Kodak’s worship of film is still alive and well and on display at the George Eastman House International Museum of Photography and Film. Situated in the picturesque old Park Avenue neighborhood of Rochester, it stands in stark juxtaposition to the derelict and demolished buildings of Kodak Park. Eastman House has a large collection, covering most of the key photographic advances over more than a century of innovations, many of them by Kodak: the first 16-millimeter movie camera; a plethora of the Brownie and Instamatic models; the device used by NASA to take the first photographs of Earth from outer space.

Two oddballs stand out. One, the Nikon DCS-100, is an old film SLR outfitted with a fat electronic umbilical cord attaching it to a grey box — a storage device that, aside from the tininess of tiny capacity, isn’t that much different in principle from the one in a smartphone today. The other, a Canon, has a built-in attachment serving the same purpose that about doubles its usual size.

They’re examples of the first marketable digital cameras, and Kodak designed them both.

A 1991 advertisement for the Nikon DCS-100, marketed for professionals.

In an early 1980s interview with the Democrat and Chronicle, then CEO Colby Chandler was asked to predict where he saw Kodak in ten, twenty-five, and fifty years. Uncertain, he responded that Kodak’s work had always been with the “miracle of the molecule,” and it would continue to be in the future. In fact, images were already being organized as bits of information and the molecule was, inexorably, on its way out.

The tipping point had come years earlier, in 1975.

That year, Steve Sasson was a 25 year-old electrical engineer working in Kodak’s Photographic Research Laboratory. His assignment was not considered pressing or significant to anyone but himself, his team, and his supervisor: the task was to find a way for captured light to be converted into an electronic signal with a numeric, or digital, value.

For digital imaging, this was the genesis.

To many people at Kodak who were not involved with the project, Sasson’s camera looked more like a device built by a hobbyist, recalls Robert Shanebrook, a retired Kodak employee who worked near the research lab at the time. It was impressive and interesting, they thought, but it was a toy, like their Instamatic plastic cameras. “Electronic photography was certainly paid attention to by some, but many didn’t think much of it,” he recalls.

Analysts have pointed to a number of factors in Kodak’s fall, from general mismanagement to poor financial decisions. Its divestiture of Eastman Chemical stripped billions in cash flow that might have propped it up as it struggled to make the transition to digital. Others point to antitrust suits that hampered the company for decades and opened the door to rivals. Some of those, notably Fuji, were able to manage the analog-to-digital conversion successfully.

To the people in the trenches, like DeMoulin, the failure always comes back to the same key error: Kodak, they say, suffered from a fundamental breakdown between, on one side the engineers and tinkerers — many of whom saw the digital future clearly and fought to bring it forth — and on the other the top management, whose interest remained fixed on molecules and the miracle of near-monopoly profits.

DeMoulin told me about watching a team in 1980 demonstrate a scanner-printer that converted film images to digital. “That’s when I thought: This digital thing is going to happen,” he recalls. His place at the helm of the professional-imaging division allowed him to autonomously invest in developing a digital still camera, and he says he pursued that vision, despite lukewarm support from the company.

“Very few companies have been successful in straying away from the expertise of its employees,” says Andrews, who works today as a senior engineer at Bausch and Lomb. Many Kodak alumni, like Andrews, found work at smaller tech-based companies that filled the employment vacuum and averted a repeat of Detroit and the automobile industry.

As demand for electronic photography slowly grew through the 1980s, the Electronic Photography Division (EPD) became the catchall for a new generation of Kodak engineers trained not in chemicals, but computer science. Engineers like Bruce Rubin began working at EPD in 1987, when printers and film scanners were being developed to transmit data through telecommunication channels; these devices were part of how the Tiananmen Square photographs were leaked.

Kodak engineers posing with thumbs up, 1989. Scan courtesy of Peter J. Sucy

But as exciting as the work was, it led to frustration and a disconnect between executives and employees. “One of the things that always drove me crazy,” Rubin remembers, “was when a proposal was denied because either somebody else was doing it, or nobody else was doing it. There was no wiggle room…[unless] Fuji was doing it too.”

Peter Sucy, another computer engineer at Kodak, describes the rarity of computers in the workplace in the late 1980s. “Almost no one had a computer at their desk,” he recalls. When the Macintosh II was announced, packed with new state-of-the-art features, he had to buy one himself. With a $3,000 price tag, it allowed him to do things with images he could not do before, including digital photo editing. Based on those exhilarating experiences, he began making proposals for products that could expand Kodak’s reach in digital platforms.

Sucy’s biggest hurdle, he asserts, was the head of marketing at EPD, who exemplified the disconnect between manager and engineer. “He used an Underwood typewriter to send out weekly missives,” Sucy recalls. “He told my boss to tell me to stop writing computer proposals, because Kodak would never be a computer peripheral company…not on his watch, at least.”

Undeterred, Sucy continued developing products using a clandestine approach, giving them code names that “didn’t sound like computer products.”

The subterfuge helped them bring some experimental products to market, but then they encountered a new problem they hadn’t expected: No matter what they came up with, nothing digital would sell. To consumers, everything was too expensive, and to professionals, the quality was not yet good enough. “It was a difficult thing to market,” Sucy admits, “especially for people who didn’t have any kind of experience marketing this kind of product; people who didn’t really know what it did.”

In the end, being early did not help, because the market simply wasn’t ready. As obvious as the endgame was, Kodak’s leaders were faced with an unwinnable predicament: either keep investing in end-of-life products until the profits dried up — and die over the long run; or switch to stillborn product lines that produced mostly red ink in the ledgers — and die immediately.

Chris Anderson, former editor in chief of Wired and founder of 3D Robotics, a designer of DIY drone kits, has written extensively about business models in the digital age. I asked Anderson about his thoughts on Kodak’s bankruptcy, and told him about the Electronic Photography Division, how the engineers had developed a four-megapixel sensor by the late 1980s. How did Kodak fail to convert such a massive head start into success?

“Who could afford that?” Anderson fired back, unimpressed. “Macs were really expensive. Computing technology couldn’t have kept up until much later.”