MNGT-4330 University of Texas, Permian Basin – GoPro sells a line of wearable, mountable, and reasonably affordable HD video cameras.

QUESTION

GoPro sells a line of wearable, mountable, and reasonably affordable HD video cameras. Although they’re now used for a variety of purposes, they were originally designed for extreme sports enthusiasts, such as surfers and snow skiers, who wanted to shoot videos of their activities. About two inches wide, the cameras look like tiny gray boxes. Despite their size, they’re packed with amazing capabilities. They can be mounted almost anywhere and shoot video that was previously impossible to get. If you’ve never seen what a GoPro camera can do, set this case aside for a few minutes and go to YouTube on your computer or smartphone. Type in the search box “Flying eagle point of view #1.” The video was shot by a GoPro camera mounted on the back of an eagle. You get to see what the eagle sees flying through a beautiful mountain canyon. The video has been viewed almost 8 million times. GoPro (technically Woodman Labs) is an enormously successful company. Currently, the firm is generating over $500 million in annual sales, and its cameras have become the gold standard for self-documenting extreme sports experiences. But it wasn’t always this way. GoPro started with a single entrepreneur, working out of his parent’s house, who was passionate about a specific idea. It’s a good story—one from which any student of entrepreneurship can learn and find takeaways that they can apply to their own start-up idea.

Nick Woodman

GoPro was started by nick Woodman, who grew up in northern California. In high school, he played football and baseball before becoming infatuated with surfing. For college, he picked the University of California, San Diego, because of its proximity to the beach. Woodman knew early on that he wanted to be an entrepreneur. Before starting GoPro, he had two start-ups, both of which failed. The first, a website called EmpowerAll. com, tried to sell electronic products for no more than a $2 markup. It barely got off the ground. The second start-up, Funbug, was a game and marketing platform that gave users the chance to win cash prizes. It was launched in 1999, the height of the dot-com bubble, and raised $3.9 million in funding. The company failed a year later, never having gained traction. Woodman was shaken by the failure of Funbug, and he decided to take some time off. He traveled to Australia and Indonesia to surf, thinking that when he returned he would find a normal job. It was in Australia that the idea for GoPro first emerged. Woodman had brought a makeshift strap that he used to tether a Kodak disposable camera to his wrist so he could photograph himself and others surfing. It didn’t work well. What he needed was a strap that was durable enough to take the wear and tear of ocean waves, and still be comfortable enough to wear. Woodman experimented with different strap designs during the trip. When he returned to California, he decided to pursue the idea of designing a wrist strap for cameras full time. Years later, reflecting on the trip, Woodman told Forbes magazine, “I remember my parents not being very supportive of it (the trip). But if I (hadn’t) followed my passion for surfing … I would have never come up with the concept to make a wrist camera.”

Prototyping and first Sale

Woodman moved into his parents’ house and started building prototypes. He was determined to bootstrap his start-up this time, still smarting from losing $3.9 million of his investors’ money on Funbug. To support himself, he made money traveling up and down the California coast selling bead-and-shell belts he bought in Indonesia for $2.50 and was able to sell in California for as much as $60. Using an improvised set of tools and his mom’s sewing machine, he gained confidence that he could make a strap that was better than anything currently available for tethering a camera to a surfer’s wrist. His thinking evolved to selling not only the strap, but a combination of the strap, a camera, and casings (to protect the camera from water and other debris). After borrowing money from his parents, he moved to a cottage in the redwood forest near Pesadero, California, where he worked nonstop testing fabrics, designing marketing materials, and writing patent applications. Getting the strap right wasn’t an easy task. He needed to find the perfect tightness and perfect fabric, so it didn’t make you sweat, didn’t make you sore, and wouldn’t break down in water. He had no expertise in camera design, so knew he’d have to license a camera from an existing manufacturer. He settled on an inexpensive 35-millimeter model made in China. He finally had what he wanted—a camera, casings, and a durable and comfortable strap. He decided to call the combination GoPro. To test the market for his product, Woodman and his roommate and first hire, neil Dana, hit the trade show circuit. The moment start-up founders dream about happened at the first show, which turned out to be the 2004 Action Sports Retailer show in San Diego. GoPro got its first order for 100 units from a Japanese distributor.

Growth Years

GoPro grossed $350,000 its first year. Woodman and Dana visited surf shops across the country trying to convince them to carry the product. In 2005, Woodman appeared on QVC three times. GoPro slowly built momentum. Woodman also didn’t stop innovating. Along with surfing, Woodman had an interest in race car driving. He treated himself to driving lessons at Infineon Raceway in Sonoma, California. on a hunch, he strapped a GoPro wrist cam to the car’s roll bar, which is in front of the driver. That led to an inspirational moment. GoPro would make mounts for its cameras so people could point them back at themselves. Woodman also broadened his vision and started attending trade shows in all the action sports and consumer electronics markets. By this time, GoPro was manufacturing its own cameras. Although GoPro was getting into surf shops and sporting’s goods stores, it hadn’t yet penetrated a major retailer. Woodman started engaging executives at REI, an outdoors and sporting goods chain. At one point, he was sending them an email once a month updating them on GoPro’s activities. Eventually, GoPro broke into REI and Dick’s Sporting Goods. In 2010, GoPro’s big break happened. After reaching out to Best Buy repeatedly with no luck, Best Buy approached GoPro. After beating sales targets in several test stores, GoPro’s cameras were placed in all Best Buy locations. GoPro also got a little lucky. The Flip camera was a big seller for Best Buy, but its appeal evaporated when smartphones obtained video capability. In 2011, the Flip camera was pulled from Best Buy’s shelves. That left a void in Best Buy’s camera line that GoPro was able to fill. As is the case for most start-up ventures, GoPro has had some scary moments. In 2007, revenue was in the low seven figures and Woodman was concerned. He wondered if GoPro would grow beyond its extreme sports niche, and considered turning the company over to a group of outside investors. The financial crisis of 2008 prevented that from happening, and GoPro moved on.

The Influence of Social media

A fascinating part of the GoPro story is the influence of social media on the firm’s success. From the beginning, extreme sports enthusiasts who bought GoPro cameras posted their videos. Many went viral and posted millions of views. This situation created the best possible scenario for GoPro. Its brand was being promoted not by the firm itself, but by its users. Piggybacking on its users’ appetite for stunning videos, GoPro sponsored several well-known extreme sports athletes, including American skateboarder and snowboarder Shaun White. For a fun experience, go to YouTube and type in “Shaun White GoPro.” There will be several videos. You can see exactly what Shaun White sees when he tackles an X Games halfpipe or a particularly difficult run, all captured by helmet mounted GoPro cameras. GoPro is also a little edgy in its sponsorships. When Felix Baumgartner set a skydiving record by jumping from the edge of space, he wore five GoPro cameras on the way down. To GoPro’s credit, in part it has made its own luck when it comes to social media. Its $300 cameras produce video that rivals that of professionally created content, so it’s fun to shoot and post. For instance, Woodman and his team knew that to produce truly satisfying video the sound quality would have to be good. Viewers would want to hear, for example, a snowboard crunching through snow to get the full impact of a thrilling descent. Wind noise rushing into a camera’s microphone is a problem in this type of setting and can easily drown out everything else. By riding bikes that are nearly silent, Woodman and his engineers were able to record almost pure wind noise in a natural environment. They then developed firmware that isolates the sound of wind and eliminates distracting sound from GoPro recordings. As a result of all of this, GoPro says it has over 222 million views on its YouTube channel and 4.7 million likes on Facebook.

The Road Ahead

Not everyone is widely optimistic about GoPro’s future. Maintaining its momentum may be tough. Major brands such as Sony, Coleman, and Swann have started selling sports cameras that are similar to GoPro’s. other tech heavyweights, such as Apple and Google, are working on wearable devices with video and photo capabilities. The wildcard is smartphones, and how good their video capabilities will eventually become. If a smartphone will eventually be able to do everything that a GoPro camera is able to do, that doesn’t project a bright future for GoPro, at least in its current form. GoPro, of course, is aware of these challenges. In May 2011, Woodman broke his vow to never take outside funding and raised $88 million in a series A round. The round involved several venture capital firms, some with deep ties in the entertainment and technology industries. Woodman says that the money was raised in part to build an experienced board of directors to help GoPro navigate the future. As for the money itself, Woodman has remained mum about how it will be used. That causes one to speculate that GoPro may have future generations of products in its pipeline.

1. Which of the characteristics of a successful entrepreneur, discussed in the chapter, do you see in Nick Woodman? To what degree do you think these characteristics have contributed to GoPro’s success?
2. How does GoPro’s basic business idea “add value” in the lives of its customers?
3. How do Nick Woodman’s entrepreneurial actions debunk the myth that most entrepreneurs are motivated by money?
4. What are the most significant challenges GoPro faces in the future? Do you think GoPro will be able to meet the challenges or do you think the company’s future is in doubt? Explain your answer.

ANSWER

The Success and Challenges of GoPro: A Case Study

Introduction

The story of GoPro and its founder, Nick Woodman, exemplifies the journey of a successful entrepreneur. This essay explores the characteristics of a successful entrepreneur demonstrated by Nick Woodman, the value proposition of GoPro’s business idea, Woodman’s motivations beyond monetary gain, and the significant challenges GoPro faces in the future.

Characteristics of a Successful Entrepreneur

Nick Woodman possesses several key characteristics of a successful entrepreneur. Firstly, he exhibits passion and perseverance, as evidenced by his unwavering dedication to his ideas despite previous entrepreneurial failures. Woodman’s ability to learn from setbacks and continuously innovate showcases his resilience. Moreover, he displays resourcefulness and creativity by using a makeshift camera strap during his surfing trip, which eventually led to the birth of GoPro.

Woodman’s entrepreneurial spirit is also characterized by his risk-taking mindset. He chose to bootstrap his start-up and lived in his parents’ house to save money, showcasing his determination and willingness to sacrifice short-term comfort for long-term success. Furthermore, his ability to identify market opportunities and pivot the business to incorporate mountable cameras and casings for extreme sports enthusiasts demonstrates his keen market awareness and adaptability.

Adding Value to Customers’ Lives

GoPro’s basic business idea revolves around providing wearable, mountable, and affordable HD video cameras. By catering to the needs of extreme sports enthusiasts, GoPro enables individuals to capture and share their adrenaline-filled experiences in ways that were previously impossible. The compact size, versatility, and durability of GoPro cameras allow users to document their activities from unique perspectives, enhancing their self-expression and storytelling.

GoPro’s cameras add value by empowering users to relive and share their adventures, fostering a sense of connection and inspiration within a community of like-minded enthusiasts. The immersive and high-quality videos captured by GoPro cameras enhance the overall experience for customers, allowing them to showcase their skills, document memorable moments, and inspire others.

Entrepreneurial Actions and Motivations

Nick Woodman’s entrepreneurial actions debunk the myth that most entrepreneurs are solely motivated by money. While financial success is a desirable outcome, Woodman’s motivation stemmed from his passion for surfing and his desire to capture those moments. His dedication to creating a reliable camera strap and subsequently building a whole ecosystem around it demonstrates his passion for improving the experiences of fellow enthusiasts.

Woodman’s entrepreneurial journey emphasizes the importance of pursuing one’s passions and finding opportunities that align with personal interests. By following his passion for surfing and leveraging his firsthand experience, he identified a gap in the market and filled it with a product that resonated with his target audience.

Significant Challenges and GoPro’s Future

GoPro faces several significant challenges in the future. One notable challenge is increased competition from major brands and tech giants entering the sports camera market. Rivals offering similar products, coupled with the potential advancement of smartphone capabilities, could pose a threat to GoPro’s market dominance.

Moreover, technological advancements and evolving consumer preferences require GoPro to continuously innovate and enhance its offerings to stay ahead. Maintaining customer loyalty and differentiating from competitors will be crucial for sustaining growth.

However, GoPro has shown resilience in the face of challenges before. The company’s ability to adapt, diversify its market presence, and continuously improve its products has enabled it to thrive. Additionally, GoPro’s brand reputation and strong social media presence, coupled with its dedicated user community, provide a solid foundation for future success.

Conclusion

Nick Woodman’s entrepreneurial journey with GoPro exemplifies the characteristics of a successful entrepreneur, including passion, perseverance, resourcefulness, and market awareness. GoPro’s value proposition lies in providing wearable, mountable, and affordable cameras that enable users to capture and share their extreme sports experiences in innovative ways. Woodman’s motivations extend beyond monetary gain, reflecting a genuine passion for his product and the desire to enhance users’ lives.

While GoPro faces challenges from competitors and evolving technologies, the company’s history of adaptation, innovation, and brand loyalty suggests that it has the potential to overcome these obstacles. By leveraging its strengths, maintaining a customer-centric approach, and continuing to innovate, GoPro can position itself for a successful future in the dynamic market of wearable cameras and adventure documentation.