Steve Jobs and the Polaroid Camera

He is no longer with us, and the world is poorer for it.

A restless college dropout, he founded a wildly successful company whose innovative products touched millions of lives. He was a brilliant, dictatorial, and pushed his staff to solve one impossible problem after another. He had no use for conventional market research, and trusted his own vision to create products with little detectable demand that flew off the shelves upon introduction. He guarded his personal privacy but reveled in his role as a master magician on stage when introducing his firm’s latest innovations to eager crowds. Investors had big smiles as the shares went up and up. Despite his demands, he was loved by employees and even by his competitors.

This could be, but this is not a tribute to the late Steve Jobs. It describes Edwin Land of Polaroid.

The son of a scrap metal dealer, Land dropped out of Harvard to pursue his own research at the New York Public Library on polarized light filters. After the war, he turned his attention to photography and introduced the Polaroid-Land instant camera in 1948. Despite a high price the first shipment of 57 cameras sold out in a matter of hours and the firm never looked back.

Sales boomed as the cameras and film became smaller, lighter, easier to use, and less expensive. The shares became a “glamour” stock growing tenfold in just five years from 1963 to 1967.

Land’s inventive genius had resulted in an astonishing new industry with technology protected by over 1,000 patents. Land held 535 patents, second only to Thomas Edison.) Eastman Kodak was forced to pay Polaroid nearly $1 billion to settle a patent infringement suit and withdrew from the instant camera business. Polaroid shares reached an all-time high in mid-1972, during excitement over the ingenious new SX-70 single lens reflex color camera. Polaroid was not only the undisputed leader but outsold all other global competitors combined.

Land was one of Steve Jobs’ heroes, and the youthful computer tinkerer from California felt almost a mystical connection with the man 46 years his senior. Both were impatient perfectionists, often driving themselves even harder than their overworked employees. When Jobs had the opportunity to meet Land personally, he found that he and Land shared a peculiar characteristic: Both believed that new products were not invented so much as discovered. Both could visualize a product that did not yet exist down to its smallest details, and the task of development was thus akin to Michelangelo’s description of sculpture: The artist’s task was to remove the unnecessary material to reveal the beauty already contained within the stone.

Polaroid filed for bankruptcy in October 2001. The research labs and film factories were shuttered, although the brand name, traded from one sharp-elbowed financier to another, survives as a ghostly reminder of its illustrious past. The years have been kinder to Eastman Kodak, but not by much. Founded long before Polaroid in 1888, it has outlived its former adversary but now struggles to avoid a similar fate.

An important message for investors

The forces of competition are relentless, and today’s innovation becomes tomorrow’s cheap commodity and then a car boot sale item. We have no reason to believe that Apple has anything but a bright future, but those who choose to ignore the benefits of a diversified portfolio to invest into a few fashionable companies, should consider the fate of Polaroid. Hundreds of other familiar names have fallen by the wayside in the past, and before they fell off the summit, the admirers declared, “It will not happen here.”