Thursday, December 20, 2012
Kodak finally sold its patent portfolio yesterday for $525 million. The patents had been estimated to be worth $2.6 billion. Those two numbers summarize the sorrowful state of the bankrupt company and reinforce the Darwinian nature of business, the "creative destruction" of Joseph Schumpeter. No business is immune. There is a headline in The Wall Street Journal this morning that the New York Stock Exchange is up for sale. If the deal goes through, that will end 200 years of independence. It is easy to forget that companies are balanced on a needle point and work constantly to stay there. One gust of wind from a wrong direction, and they can tumble. Kodak's story is an often-told object lesson, but there are plenty who repeat it with the silent thought that "this can't happen to me." No one likes to accept mortality, but it is a fact of life for humans and enterprises. The great Silicon Valley companies of today might not be around tomorrow as other companies usurp their place. That is why companies should monitor the marketplace always and be flexible enough to move quickly. Kodak rested for too long on its film stock even though it invented the future that would kill it. It is not the first nor last time this has happened.