine. Ready? *Loud noises* Ok, we are there. The year is 1975, and a young engineer by the name of Steven Sasson walks into work at the largest photography business on the planet, Kodak. Sasson spends his day in a series of meetings, demonstrating a new device that he had created, the first digital camera. The unit was large and bulky; images were captured in half a second and then recorded onto a cassette tape. Once the cassette tape had recorded the image, Sasson would hand the recording to his assistant. The assistant then plugged the cassette into a playback unit to display the 100-pixel x 100-pixel black and white image on a monitor screen.
Kodak’s executive team was not convinced. Responses to Sasson include (but not limited to):
“Who wants their images on a television screen?”
“You are proposing to eliminate Kodak Film, Kodak Flash Cubes, Kodak Ink, Kodak Paper.”
Needless to say, the C-level team was not convinced but permitted Sasson to continue his work.
*Bright flash* It is now 1989, Sasson and another engineer, Robert Hills, just created the original digital handheld SLR camera. The camera features a whopping 1.2-megapixel sensor and memory card slots; this was the camera that would change the world forever. However, Kodak did not see it that way and shelved the product, but kept the patent. The marketing and business department relied heavily on paper and ink sales, and Sasson’s digital camera insisted those two products would eventually become nearly nonexistent.
Ok, let’s get back in the time machine again. The date is January 19th, 2012 and Kodak, a 10,000 employee company, files Chapter 11 bankruptcy. Fast forward to April 9th of the same year; Facebook buys Instagram, a 13 employee company, for one billion dollars. Clearly, Kodak was overly romantic about their products and services, which resulted in the dethroning of a photography conglomerate by a much smaller competitor (IG) who had their finger on the pulse.
Hold on, let’s go back to the time machine. The date is April 16th, 2016, and Gary Vaynerchuk, someone whom we highlighted in a previous Friday 5 post, is speaking with Stephanie Ruhle on stage for a 92Y Q&A. Stephanie asks Gary a very intriguing question:
“Are there any brands out there that you look at and go ‘ugh, that is an iconic brand that has meant so much in history but today means nothing, I would love to get my hands on it!’?”
Gary immediately responds with, “Nintendo.” Stephanie then asks her one-word follow-up, “Why?” His response is epic, just watch the 46-second video and keep reading.
Let’s fire up the time machine again; the date is July 19th, 2016 and Pokémon Go is the most popular mobile game in the US ever, earning millions of dollars a day. Nintendo, which is a publicly traded company, owns 32% of Pokémon, a private company not available for public ownership. Due to Nintendo’s affiliation to Pokémon, as well as the inability to invest directly in Pokémon itself, Nintendo’s share price and market cap have skyrocketed past some huge brand names represented in the graph below.
Travel forward to Friday, July 22nd, 2016, and Nintendo releases a statement after trading hours clarifying the impact of Pokémon Go on their bottom line, which is minimal. By Monday, July 25th, the stock plummeted as much as 17% with the Tokyo stock exchange rules halting trading activity once a position moves more than 18% in a single day.
Ok, you are free to exit the time machine now, we are back in our current day *phew*. The gift of hindsight in real time is a rare occurrence that should be treasured dearly. Nintendo has been fortunate enough to receive this gift. Gary Vaynerchuk was wise enough to throw them under the bus for getting romantic about their product and process. When Pokémon Go came around for release, the world could have easily pointed at Gary and said, you were wrong, Nintendo was, in fact, working on an app that would shift the marketplace entirely, and is not romantic about their newest console (which is a complete failure). Gary even wrote a piece exonerating Nintendo of their new found embrace of current events and culture! Hopefully, Nintendo realizes the impact Mario, Zelda, etc., could have on the app store and doesn’t get dethroned like Instagram did Kodak.