Surfing, Versatile Cameras & GoPro Finally Getting A Grip
GoPro could have been the next Kodak in 2017. How did Nick Woodman even think of selling the company?
Hey there Zedites,
This one’s about a rise, a fall and a finding of firmer grounds.
A Story For You
A versatile, high-performance camera that’s waterproof, rugged and durable at the same time. What’s the brand that popped in your mind? Unless you’ve been asleep at the wheel for over two decades, it’s going to be the GoPro. GoPro doesn’t make cameras, it builds them; and they do that with great finesse to help their customers film and capture stunning videos. No wonder the business pulls in $1 billion in annual revenues.
A vivid memory, of laying my hands on one of the beastly little devices, is still etched in mind. The connectivity to my smartphone showed me what I was recording in real time. It just had a ‘wow’ factor to it and I always wanted to own one! Its usability was why GoPros were so common when I attended film school. Nicholas Woodman is a genius. However, and it’s safe to say, that wasn’t his first company. He failed twice, with Empowerall.com and Funbug.com, before creating GoPro. But it’s what he did during the stint of both these companies that paved the way for his third venture - he surfed. He surfed to clear his head or even start his day and that’s what gave him the idea to create what would eventually be a billion dollar company. Nick truly followed what he preached - Evolve or die.
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The origin of Woodman Labs Inc. (now GoPro In.c) began when the surf fanatic, skier and motorsport enthusiast couldn’t find a device that competently recorded the memories he was creating with his friends. In 2001, after the failure of his first two companies, Nick (then 26) would journey across Australia and Indonesia with his wife and his friends in search for the best surf spots. And when they did find a few good ones, their only hope was for someone to film them as they were riding the tides. But no one ever did. Because there was no camera system out there, that could capture the experience. Apple hadn’t revolutionized the world with the iPhone and Kodak had another 2 years before it started its irreversible journey downhill.
Nick had a timeline for himself - if he hadn’t invented a product that he adored by the age of 30, he would find a real job, submitting himself to be a cog in yet another machine. And this fear, the fear of submission is what drove him to always be on the lookout for new ideas.
Contrary to popular belief, the journey of GoPro didn’t begin with cameras but camera straps; these were like wristbands to which you could attach your cameras and film. They were handy but a $235,000 loan from Dad, an additional $30,000 and sewing machine from Mum and $30,000 of his own savings (which included the 10 grand he made selling beads from the Indonesia trip) should’ve resulted in something more than just the ‘Ultimate Camera Strap’.
Needless to say, it flopped, big time. Store-bought cameras weren’t sealing the deal for GoPro, which nudged Nick to manufacture his own camera. It took two years of excruciating research to find a manufacturer in China that would eventually go on to build the first GoPro Hero in 2004.
A 35mm reusable camera, that costed the Chinese manufacturers $3 a unit and retailed around $30. Nick would cruise in his 1971 Volkswagen Bus to surf shops, events, trades to sell a product that he was proud of, helping Woodman Labs Inc. to end the year with $150,000 in revenue. The first big break for the dandy cameras came in 2005 when Nick appeared on QVC, managing to sell over 3000 GoPros within 10 minutes. That year, GoPro ended with $306,000 in profit. It was a hit! And there was no looking back.
The emergence of YouTube around 2006 and the first, all-digital video ready GoPro was like a marriage of two beautiful products that would propel each other to greatness. Until then, GoPro could only shoot images but the newly launched GoPro Digital Hero allowed for 10-second videos at 320x240. Unfortunately, the device didn’t have audio recording capabilities, which was taken care of with the 2007 Digital Hero 3 - unlimited audio, unlimited video. There were advancements in the product every single year.
The first real test for the GoPro came with the iPhone 3GS. Come to think of it, the iPhone was a threat to a lot of companies when it first rolled out. Nick’s baby was just one of them. He had to go back to the drawing board and ponder over what was next. Lo and behold, in 2010, GoPro, launched a 1080p video camera with a 127° wide angle lens. The company ended the year with a whopping $64 million in sales!
It was all going great for GoPro but every journey has its ups and downs. The company went public in 2014, coming of a strong quarter ($280 million, a 45.7% increase from last year’s quarter), granting Nicholas Woodman his billionaire status. It was one of the most successful tech IPOs of its time. Riding the tide on a high, their drive for growth led them to increase their workforce from 700 to 1600 employees in a span of just 18 months! Add that to the Hero 4 which released to a negative reception with an exorbitant retail price of $399 and lack of marketing and it was all a recipe for disaster. The company suffered $13 million in losses.
“We went from being thrifty and scrappy and efficient and wildly innovative to being bloated and–what’s the opposite of thrifty? It was undermining the strength of our brand and deconstructing everything we had built.“ - Nick Woodman
2016 and 2017 (the year they laid off 270 employees) looked like the end of the company. The Karma drone, a product they launched in 2017 was recalled (all 2500 of them), resulting in unexpected refunds and a class action lawsuit that alleged wrongful information and misleading statements by the company to the investors. Nothing seemed to be going GoPro’s way. In 2018, Woodman was even open to selling the company.
Now, every time a company gets too ahead of itself, it goes back to the basics. Instead of focusing on the numbers, they started working on the product and ideation, i.e they went back to the reason GoPro was conceived. It was going to take some time, but they were in for the challenge.
In 2019, GoPro made some changes to their after-sales service.
For $4.99 a month, you now received damaged camera replacement, unlimited cloud storage, and 50% off mounts and accessories.
(Credits: Premium Beat by Shutterstock)
A series of product improvements, a focus on the subscription model and the oddly enough, the pandemic, helped GoPro strengthen the ground beneath them. The company is slowly on the rise again and here’s Nick’s summary of learnings:
Be very careful about sharing ideas about where you want to take your business tomorrow because it’s the tomorrow that everybody is going to become fixated on.
When things are going really well, you can be lured into thinking that everything’s easier than it is. Just because you’re a World Series-winning pitcher doesn’t mean you can go play quarterback.
If it’s not authentic to you, your instincts start to falter.
As an individual, how you organise your day affects your productivity. As a company, how you organise your teams and your communication affects your efficiency. (Credits: Inc)
While it’s crazy to think about how it all started with surfing, it’s crazier to acknowledge that GoPro was on the brink of insolvency and had they not gone back to what they were the best at, i.e. building versatile and durable cameras that can be enjoyed by all, they would have lost it all.
A Story From You
Sometimes all you need is a return to the basics. Getting ahead of yourself is one way to make sure you fail. Nick caught himself in time, eventually saving what could’ve been the end of a very beautiful product.
All of us have gotten ahead of ourselves at times. You know, when the overconfidence seeps in and you start feeling invincible?
We love listening to your stories so do share with us. Do you remember the time you faltered while riding on a high?
Humble as ever,