Latest / Boardroom Conversations with Fexingo: CEOs, Strategy, and Corporate Leadership Explained / How the Leica Board Turned a Museum Brand Into a Growth Story
Transcript
- Lucas: So today I want to talk about a company that, for most of its history, was a beloved museum piece — technically brilliant, culturally revered, and commercially almost irrelevant. Luna: You're talking about Leica, right? The German camera maker. Lucas: Exactly. Leica is one of those brands that photographers get emotional about. The red dot, the rangefinder, the fact that Henri Cartier-Bresson shot everything on a Leica. But by 2010, the company was selling maybe 10,000 cameras a year globally. It was profitable in a small, quiet way, but it was a luxury curiosity — not a real business. Luna: And then smartphones happened. The entire compact camera market basically evaporated. Canon and Nikon took a massive hit. You'd think Leica would've been crushed. Lucas: You would. And yet, over the last decade, Leica has grown its revenue from around 200 million euros to approaching half a billion. The board pulled off a quiet turnaround that most people in tech barely noticed. Today I want to drill into how they did it. Luna: Alright. So what was the first bet? Lucas: The first bet was the SL system, launched in 2015. Up until then, Leica made rangefinders — beautiful, manual-focus cameras that are terrible for video. The SL was their first full-frame mirrorless camera, and it was built specifically for professional video shooters. The body alone cost seven thousand dollars. Luna: Seven thousand? That's more than a Sony or Canon flagship. Lucas: Way more. But the board understood that they weren't competing on price — they were competing on the experience of using the thing. The SL had the best electronic viewfinder on the market, weather sealing that felt like a tank, and lenses that were optically unmatched. It didn't sell in huge numbers, but it sold to people who would never have considered a Leica before — commercial videographers, studio photographers, people who needed a tool, not a talisman. Luna: So it expanded the addressable market from 'Leica people' to 'professionals who want the best.' That's smart. Lucas: Exactly. And the board was patient. They didn't expect the SL to be a blockbuster. They treated it as a platform — invest in the L-mount lens system, get other manufacturers like Panasonic and Sigma to adopt it, and build an ecosystem. That kind of long-term thinking is rare in consumer electronics. Luna: What was the second bet? I assume it's the Huawei partnership. Lucas: It is. And this was controversial within the company. There were purists on the board who said, 'We're Leica. We don't put our name on a phone.' But the more pragmatic members — including the CEO at the time, Oliver Kaltner — argued that the smartphone was where photography was happening. If Leica wasn't there, it would become irrelevant to a whole generation. Luna: And they didn't just license the name. They actually co-engineered the camera modules. Lucas: Right. Leica optical engineers worked with Huawei's team on lens design, software calibration, colour science. The result — the Huawei P9 in 2016, then the Mate series — put Leica's name on tens of millions of phones. Suddenly, a 20-year-old in Shanghai who'd never held a standalone camera associated the red dot with great photography. Luna: And that feeds back into the core camera business. Brand awareness, halo effect. Lucas: Exactly. It also gave Leica a foothold in China, which was the third piece. The board recognized early that China would be the world's largest luxury market. They opened Leica boutiques in Beijing, Shanghai, Chengdu — not just shops, but galleries and academies where people could learn photography. They sold the lifestyle as much as the hardware. Luna: It's interesting — they didn't try to go mass market. They stayed premium. But they widened the definition of who could be a premium customer. Lucas: That's exactly the board's strategy in a nutshell. They refused to chase volume. They kept production in Germany, mostly hand-assembled, and kept prices high. The M10, which came out in 2017, cost around six thousand five hundred dollars for the body alone. But they sold more M10s than any previous M-model. Luna: Because the brand was hotter. The smartphone partnership made Leica feel contemporary, not archival. Lucas: Bingo. And the board was disciplined about not over-extending. They didn't launch a Leica smartphone. They didn't license the brand to toasters or luggage. They did one thing — optics — and they did it at multiple price points: from the thousand-dollar D-Lux compact to the fifty-thousand-dollar S3 medium format. Luna: Let me ask you this. The board — it's a family-controlled company, right? The Kaufmann family owns a majority stake. Lucas: Yes, Dr. Andreas Kaufmann led a buyout in the late 90s and his family still controls the board. That long-term ownership structure matters. They don't have to answer to quarterly earnings calls. They can make a ten-year bet on the L-mount alliance, or a five-year bet on Huawei, without worrying about an activist investor pushing for a dividend increase. Luna: That's a huge advantage. Most consumer electronics companies can't think that way. Lucas: It's also why they survived the 2020 supply chain shocks relatively well. Because they had no debt, owned their own factory in Wetzlar, and had a loyal customer base that would wait six months for a camera. The board didn't panic and shift production to China. They just slowed down and kept quality high. Luna: That kind of discipline is rare. And it's exactly why we spend time on these board-level conversations — because the decisions made around that polished walnut table determine whether a company thrives or just survives. Lucas: That's the whole point of this show, honestly. And if these conversations have moved your work forward in some small way, we deliberately don't run ads on them. The way that choice stays sustainable is listener support. Luna: Yeah. If you find value in episodes like this one, you can toss a few dollars into the kit at buy me a coffee dot com slash fexingo. It's just a way to keep the whole thing ad-free and independent. Lucas: Exactly. And we're back to Leica. Because there's one more piece I want to mention — the used market. Leica cameras hold their value incredibly well. A ten-year-old M9 still sells for three thousand dollars. Luna: That's basically a lifetime warranty on resale value. It lowers the cost of ownership for the buyer. Lucas: Right. And the board figured out how to monetize that. They launched a certified pre-owned program in 2018, selling refurbished cameras with a warranty. It brought younger buyers into the ecosystem who couldn't afford a new Leica. And once they're in, they start buying lenses — which is where the real profit is. Luna: That's clever. It's like Apple's refurbished store, but for a brand that costs ten times as much. Lucas: It also builds a community. There are Leica user groups, Leica academies, Leica walks. People join a tribe. The board deliberately invests in that soft infrastructure because they know that a customer who feels like a member is a customer for life. Luna: So the takeaway from this episode is that the Leica board took a brand that was a niche historical artifact and turned it into a growth business by staying true to its core — precision optics — while expanding into new form factors, new geographies, and new price tiers, all without compromising on quality. Lucas: That's the takeaway. And they did it over 10 years, not 10 months. The board's willingness to be patient, to say no to easy money, and to invest in brand building rather than quarter-over-quarter volume — that's the lesson for any company that wants to be a hundred-year brand in a disposable world. Luna: Alright, that's our hundredth episode. Thanks for sticking with us. Lucas: On to the next hundred. See you tomorrow.