Kevin: December nineteen seventy-five. A back room at Kodak in Rochester, New York. A twenty-four-year-old engineer named Steve Sassen is holding a machine he built himself out of spare parts. It's the size of a toaster and it weighs about eight pounds. He points it across the room and presses a button. Inside the box, a sensor reads the light, and the image creeps onto a cassette tape, the same kind, and I'm Carbon dating myself here, you'd play music on. Then he slides the tape into a reader wired to a TV, and a face slowly assembles on the screen in black and white, one line at a time. It works. Sassin has just built the first digital camera, and he's done it inside the company that owns photography itself. He carries it upstairs to the people who run the place. They look at a photograph that used no film, left no negative, and needed no developing, nothing to sell after the shutter clicks. The reaction, in Sassin's own words, years later, is that it's a cute little gadget, but he shouldn't tell anyone about it. So he doesn't. The camera goes in a drawer, and Kodak spends the next 30 years protecting the very thing this little box would eventually destroy. But in a departure from our usual format, there was something different about this Ctrl-Z. There were two separate moments handing the company a clean chance to make the smart decision. Both times, it refused. So today, we take those two decisions and we try them the other way. Let's hit Control-Z. Welcome to Control-Z Rewritten, the podcast where we take the biggest decisions in history and ask, What happens if they go the other way? Not random what-ifs, but real 50-50 calls with alternatives that were actually on the table. Two decisions where we hit Ctrl-Z, try them the other way, and see what changes. In the 1970s, 90 cents of every dollar Americans spent on photographic film went to one company. And 85 cents of every dollar they spent on cameras went to the same place. Kodak employed 145,000 people. It ran about 2% of all industrial research happening in the entire United States. Its yellow logo was a household name on every continent. But Kodak didn't really sell cameras. It sold the camera cheap and sometimes it even gave it away. It made its fortune on everything you did afterward. The film you loaded, the paper your prints came back on, the chemicals that developed them. And the processing itself. It's a razors and blades principle. The razor goes out cheap because the company knows you'll buy blades for the rest of your life. Every photograph snapped anywhere on Earth was one more tiny blade, and the money rolled into Kodak at a margin of 70%. Of every dollar that came through the door, 70 cents was pure profit. Take a digital photo and strip that down to what it actually is. And you find light landing on a sensor, turning into a file, sitting on a microchip. The film, the paper, the chemicals, the processing, basically every single thing Kodak sold twice over is gone. Making one is nearly free. Keeping it costs nothing. And the instant the shutter clicks, there's no blade left for Kodak to sell. Which means the business with the most to lose from digital photography was the one that invented it. Kodak saw exactly what it had, a machine that could erase its own empire, and decided that the safe move was to lock it away. In 1981, Sony released a camera called the Mavika that recorded its pictures onto small magnetic disks instead of film. It stored those pictures as an analog signal, the same basic technology as a videotape, which made it electronic, but the step short of truly digital. But it needed no film at all, and that was enough to rattle Kodak. One executive later described the reaction inside the building with a single word, fear. The company had a man whose whole job was reading the future. His title was Head of Market Intelligence, and his name was Vince Baraba. The CEO handed him a question: Is this filmless idea a real threat or is it a toy? Baraba ran a serious study looking at the technology on both sides and How fast customers might switch and how good these new pictures could realistically get. The answer came back in two parts. Digital photography would eventually replace film completely, and Kodak had roughly 10 years before the ground started to give way. Kodak paid for that study, and its own people signed it. Five years later, in 1986, the company's labs proved the forecast right by building the first sensor. That could capture a million dots of detail, also known as a megapixel, which is the exact milestone Baraba's report had flagged as the turning point. Now, a business with 10 years of warning and a crystal ball, it built itself, has one obvious move. Start becoming something else. Kodak's own founder had already done exactly this. George Eastman threw out a money-making product on two separate occasions. each time a better one came along, killing his own bestsellers on purpose before a rival could. The playbook was sitting right there in the founder's biography, but Kodak did the opposite. Leadership took a report that said digital would win, and they used it to calculate how many more years they could squeeze out of film. They aimed their own digital research back at the old product, using the new technology To make film a little sharper. So here's where we press Ctrl Z. So this time, Kodak acts on its own report. Starting in 1982, film stops being the thing the company guards and becomes the asset it quietly drains, a block of ice sold off hard and fast for every dollar it's still worth, while that money builds whatever comes next. First move is the chip. Every camera needs something to catch the light, and in the digital world, that something is the image sensor, a flat square of silicone that turns light into data. Kodak built the first good one in 1986. In the alternate timeline, the company decides its real product is the sensor itself, the part every camera will need and almost nobody else knows how to make well. Through the 1990s, Kodak's engineers shrink it, make it cheaper, and switch it to a newer design that sips power instead of gulping it. By the time the first camera phones appear after 2000, a Kodak sensor sits behind a huge share of the lenses on the planet, earning a few cents on a staggering number of devices. That chip business is a real thing from our timeline, by the way. Kodak ran it for years. Then, in 2011, broken out of options, The company sold the whole thing off a few months before it went bankrupt, handing away the one piece of the future it had held onto since 1986. But in our version, like Jack Dawson, Kodak never lets go. The second move is chemistry, and this is the one that saves everything. So strip film down to what it really is, and you find a hundred years of knowing how to coat finicky chemicals onto a thin sheet in perfectly even layers. That skill travels a long way from photography. The same coding know-how makes the optical films that go inside flat-screen TVs. The gelatin that suspends the light-sensitive chemistry in film comes from collagen, the molecule that also keeps human skin firm, and it becomes the base of a skincare line. The imaging expertise becomes medical scanners. And Kodak builds all of it the hard way in its own labs. Instead of writing checks for companies it doesn't understand. And it ends up with three or four solid businesses that have absolutely nothing to do with taking pictures. By the time the iPhone arrives in 2007 and clears ordinary cameras off the face of the earth, Kodak barely notices. The cameras were never where the money lived. By 2007, Kodak's revenue comes from the sensors inside those phones. The optical film inside every laptop and television screen sold that year, the skincare line, and the medical machines. So when 2012 rolls around, which is the year the real company filed for bankruptcy, this version of Kodak is a smaller, stranger, perfectly healthy business that happens to have started out making photographs. So even here, film dies. A decade of warning can't keep the product alive. But what it changes is everything around the product, because it gives Kodak the years to grow new businesses, so that when photographs stop paying the bills, plenty of other things already do. The company still shrinks from 145,000 employees down to something far smaller, and the city of Rochester still feels every bit of it. The control Z prize was survival, the plain, unglamorous kind. A future where the company simply still exists. And that prize was real. A company actually lived it. We'll get to that later. That entire future depended on Kodak listening in 1981, and the real Kodak never did. It kept protecting film, it kept milking that same monopoly, and carried that grip straight into the 90s, which is where history almost mercifully hands Kodak a second chance at the very same mistake. By 1996, you didn't need a crystal ball anymore. Digital cameras were already on store shelves, they were expensive. Clumsy, low resolution, but they were real, and they were visibly getting better every single year. Even a child could see where the line was headed. And right in the middle of that, Kodak gathered four of the biggest names and cameras Fuji, Canon, Nikon, and Minolta, and quietly spent more than $500 million under the codename Orion building a brand new format. But that new format was film. Smaller film, in a slick drop-in cartridge with a handful of clever features bolted on. They called it Advantix. You dropped the cartridge in, closed the door, and the camera pulled the film into place for you, with no fumbling and no way to load it wrong. A magnetic coating on the film recorded the date and the light reading for every frame, so the lab could turn out a better print. You could pick the shape of each shot as you took it. So a standard photo, a wider one, or a long panoramic strip. Kodak had taken 35mm, the film standard the whole world had leaned on for 60 years, and engineered every last hassle out of it. At this point, film still ran the entire planet. There was a photo lab on every corner and a drugstore counter in every town that did nothing all day but develop roles. There were billions of film cameras already sitting in pockets and closets. And dropping off a roll to pick up prints the next afternoon was simply what taking pictures meant. It was a habit that was a hundred years deep. Kodak looked at all of that and made the bet that a lot of smart people would have made. Film had years left in it, and a better cartridge could buy more of them. So Kodak poured all of that money, plus five of the most powerful companies in the business, into a sharper version of the one product. Every executive in the room knew was already dying. And the other choice was sitting right there. Take the 500 million, take the engineers, and aim every bit of it at digital instead. Control Z number two. In 1995, Kodak kills Advantics before it ever ships. The money and the people swing over to digital, and the company commits five full years earlier than it did in the world we. Actually For a while, it works beautifully. Kodak walks into the digital camera boom of the early 2000s as the brand everybody already trusts, and it runs the table. The real Kodak briefly topped the American digital camera market in 2005, the same year its digital business finally outsold film for the first time. And that was the half-hearted version, the company barely trying. The committed version owns the whole category. Kodak builds the place where people store and share their pictures online years before the world has a name for it. In reality, Kodak actually bought a photo sharing site in 2001 and just let it quietly rot. Here, it doesn't. For most of a decade, the comeback looks complete. But then 2007 happens. The iPhone. Inside of a few years, the standalone camera becomes a dead object. Nobody carries a separate one anymore because the phone already in their pocket is good enough and it's already there. On top of that, the pictures go somewhere Kodak doesn't own, onto apps with names like Facebook and Instagram, built by other people entirely. The whole digital empire Kodak just spent 10 years winning evaporates in about 36 months. In the real world, Its share of the camera market dropped from a quarter of the country to almost nothing in five years, and none of it had been making real money anyway. This Kodak survives. Barely and smaller and bruised, but it survives, walking into the 2010s as a mid-sized outfit that still makes cameras and sensors and runs a photo service. The real Kodak walked into those same years and disappeared. A nineteen ninety-six Head Start bought just enough time to win the digital photography market, and not one year more. That was the ceiling, and it was the one market the phone showed up to take. Everything I just described in that 1981 timeline, the chemistry company, the screens, the skincare, the survival, that all actually happened. A real business stared down the death of film, made the hard pivot, and came out the other side alive and growing. It just wasn't Kodak. It was Fuji. Across the Pacific Ocean, Fujifilm started from the identical trap. In the year 2000, around 60% of its sales and two-thirds of its profit came from film, every bit as hooked as the giant back in Rochester. Then, a new boss named Shigitaka Komori did the thing Kodak's own report had recommended back in 1981. He made his scientists lay every single technology the company owned out on a table. And he asked one blunt question: Film is dying, so what else can these skills build? The answers turned into real products. The coding skill became a special optical film called FujiTac, which today sits inside roughly 70% of the flat screens on Earth. So the phone you might be holding right now, the laptop on your desk, and even the television on your wall. The gelatin and collagen knowledge became a skincare line called Astalift, not Astlift, though that is a tempting way to say it. The chemistry went into pharmaceuticals and medical scanners. And over the same 10 years that Kodak sales fell by almost half, Fuji's climbed by nearly 60%. It was the same starting line, the same dying product, and the same 10-year warning, but the opposite ending. The difference between the two came down to timing. By the time the smartphone showed up, Fuji had already stopped being a photography company. So the phone took a business it barely cared about anymore. The real Kodak met the same moment still selling films and prints and lost the entire company in the process. The cautionary story everyone tells about Kodak is that it missed digital photography. But that story is backwards. Kodak invented digital photography in 1975. They built the first megapixel sensor in 1986. They shipped the first professional digital camera in 1991, and by 2005, they sat at the very top of the American market it had created. Then Seven years later, Kodak filed for bankruptcy. You cannot miss a future you invented, built, shipped, and led. Kodak saw into the future in writing twice, and both times it chose the past. Strip the technology out of the story, and you're left with something simpler and more difficult about what a warning is actually for. A warning that says you have 10 years is a gift of time. And time is the rarest thing a dying business ever gets. Time is what you spend on the only move that actually works. You stop being the kind of company the future is coming to kill. Kodak got that gift in 1981, a full decade of it, and spent every year of it defending the very thing it was being told to walk away from. Then it got a second, smaller gift in 1996: $500 million and a clean shot at the future. And it spent that one building a better film. By 1996, the second warning couldn't do what the first one could. Ten years is enough time to walk off the battlefield. A few years is only enough time to win a fight on the ground that's about to be wiped off the map. The earlier the warning, The wider the door it opens. Kodak got the earliest warning in the entire industry and stood in front of that open door for 30 years. Back down the hall in a lab in Rochester, the first digital camera ever built sat in a drawer the whole time. The company knew exactly what it was because its own people had run the numbers and written the report. The real undo button sat right there on the desk twice. And nobody ever pressed it. Decisions don't get do-overs, but on this show they do. If you like the show, please rate and subscribe wherever you happen to be listening. It helps other people find the show and allows me to understand whether people are actually enjoying it. Until next time, I'm Kevin Perez Allen. Thanks for hitting Ctrl-Z with me.