If you've ever watched heart-stopping videos of people skydiving, doing crazy tricks on a bike or hucking off
a cliff chances are you've watched footage from a GoPro.
The company that defined the action camera industry has had its shares of ups and downs since the release of
its first camera in 2004.
Stocks skyrocketed after it went public in 2014 but then started to stumble in 2015 and have never recovered.
We spent the day skiing with founder and CEO Nick Woodman at Big Sky in Montana.
I love our office today!
To hear his story behind GoPro 's rocky road of success, failures and to learn what's next for the company.
The story starts in 2002 when Nick Woodman was 26 years old.
His first business had just burst with the dot.com
bubble and he decided to take a surfing trip to Australia and Indonesia to figure out his next steps.
I had my idea for GoPro preparing for that trip.
I knew this was going to be a surf trip of a lifetime.
I went to work on this idea I had for a camera that I could wear on my wrist while I was surfing and that surf
trip turned into a R&D product development trip because the prototype worked so well.
And five months later I returned home to start GoPro.
It was the first surf trip I was ever excited to come home from.
I was so excited to start the business.
So how did you take it from an idea to actually building the camera?
I had no idea how to build a camera.
I'm not an engineer.
I'm more of an idea person.
I found a camera online on early Alibaba.
Bought the camera from China.
Made some customization using plastic blocks that I dremeled and hot glued to the camera and then FedEx'd
it back to the company in China and they ended up making it for me.
So the first GoPro was very humble and cobbled together using existing things that were already out in the world.
Another one of those entrepreneurs is Nicholas Woodman.
I came up with the Hero camera design which allows you to securely wear the camera.
I really learned how to grow GoPro on the fly.
I didn't know how to hire everybody and I had no previous business experience.
I was a creative person.
So the first GoPro employees were people that I went to college with or family members.
The first investors in the company were family members as well.
I started GoPro with $30,000 that I'd saved from my previous job.
And I borrowed $35,000 from my mom.
And I launched GoPro on $65,000.
Hey, where did the name come from?
One of the easiest things in building GoPro is coming up with the name .
I was camped out on the north coast of California in my '74 Volkswagen bus and I was just finishing my patent
and the name came to me in about 10 minutes.
The process was, I asked myself, well what are my friends and I, my surfer friends and I,
want to do more than anything?
Because remember originally GoPro was intended to just be a camera for surfers.
And as surfers we want to GoPro.
GoPro. Hey, that's pretty good.
What started as a camera intended for surfers evolved into a revolutionary camera for action sports, travelers and filmmakers.
When we launched the HD Hero over Christmas of 2009, that's when GoPro really blew up.
And the HD quality of the HD Hero was way beyond what anybody thought was possible from such a small camera
and you started to see GoPro footage in everything from movies, television commercials, ski movies.
GoPro is everywhere.
That's when we knew we were really onto something.
The HD Hero was priced at $299 and consumers seemed willing to pay as growth continued for the start-up.
So why did you decide to take the company public?
As a consumer product company, consumer brand, being public is a really big marketing event for the
company and helped put GoPro on a global stage.
Being public helps us attract top caliber employees and really puts GoPro on a professional stage, that as
a private company we were having trouble getting that level of attention.
GoPro IPO'd at $24 a share in 2014 and it was one of the hottest IPOs of the year.
Nick Woodman became the highest paid CEO in America after receiving a bundle of stock worth $285 million.
The stock soared based on success of the Hero 4 lineup but the company quickly stumbled when it did not
release a new flagship camera in 2015.
At one time high flyer GoPro tumbling 40% since the start of the year.
I learned that our customers really want to see a new GoPro from us every year.
Or they want to see us significantly discount the previous year's model.
We've learned from that and now we're dedicated to coming out with new cameras every year.
GoPro also had to keep up with increasing competition from other action sports cameras like Sony and Chinese company Yi.
Although it has always had a hold on the U.S. market.
When people ask me how is it that we have maintained market leadership all these years.
How is it that GoPro still has 98 percent share in North America, for example.
And it's because of our brand because we have millions of customers around the world who are sharing GoPro
experiences and helping us market socially.
And it's also because we've had a relentless pace of innovation coming out with new cameras every year that
other slower moving companies haven't been able to keep up with.
But just because it was making a new camera every year didn't mean people bought a new one each year.
Some models completely flopped and that was just the beginning of challenges for the company.
It IPO'd to a lot of fanfare.
They were pitching this really great action camera that a lot people were buying back in 2014 and they had what
they were trying to build was a media business and so it got valued very much like a social media company.
That drove the stock all the way up into the 90s.
GoPro hired teams of video producers and the idea was to create content with its cameras to sell advertising.
Recognizing that GoPro's brand and everyone's excitement around the brand really stems from the
incredible content that the brand is known for and that our customers capture and share with their GoPros.
We thought that this could serve as a good platform for GoPro to scale the brand as a media company.
But it never paid off and turned out to be a painful mistake for the company that resulted in mass layoffs.
Another failure came in 2016 when GoPro diversified into the drone market for the first time.
The broader concern though even in terms of their entry into the drone market is it seems from our perspective
a little bit too late. I mean that category has been on fire for a few years.
The Karma faced delays and when it did finally launch the drone literally started falling from the sky.
The issue was that the battery latch that was inside the drone was made of plastic.
And while the drone was flying the vibration would deform over time the plastic latch.
It would just come undone and let the battery back out the back.
But unfortunately, we only discovered that issue after we had already shipped the product.
We issued a recall as it was the right thing to do.
As we looked at where the drone market was headed, the size of it, complexities risks with regulation and
the overall profitability of the category, we just decided it made business sense to exit that business.
They ran into you know typical consumer electronic problems.
Channel problems, over supply, little demand, some new initiatives didn't work out.
And so you know that's caused the stock to fall down to about at the low was $3.80.
If you were to pinpoint your biggest challenge as CEO of GoPro, what would you say?
Once we were a larger more mature organization, I would say focus.
There's so much nuance in business and recognizing that focus and staying true to what the world wants from
you as a business staying true to your customer is really important as you grow.
Woodman has spent the last few years getting the company back into focus.
It went through four rounds of layoffs, tightening the global staff from a high of nearly 1,800 to about 900 employees today.
You know our most successful years we were small and scrappy.
I like thinking of the organization as an athlete and being fit, nimble is always better.
Our focus is to do fewer things better.
Woodman has become an expert at cutting costs.
Management got rid of the things that were not profitable like the media business, like the drone business.
They ultimately cut out about 45% of operating expenses completely out of the income statement.
To avoid potential tariffs, GoPro is moving most of its U.S. bound camera production
out of China to Guadalajara, Mexico.
He said even without tariffs this will save the company money.
But still GoPro faces tough competition.
Not from other action sports cameras, but from the cameras in all of our pockets.
As smartphone cameras have continued to improve, sales of GoPro have continued to slow.
Yes we compete with traditional camera companies.
Yes we compete with smartphones.
Yes we compete with home speakers.
We compete for share of wallet.
So we've got to be very aggressive in wowing the customer with the products.
You've seen us do that with Hero 7 Black, our flagship product that we just launched this past holiday and it's
really propelled the company back to growth and profitability in an exciting way.
GoPro became profitable in the fourth quarter of 2018, which was only the company's second time hitting
profitability since third quarter of 2015.
The company has gotten back to its roots and has developed some big advances in its recent cameras.
GoPro start recording.
The latest, the Hero 7, has Hypersmooth technology built in that eliminates the need for a stabilization gimbal.
Customers have noticed.
It is an amazing product.
It is, by far, the best GoPro GoPro has ever released.
The Hero 7 Black is the best-selling Hero camera of any holiday season and the other two models, the White and
Silver seem to be holding their own.
They went out and made a couple acquisitions on the software side to greatly improve editing.
Now you can edit videos in mere minutes and in fact they now have an artificial intelligence engine that will edit them for you.
The company also launched GoPro Plus, a service that automatically uploads pictures and video footage to the cloud.
It has nearly 200,000 subscribers paying $4.99
a month and it created a 360 degree camera called Fusion, which Woodman hinted is the future of its cameras.
It's not so much about creating content for VR.
People's primary interest in Fusion is to use it as an incredibly versatile camera that allows you to capture everything around you at once.
We're using that and learning from Fusion to develop a next-generation camera that we think will be really exciting to consumers.
Looking longer term, much longer term, they have a 360 camera and so we think that they will redefine how we
capture images in the future with the Fusion.
Woodman seems open to doing what it takes to keep GoPro alive.
He has said that he would potentially sell the company if the right buyer were to come along
and he hasn't ruled out taking the company private.
Is there a situation where you'd consider taking the company private again?
If it's a good strategy that would make for a stronger company and a stronger brand and give us better growth
prospects for the future, I would be open to any strategy.
GoPro will inevitably hit more bumps in the road.
But one thing I learned after skiing with Nick Woodman for a day is that he is an eternal optimist.
So rad!
Do you think it will ever be possible to get back to your stock highs?
Oh absolutely.
You just have to continue to grow the business and create value and wow customers.
Playing it safe is playing it small and that's just not our style.
So I have no regrets about some of our missteps and hopefully they make us smarter and more capable for what comes next.