Ericsson and Kodak

Satoshi Nakamoto 

According to greatest Talmudist alive, Adin Steinsaltz,  life as we see it is not all there is. There is more to existence than our physical and material concern. The holy person is someone, possibly your grocer - but you may feel that he is connected with something "other" ... beyond our ordinary comprehension.

Satoshi Nakamoto is the name used by the unknown person or people who designed bitcoin and created its original reference implementation in 2008. He is not a religious saint, but definitely a  person who is saintly. We sense that he or she is attached to a higher realm, or has someone's knowledge beyond what we can understand

Two iconic companies founded in the 19th century

Kodak was founded by George Eastman and Henry A. Strong on September 4, 1888. It held a dominant position in the photographic film for a century.  After re-emerged from a Chapter 11 bankruptcy in 2013, it still has 1.8 billion dollars in revenues and 6,100 employees

Ericsson was founded in 1876 by Lars Magnus Ericsson; as of 2016, it is headquartered in Stockholm, Sweden. It dominated worldwide the telecom industry for a century and still plays a key role, but it is challenged by the environmental business reality, now digitalized. It has over 100,000 employees.

I love Ericsson. I am part of "gig" economy, the 57 million US freelancers.  I really enjoyed being part of this company. Every person I met is a gifted professional, fanatically loyal to be part Ericsson. I felt that we counted as human beings, we were all important. The satisfaction at work dominates our lives and is essential for our happiness.

Kodak Cryptocurrency move

On January 8 Kodak made a surprise announcement. 

1. Kodak-branded mining rig called the KashMiner, which was showcased at this year's CES. It's created and run by a company called Spotlite, and has licensed the Kodak name. : Users pay $3,400 to rent the mining machine for two years. But here's the catch: You have to give back half your profits
2. The initial coin offering (ICO) for the Kodak-branded cryptocurrency, dubbed KodakCoin, has been scheduled for January 31, but it has been delayed for several weeks following a pre-sale during which 8 million KodakCoins were sold.

Why has been Kodak ICO delayed? We read in a statement on Kodak Website that the interest for KodakCoin is over 40,000 interested buyers.  The delay is being attributed to an extended process of verifying that those trying to invest are actually accredited in the U.S., meaning that they have a net worth of more than $1 million or an income of at least $200,000 per year.

According to CoinDesk

• The project is the result of a deal between Kodak and WENN Digital, and is intended to serve as the underlying token for a decentralized photo rights management platform. The value Kodask stock grew 3x followed by 10% decrease after ICO date was pushed  ahed for a few weeks. 

Stock price of Kodak after the delay in ICO of KodakCoin

Harvard  Business Review advise to Kodak

According to an article from 2016 in HBR 

• Kodak was so blinded by its success that it completely missed the rise of digital technologies. But that doesn’t square with reality. After all, the first prototype of a digital camera was created in 1975 by Steve Sasson, an engineer working for … Kodak. The camera was as big as a toaster, took 20 seconds to take an image, had low quality, and required complicated connections to a television to view, but it clearly had massive disruptive potential.
• Spotting something and doing something about it are very different things. So, another explanation is that Kodak invented the technology but didn’t invest in it. Sasson himself told The New York Times that management’s response to his digital camera was “that’s cute – but don’t tell anyone about it.” A good line, but not completely accurate. In fact, Kodak invested billions to develop a range of digital cameras.

So here is the advice to Kodak from top business gurus at Harvard University on how Kodak could have had avoided the downfall

 If your company is beginning to talk about a digital transformation, make sure you ask three questions:

1. What business are we in today? Don’t answer the question with technologies, offerings, or categories. Instead, define the problem you are solving for customers, or, in our parlance “the job you are doing for them.” 
2. What new opportunities does the disruption open up?  Perceived as a threat, disruption is actually a great growth opportunity. Disruption always grows markets, but it also always transforms business models. 
3. What capabilities do we need to realize these opportunities? Another great irony is that incumbents are best positioned to seize disruptive opportunities. After all, they have many capabilities that entrants are racing to replicate, such as access to markets, technologies, and healthy balance sheets. Of course, these capabilities impose constraints as well, and are almost always insufficient to compete in new markets in new ways. Approach new growth with appropriate humility

 "The American icon had the talent, the money, and even the foresight to make the transition. Instead, it ended up the victim of the aftershocks of a disruptive change. Learn the right lessons, and you can avoid its fate." ends the article.

Anyone can hold the helm when the sea is calm.

Ericsson lessons from Kodak

The first question is, does it make sense in a digital world to issue crypto tokens?

I don't know the answer. I can humbly just bring suggestions to the business minds and turnaround professionals who run a company the size of Ericsson.  Do they consider the three questions above from HBR relevant?

I think with headlines in Financial Times as Ericsson shares down 9% on fifth consecutive quarterly loss the answer could be yes. 

If Kodak issues a coin to serve as the underlying token for a decentralized photo rights management platform,  their business partners are the paparazzi  (according to malicious critics on twitter)

Ericsson engineer Joe Armstrong developed Erlang with the logic of telecommunications in mind: millions of parallel conversations happening at the same time, with almost zero tolerance for downtime. Why Ericsson cannot make a product like Whatsup. which sold for 19 billion to Facebook? Ericsson can make it free for any company using open source Erlang, up to, say, 1 million dollars in profits and but charge a license fee as a percentage if the company makes larger profits?

People forget the Bluetooth technology is also developed by Ericsson

These are some examples where an Ericsson token ICO makes sense. There is a potential to see the shares of Ericsson jump three times to USD 20 per share, simply because it announces the Ericsson professional token.

A well-executed Ericsson 2018 crypto-token ICO may lead in 2018 to a price above 2014 level

Maybe this is wishful thinking,  but the risk for a  pivot is very small It is a way to recapture the value of Ericsson intellectual rights. This will not be a casino chip or a speculative token. This will be based on the value of the entire sales past, present, and future of  Ericsson, and an incentive to a true turnaround.