Some of the most successful businesses in history were born from early failures. With Apple, it was Steve Jobs being fired and coming back years later to lead the company to fortune. For Microsoft co-founders Bill Gates and Paul Allen, it was a failed business that crunched traffic data into reports for transit engineers. And for GoPro, it took one failed startup attempt and multiple wipeouts face-first into the ocean.
GoPro was born out of necessity
Unlike so many great inventions that have happened by mistake, GoPro was born out of necessity. Fresh from Funbug, a failed gaming and marketing startup, GoPro founder Nick Woodman did what any self-respecting entrepreneur would do, and went on a surfing trip halfway across the world. He was enamored with taking pictures, and as a side project, jury-rigged a waterproof camera that could be strapped around his wrist with a surfboard leash.
But those cameras couldn't take a beating when Woodman wiped out, which was often. He eventually came to the realization it might be better to focus on making the cameras himself. With some borrowed money from his parents, and lots of testing, he built the first prototype of the GoPro in 2004. Now a decade — and many models — later, the company is going public with the hopes that it's left the face-plants in the past.
That $100 million could go up substantially
In a filing today, the company said it plans to raise $100 million from its initial public offering, and will list on the NASDAQ exchange under the ticker symbol GPRO. That number sets a baseline, and may increase substantially depending on investor interest GoPro encounters during its roadshow leading up to the IPO.
Along with the IPO figure, the company disclosed its financials, saying that it earned $60.6 million in profit off revenues close to $1 billion last year. It also said that nearly half its sales came from outside the US last year, a percentage that's already beyond beyond the halfway mark so far, this year.
GoPro also detailed a dual class plan for its common stock, giving voting control to Woodman and other executives. That means the group that founded and directed the company early on will hold the reins as it evolves, something that's been a key factor in the long term growth and evolution at companies like Google and Facebook.
A small empire
While GoPro's main product is cameras, the company sells a dizzying selection of mounts and accessories that take it beyond what you get out of the box. In fact, it's one of the big things that's helped make it stand out from competitors. You can stick one of the company's cameras anywhere, be it on your wrist, head, chest, or on surfboards, cars, bikes, or anything flat enough to handle a suction cup. GoPro also sells hardware add-ons, like wireless remote controls, external video screens, and power packs.
Cameras are just the start
In a world filled with inexpensive smartphones that get bigger screens and better cameras every few months, there is the very real question of how GoPro can not only survive, but continue to flourish, something investors will expect to be addressed. In an interview with Forbes last year, Woodman said he views GoPro as having an edge in durability and utility. More recently, he's argued that both GoPro and smartphones are eating away at traditional point-and-shoot cameras, and earning more space on store shelves as a result.
Even so, in its filing, GoPro admitted that smartphones, tablets, and the companies making them could create hardened versions of their own products, becoming a very real threat.
"Smartphones and tablets with photo and video functionality have significantly displaced traditional camera sales," the company notes. "It is possible that, in the future, the manufacturers of these devices, such as Apple Inc. and Samsung, may design them for use in a range of conditions, including challenging physical environments, or develop products similar to ours."
Even so, the GoPro has managed to flourish at a time when smartphones have seen some of their biggest sales. Sales of GoPro have soared, more than doubling each year since the first model launched. All told, it's sold 8.5 million HD cameras since 2009, with 3.8 million of those being sold just last year. In 2011, the company racked up $234.2 million in revenue, followed a year later with $526 million. In an interview with Forbes, Woodman originally said he expected last year's sales to double, though it fell just shy of that with $985.7 million.
Others haven't come close. According to IDC, GoPro had a 30.4 percent share of digital camcorders last year. That's higher than Sony, Panasonic, and Canon — companies that helped created that entire digital camcorder category, and that sell more than just action cameras. In the ruggedized camcorder category, GoPro accounted for 77 percent of the market last year, and have been the top brand in standalone video cameras for the past five quarters, according to the NPD group.
"I don't see anyone effectively competing with them because focusing on the quality of the hardware is missing the point," says Stephen Baker, a VP of industry analysis for the NPD Group. "Go Pro wins because of its ecosystem, because people want to be associated with the brand. It is about lifestyle and not hardware — which is a good thing."
More money, more competition
GoPro cameras are available just about anywhere these days, but that wasn't always the case. Woodman originally began selling cameras out of a Volkswagen bus, and later at trade shows. GoPro's big break came once it got on store shelves, beginning with deals to get cameras inside REI and Best Buy. In 2011, GoPro caught the attention of five venture firms that, led by Steamboat Ventures, put $88 million into the company. A year later, Foxconn — a company more well-known for assembling electronics for Apple and others — bought an 8.88 percent stake in GoPro for $200 million, valuing GoPro at $2.25 billion. That particular deal was described as strategic by both companies, with Foxconn getting access to GoPro's imaging technologies, and GoPro having more direct access to Foxconn's massive manufacturing empire.
GoPro's success has created plenty of competitors
GoPro's success has spurred no shortage of competitors, including me-too products from existing tech giants. Sony, which made a pocket camera called the Bloggie, switched gears with the smaller, mountable Action Cam in 2012. The same year, JVC launched the Adixxion, a diminutive waterproof action camera with built-in Wi-Fi and a screen on the back. Last year, Panasonic even tried its hand with a camera that can snake around your ear. There have also been a handful of action-camera upstarts like Ion, Veho, Geonaute, and Drift, all of whom are intent on getting a piece of the growing pie.
But others have not been so lucky. Contour, a Seattle-based startup, began around the same time as GoPro and with a similar aim. Instead of surfing, co-founders Marc Barros and Jason Green created the lipstick-style action camera to stick on to ski helmets. The company grew briskly, but ultimately couldn't keep up with GoPro, and closed up shop last August to the surprise of some of its employees. Contour investor Clarke Capital ultimately ended up buying the company's assets, and continues to sell existing camera models.
Similar fears of staying power surround GoPro, despite stellar sales. There is a very real question of just how it plans to keep its momentum going, and whether that involves expanding into new areas. The earliest peek into that plan would seem to suggest that GoPro is determined to evolve beyond its status as a hardware maker, and move towards being a media company, piggybacking on the viral nature of the videos its users create and share. So far, that includes a curated channel on Microsoft's Xbox consoles, which launched on the Xbox 360 last month and is headed to the Xbox One later. That's on top of similar curated channels on YouTube, Twitter, and Facebook.
For GoPro, the payoffs have been huge, and transformative in terms of documenting what's happening in the world. Like Russian dashboard cams that captured the Chelyabinsk meteor from just about every angle when it struck the Earth last year, GoPro has allowed the entire world to experience the thrill of extreme sports through the eyes of the daredevil athletes who risk their necks. What began as a mostly surfing-oriented device has quickly expanded to rock climbing, racecar driving, and everyday backyard hijinks. And all that relatively mundane footage means that occasionally something more exciting breaks out and goes viral, further adding to GoPro's cachet.
Pigs help sell cameras too
Case in point: a video that blew up in early February featuring a duo of skydivers. The clip starts with the pair of skydivers inside a plane high above Northern California, one of whom flashes the camera a sly middle finger. Seconds later, and without warning, the camera goes tumbling out of the plane, spinning so fast viewers are treated to a dizzying free fall. The camera ultimately lands in a pig pen, where it's nearly eaten by one of the inhabitants, but manages to keep rolling footage unscathed.
GoPro has used clips like this to promote its products in advertisements on various social networks. It's also pulled out all the stops when it comes to showing off the products in stores and to the press. The company's designed specialty kiosks with video footage that shows the product in action as well as its results. It's taken a similarly unorthodox approach pitching the product to the media, inviting around 60 journalists to test out its third-generation Hero camera on their choice of land, sea, or air: activities involved motorcycles, scuba diving with sharks, skydiving from hot air balloons, or riding shotgun in Czech military jets.
Lifestyle imagery is a clear part of GoPro's business
And now, as it aims to go public, lifestyle imagery and the aspiration to obtain it are becoming a clearer part of its business. Last October, GoPro inked a deal with Virgin America to show videos shot on its cameras to passengers. In January, that was joined with the aforementioned plans to launch a GoPro channel on Microsoft's Xbox console, where players can even buy cameras and accessories straight from their couch. And according to GoPro, the company plans to start making money off those partnerships with advertising and sponsorships this very quarter.
In that sense, for GoPro now — and possibly well into the future — hardware is not everything. Competitors are catching up with, and even surpassing, GoPro with cameras that have more features at a lower price. There are also Sony and Samsung, which have begun hardening their smartphones to survive dunks in water and spills onto pavement, a trend that could very well spread to other manufacturers and shorten the durability divide Woodman preaches. If that ends up being the case, the one thing that's likely to separate GoPro from the pack is its brand. In just 10 years, it's become synonymous with the very activities it's been designed to chronicle — even if those are face plants into the ocean.
"Anybody can build hardened smartphones, sell head mounts or build a waterproof device, but they still cant be a GoPro," Baker says. "Of course it remains to be seen if this can be effective in the long run."
Ben Popper contributed to this report.