What happens when you are in the polarization film business and your daughter asks why she can’t see the picture right away? You invent Polaroid.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us. But we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
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Dave Young:
Welcome back to the Empire Builders Podcast, Dave Young here alongside Stephen Semple. And today’s topic, man, you keep picking topics that take me back to my childhood, Stephen. And for this one, it’s the camera my dad had. It’s the Polaroid.
Stephen Semple:
Is that right? Your dad had one?
Dave Young:
Oh, yeah. Oh, yeah. And it was a great camera. He used to let me take pictures. And he’d set the timer and I’d peel the backing off. These were the old kind, not the SX-70, modern day seventies.
Stephen Semple:
You were old school. You had the little backing you had to peel off. Right?
Dave Young:
Uh-huh. Uh-huh.
Stephen Semple:
Awesome.
Dave Young:
And he had extra doodads and things like a little timer that would snap onto the button so we could do a family pic.
Stephen Semple:
Oh, is that right?
Dave Young:
Oh, yeah.
Stephen Semple:
Wow.
Dave Young:
All the fun stuff.
Stephen Semple:
Well, when I got talking about this with my oldest daughter, Crystal, what I was surprised to learn, and I learned this when I said to her I was going to do this and then discovered more about it. Polaroid is still around. She is a camp counselor in the summertime. Little kids show up at camp with a Polaroid camera. And it’s still the point it and comes out, and you’ve got to wait for a minute for it to it develop. But yeah, it’s still a thing.
Dave Young:
And honestly, the nice part is the algorithm doesn’t get ahold of that image.
Stephen Semple:
That’s true. That’s true
Dave Young:
Big data doesn’t have a picture of your kid If you use a Polaroid.
Stephen Semple:
Well, that’s maybe why they’re giving these little kids to do that. It’s estimated that they do around $770 million in business.
Dave Young:
Wow. Wow.
Stephen Semple:
So it’s not insignificant. Yeah. Yeah.
Dave Young:
I’d say that’s not insignificant, I think.
Stephen Semple:
Yeah. But as we know, it was revolutionary at the time, this whole instant picture. And at their peak, which was 1991, they were doing about $3 billion in business.
Dave Young:
Yeah.
Stephen Semple:
So that’s-
Dave Young:
Man, I would’ve thought their peak was way earlier than that for some reason.
Stephen Semple:
Yeah, that was the peak, ’91. Yeah.
Dave Young:
Just before digital kind of came in.
Stephen Semple:
And kind of messed with a bunch of things. Yeah. The company was founded by Edwin Land and George Wheelwright in 1937 in Cambridge, Massachusetts. But didn’t start off as a camera company. Edwin Land was in Harvard, and he dropped out of Harvard to pursue business. But what he had invented was the coating that polarizes lenses.
Dave Young:
Oh, okay.
Stephen Semple:
So hence the name Polaroid.
Dave Young:
Polaroid. Yeah.
Stephen Semple:
Yeah. And I’ve always wondered about that. Why Polaroid? And it came from that. And the business became huge in 1941 when the US entered World War II, because it was being used for flight goggles. It was massive. Sales went from $760,000 pre-war to like $16 million in 1943.
Dave Young:
Wow.
Stephen Semple:
Selling this polarizing technology. But 90% of the contracts were military. There was no Sunglass Hut yet. Right?
Dave Young:
No. No.
Stephen Semple:
So that was a problem. That was a problem.
Dave Young:
Well, you just had to wait for all those veterans to come home with their glasses.
Stephen Semple:
I guess that’s it.
Dave Young:
That would popularize it.
Stephen Semple:
So, like with so many things that we saw, they came back and all of a sudden things like Scotch whiskey. I want Scotch whiskey now, right?
Dave Young:
Yeah.
Stephen Semple:
So Edwin Land is on vacation in Santa Fe in December in 1943, and he’s taking a picture. And his daughter says, “Why can’t I see the picture now? Why do I have to wait?”
Dave Young:
Right.
Stephen Semple:
Right?
Dave Young:
Sure.
Stephen Semple:
We can all picture a young child saying that, right?
Dave Young:
I’m thinking like Willy Wonka, “Daddy, I want the picture now.”
Stephen Semple:
Yes. Yeah. So this question of, “Why can’t we?” This question sits with him, and he starts thinking about it. And literally within an hour he knows how to do it. Everything becomes clear.
Dave Young:
Really?
Stephen Semple:
His brain is on fire. That very same night, he picks up the phone, calls his patent lawyer, and basically has got enough of an idea to file a patent.
Dave Young:
No kidding.
Stephen Semple:
Yep. ,And he jots down the idea and he creates the name of the project and he calls it SX-70.
Dave Young:
Yeah.
Stephen Semple:
Remember that name, for later.
Dave Young:
Yes. Wow. Okay.
Stephen Semple:
Yeah.
Dave Young:
So here’s the lesson. Can I just interrupt and throw the lesson out right now?
Stephen Semple:
Absolutely.
Dave Young:
Vacation in Santa Fe and take your daughter with you.
Stephen Semple:
There you go. I’m actually going to go a little bit deeper into that. How often do we have great ideas when we’re in these moments of relaxation?
Dave Young:
Absolutely.
Stephen Semple:
And I think a lot of business owners and a lot of entrepreneurs do not take enough downtime. And what’s incredible is I’m in a coaching program called The Strategic Coach. You get together once a quarter and you spend a day. It’s created by Dan Sullivan. It has a phenomenal success rate for coaching entrepreneurs. And one of Dan Sullivan’s number one thing he teaches, number one thing, “You want to make more money? Take more vacations.”
Dave Young:
Yeah.
Stephen Semple:
And his definition of vacation is no calling into the office, none of that crap. Take time away. And I’ve enrolled in this course, and I’m going to tell you, my creativity has gone up.
Dave Young:
Well, you think about Edwin Land in 1943.
Stephen Semple:
Yes.
Dave Young:
He’s vacationing in Santa Fe. There’s no managing your office in 1943 from Santa Fe, New Mexico.
Stephen Semple:
Right. Exactly.
Dave Young:
There’s no emails. You might get a telegram.
Stephen Semple:
Maybe.
Dave Young:
You might maybe get a phone call.
Stephen Semple:
Phone calls were really expensive.
Dave Young:
And you pretty much arranged them, right?
Stephen Semple:
Yes, you did.
Dave Young:
In those days.
Stephen Semple:
Yeah.
Dave Young:
If he’s going to call his lawyer. Anyway, today it’s harder to do because your work just goes. There’s so many of us that just work from home anyway. But the work just goes with you whenever you take vacation, and it’s hard to shut the emails off.
Stephen Semple:
It’s a conscious effort today, where before it just happened.
Dave Young:
Yeah.
Stephen Semple:
But I believe that people need to do more of that. But now, let’s get back to the story of Edwin.
Dave Young:
So at this point, he’s just thought up a camera.
Stephen Semple:
He’s just thought up a camera, and he’s filed a patent. And within a month, he’s got kind of a rough prototype. September, 1945, World War II ends. Cash starts to dry up. So suddenly, there’s a lot more riding on this project.
Dave Young:
Oh, yeah.
Stephen Semple:
So it’s February 21st, 1947, and the Winter Convention of the Optical Society of America is happening. And Edwin decides he’s going to present this idea of this new camera, and he’s going to show it off. And so, he’s invited the press. And what he’s done is he’s modified a regular camera to make this work. And it doesn’t spit out a picture at this point, it happens inside the camera. So here’s how he decides to present it. He’s standing on stage in front of the crowd. He turns the lens on himself, he takes a picture, and all he says to the crowd is, “50 seconds.”
Dave Young:
Wow. So a selfie.
Stephen Semple:
The crowd waits, and he just shows the crowd an 8×10 fully developed picture. The crowd is dazzled. It’s huge news. But what a great way to do it.
Dave Young:
Yeah.
Stephen Semple:
Just walk on stage, doesn’t introduce himself or anything, turns, takes picture, “50 seconds.”
Dave Young:
50 seconds.
Stephen Semple:
And then, shows them the picture.
Dave Young:
Nice.
Stephen Semple:
The next day it’s in The New York Times and other papers. A week later, it’s the Picture of the Week in Life Magazine. And at that time, Life Magazine was just absolutely huge. So now he needs to make a working model.
Dave Young:
Sure.
Stephen Semple:
It takes a year to make a production model along with film. Now he’s got to find somebody to make film. And he approaches Kodak, because they have been collaborating on coatings at this point. Kodak actually gave Land his first contract for polarizing, and it was a coating for camera lenses.
Dave Young:
Okay.
Stephen Semple:
Right? So now Kodak sees it as a toy and a bit of a novelty product, but they do see it as expanding the market for cameras, like a gateway thing. And in an internal release at Kodak, basically Kodak said, “Anything that is good for photography is good for Kodak.”
Dave Young:
That’s back when they were thinking right.
Stephen Semple:
I was going to say, “Could you imagine?” They sure lost their way on that statement, didn’t they?
Dave Young:
Yeah. Yeah, they did.
Stephen Semple:
And boy, they sure lost the spirit of that later in life. And if folks want to learn more what we’re talking about on this, go to episode 148 of the Empire Builders Podcast, where Gary Bernier and I go through the decline of Kodak. And when you’re listening to that, think about that statement. So anyway, go listen, it’s fascinating. But Kodak agrees to help develop the film. November of 1948, after two years, the first camera goes on market as the Model 96 Land camera. That’s what they call it.
Dave Young:
I remember the Polaroid Land cameras.
Stephen Semple:
Yes. Yes. Now, with this camera, you have to wait a minute between shots because the film stays in the camera until developed.
Dave Young:
Okay.
Stephen Semple:
That’s how the first ones worked. And it’s released on Black Friday, 1948. The price is $89.75, which is about $1,000 in today’s money. And it launches in Jordan Marsh department store in Boston and sells out in a day. The first year sales are $5 million. And the most optimistic projection that they had come up with was that at most 50,000 units would ever be sold, total. Well, in the first eight years, they sold a million units.
Dave Young:
Yeah.
Stephen Semple:
Right? So it blew through everything. And the interesting thing about Land is Edwin Land, was actually named as one of Steve Jobs’s heroes. This was one of the people Jobs idolized in terms of his ability of thinking about products and developing products and things along that lines. And Land wanted artists to use this camera as well. He didn’t want it to just be a toy and novelty item. So he hires Ansel Adams as a consultant..
Dave Young:
Cool. All right.
Stephen Semple:
And one of the first things he does, he goes to Meriway Morris, like the first camera was also sepia tones, and he wanted to move it to black and white, and that was a big job. And she comes up with a solution, but there’s a problem.
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
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Dave Young:
Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.
Stephen Semple:
The first camera was also sepia tones, and he wanted to move it to black and white, and that was a big job. And she comes up with a solution, but there’s a problem. They discovered after releasing this the pictures faded fairly quickly, which really upset a lot of customers.
Dave Young:
Yeah.
Stephen Semple:
Remember, no negative. No negative, right? So Land creates a finisher that you can paint over the pictures. But it’s messy, it’s not good, lots of friction. But customers still accept it, even though it’s not the right answer.
Dave Young:
Man, I actually remember that too.
Stephen Semple:
Do you really?
Dave Young:
Oh, yeah.
Stephen Semple:
Wow.
Dave Young:
Yeah, there was a thing that you could wipe over the picture. Yeah. Okay. Okay.
Stephen Semple:
Okay. The next thing that they want to do is create color. And in 1956, they launch instant color, which is huge. And Kodak supplies the film and the stock. And one of the most profitable products of Kodak is actually supplying Polaroid.
Dave Young:
Polaroid.
Stephen Semple:
Yeah.
Dave Young:
Wow.
Stephen Semple:
But here’s where things start getting a little messy. Life Magazine does a cover issue on Polaroid, and there’s no mention of Kodak, no mention that Kodak helped with the development, and Kodak flips out. And in 1963, Kodak decides to respond with a camera of their own called the Kodak Instamatic. Now, the Instamatic is still not instant pictures, it’s just a point-and-shoot camera.
Dave Young:
Sure, with the little cartridge film.
Stephen Semple:
Yes.
Dave Young:
Yeah.
Stephen Semple:
But this film still has to go to the developer, but Kodak decides to klobber Polaroid on price. At this point, Polaroid is $164.95, and Kodak launches the Instamatic at $16.
Dave Young:
Yeah. Yeah.
Stephen Semple:
And basically, they sell in a decade, 70 million Instamatics, really cutting into Polaroid. But this whole idea of quick pictures is really exploding. So by mid-1965, Polaroid launches a new camera. It’s smaller. You can attach it to your wrist, and they call it the Swinger, and they lower the price.
Dave Young:
The Swinger, baby.
Stephen Semple:
The Swinger. They lower the price down to $19.95, and it basically completely sells out. And they do this ad campaign where the jingle is sung by Barry Mannilow.
Dave Young:
Okay.
Stephen Semple:
And this becomes their fastest selling product yet.
Dave Young:
And it’s just a little boxy camera. Right?
Stephen Semple:
Yes.
Dave Young:
It’s not the one… My dad’s Polaroid had this bellows lens that came in and out, and I think the Swinger, just a fixed focus lens.
Stephen Semple:
Yes.
Dave Young:
You just point it, shoot, pull the film out. Yeah.
Stephen Semple:
That’s it. That’s it.
Dave Young:
Okay.
Stephen Semple:
Yeah. But Land is still not a fan. He’s still not satisfied with the results. He wants something that happens in one step. He doesn’t want to have the removing of that backing sheet.
Dave Young:
Yeah.
Stephen Semple:
He wants to get rid of that. So he creates a new kind of photo paper with a strip on the bottom which holds the chemicals, and then squeezes those chemicals across the film. And that’s the reason why Polaroid pictures have got that little strip of white on the bottom.
Dave Young:
Sure.
Stephen Semple:
Which accidentally becomes the spot that everybody loves, where you write, “This was Dave, 1949.”
Dave Young:
Yeah, because you could write on that. But it did, it just squoze it out, and you didn’t have to do the whole peel. And then, you didn’t have this disgusting, sticky, nasty sheet of whatever gunk was left on it to throw away.
Stephen Semple:
Yeah. So land goes back to pitch it to Kodak to make this. And Kodak is still kind of pissed at Land, and they’re also freaking out about how this is really going to change photography. And Kodak would love to bring an instant camera to the market if they get access to the patents. But Land has all these patents. Land patented every step. He had thousands of patents on this. And Kodak says to them, “You know what? We’ll help you with this film, but you need to license it to us.” And Land says, “Nope, not doing that.”
So Kodak refuses to make this new film. Land won’t give in. So now Land’s got to build a factory to produce it themselves.
Dave Young:
Okay.
Stephen Semple:
And really, it’s only a matter of time until Kodak reverse engineers this whole thing. So in 1972, Polaroid starts to mass produce the camera, and they come out with a new one, the SX-70. Finally that name-
Dave Young:
The SX-70. Yep.
Stephen Semple:
… comes up, and that’s the one that folds into itself, so it folds down. And it costs Polaroid almost $1 billion dollars to develop and build this infrastructure for this camera with almost zero market research. There was no market research on this. He just went, “This is a great idea. Let’s do it.”
Dave Young:
I tell you, this is why Jobs loved him.
Stephen Semple:
Mm-hmm.
Dave Young:
Right?
Stephen Semple:
Yep.
Dave Young:
Because that camera, it was the Apple of its day. My dad had the bellows operated old Polaroid Land camera, and his buddy Jack bought the SX-70. And to compare the two next to each other, the SX-70 was just slick. It was leather covered, brown leather.
Stephen Semple:
Yes. It was a beautiful camera.
Dave Young:
And it just snapped open.
Stephen Semple:
Yep.
Dave Young:
It was the size of what? Like a paperback book almost.
Stephen Semple:
Yep.
Dave Young:
And it snapped open. My dad’s Polaroid, you snap, you took the picture, and then you had to reach in and grab the little paper tab that stuck out the back with the film, and you had to smoothly pull it out of the camera and then wait 60 seconds. The Polaroid SX-70, you’d push the button and the motor whirs, and the picture comes squirting out the front of the camera.
Stephen Semple:
Yes.
Dave Young:
It still takes a little while to develop, but it was just a slick, beautiful piece of engineering.
Stephen Semple:
Yes. It’s interesting. When I had heard early in the research on Polaroid, I had heard that Jobs was a fan. And it’s actually part of what made me interested in this because I thought, “Why?” And the more I learned about Land, the more I was like, “Oh, I get it. I get it.”
Dave Young:
Yeah.
Stephen Semple:
Because it was also the whole tactile feel and the look of the camera and all that other stuff. And I was like, “And doing this with no market research and whatnot,” I’m like, “Yep, I get it.” And also, the whole thing coming from just the question of the kid, like saying, “Why can’t we do this?” Yeah, I totally get it.
So the SX-70 comes out, and it’s a monster success on launch. And Polaroid really invests in Hollywood. They go for celebrity endorsements. They get famous artists and photographers using the camera, the stock source.
But Kodak is still a threat. Kodak knows how to make cameras, and they know how to make the film. There’s just the legal problems of patent. So Kodak creates kind of a clunky knockoff, and Polaroid sues. And it takes 14 years, and eventually Polaroid is awarded $900 million. Land dies before the settlement ever happens. And following Land’s death, the company stagnates. And basically, because he passes away in 1991 and in 2001, Polaroid declares bankruptcy.
Now, they were still doing some production and they were licensing, but winding down. And there was lots of lawsuits and changing of hands. Then in 2017, the name and the last factory that was still around was acquired by a Polish investor, Slava Smololowski, who rebuilt the process from scratch. He reverse engineered everything. And today they’re doing like $770 million worth of business. And let’s face it, the Polaroid picture was the inspiration for the Instagram logo. We all know that.
Dave Young:
Oh, yeah, yeah.
Stephen Semple:
Yeah. So it’s really quite a remarkable business and story that all started, all started with a child’s question while on vacation.
Dave Young:
Mm-hmm. Take your kids on vacation to Santa Fe. Maybe it doesn’t have to be Santa Fe.
Stephen Semple:
Right. And again, we talked about this. The thing that’s missing in the world today is this whole part of disconnecting.
Dave Young:
Mm-hmm. Mm-hmm.
Stephen Semple:
There’s a power that happens. I think one of the mistakes entrepreneurs are making today and business people is this constant in business. We work from home. We take our jobs on vacation. I was talking to you earlier about being in this program run by Dan Sullivan, the Strategic Coach program, which is specifically for high-performing entrepreneurs. But one of the big things that Dan talks about, his very, very first lesson is, “If you want to make more money, take more vacations.” And his definition of vacation is a complete disconnect. You don’t check email. You don’t call in. And when started doing this, I had been in the program for a long time, left, came back, and I’m finding my creativity is improving with doing this disconnection. So it’s like, yes, disconnect. Spend time with friends and family, but also allow yourself to pursue these crazy questions.
Dave Young:
Sure. And again, the parallels between Steven Jobs and Edwin Land, they didn’t focus group these things. Right?
Stephen Semple:
No.
Dave Young:
Build the product that you’d love to own.
Stephen Semple:
Right.
Dave Young:
Right?
Stephen Semple:
Yes.
Dave Young:
And trust that there are people that are like you. And once they see it.
Stephen Semple:
Yeah. Because if you had sat down a whole pile of photographers and said, “What would you like in a camera?” Probably none of them would say something that spits out a picture instantly. Their brains wouldn’t be there. That’s the brain of an impatient little kid.
Dave Young:
Yeah, exactly. Exactly. “Why do we have to wait?”
Stephen Semple:
Yeah. Yeah.
Dave Young:
So cool. Well, thank you for bringing the Polaroid story.
Stephen Semple:
Yeah.
Dave Young:
I wish I had one because I’d take a picture of us on the screen together.
Stephen Semple:
And it’s fun to know that it’s still around.
Dave Young:
Yeah. Awesome. You got anything else? Are we good?
Stephen Semple:
Nope. That’s it. Thanks, man.
Dave Young:
Are we set?
Stephen Semple:
Click.
Dave Young:
Thank you.
Stephen Semple:
Click.
Dave Young:
Click.
Stephen Semple:
Thanks, David.
Dave Young: Thank you. Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five-star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at EmpireBuildingProgram.com.
