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January 20, 2012

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Baron95

Tomi, You are forgetting one important ingredient in success - location of ground zero for disruption.

Kodak could only have prospered, if they had moved their R&D and headquarters to Silicon Valley at the beginning of the digital revolution. Same with Nokia. The Internet/Digital/Content/SW disruptions that are centered in Silicon Valley can ONLY happen there. Only that culture is capable of creating it with the speed and boldness.

Similarly, the advertising revolution of the post war years could only have happened around Madison avenue.

And the advances of Movies and Studios over the last Century could only have happened in Hollywood.

And the financial innovations (bubbles, excesses et all) could only have happened at Wall Street and The City.

There were many great film makers all over the world - yet NONE, not one has ever produced a blockbuster movie outside of Hollywood.

Similarly, there will not be any blockbuster mobile OS/ecosystem unless it comes from Silicon Valley.

True, in a connected world, location should be less critical, but it has not happened yet. There is no place like Silicon Valley. You belittled Elop for the Lumia design coming out of Silicon Valley - you should be cheering him instead.

zlutor

@Baron95: Man, are you serious?! London, The City, SAP or Symbian do ring the bell? Just to name a few...

Oh my Godness, saying no innovation outside of the US is - well, what term should I say - nonsense, at minimum...

PERUS

@Baron95:
Dude, I guess it's Allan Moore not Tomi Ahonen. Otherwise you'll read more "fire elop, bad evil microsoft" or similar. Can't you read the differences? Hehe.

Alan Moore

Thanks Perus ! yes its me Alan Moore.

Dear Baron95 - I know Silicon Valley is important, in fact I write about innovation eco-systems. However LEGO did not move to Silicon Valley.

You do get epicentres of innovation - true.

But skype came from Estonia, and others here have made their own observations in the comments sections.

So I suggest you need to adjust your perspective somewhat - otherwise you will exist forever in an ambiguous state.

Sir Not Appearing In These Comments

It has been interesting to read about Kodak's role in the development of digital cameras and their subsequent failure to build on that. It seems that companies that are particularly successful in one field really are hostages to their own success. Afraid of new products that compete with their existing business, they are apparently unaware that if they don't make them someone else will. It's preferable to see a competitor take your business when that competitor is yourself.

I think it was Simon Phipps who said in an interview (http://twit.tv/show/floss-weekly/113) that companies really need to fail before they can meaningfully change and, although Nokia didn't really face a paradigm shift like Kodak did, I think this observation still applies to Nokia. The tragedy is that there are people working there who have recognised that fundamental change to the company is required, yet only lip service has been paid to the idea of change.

When Stephen Elop arrived at Nokia there was a huge opportunity to effect this much-needed fundamental change, but that opportunity was discarded in favour of taking what must have seemed like a safer course of action. I think fans of Nokia will have to wait for a new CEO if they want to see meaningful change.

cycnus

Some innovation is not innovation at all. It just a natural evolution of technology.

For example, after car were build, they found problem, how to alert the car in front of them, and how to tell the car behind them they want to change lane. Therefore, horn and signal light were a natural evolution, not innovation at all..... and so on....

So, in the era of everything analog transform into digital counterpart. I think the management of kodak were really not the best person to run the company if they don't foresee this.

Baron95

You can either accept reality or wish that things were different.

Nokia was disrupted THE SECOND phones became more about SW, content and user experience, instead of production efficiencies, and the like.

SAP is in a very slow moving market with severe barriers of entry. It sells only to enterprises. If SAP (with its culture) had to compete in ANY fast moving consumer field, it would fail miserably. Salesforce.com in a few short years, has already achieve 1/3 of the current SAP market cap.

Lego is a good company for sure, but being privately held it is hard to see how profitable or valuable it actually is.

I'd like to see anyone actually provide the counterpoint that Apple and Google, two silicon valley companies, came into the mobile scene and in 4 years completely destroyed the market cap of Nokia, RIM, et al.

And while at it feel free to point out any blockbuster top movie that did not come from Hollywood.

Or, well, you got the point...

If RIM and Nokia had moved to Silicon Valley in 2007, they'd be in better shape now. Simple as that.

svensson

My first compact digital camera was a 2Mpix Kodak, it died on me soon after warranty expired, never bought Kodak again. But it is an institution and I am going to be equally sad when Nokia falls through the floor as well.
I use Nokia, my wife uses Nokia (the new N9, she loves it) but I see no future in it, Nokia has lost the respect it once had with the youngsters and the general public.
Looking forward to Belle on my N8, 2 weeks until official release here in Sweden, fingers crossed.

incognito

(Argh... The stupid comment system swallowed my comment, I'll try to split it)

@Baron95, you don't have to look far - Slumdog Millionaire, easily, a British production movie (with a British director, and most of the crew being British as well) that has pretty much nothing with Hollywood. Of course, there were some Hollywood-based companies and co-producers involved, which enabled it to compete at the Academy Awards outside of the foreign film category, but that's like claiming that Nokia is a Silicon Valley company because there certainly are some stockholders from the Silicon Valley, and not only that - Nokia has a research center at Silicon Valley (Palo Alto) since 2006.

Also, keep in mind that the term 'blockbuster' has lost its original meaning a long, long time ago - from a term to describe particularly powerful bombs, over the term to describe successful theater plays, and then a term to describe movies that were well received by the audience or grossed more than $100m, to a term that today represents a specific genre of movie that has high-production cost and advertisement budget no matter of its actual success (Godzilla being one of the shiny examples). If you use the more conservative meaning of it, then certainly `My Big Fat Greek Wedding`, an independent movie, would fall under the blockbuster umbrella with it being the officially most successful USofA movie of all time, with its return of investment topping ~6100%!

Since today the term 'blockbuster' has nothing to do with the actual success, quality or a historical impact of the movie, and with it redefined by the Hollywood industry itself (and movies are 'awarded' the blockbuster 'title' arbitrary) it's no wonder that most blockbuster movies are Hollywood-based.

incognito

(Part 2)

Also, same goes for the Silicon Valley 'argument' and its determinable effect on the IT-based companies. Are you saying that Texas Instruments will perish if they don't relocate to the Bay Area? How about ARM Holdings, a British company that has been making fun of Intel in the low-powered arena for almost a decade, and to make it worse a lot of Silicon Valley companies prefer to use ARM silicon (no pun intended) than that of their neighbor Intel? I've been hearing this claptrap about the Silicon Valley for the past two decades while one-hit-wonders and long-term successes were popping all over the world. Sure, with probably the largest venture capital market in the IT world, the Silicon Valley is (still) one of the greatest places to start your IT-oriented business at, but if you're already successful you certainly don't need to relocate there to stay at the top of the game. And keep in mind, for every Silicon Valley's Google, there are thousands of others that die-off. And for every Hollywood's E.T. the Extra-Terrestrial there are thousands of movies that fall under the radar of even straight-to-DVD arena.

You have way, way too USA-centric view of the world.

Alan Moore

I am with Incognito on this (good list btw) - Did you mention Lord of the Rings trilogy from - New Zealand!!

Also look at a company like GrowVC - the worlds first venture fund funded by a global community.

11,000 members in 200 countries.

Alex Kerr

> It took Apple and Google to show Nokia how to re-imagine the phone.
(I know this a quote from someone else, but it's used here)

Did it? It took the iPhone's success to show an arrogant and internally bureaucratic Nokia that it had to sharpen up it's game in the highest end phones a bit, but that is all.

Nokia had touch screens, icon layouts, etc etc in fact everything the iPhone offers, including ecosystem, apps and all the rest, out long before the iPhone. As for Android - pah! It's nothing but a poor man's Symbian. Android is GREAT. But it's STILL nothing but a poor man's Symbian at least in terms of software and the hardware it presently runs on. And it will not have the success people forecast for it either. (Though it will be extremely successful, it just won't rule the world by a long shot).

Anyway, I digress - Apple just polished what Nokia already had done. Android did a poor copy of iPhone and Nokia. Nokia's fall is generally pretty much it's own fault - something that the continually astoundingly ignorant press continue to miss.

Further, Tomi (yes I know the above article is by Alan) has written extensively on how Nokia did not fail because of touchscreens, Apple, iPhone or anything else, and how phones with a keyboard are still way more popular than touch screens and will continue to be so (I believe).

So...let's not have revisionist history just because it fits neatly into a point an article is trying to make. In the context of Kodak, it failed because it failed to recognise and respond to the threat Nokia was (everyone else was just copying Nokia) with their world-leading cameras, their market leadership over years, the sheer number of cameras they were selling (in the guise of phones) AND the picture sharing and other capabilities built into their phones (Nokia have always had by far the most capable and best performing phones at the low and high end). Look at Carl Zeiss for a contrast. Shifted themselves from lens for stand alone cameras to seeing the future, and teaming up with the best phone maker (Nokia). THAT'S how you end up with something like the N8 (in part - I recognise the lens is only one part of the N8 camera's genius). (And again, Nokia's INTERNAL failures alone explain how the N8 does not have the slick responsiveness of the iPhone user interface and the marketing to the public and developers that gave the iPhone it's app base).

darwinphish

@Baron: Your belief that "Kodak could only have prospered, if they had moved their R&D and headquarters to Silicon Valley" ignores the fact that not all Silicon Valley companies succeed. Furthermore, companies, like Xerox, did not prosper despite having R&D there.

Kodak's problem is simply that they refused to disrupt themselves and then had to watch others do it to them. Their's was a failure of vision and leadership, not a failure of technology or lack of innovation. Likewise, Microsoft's problem is not that they are in Redmond, Nokia's not because they are in Helsinkin, nor RIM's because its in Waterloo. Bad leadership trumps geography.

As for the comment about blockbuster movies, I guess you have never heard of Bollywood.

KPOM

In similar news, RIM's co-CEO/Chairmen finally accepted reality and stepped down. Unlike Kodak, they did actually attempt to react to Apple, but didn't move quickly enough. Like Kodak, they couldn't believe that "outsiders" could move as quickly as they did. I've heard that 5 years ago, after the original iPhone announcement, RIM executives claimed Apple couldn't possibly deliver on what they had promised.

Baron95

@Darwinfish - I never said that Kodak could only have prospered if they had moved to Silicon Valley. First, I don't think Kodak could have prospered after photography went digital, just as Nokia could not have prospered after the iPhone.

I was talking about managing the inevitable decline. And all I said is that Kodak could have been in better shape then they are now if they have moved significant portions of the operations to Silicon Valley. Kodak had three main competency. Producing photo print paper, producing film and services to develop film. Photography itself, was a side business, never a leading one. They made some good moves into medical imaging, etc. There was very little competency inside Kodak for the digital imaging world. They were like the horse and buggy company in the advent of automobiles. There is no single company that has any meaningfully large share of digital imaging today, comparable to what Kodak had in the past. Digital imaging simply democratized and diluted the value chain.

The problem with Kodak and Nokia is that the FIRST step in their "stabilization", should be to accept that they would no longer dominate an industry. Only then can they properly plan their business.

@KPOM, unfortunately that Lazaridis and Basille did, was appoint an insider, a clone of theirs as CEO. Heins is the wrong leader. An insider, from Germany, in-ward focused, with no clout at all in Silicon Valley.

No one would ever invite him to do a keynote at CES, nor will he ever command any respect. He will be fired in less than 2 years

The last thing that RIMM needed was another insider at the top. Heins has been directly responsible for all the technical delays.

There could not be a worse choice of CEO for RIMM.

Sad, sad, sad - Short RIM.

HCE


@Baron95

I generally agree with much of what you say but this time I beg to disagree. I do agree that Apple and Google disrupted the smartphone industry. However not all disruptions begin in the Valley. Microsoft has dominated desktop software for so long and they are not a Silicon Valley company (though they do have a branch here). Amazon did to retailing what Microsoft did to software and they are, like Microsoft, based in the Seattle area.

I don't see why you think that moving Kodak to Silicon Valley would have done anything for them. It isn't as if there is some special magic in the Valley that causes innovation to spontaneously spring forth. The reason the Valley produces so many software innovators is because there is a huge pool of software talent here. The valley does not have much talent in photography-related technologies. Most of the talent in the photography industry is in Japan. By your logic, Kodak should have shifted their headquarters to Japan!!

IMHO Kodak's problems started long before the digital revolution began. It started when they decided to basically give up on their camera business and become primarily a purveyor of film and other photography technologies. It also should not be forgotten that Kodak was one of the early pioneers of digital photography. It's just that there were no cameras to put their sensors in! Turns out that CCD and CMOS sensors weren't that hard to make and many of the major camera manufacturer have ended up making their own and Kodak ended up competing with a whole host of electronics companies to supply sensors that did not have their own sensor manufacturing technology. If Kodak had retained its camera and lens division (the way its chief film rival Fuji did), they would not be in their current sad shape.

- HCE

Baron95

Hi HCE - valid questions.

I guess I should have used "Silicon Valley" in quotes.

The same way that "Wall St" doesn't mean exclusively the firms that are on Wall St, New York, NY. "Silicon Valley" doesn't mean exclusively Palo Alto and the immediate surroundings.

WellsFargo, headquartered in San Francisco and Barclay's, headquartered in London, are very much part of "Wall Street", as say, Citibank. They are equally connected to it and equally respected.

Similarly, Qualcomm, based in San Diego, and Amazon, Seattle, are very much connected to the Silicon Valley culture.

Microsoft is somewhat in between, with mature businesses, like Office, somewhat detached from the Silicon Valley culture. But *ALL* the growth areas of Microsoft (including Bing, Hotmail, Skype, XBox/XboxLive, Windows Phone) are centered on Microsoft's Mountain View Campus in the heart of Silicon Valley.

I.E. Even all powerful Microsoft, realized it *had to* be there or suffer.

Regarding Kodak, the SW and Internet Services of Silicon Valley is EXACTLY what Kodak needed. Not more camera expertise. Kodak SHOULD HAVE launched Flixter. Kodak SHOULD HAVE launched Netflix. Just to name two services. They already had a huge "mail-in film, get back pictures business". They already knew how to move pictures from film to digital. It was a crime that they did not invented Flixter and Netflix. If they were in Silicon Valley, they probably would have. With the money they had, they'd probably have started 20-30 new businesses in the past 15 years. Out of that 2 or 3 would have been successful.

That is the Silicon Valley difference. You have to be here to get it.

darwinphish

@Baron: Dude, read what you actually wrote previously before responding. Your exact words, copied and pasted from above: "Kodak could only have prospered, if they had moved their R&D and headquarters to Silicon Valley at the beginning of the digital revolution". Kodak's problem was not the location of their R&D and headquarters. Using your horse and buggy analogy, they invented the internal combustion engine but never took car making seriously. By time they did, it was too late.

The most obvious counter example to your argument is Xerox. They had R&D in Silicon Valley, invented amazing technologies and basically did nothing with it.

Baron95

@Darwinfish - I guess, I literally said that, but I misspoke. You can't edit your comments here. So, I am correcting myself. Apologies to the members for the confusion.

I don't think it is likely that Kodak could have prospered, but it was likely that they could have managed better than they did the inevitable disruption and loss of market power, had they moved to Silicon Valley.

Moving to Silicon Valley or being in Silicon Valley is no guarantee. But if your company is being disrupted by Silicon Valley consumer SW and internet services companies, having a presence in Silicon Valley greatly improve your odds.

Tomi T Ahonen

Hi all

Excellent discussion. I removed a few spam comments and Baron95 - you stepped across the line on being rude on this blog, you know the rules, I removed the comment you criticized someone for using terminology you felt was not modern. This blog has a vast international readership as you know, not all speak or write English as their native language, we will let them use the terminology they want. If you start to accuse writers of using wrong words, I will delete all such comments. You know this. Play nice, Baron and your comments can stay.

PS this is obviously Alan's posting not mine, I will let Alan do most of the comments, but I will also join in the discussion as Kodak alone is a very relevant tech story - and I would have written a similar blog (probably far longer knowing my style haha) not to mention the reference to Nokia.

Tomi Ahonen :-)

Ryan Tracey

Excellent post, Tomi.

Another factor that I would add to Kodak's demise is simply the fact that they forgot how to do the simple things right.

Recently I needed to buy a cheap but handy video camera for my work team. (Mobile phones are great, but we needed a single item to share among multiple people.) Given the demise of Flip, and after reading a few reviews on the web, I decided to buy a Kodak Playfull.

When it was delivered and I took it out of the box - silly me - I realised I needed an SD card. Annoying, but fixable, so I popped out to the local tech store and bought one.

My point is, if Kodak informed me during the online ordering process that the camera needs an SD card - and by the way would you like us to add one to your order? - they would have extracted a few extra bucks out of me.

ノースフェイス

価に(2 +1)が含まれているかどうかわからない場合は評価、ない古き良き時代から多くのプライマリとセカンダリの学校の生徒。

Visio Professional 2010 Download

When the economy is shaken by a powerful set of new opportunities with the emergence of the next technological revolution, society is still strongly wedded to the old paradigm and its institutional framework. Suddenly in relation to the new technologies, the old habits and regulations become obstacles, the old services and infrastructures are found wanting, the old organisations and institutions inadequate. A new context must be created; a new ‘common sense’ must emerge and propogate.

onenote 2010

We have arrived at the edge of the adaptive range of our industrial world. At the edge, because that world, our world is being overwhelmed by a trilemma of social, organisational and economic complexity. We are in transit from a linear world to a non-linear one. Non-linear because it is for all of us socially, organisationally and economically ambiguous, confusing and worrying. Consequently we are faced with an increasingly pressing and urgent problem, WHAT COMES NEXT? And also we are therefore presented with a design challenge: HOW do we create better societies, more able organisations and, more vibrant and equitable economies relevant to the world we live in today? No Straight Lines presents a new logic and inspiring plea for a more human centric world that argues we now have the possibility to truly transform our world, to be more resilient, to be more relevant to us both personally and collectively, socially cohesive, sustainable, economically vibrant and humane, through the tools, capabilities, language and processes at our fingertips.

グッチ

しかし昨秋、国土交通省や亘理町などが堤防の拡幅を検討していると知り、修復工事を中断した。国交省は拡幅に必要な川沿いの住宅地で用地買収を進める方針だが、買収範囲は未定。男性は「範囲が決まらなければ、自宅を移転させるか手放すか、決められない」と嘆く。

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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