The Pattern Repeats
Bad people do bad things. I don't think anyone could argue with that. But if that's the reason bad things happen, we're helplessly waiting for the next bad person to do the next bad thing. What if there was a better question?
Scandal erupts. Villains are identified and punished. Everyone celebrates the system working as intended.
But that's only half the story.
The other half is what the system was doing before the collapse. What structural conditions made the outcome nearly unavoidable. Why the same structures keep appearing in different industries, different eras, and different organizations while we keep reaching for the same human explanations.
The Pattern Repeats doesn't exonerate the actors. The damage was real and the accountability was earned. It asks the harder question. What made this rational when it should have been unthinkable. And what does that tell us about where it's happening right now. The case studies are simplified to focus on the structure, the consequences are not.
A Blurred Lens
This edition: when the right answer becomes the wrong outcome.
You're running an incredibly successful business. You've captured most of the market and your margins are better than you could have hoped.
Someone in your lab is working on a new technology. It's clunky and expensive at the moment but has the potential to change how people think about what you do. It also will never come close to matching the margins you have today.
Do you commit to building it knowing that if it succeeds it might ruin the existing business?
The Empire
Kodak built an empire on film.
Sure they sold plenty of cameras and they made decent margins. But the real money lived in film sales and the things that were required to process the film into physical images.
The exact breakdown was never publicly reported, but the direction was never really in question. In 1976, Kodak sold roughly 90% of all the film bought in the United States. One executive claimed the film carried margins of around 80%.
Selling cameras was good. Selling film was worth a fortune.
But by the early 90's, Kodak began losing market share to a new technology.
The digital camera.
It seems like a classic case of a company that failed to adapt and got left behind. But Kodak actually developed the technology before anyone else. And then it sat on a shelf.
By the early 2000's, Kodak would be filing for bankruptcy. The product that killed them was a product they invented, eventually deployed, and still couldn't survive.
The End of the World
In 1974, Steven Sasson began work on a new way to capture images. Rather than using light to expose film to create images, the new process used an electronic image sensor. No film needed.
If it worked, images could be captured digitally.
By the end of 1975, Sasson had a working prototype.
The prototype itself wasn't anything impressive. It took 23 seconds to take a picture, processed at .01 megapixels, in black and white only. And to top it off, it weighed 8 pounds.
But it worked.
When Kodak saw this, they saw an advancement that wouldn't just change the industry. It would eliminate almost everything that made them profitable.
It wasn't just a new technology. It was the end of the world they knew.
The Camera is Just the Beginning
Kodak was never a camera company.
They were a film and image processing company who happened to also sell cameras.
The exact breakdown was never publicly reported, but the direction was never really in question.
This created an unsolvable dilemma. They had just proven that it was possible to take a picture that required no film at all. But their entire business model relied on film being the revenue driver.
Beyond film being incredibly lucrative, it was a recurring revenue stream.
If Kodak sold a customer a camera, that customer would return again and again to buy film, pay for processing, and order prints. Every camera sold was the beginning of a revenue relationship. The digital age collapsed that relationship into a single transaction.
Once the camera was sold, Kodak's role in that customer's life was effectively over.
The Confirmation Trap
Customers seemed happy. No one was complaining about having to use film to capture images. From Kodak's perspective, the system was working. Why try to change it now?
But the system working because consumers genuinely like the system and the system working because there isn't a better alternative are two very different operating postures.
And when you're the dominant force in the market, those two things can feel nearly identical.
The problem is, any kind of consumer report on an unannounced new technology is, by definition, incomplete at best and confidently wrong at worst.
Kodak could have interviewed every photographer about their preference for using Kodak film to capture moments and images. And given the 90% market capture, they likely would have received overwhelmingly positive feedback about why photographers choose Kodak.
Nobody interviewed would know that there was an option that didn't include film. It was outside the realm of what they would have considered. It was structurally incapable of surfacing that film itself felt like a barrier that should be solved for.
The Camera That Couldn’t Save Them
Kodak eventually made the leap to digital. The cameras they created were successful.
But the business model wasn't ever built around camera sales. It couldn't absorb the loss of recurring revenue from the high margin film sales.
Kodak restructured through bankruptcy in 2012. While they still exist today, the company is a shell of its former self.
At its peak, it employed over 140,000 people and had a market cap of around $28 billion. Today it employs 3,400 people and generates just over $1 billion annually.
The issue was never that Kodak couldn't see digital on the horizon. It was that everything the business rewarded made delaying adoption as long as possible the rational choice. And by the time adoption was forced, it was too late.
The Question That Didn’t Matter
Kodak wasn't blind to digital photography. They built it.
The problem was that their business model rewarded proving film was still valuable rather than investigating whether film was necessary.
The evidence wasn't false. The question generating the evidence was.
The real question that was never asked was: do they prefer using film at all?
Most people can point to real evidence that confirms what they already believe. The harder question is whether the evidence is answering the right question or just the one the evidence was already built to answer.