How To Survive A Wipeout
Entrepreneur|December 2019
What happens when a company ignores its hard-core customers and tries to grow at all costs? GoPro discovered the answer: It crashes hard. Now the action-camera company is trying to pick itself back up—by thinking a lot smaller.
By Clint Carter

THIS PAST AUGUST, 40 influencers from 19 countries left their homes with camera in hand. Their mission: Film themselves from the moment they stepped out the door, onward to the airport, and en route to the remote Western Australia town of Broome. They’d charge into the ocean, do bike flips, and ride camels on the beach. And then they’d race to stitch the footage together into a montage and submit it for a contest by 11:59 p.m.

The next morning, the influencers are surprisingly bright-eyed, sitting in a conference room, waiting to learn who made the best video. “I know you guys are curious to know who got the award,” says Devon DiPietro, head of community at the action-camera company GoPro, which organized the event. “But there were so many good submissions that we’re not ready to announce it yet.”

The influencers nod. They know they’re good. So does GoPro, which is why the company spent a lot of money bringing them here. With any luck, the influencers will now help the company make a lot of money.

This big bash in Broome is what GoPro calls its Creator Summit, and it’s the pinnacle event in an ongoing effort to fix its business. GoPro never had trouble with exposure—the brand’s name is synonymous with first-person action footage. But it’s had an on-and-off relationship with profitability. In 2014, its stock topped out at $93.85. Then the company stumbled, and it lost more than $700 million between 2016 and 2019. This year, it's stock price dipped below $3.50. If you’d invested $10,000 at GoPro’s peak, you wouldn’t have enough cash to buy its flagship camera. (It goes for about $400.)

Now GoPro is going through the same process countless companies do at every stage of business: It’s rethinking exactly who its target audience is—and how to appeal to them. That’s why, over the next four days, the influencers GoPro has brought to Australia will ride boats and Jet Skis, snorkel through a flooded mangrove forest, and swim with sharks. They’ll take mud baths, buzz the coastline in floatplanes, and document a schedule of activities GoPro believes its core users thirst for. The company foots the bill and has put up an additional $10,000 in prize money to reward these influencers during an array of challenges. In return, the creators will post 566 times, generating 30 million impressions and 1.8 million social engagements.

Will that generate revenue? It just might. “You’re seeing a real turnaround in their core business,” says Andrew Uerkwitz, a senior tech analyst at Oppenheimer & Co. “They’re actually going to turn a profit this year.”

But first, the influencers need their validation. A little later this first morning, DiPietro finally announces who made the best video. “Congratulations, Nick Pescetto!” she says.

Pescetto, an Italian influencer with gorgeous sun-fried dreadlocks and a quarter million social media followers, steps up to accept his award. With one hand, he shakes DiPietro’s hand. With the other, he holds a GoPro, rotating it between his own grinning face and the applause of his peers.

“EVERYBODY LIKES to see the champ fall from grace,” says GoPro founder and CEO Nick Woodman. “It’s ‘We love you! We love you!’ And then you slip up and they’re on you with daggers, stabbing you to death.”

If it’s not immediately clear, GoPro is the Julius in this allegory. Before the brand’s assassination, it was widely held up as a shining example of entrepreneurial glory.

The origin story is well-told. In 2002, during a five-month surfing trip through Australia and Indonesia, Woodman, then 26, began fidgeting with a strap that would allow him to rig a waterproof camera to his wrist. If he could document his time in the barrel—what surfers call the inside of a wave—it might help him go pro. (Get it?) So he raised some money from his parents, put in $30,000 of his own savings, created a 35-millimeter camera with a strap on it, and sold his first unit in 2004 for $19.99.

A natural salesman, Woodman drove up and down the coast, pitching his camera to surf and skate shops. They understood the appeal. “Before GoPro, unless you had a photographer following you around, nobody had footage of themselves doing anything active,” says Woodman. “It was always the before and after photos in the parking lot.” Growth was steady, thanks to trade shows and athletes using the cameras, but the real pop came in 2006 when GoPro launched its first digital camera. Sales topped $800,000. As the cameras improved in functionality, so did profits. In late 2009, it sold a camera called the HD Hero that brought in $64 million over the course of 2010.

The following year, GoPro raised $88 million in venture funding and was valued at $400 million. When it went public in 2014, it had 25,000 specialty retail accounts. “Those were the good days,” says Todd Ballard, GoPro’s chief marketing officer. “It felt like everything we touched turned to gold.”

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