When I got to photocd, the management’s focus was on replicating the quality and detail of film in the digital space, and they did not notice/understand that the lower level of quality of digital would still be useful. Their marketing was driven too much by the voices of professional photography and the ad industry’s need for the quality capability of enlargement.
My colleagues and I actually started work on a business plan to use lower resolution digital imaging for applications in real estate and other industries that could use snapshots of lower resolution. We had really just gotten started on this, when management found out via a personal dispute of one of my colleagues and hauled us in for discipline. We stated our case and said we thought Kodak should get involved, but that fell on deaf ears. Our group fell apart when Kodak did not renew one of our contracts, and he went to work for Sony writing their digital image storage software, which became one of the top tools at that time.
The impression I got was that upper management was well aware of the digital advance but completely oblivious to the speed of its progress. They thought in terms of the huge length of time it took to develop new film products and their associated factories. In 1992, they actually thought that digital would not be a serious threat until about 2005. Oops!