Remember Kodak? For those of you who don’t, Kodak dominated the photography industry (film and paper) for most of the 20th century. At its peak, it had more than 80% market share in the U.S. and 50% globally. By 2006, the company was destroyed by digital photography.
The tragedy is that Kodak invented digital photography in 1975, but out of fear of what it might do to their extremely profitable film and paper businesses, senior Kodak executives forbade Steven Sasson, the engineer who invented the first digital camera, from talking about it.
By 2006, Kodak had discontinued Kodachrome (the most popular photographic film in the world). In 2012, the company went bankrupt.
This cautionary tale is (and many like are) brilliantly explored and explained in Clayton Christensen’s wonderful book, The Innovator’s Dilemma. He writes:
The reason [why great companies failed] is that good management itself was the root cause. Managers played the game the way it’s supposed to be played. The very decision-making and resource allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies: listening to customers; tracking competitors actions carefully; and investing resources to design and build higher-performance, higher-quality products that will yield greater profit. These are the reasons why great firms stumbled or failed when confronted with disruptive technology change.
Google invented the underlying technology for ChatGPT years ago. They have it. They also have to protect annual ad/search revenue in excess of $200 billion. How will Google handle its innovator’s dilemma?
We’ll find out soon enough. On Wednesday (Feb. 8), Google is holding an event about how it is “using the power of AI to reimagine how people search for, explore, and interact with information, making it more natural and intuitive than ever before to find what you need.” Google CEO Sundar Pichai said the company is planning on letting people interact directly with its “newest, most powerful language models as a companion to search” soon.
No matter how this plays out, this story will have some extraordinary lessons to teach us.
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.