Don’t protect your property

Gästinlägg av Simon Sinek

It all started in 1885. Grover Cleveland was president of the United States when George Eastman introduced roll film, the invention that paved the way for the development of the motion picture. The film business was such a good business, in fact, that Eastman’s company, Kodak, went on to form an entirely new company whose sole purpose was to manufacture the chemicals needed to develop their film.

In 1936, Kodak introduced 35mm film and life was good.

But then, in 1975, Kodak did something horrible: they invented the digital camera. You heard me right, Kodak invented the digital camera in the 1970s. This was not good. Fearing their new invention would eat away at film and chemical sales, Kodak worked to suppress the new technology.

Kodak made the biggest mistake possible.

As Zig Ziegler said: ”People don’t buy drills, they buy holes”. And Kodak ignored the hole to protect the drill.

Instead of building a business around why people use film, they set out to protect the film itself. No company can suppress an advancement in technology, and certainly not for such a selfish reason as to preserve the status quo to maintain sales of one piece of intellectual property.

And in 1999 it all started to unravel.

Just as digital photography was starting to gain momentum, Kodak’s stock traded at about $80. It has been a steady decline since and now their stock rarely goes beyond between $4 – $5 a share.

The massive loss of money notwithstanding, Kodak has been forced to lay off thousands of workers to stay in business. All because they focused on what they were selling at the expense of why people were buying it.

Imagine if Kodak embraced the reason the film existed and let go of the film. They would be THE pioneer in digital photography.

To paraphrase Seth Godin, the goal is not to find customers for your products, it’s to make products for your customers.

Sadly, other industries were too busy protecting their drills while ignoring the holes to notice what happened to Kodak. The music industry was too busy trying to protect DVDs and an album culture as the world around them moved to an mp3 and song culture. They tried to suppress the spread of mp3s by running around suing 13 year olds.

Even my own publisher, Penguin Books, which is now living in a digital book world, refused to let me give away my book on Kindle for free for a week for fear that it would, and I quote, ”eat away at hard cover sales”. People don’t want a paper-bound book, they want the ideas contained within that book.

Companies obsessed with protecting their intellectual property forget that people are actually buying the application of their intellectual property – why the product exists.

The ones that understand this are the ones that find new and different ways to help people get that application they want regardless the form the intellectual property takes. Call it open source, if you want, the companies who embrace the philosophy are the leaders and the innovators.

Kodak, publishing and the music industry – they are the dinosaurs.

Simon Sinek undervisar företagsledare i konsten att inspirera människor. Han konsulterar, skriver och håller tal runt om i världen om kraften i ett tydligt Varför – om syftet, meningen, tron på något som en stark drivkraft hos oss alla. Simons lika enkla som geniala idé, The Golden Circle, är baserad på biologin bakom människans beslutsprocess.

Simon bor i New York, där han undervisar i strategisk kommunikation på Columbia University.
Hans första bok, Start With Why: How Great Leaders Inspire Everyone to Take Action, kom ut i oktober 2009.



Micco på Twitter ___ The Brand-Man på Facebook

This post is also published on Re:Focus.

21 thoughts on “Don’t protect your property”

  1. Interesting reading.

    However, I disagree in that protecting intellectual property would be a problem. Kodak’s mistake was that they didn’t see or didn’t want to believe in the change of technology and reacted too slowly to this.

    There are thousands of large corporations who know how to protect their intellectual property AND how to combine this with continous product/service development AND of course excel in marketing.

  2. Very good text. Coca-Cola is an example of what Anders is talking about. They have dealt with countless infringements. Interestingly Kodak seem to have lost their way somewhere. In the beginning they actually marketed photography as such. They even tried to call it “Kodackery”.

  3. @Anders Sahlqvist
    The problem dosent lie within protecting intellectual proerty. The problem is when you protect your old intellectual property to the exetent that the new innovations are hidden even from within the organisation.

    Instead you should take advanatage of being early and try to introduce new products in paralell with your old products, and above all realise that even though you are early with an idea, others may have the same technology, and even if a product is not mature enough to release immediately you can at least start adapting your business and be ready for a shift if/when it comes, and then take a lead early on

  4. @Klas2k
    Exactly my point.

    Apple is the perfect example. They’re the leading company in the industry since they continue to develop new ideas into products and services. AND they protect their innovations, designs and trademarks vigorously!

  5. Far from all innovations/intellectual property are outdated. But the main point here is not whether to protect intellectual property or not, it’s if a company should focus its business (and future) on its portfolio of intellectual property – or on customer needs and wants.

    Guy Kawasaki, the first Apple evangelist and responsible for marketing the Macintosh back in 1984, have said: “Patents are nice – in particular, they impress parents – but they aren’t products, and they don’t make people buy products.”

  6. @Micco
    Right. The focus should never be on intellectual property, but it’s a necessity if you want to be really big!

    You will never hear Jobs talk about Apple’s focus on intellectual property. On the other hand, you will never hear Jobs talk about Apple as a complete open source company giving away all their innovations to competitors. They rely on their registered trademarks, designs and patents. Jobs knows it, but it’s something that goes on behind the scenes without him having to deal with it.

  7. True shit. And I know that some of the worlds largest corporations (no names will be revealed, sorry) still pay bonus salaries for patent registrations, even though 99,9 % of the registrations never become a product. That practice is only good in theory, as the employees start realizing that pumping out patent registrations might be the only way to get a decent pay check. (And about Kodak. I do love my Zi8…)

  8. Wonderful read and the thoughts on the music industries mirror what we live with as an actor in the movie industry.

    As an online video-on-demand service – essentially a film distributor – we’re trying to impress on the movie companies the need to distribute in digital arenas. But the history-proven practice of “release windows”, where movies are first released in cinema, then on DVDs, then cable and finally free-to-air TV, dominate. In fact, it still makes financial sense: a movie producer will get more money for an individual title following the release windows practice rather than going for simultaneous releases (“day-and-date releases” as they’re called).

    We’re betting this is a thing that will change, though.

    And we’re trying to impress that upon the content owners in every negotiation. It’s time consuming but an essential part of our business: persuading the movie companies to release to digital quicker and more frequently.

    If you have thoughts on how we can push this development forward, I would of course love to hear from Simon, Micco and you all here think.

    Anders Sjöman

  9. @Anders Sjöman
    First of all, the way I see it Voddler is a terrific product with content people love, although speaking as a (former) user, I was disturbed by the technical problems in the beginning and I guess you lost a few early adopters there.

    But, there’s no question about it, you’re on the right track and my feeling is that once you get one of the major movie companies to use your distribution on an early release stage, the others will follow. In order to get that first company you need a lot more users, a big audience.

    Having that said, I think you need to restart with the “early adopters”, showing us that this time it really works. Movies are a lot of fun – I personally watched many “old” movies I had never seen before that I enjoyed immensely. How you get us back on track, I don’t know.

    As a film lover, one thing I would appreciate is movies from film festivals from all over the world, perhaps even scheduled broadcasts from the festivals.

    I hope you have the endurance, because you’ll need it, both with the big companies but foremost with your contact with the users.

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