Responsible finance: Trump’s Kodak moment
By clinging to the rhetoric of protecting fossil fuel jobs, Trump is helping no one.
“They want no oil and gas,” US president Trump said of the Democrats on the opening night of the Republican National Convention, sandwiched between: “They want no guns”, and “They want no God”. On closing night he elaborated: “[Democratic nominee for President, Joe] Biden has promised to abolish the production of American oil, coal, shale and natural gas, laying waste to the economies of Pennsylvania, Ohio, Texas, North Dakota, Oklahoma, Colorado and New Mexico – destroying those states, absolutely destroying those states, and others. Millions of jobs will be lost, and energy prices will soar.”
Watching his insistence on oil and gas, I was reminded of Kodak. In 2001, Kodak bought digital photography website, Ofoto (rebranded to Kodak Gallery). By 2008 Kodak had 60 million customers, yet by 2012 it was bankrupt. Why? Because the firm made 80% margins on film, and a new business model with a different ramping rate and nowhere near that profitability initially just couldn’t convince the senior executives to make the shift, so digital remained considered a side business.
When I spoke to Ofoto founder Lisa Gransky years ago, she said: “Those running the company thought the shift to digital would be slower, emerging markets would grow with film and that they had time to ramp down the film side of the business while the digital took over – but the shift happened almost overnight.