Insights into Business Revival and Market Disruption, with Ben Gibson

Embark on exploring the corporate world's natural progression with tech industry veteran Ben Gibson as he and host Gary Pageau navigate the "EMFL" model together. Gibson sheds light on how companies are born out of innovation and mature through marketing, financial acumen, and sometimes, legal restructuring. Anchored by Gibson's rich experiences at large companies like GE, Eastman Kodak Co., and Logitech, the discussion offers an analytical lens to predict where a business stands and foresees its trajectory; it's a deep dive into the corporate lifeline not to be missed.

Are market disruptions the secret ingredient for corporate longevity? Gibson unravels this conundrum as he recounts the phenomenal pivot of Apple and how defying the status quo propelled them to new heights. He discusses the Business Model Canvas to dissect the alignment (or misalignment) of innovative products with market needs, spotlighting the successes and pitfalls of giants like Nike.

The conflict between short-sighted stock analyses and visionary long-term planning takes center stage. Gibson shows the contrast between the outcomes of companies like Fujifilm and

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Chapters

• 0:02 Business Life Cycles and Innovation Trends
• 14:17 Lessons in Business Model Innovation
• 22:38 [Ad] OWNR OPS Podcast
• 23:18 (Cont.) Lessons in Business Model Innovation
• 27:07 Strategic Long-Term Planning in Business
• 32:04 Future of Kodak and Printing Industry

Transcript

Erin Manning: 0:02

Welcome to the Dead Pixel Society podcast, the photo imaging industry's leading news source. Here's your host, gary Pegeau. The Dead Pixel Society podcast is brought to you by MediaClip, advertag Printing and Independent Photo Imagers.

Gary Pageau: 0:18

Hello again and welcome to the Dead Pixel Society podcast. I'm your host, gary Pajon. We're joined by a returning guest, ben Gibson, who's a technology industry consultant with numerous blue chip clients in the past, including GE, ibm, eastman, kodak and Logitech. Hi Ben, how are you today?

Ben Gibson: 0:38

I am doing very well. How are you, Gary?

Gary Pageau: 0:40

I'm doing great. Now. People may remember Ben from his appearance on the first and so far only panel discussion we had on the Dead Pixel Society podcast. About kind, about more of a general business trend or concept, or I'm not sure what you call it, Ben, but it's a way of determining what stage a business is in and where it's most profitable. So first, before we get into that fun stuff, can you do like a 30-second history for the listeners?

Ben Gibson: 1:23

Well, um sure, and you know, I guess I would best characterize myself as, uh, as an engineer you know so.

Ben Gibson: 1:30

I, I, uh worked my way through college fixing bowling machines. Uh, got a, got a degree in engineering and then went to work at GE working on really geeky stuff um, like digital signal processing for submarines, and Kodak hired me to do digital signal processing for imaging right Photo CD cameras, et cetera, et cetera. So that's how I migrated there and I had a great first phase at Kodak, left there in 2010 and went to Logitech and worked on audio. So I then switched from, you know, sonar and radar to imaging, to audio right.

Ben Gibson: 2:05

Making making waves, as I like to say.

Gary Pageau: 2:09

Now, that's the name for a book. If you do your autobiography. That's the name Making Waves with Ben Gibson.

Ben Gibson: 2:15

That's right, making Waves so. But you know I started to notice. And then, you know, I did some consulting with IBM and again Kodak. So you know I started to notice that, started to notice that I've always been a systems engineer, right. So systems engineer is very much about life cycles input, output, signal to noise ratio noise you amplify and then you dampen and all that kind of stuff. And there's very much a cyclic nature to everything we have, even our own lives, right. And so so I started to say, well, I started to just notice these patterns and I don't really know how I came up with the name so much.

Ben Gibson: 2:50

But then you say, well, you know, in a business, you know they're started by engineers and then they're run by marketing and then they're run by finance and then they're run by lawyers. The end, right, you know, you think about your startup company going. You know, trying to find product market fit, doing very technology focused. And then you know, once you find that that fit, the marketing, people come in and just try to massively scale it globally, everywhere, right, that one thing.

Ben Gibson: 3:17

And then you know, when you run out of customers and every, every company runs out of customers, at some point, you know the shareholders still want their money. And then they say, oh well, I guess instead of getting the money from the stock growing, we're going to get it from dividends, right? And then they start managing costs because they can't rely on revenue growth anymore. And then you know that leads to eventually. You know, if you don't have revenue growth, you're eventually going to run out of earnings to leverage. And then what happens is all hell breaks loose and you end up in the lawyer phase and that's when everything gets cleaned up right. So almost every business has that life cycle associated with it. So you know I called it EMFL because you know it's engineering, marketing, finance, lawyers, right?

Ben Gibson: 4:05

And you know and you can take almost any company and you can analyze it and say hey, what phase are they in? Right, is revenue growing, are they?

Erin Manning: 4:12

innovating.

Ben Gibson: 4:13

And you know you can sort of figure out where they are and what they're going to do and be very predictive of what so there's different characteristics, you know, and just as an aside, so one time I was asked to present at a conference with Vince Cerf, who is the Google guru, was in the morning, he was the keynote speaker in the morning talking about innovation at Google, and they had asked me to talk in the afternoon about why innovation fails. So why innovation succeeds and why innovation fails. Right, so you know why innovation succeeds and why innovation fails. And you know I was kind of like a little bit offended when I was asked to do that. I said well, first of all, innovation doesn't really fail. Every company tries to innovate, but innovation looks different depending on where you are in that business.

Erin Manning: 5:01

Yep, yep.

Ben Gibson: 5:02

Right. So anyways, so I got you know, you start digging into, like you know, what phase the company's in and who's running the company and and all of that kind of stuff, and and it starts to create a pretty, a pretty simple model, Right.

Gary Pageau: 5:17

So, for example, Well, I go back to your speech. What was your? Go back to the speech. I want to hear about your. You know what Vin said and what you said. Was it like point counterpoint?

Ben Gibson: 5:27

Well, we weren't speaking together, it wasn't a panel discussion, but obviously Google and you think this was probably five or six years ago so it wasn't the Google that Alphabet's having their own issues with the marketing and finance phase right now?

Ben Gibson: 5:42

right, you know, but he was talking a lot about you know, their playground, right, and how they would try certain things in their playground, and in fact, you know. I'm glad you asked that question because there's a really good example of two companies that I have experience with when I was. So Google has this sort of they throw spaghetti against the wall with very smart people and they they try different things. And an example that they had was Google TV. Right, if you remember that product, they went, they got together with Intel, they got together and they were going to build a set top box and put a mouse, keyboard and camera on everybody's TV and life was going to be wonderful and they spent a lot of money and then they needed somebody to build the mice and keyboards, and of course, logitech's like raised their hand and go, wow, this would be great.

Ben Gibson: 6:34

Right, we're going to do, we're going to do Logitech or we're going to do mice and keyboards for Google TV, and you know, but but Google was not committed to the workflow yet. Right, they were committed to the concept of Google TV, but Logitech, by building a specific mouse and building a specific keyboard, was committed to a certain workflow, right. So what happened in that case was Google did their typical experimentation and they said, hey, this is sort of working, but let's, let's pivot to Chromecast, right, right, because everyone's using their phone anyways. Right, so let's pivot to Chromecast and and Logitech sitting there with mice and keyboards. So, in other words, you know, they can't pivot.

Erin Manning: 7:17

Right.

Ben Gibson: 7:18

So you know Intel and Google pivot and Logitech can't pivot, and Logitech, sitting here with you know a hundred million dollar loss and you know this is a very profitable, successful company that did not need lines of credit and did not need self-funding Right. So so all of a sudden, you're left with a hundred million dollar hole and you know you have to go.

Gary Pageau: 7:43

And a bunch of custom made gear you can't get rid of.

Ben Gibson: 7:45

Yeah, exactly, you know, the worst time to go to a bank for a line of credit is when you need one. Right, right.

Gary Pageau: 7:50

Exactly.

Ben Gibson: 7:51

But you know they've recovered and Bracken Darrell did an amazing job turning that company around and they're doing very well now. But it's an example of you know, here's a company that was sort of in the marketing phase of Logitech and a company in the engineering phase of Google at the time and you know, innovation looked very different for those two companies. Right In that one example, right.

Gary Pageau: 8:14

Yeah, that's a great example because it does kind of talk when you see what's happening, like in the photo space. There are different people trying to partner up and it is almost a phase mismatch Maybe that's a phrase we can catch right, where you have some crazy startup who wants to create some sort of printing thing but they've got a partner with a very traditional printing platform who is probably in the finance phase, right, yeah, you know, they're about kind of maintaining, you know controlling costs and maintaining production workflow, and you know, and they're just going to. You know they're they're. They're about kind of maintaining, you know, controlling costs and maintaining production workflow, and you know, and they're just going to. You know milk that thing forever. And then, but you got someone coming in who's all jacked up with engineering, they're. Well, can you put a gloss on this one corner of this picture? You know, I can just see where that would be. A phase mismatch would be a big challenge, I would imagine.

Ben Gibson: 9:01

Yeah, well, and, and to that point it is a phase mismatch. But you know, let's look at Indigo, right, because Indigo, if you compared it to Xerox and other technologies that were doing electro photography, the one thing that Indigo did was it had the finishing platform that you could just plug and play different finishing modules onto right. The innovation wasn't the ink or the it was, it was the ability to finish.

Gary Pageau: 9:26

How dare you, sir, how dare you?

Ben Gibson: 9:29

I know I might, I might, I might go to chemistry hell for that one, but the reality is but that that's different phases of of the workflow, right and I'm going to get a nasty letter from Indigo HB going. You know, know this is wrong, but you know if, if indigo thinks they won because of the ink, they need to talk to their finishing department well, no, I'm agreeing, I'm just saying I'm sure the finishing engineer lead is probably going yeah, go you know, go, go, go.

Gary Pageau: 9:58

I tried to tell him that you know, uh anyways.

Ben Gibson: 9:59

But the point is is you know anyways. But point is is that you know every company is is on some phase of the life cycle right. And companies. You know an example some companies have very short lives on a life cycle.

Ben Gibson: 10:14

You know, if you take a Yahoo or an Instagram or something like that, I mean they're they, they scale massively, they're very popular, but then they can't hold on because TikTok comes along, right, right, and the next thing comes along. So tech companies, like apps, tend to have very short life cycles. We can think back to the time when Yahoo was talking about. Yahoo went from workplace food and work-life balance and everything to restricting work life, right, and cutting costs and cutting all that stuff right, right, uh, and, and oftentimes, um, you know, cult, you know, nobody ever puts in their deck, in their, in their investor deck. We're going to create a really crappy culture, right? Nobody ever hires an hr person to say that and put that in the investor deck, right?

Gary Pageau: 11:06

but hire a celebrity ceo. Who will, who will poison our culture?

Ben Gibson: 11:11

but when companies go into the finance phase and they can't grow revenue and they have to start cutting costs and earnings becomes the way they pay their shareholders back, those cultures become toxic. So a great culture turns into a toxic culture. Did somebody build a toxic culture? No, they just ran out of money, right.

Gary Pageau: 11:29

Well, well, well, I would say that the customer changed right. The customer changed from being end users of the product to the shareholders.

Ben Gibson: 11:59

Well, that's right. And, by the way, I mean this this kind of. There's another example of like when companies are in the marketing phase and you buy a stock, you make your money when the stock price goes up. If you buy a stock like IBM or a company that's in the finance phase, you're looking at dividends, right. So when you see things like dividends increases or stock buybacks right, they're trying to use the stock to attract shareholders. But companies in the engineering and marketing phase are using product to attract shareholders right, exactly.

Ben Gibson: 12:37

So you see these patterns sort of like heating themselves over and over again. You can look at a company and say, well, who's buying their stock? And you can sort of tell, or what you know are they talking about. What are they talking about in their press release? You know, are they talking about revenue growth. If you have a revenue story, every company will tell their revenue story. If you don't have a revenue story, you tell an EBITDA story.

Gary Pageau: 12:57

Right, right, exactly.

Ben Gibson: 12:58

Anyways, if you, if you see a company, you read I read countless financial, you know when, when, when reporters are reported and I read them and I look and say, well, what's the PR person leading with? Are they leading with EBITDA, are they leading with revenue? Right?

Gary Pageau: 13:12

Well, I think it was interesting. There's a company I'm not going to say their name, but I'm not, I suppose I could but it's a small lighting company. Their big thing was coming with lighting gear, right, and they got really popular with content creators and, uh, bad quarters, uh, because they had to restructure and stuff and now but now they're really pushing with. We're going back to our release cycle of three to four new products a year that they think that's going to rejuvenate the gum can. Can a company really do something like that if they've been down a path and they realize they've kind of like, hey, listen, you know we're not doing the product innovation like we should. We can, course, correct, correct.

Ben Gibson: 13:55

Yeah Well, you know that is a great question. And in general, no, in general, companies do not go backwards once they've gone forwards. You know we try to get young. I mean, look at human beings, right, we try to get younger. I don't know about you, but maybe, if I'm lucky, I can look younger in six months, but I'm not going to be younger in six months.

Ben Gibson: 14:17

And the only times I've seen companies successfully go backwards there's two examples. The most obvious example is mergers and acquisitions. So if you see a company, they split, they take the growing part and they create a new company. They take the old part, they throw it into some sort of a private equity and flush the cash out of it. You see that kind of a situation. The new entity can move backwards, right, and then you know you have the Apple situation where you're a PC company and then you launch a product that's just a killer home run product and there's so many companies that think they can do that, right. But you can maybe only point to three or four times that it's really happened in the last, you know, two or three decades, you know it was funny because I read over the summer.

Gary Pageau: 15:09

My beach read was Steve Jobs biography. The Walter was Walter Eisenstein who wrote that and it was just interesting to me because he's on such a pedestal with a lot of the business community and he did a lot of interesting things, but a lot of it was just and I'm not gonna say luck, but timing. When he grew up in Silicon Valley, being able to call up HP and get chips to make his stuff and having a technical expert in Wozniak, as is one of his best friends, and the VC money being there from Silicon Valley, you know, just the timing is really what which would make it, which makes it much more difficult to think you can do that now.

Ben Gibson: 15:53

Right, and timing is a critical element. And you know one of the things usually you know after I get you know people ask me about well, how do you, how do you prevent this from happening? Right? Well, you don't sort of, but but you can't stop aging either, right yeah?

Ben Gibson: 16:07

You can. You can be aware and delay it. Maybe Right. And one of the ways you delay that is to constantly question your assumptions. I mean, you think about the only way humans can make decisions is to make. You know you have facts and you have assumptions and you have to make and there's a risk associated with that box of facts and assumptions and you make a decision and sometimes you get it right and sometimes you get it wrong. But constantly revisit your assumptions, like when you look and say, well, I have this great idea, and then you learn that you know there were a lot of great ideas that that we had in the 90s, that you know there just wasn't enough bandwidth in a, you know, a 28.8 modem to execute, right.

Ben Gibson: 16:45

Yeah, you don't even think about bandwidth now right, yeah, bandwidth is in consequence.

Gary Pageau: 16:49

I remember I was having a talk with uh, well, it was joe rundy, I know.

Gary Pageau: 16:53

If I remember remembers dr joe rundy from the photo industry, obviously one of the smartest people in the pr game back in the day and we were talking about uh. When he was doing uh with kodak dna I, he was showing me some camera, some digital camera prototype or something. Early on I was getting pre-disclosed. I felt like I was on one of the cool kids, you know. I said, joe, this is. You know, why are you guys doing this? Because you know people shoot less film and he goes well, you've. You know, you've got it. You've got to kill your children to move forward, you know. So I think kodak was trying to do that in some ways and it may have been a timing or an execution or something, but they kind of had that attitude back then that we've got to do this because or else someone else is going to.

Ben Gibson: 17:36

I think companies do, and you know we could talk about that for hours, but let me let me give you a more relevant example.

Ben Gibson: 17:42

So there's this tool called the Business Model Canvas, yeah, and it's pretty famous, many people have heard of it, and when you look at that and you look at the margin and the material velocity of different services and products that a company provides, when you get an incompatibility and let's say, I want to innovate, my entire ship is moving in one direction and I want to innovate in a different direction. I can't move that ship, right, right, and so you know it, it it gets out, it gets out of sync and what you're seeing is you know there was a big rush for direct to consumer. You know every brand was going to go direct to consumer, right, and you know Nike, just because of their, their skill, their scale, had some luck with it. But you know it's really, really hard to do, because if you were to create a business unit that's a channel, it's going to have a different model. You can't optimize your operation for two different business models, right? So, going to have a different model. You can't optimize your operation for two different business models, right.

Ben Gibson: 18:37

So if you have a high velocity channel with 20 points of margin and a low velocity channel with 60 points of margin. You can't build a system that will optimize those two simultaneously.

Gary Pageau: 18:47

Oh, come on, there's some Harvard MBA out there who thinks they can do it.

Ben Gibson: 18:51

Yeah, Well, you know, maybe there's a pivot table in Excel that I missed. People are always trying it. That I missed.

Gary Pageau: 18:55

People are always trying it, as I guess my point. I mean, you know, we see it all the time.

Ben Gibson: 19:06

Yeah, you know people try it again. You know and and that's why I point people back to you know the business model canvas and you know who's the customer. If you look at the business model canvas back to EMFL, you know that that whole value proposition. If you look at the business model canvas back to EMFL, you know that that whole value proposition, customer segmentation portion of it, is very compatible with the engineering phase, right. And then the and then when you add the, the, the go-to-market and the customer service and the logistics, that's when you get the marketing phase, cause you're scaling it widely, right. But then when you start getting into, you know you can't grow it anymore. Then you start focusing on, you know the, the earnings and and extracting money, uh, from from earnings, right?

Gary Pageau: 19:40

so. So there's a lot of talk or announcements of m&a right now, right, mergers and acquisitions, people looking to buy each other out for very in the photo industry, right. Just I know of several deals that are in the process, several that have been announced in terms of several deals that are in the process, several that have been announced In terms of phase. When is a good time to look at that? Because you certainly don't want to look at lawyer phase. No, that seems to be where it happens.

Ben Gibson: 20:02

Well, if you're buying, you might want to look at lawyer phase, right, but if you're trying to sell, you know, I think you really need to look in the marketing phase. I, you know, and look, I followed this industry for 20 years and I might be too too honest for my own good right now, but most companies that start up in the photo output space think the market opportunity is bigger than it is. Right, right, and, and I you know, maybe there's a killer technology or killer app that's going to flip the market and it's going to suddenly explode, but it's been really predictable and flat for 20 years now. Right right um, so?

Ben Gibson: 20:40

so what happens is when you have a play and you say, well, I have this really innovative idea that's going to flip the market, um, you know, you sort of reach that point where you can't really push it any further. Maybe you, you know, you, maybe you successfully created the 50 or 100 million dollar business that wanted to create, but but then you're up against the wall. Right At that point you need to, you need to cooperate with other people and combine, and because what happens is a lot of them think, well, by the time they realize that they can't grow anymore, now your value is gone. Right, because when you, when you value a company, you're looking at the future value of the company. If revenue is not growing, then you're looking and saying, okay, well, how much earnings is this thing throwing off for how long? And your valuation goes into the toilet. Right, and maybe I'm not allowed to say that out loud, but I think it's pretty obvious that that happens.

Gary Pageau: 21:35

Well, we do allow the word toilet on this show.

Ben Gibson: 21:38

Okay, good, good, but but you know, people are people will will go into denial about that, right, they think you know. I just need this one more feature and then all of a sudden you know everything will work, work well, right.

Ben Gibson: 21:49

But I I think you know what you're seeing now is a cycle in in photo output that we've seen before, right? You sort of have you know you have this and it looks like a cycle, right, you have the company start and then they consolidate, and then they they decline, and then they regroup and they reorganize themselves. So I've watched the M&A. It's like two startups decide to get together and grow. Good, as long as they have a really good understanding of how big their market is and how much money they can produce, because a lot of these companies just can't produce enough revenue to really over it's. It's expensive, right.

Erin Manning: 22:52

Right.

Ben Gibson: 22:53

A lot of capital involved, and so on. Right.

Gary Pageau: 22:56

Especially if you're actually physically making something right. If you're an app company, it's a little different, but yeah.

Ben Gibson: 23:02

You know labor is expensive, you can't get labor. You know materials are expensive, et cetera. Right, so it's tough.

Gary Pageau: 23:09

It seems to me like different company, like in terms of the phases, the length of time can vary widely among all four of those Absolutely so let me, let me give you an example of a really really long life cycle.

Ben Gibson: 23:24

Right, you know, probably is prudential Insurance, right? So Prudential Insurance is a company that is. I mean, there's probably going to be more people on the planet five years from now than there are today.

Ben Gibson: 23:40

Right and those people are going to need life insurance, right. So here's a, here's a company that just just chugs along and just follows GDP and population growth and provides the service and and has a, you know, a very stable business model that's going to, you know. So they're, you know they could have a two, three hundred year life cycle, right, right, as opposed to Yahoo that that has like four, you know you're like jogging yahoo.

Gary Pageau: 24:07

Do you have a bone to pick with them?

Ben Gibson: 24:09

no, I don't have a bone to pick with them, but it's easy to pick on them because they're, you know, in the history, right? I can pick on tiktok, or I can pick on.

Gary Pageau: 24:16

Hey, I still get a few people with yahoo mail emails.

Ben Gibson: 24:18

Yeah, they're still out there yeah, well, that's one of those. Um you know, your mama jokes, jokes. Your mom is so old. Her email is mom at AOLcom.

Gary Pageau: 24:26

Yeah, there you go.

Ben Gibson: 24:28

So, anyways, but to your point. I mean companies have different times in the life cycle. Right, you know you might have a. You know a company I mean. An example is IBM, right, so IBM went through a period of time when they had 15 or 20 consecutive quarters of year over year revenue decline and I honestly I haven't looked at them in a while and I know they split, so they probably have a part that's growing and not growing.

Ben Gibson: 24:56

But this is a company that is in the finance phase for years, right, and the reason they're in finance phase for years is because they just had a tremendous number of assets. You looked at their balance sheet in 2000 and you could say, you know, yeah, no, this company could probably live for 20 years. You know, if they play their cards, right, you know, I mean it really. You know it took Kodak 10 or 12 years to. You know, when you look at kind of where a peak to where, where, you know in 2012, right, right, so companies that have huge assets can can live longer in the finance phase than companies that don't right Right.

Ben Gibson: 25:34

So you see, these companies that come in so like Tesla is an example of you know why are they doing so well right now? And I would say they're in the engineering phase and, and you know, electric car notwithstanding, you know that's all they've ever done, right. So they can optimize their entire supply chain. They don't have to worry about converting from gas and diesel, and trying to leverage their parts. And completely new vendors and everything else, like GM and Ford.

Gary Pageau: 25:58

Don't have to have a dealer network like traditional, exactly.

Ben Gibson: 26:03

Exactly so. There are countless examples and, hopefully, people you know. You start to look at companies and say hey, yeah, that company's in the finance phase, right, so well. Or in the engineering phase.

Gary Pageau: 26:14

You recently posted about an example in the photo industry, about a country, a company that's 90 years old that we both know called Fujifilm. Yeah, that you said is at the nexus of the engineering marketing phase and they were specifically talking about the limited quantities of the brand new X106 rangefinder camera. Now, that's a 90 year old company that is somehow, you know, walk in that tightrope of staying there without, without transitioning, and not to say that they haven't done that and you know haven't, you know haven't gotten into, you know the other phases or whatever. But I'm just curious what your insights were there.

Ben Gibson: 26:58

Well, the other part of my post was that if you look at stock analysts looking at Fujifilm stock, they almost to a person will say the stock underperforms Right Right, almost to a person, right Right. Because, they want that.

Gary Pageau: 27:12

F. They want that F base.

Ben Gibson: 27:14

You got it. Well, they, they want the money. I mean, they want to be able to buy it and buy low, sell high, right, and they're not going to keep it forever anyway. So they're and they're, and they have somebody who they pay to watch it, so they know right when to sell, the right one to buy. So they're just looking for their little, their little cycle. But, but.

Ben Gibson: 27:32

but fujifilm has, you know, has very long-term strategic plans right, I mean when, when you hear about you know hoshin plans of you know 10, 15 years, they're very much you know on that. So so the reason is they look and they say, okay, well, product, customer technology, kiritsu, right. Then they feel like that's their primary service, where a lot of companies you know feel like their shareholders are their primary service, right, right, you know. And an example I mean the best example recently, of this which I posted on was what happened with xerox, right.

Ben Gibson: 28:08

So xerox comes in, uh, and you know, fuji film had the fuji xerox relationship and that was a very profitable division. And and and, uh, you know xerox got to the point compete, trying to compete at the higher end. They're saying, look, we need to. Uh, fuji reached out, said hey, we'll, we'll buy you right. And then carl carl icon comes in and says oh, no, no, no, no, we want shareholder value, right, we believe the shareholders are not going to get their value if fuji film buys them, right. So we want your home. And what did he do? He fleeced the company and left right. And so now they're going through layoffs. It's in the paper here right?

Gary Pageau: 28:46

yep, I've covered it in my newsletter. It's not great.

Ben Gibson: 28:49

It's not good, right, because the finance Carl Icahn is your example of a finance phase chairman. Right, you can argue and say Elon Musk is the engineering phase and, and you know, twitter controversy with the media notwithstanding he is an engineering phase. It's spacex or x, or or tesla, jeff bezos, you know the marketing phase right, carl icon, the lawyer fit.

Ben Gibson: 29:16

Or the the finance phase right, he is the master of the finance phase. And then the lawyer phase is, I say, any number of 1200 an hour lawyers, right, that work, that work on bankruptcies and everything else. Once that whole thing's dead right. But you can see these patterns. If I see somebody like Carl Icahn is sniffing around, I would say, okay, how am I going to look at that? I can argue whether I like the company or not, but you can sort of say, here's how I would make money if Carl Icahn was running the company. Here's how I would make money if Elon Musk was running the company. Because of where they are in that phase, right, I might really be in trouble now.

Gary Pageau: 29:56

No, I don't know. I think you've raised a good point with that. Look at the data right.

Ben Gibson: 30:01

Well, because I mean he's done it with other companies, Right, I mean?

Gary Pageau: 30:04

that's the history, right. I mean that's the history right. I mean that's the thing it's sort of. You know, I think the business press likes it because it's controversial and he says crazy things. And you know, he's a history of drama right, he's a kind of a drama machine.

Ben Gibson: 30:17

Well, investment. The two most predictable phases in investment is when a company is growing and when a company is declining right. So you look at. You look at, say, okay, I'm going to buy stock, but you know, buy low, sell high, because I'm looking at the stock price and I know, you know, revenue is growing, it's going to go up. And then the next phase is when you, when people, start shorting it to the ground, because once hedge funds get ahold of these companies that are in the finance phase phase and they start shorting them to the ground, you know they're going to force the stock to the ground. So you just keep betting lower, lower, lower, lower, right, and you short the stock. And that's how these you know day traders that spend you know, spend a far, far fewer hours a day working than I do make make millions of dollars, right.

Gary Pageau: 30:57

So let's talk a little bit about Eastman Kodak's recent discussions regarding film production, right Cause I think that's sort of where they're getting back to their heritage, where I'm not you know, and again I you know. I don't want to comment specifically on you know what your projections are for the company or whatever, but just sort of like the phase they're in where they're kind of getting back to their roots. Right, they're a chemical company doing chemical things and they've recently announced in the quarterly call they are going to be the last manufacturer standing for film and and I just thought that was just an interesting commentary about you know they're, they're now making more money.

Ben Gibson: 31:35

Yeah, yeah, I mean I, I think I would. I would probably call it a pivot, you know, because if you looked at the post bankruptcy days, you know there was a real call towards hey, this is going to be a commercial printing company and we're going to go out there and and and they've done amazing work in that space, building solutions. But printing is still sort of kind of in secular decline, with the exception of packaging, right, and there's nothing Kodak or anybody else can do that except be the best, best solution in that space, right, but it's not going to be the rocket growth. I mean, think about the customers for a second right. If you're a print shop and you have an offset press right, fully amortized, 30 years old, and it's running, is a bank going to recapitalize me to buy a new digital press right? The economy's, you know it, it's tough, the recapitalization is right, yeah, I mean it's funny.

Gary Pageau: 32:30

You said because I was visiting one of my, uh, industry friends and they've got an old press like that and they said you know, we bring work on it it's and we just run that we're going to run that thing into the ground yeah, you're running exactly, you know it's like.

Ben Gibson: 32:45

You know it's like a 1986 Camry, you know it is still going right, but so you know. But I think that the pivot to materials it's being boosted by, you know, the repatriation of manufacturing that's been going on since COVID, right, I mean that that has been a real trend of of the whole supply chain. Yeah, there were some problems and containers were in the wrong place, but I think countries and regions started to realize they're vulnerable, right, right, and so there is a real repatriation going on. And if you look at Eastman Business Park and you say that's the largest industrial park in New York State, it's nearly fully intact.

Ben Gibson: 33:28

Still, you know, from from the it, it, it's completely self-sufficient, it has rail lines, it has power, it has, it can operate completely self-sufficiently. And you're saying, hey, here there's great schools here. So people are saying, hey, well, that that's a really good place. And, as a result, what you get is you get a combination of, you know, being a landlord for new tech, building your own new tech and doing all the things that you've always done for you know, the last hundred plus years, right? So it really is saying, hey, this is where the core is and it's you know. You see it in the results. I mean, that's as far as I can go.

Ben Gibson: 34:06

Yeah Well, I'm just saying it's public announcements and public information, if, if, if anybody wants to know what's driving you know. So if I'm sitting there and and I'm looking at this company, I'm saying, yeah, the revenue growth wasn't quite there, but the pivot, the pivot was for earnings and the earnings are there now flowing cash, reinvesting in capital, attracting new customers into eastman business park because it's here and they need a place where they can plug in. Um, it's going to be an interesting story over the next three to five years.

Gary Pageau: 34:38

I can tell you, yeah, I think they're definitely, you know, kind of gotten off the uh, you know, this is a case study of how the companies destroyed their heritage and whatever, and I think now it's a much more positive story, like you said. And now they can, because they have this capability, they're actually reinventing in film process, filmmaking equipment. Right, because they can, they now the cash to reinvest and, yeah, film is, you know, it's kind of a niche product right now. It's certainly not going to be the future of the company, but it's a it's. It's kind of a niche product right now. It's certainly not going to be the future of the company, but it's a it's. It's still a popular thing and they can be the last people on the planet making it.

Ben Gibson: 35:12

Yeah, and you know, just on the last manufacturer standing comment, you know, I know that, you know, if you read on, I read all the blogs, right? Because I'm interested in the industry. You know, and, and I think you know there's always that question well, so-and-so is making film. What does that mean to being the last manufacturer standing in film? And you know the answer is it doesn't matter, right? The last manufacturer standing in film is a battle cry. It's a battle cry for the employees, it's a battle cry for the community, for the customers. If there is ever a last roll of film made, or you know a last uh PCB board, uh, mask or something made, it's going to be made by Kodak, right?

Ben Gibson: 35:51

Uh and and that's, you know, that's the part of it that sort of says okay, you know if you're, if you're a chemist and you're in, you know you're at Purdue or you're at Cornell, and you say, hey, should I go to work for Kodak? Yeah, you probably should, you know because, it's going to be a great place to to be. So, anyways, enough, enough. Enough on that topic, I guess, Right.

Gary Pageau: 36:12

No, no, I didn't know. I just think it's a great place to kind of bring it, bring our conversation to a conclusion, sort of on the positive side, that there is a great future for for this kind of stuff. If you're actually making stuff, if you're at that nexus of engineering and marketing, you can certainly have a successful business. Just keep those darn accountants and those darn lawyers out of it.

Ben Gibson: 36:32

Well, you know, keep, yeah, I mean, make sure your shareholders are committed to your strategy, right. I mean that really, you know you can talk about the analysts or some guy trying to short the stock, you know on Reddit or something like that Right, but but that they don't matter. To short the stock, you know on Reddit or something like that, right, but, but that they don't matter. What really matters is making sure that you're aligned with your shareholders, right.

Ben Gibson: 36:51

And just look at who the shareholders are and you'll say, hey, that's, that's not. That's pretty impressive list of people, Right?

Gary Pageau: 36:57

Yeah, awesome. Well, thank you, ben. Where can people go to see more of your musings?

Ben Gibson: 37:03

Oh, my musings. The best place to see my musings, I you know, are LinkedIn. Right, I hate, I hate to shout out to Microsoft, but but you know I'm not like a big build a webpage kind of a guy, you know I I go on to for for the general community I tend, I tend to share, you know, a few, a few thoughts on. Linkedin and then you know, for for my friends, facebook or you know stuff like that. But you know old school, right? I haven't haven't graduated to the next thing yet, right?

Gary Pageau: 37:34

So I haven't done not doing Tik TOK videos.

Ben Gibson: 37:36

I gotta.

Gary Pageau: 37:36

I guess I gotta learn how to do that. Well, I, I, I and I think the world is thankful for that. Well, thank you, ben. Great talking to you again. Take care. Hope to see you next time I'm in or near Rochester. Take care.

Erin Manning: 37:53

Yes, sir, see ya, no-transcript.