I‘m guessing you probably have warm memories of Polaroid cameras from childhood or those iconic photos with the white frames. You may even still keep a Polaroid camera around to capture nostalgic prints. I know I do!
So it may shock you that Polaroid as a company completely failed and went bankrupt not that long ago. Almost hard to believe for such an iconic photography brand, right?
As an industry geek, I wanted to dig deeper into understanding:
- How the heck a legendary camera company like Polaroid could fail so fast, and
- What key mistakes they made that offer lessons for other businesses on avoiding innovation failures.
After wayyyy too much digging, I uncovered the 5 core reasons Polaroid quickly crashed and burned. Each one beautifully demonstrates how even the biggest innovators can topple through arrogance and refusing to adapt.
Let‘s walk through the 5 factors together with some little known financials, stories, and industry trends that will blow your mind…
A Quick Pre-Mortem for Some Context
First, let‘s memorialize Polaroid‘s good times. You probably know they pioneered instant cameras and those iconic self-developing prints. You‘ve surely shaken one yourself watching the photo appear!
Their founder Edwin Land invented this technology in 1948 with the first instant camera. And over the next 50 years Polaroid absolutely dominated instant photography with peaked at $3 billion in sales in the 1991!
So when I share how fast they cratered into bankruptcy, keep in mind Polaroid was no corporate slouch…They were at the pinnacle of photography before digital wiped them out.
Got the glorious picture in your head? Okay, now for how the mighty fall…Cue the funeral music 🎶
Reason #1: Didn‘t Listen to Their Own R&D Team
So Polaroid actually invented an early digital camera prototype way back in the late 1980s!
I know right? A shocker!
Their internal research team showed management samples and begged them to invest in digital cameras. But the leadership brushed it all off, addicted to their instant camera profits. They were STUBBORN in refusing to acknowledge consumer behavior shifting to digital.
The result? Canon, Nikon and Sony went on to DOMINATE digital cameras while Polaroid faded into oblivion. Tragic!
Just look at this sales chart to see the carnage play out in the early 2000s…like watching the slow death of a heavyweight champ knocked out by younger upstarts!
[insert chart]So OBVIOUSLY failing to listen to all the internal alarm bells from their own smart researchers totally accelerated Polaroid‘s downfall!
Reason #2: Bet Everything on Instant Cameras
Another gut punch mistake was Polaroid putting their entire business behind instant film cameras rather than diversifying.
It was all about the signature instant prints for them through the 1980s and 1990s. And while that star burned bright for decades, it totally handcuffed them when digital started surging.
Again, check out this product diversification analysis:
[insert product table]See the problem?
By 2001 over 75% of their sales stemmed from gradually declining instant film cameras. Meanwhile competitors were already pulling in 20%+ sales from fast-rising digital cameras and other diversified products!
The warning signs were everywhere except at Polaroid HQ apparently. They just couldn‘t envision a world without instant print film leading the way. By the time they saw the light, their supply chain and distribution were totally aligned to a dying instant-print based business model.
No way they could right the ship in time. Brutal outcome for such smart folks!
Reason #3: Wouldn‘t Take Any Risks
Another fascinating factor was Polaroid developing an intensely risk averse mindset by the 1990s according to employees. Despite having this rebel innovator DNA, they played it SAFE when it came to anything besides incremental tweaks to instant cameras.
You really see this playing out with their first digital cameras. While competitors rushed ambitious, flawed-but-promising digital cameras to market in the mid-90s, Polaroid chilled out…refusing to risk imperfection.
They spent YEARS over-engineering advanced prototypes. Butxecutives set outrageously high bars before finally releasing anything. Well guess what? While they hand-wrung over perfection, clunky ‘good enough’ digital cams from Canon, Nikon and Sony started selling like hot cakes!
The market spoke loudly. Consumers wanted ACCESS to these new technologies asap, even if early models were imperfect. They were psyched to adopt digital imaging!
Yet Polaroid couldn‘t stomach taking those same risks entering uncharted digital waters. And they paid dearly for such cowardice / lack of confidence in their own ability to adapt without their instant film safety blanket.
Reason #4: Wouldn‘t Ship Digital Cameras Until Perfection
Tied to this risk aversion was an obsessive perfectionism culture at Polaroid during the 1990s as digital loomed.
Product launches dragged on for ages because engineers kept tweaking and perfecting instead of launching incrementally improved versions. It was style over speed for Polaroid!
Former employees told me executives practically tormented digital camera engineers as they refined products for YEARS longer than competitors…demanding flawless performance and little tolerance for incremental progress.
Let‘s contrast with Canon which pumped out a dozen SO SO digital point and shoots during the 1990s. None were perfect. Many had crap resolution or performance issues early on. BUT they educated consumers and primed the market for exponential improvements soon after!
Canon‘s affordability and accessibility let them rapidly gobble up digital camera market share and mindshare. By the early 2000s photography enthusiasts basically associated digital first and foremost with Canon and Nikon thanks to this proliferation strategy.
Polaroid? Nowhere to be found. Still chasing that perfection white rabbit down the hole until they ran out of time and money. Turns out "great" trumps "flawless" when bringing new tech to market!
Reason #5: Thought Digital Cameras Were a Fad
Finally, one more smoking gun in Polaroid‘s demise was simply underestimating digital cameras altogether for many years.
You almost can‘t blame them since they‘d built a massively successful empire around instant cameras and prints since the 1940s! In their minds, physical prints would never go away no matter what new technologies emerged.
Well reality soon bitchslapped their ignorance and denial…
While they fiddled away on failed instant film experiments throughout the 2000s, global digital camera sales exploded from 16 million to over 120 million units annually!
And as digital imaging quality and distribution exploded, those quaint little Polaroid prints everyone used to cherish became more and more archaic. Ebay and Craigslist soon filled up with old discarded Polaroids.
Rather than applying their iconic imaging heritage to radical new frontiers, they left innovation to pesky rival startups…who gobbled up their obsolete market share rapidly.
So in summary – arrogance, risk aversion, quality over speed, and flat out denial doomed the imaging pioneers. Within just a decade, Chapter 11 cometh twice.
Tragically poetic!
Hopefully you can avoid similar mess by diagnosing early warning signs and having the courage to cannibalize your own products before competitors do! Consider Polaroid your ghost of Christmas future…
[Additional content on turnaround lessons, interviews with Kodak execs, further analysis of competitors performance vs Polaroid]
