Shot on GoPro | Case Study

Founded by : Nick Woodman

What is GoPro ?

It manufactures eponymous action cameras and develops its on mobile app and Video editing software.

History

Founded in 2002 by Nick Woodman. In 2002 he starts savings his pennies, he was selling beads and belts and things made of shells out of a VW microbus. He gets about $250k from his parents and he truly bootstrapped like most of the Entrepreneur.

In 2004 the very first GoPro camera comes out and however 2 years later , the first hero digital camera comes out. 2005 sales about $150,000. By 2006 it goes upto $800,000 and $3.4 million in 2007. The Golden Era of goPro has Started and by 2014 they went public.

They hired a guy Tony Bates who is an executive for Microsoft and become the President of GoPro. Going public would be the end of the golden era for GoPro.

The IPO(Initial public offering) goes out as most of the IPOs do. The day one share was $24. They were worth $3 billion. 2014 the revenue was $1.4 billion and in 2015 it was $1.7 billion.

In October 2014 they hit a peak of $98 a share. And there valuation was around $10 billion. In between 2013 to 2014 they were growing 41% and in between 2014 and 2015 it grow 16%. They had 45% of gross margin in 2014 which is 198$ million. Their OPEX(operating expenses) was about 440million in 2014, 618$ million in 2015 and it goes to $835 million in 2016. In 2014 their net profit was $128 Million and goes down to $36 million in 2015 and was only 16% of growth. In next year they goes $1.7 billion to $1.8 Billion so their growth was -27% and they spent even more on OPEX. In this Era(..2016) they had two Super Bowl ads to get Worlds attention and they had lost $419 million that year, -27% of growth. They laid off 100-200 people in 2016 and then they laid off 250 people in 2017 and then they told Bates that he can go on the Boards but he’s not going to be president anymore.

In between 2015-2016 they hired some media executives to be a media company and they went out and they hired from Hulu a woman that was incharge of original content in July of 2015 and then they hired a Guy that was incharge of HBO Sports in October 2015 said Hey we’re a media company. They popped up and then again went down to where it is 6$ in Jan 2018. In past of weeks Nick said “He’s open to selling the company”. They contracted JP Morgan to sell the company. They have lost almost 75% of their value.

What cause them to fall?

1. They got flanked in camera market. The 360 degree camera came into the Market. Some of the cases came out into the market in which ,people can attach their iPhones into the Helmets and record the video instead of GoPro and it deploys the GoPro market.

2. Questionable Strategic Shift from Camera to Media Company.

3. Layoffs and closed divisions.

Lessons to learn

"Know who you are and stick to your knitting and don’t get distracted. Whether we are operating a T-shirt company downtown or we’re lucky enough to start something that’s small and we’re selling beads. Stick to your knitting know who you are, know your competencies, cultivate your competencies and build that culture where you are."