Most of you know GoPro - the original action camera for extreme sports.

They’re the reason we can see videos like this…

GoPro was once one of the fastest growing companies with share prices at $98 a piece… but today they value under $4.

In 2014, GoPro was valued at $2.96B. Then just 2 years later they were losing $373M a year.

What happened?

Great question.

Today, we’ll talk about how GoPro went from one of the fastest-growing companies in the world to losing millions, and what we learned from it.

Here’s what we got for ya:

Read Time: 4 min 52 sec

The story of GoPro starts in 2003 on a surfing trip with a failed CEO and a desperate search for a waterproof camera.

Nick Woodman (GoPro founder) wanted a camera that he could take with him surfing… something that the camera market didn’t offer.

So Woodman decided to create his own. But to do that he needed money.

At this point, Woodman had closed two failing businesses and lost almost $4M of investor money.

So he started selling jewelry out of his Volkswagen with his wife to get the funds.

(I’m not kidding. GoPro started in a van)

After raising $10K that year, Woodman built a strap that connected to a 35mm camera in a waterproof box.

In 2004, Woodman sold his first GoPro for $20. That year, he drove around Australia in his van and sold them to surfer shops.

His pitch: The first action camera for professional content at an affordable price.

In his first year, he made $150K in sales.

This product did not exist before GoPro. If you wanted a shot of you skiing, there had to be someone filming it from the bottom.

So as more people started to post videos of them doing crazy stunts like skydiving or dangerous bike tricks…

GoPro’s sales took off. By 2014 (10 years later), GoPro was valued at $2.96 billion.

Then later that year, things changed…

GoPro announced they wanted to become a media company

In theory, becoming a media company was a great idea.

Companies like Redbull and YouTube originals not only make billions a year with low margins but they are valued higher on the stock market.

So, GoPro hired over 50 employees in the span of a few days and spent most of their resources on content… over 71% of which was never released.

Most say becoming a media company marked the beginning of the fall of GoPro. But if you ask me, it started way earlier than that…

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It’s true, GoPro was making millions a year and growing fast. The problem was, they only had an 8% profit margin…

So for every $1,000 they made, they only kept $80.

On top of this, GoPro:

#1 - Made very few updates to their product after going all in on media.

#2 - Did not try to keep up with competitors

Buyers wanted an action camera with a 360 range. So other companies started to make them.

When people asked GoPro, they said “Just buy two and tape one to the back of the other.”

Yikes.

#3 - Tried (and failed) to build a GoPro drone

In 2016, GoPro launched the Karma Drone:

Three months after its release, the drones started “falling from the sky” because the batteries would die unexpectedly.

After recalls, GoPro lost over $96M dollars trying to enter the drone market.

#4 - Paid the CEO a salary larger than their net profit

In 2014, Woodman became the highest-paid CEO in the US at $285M/ year. That year, the company itself made $128M in profit.

For reference, Apple pays its CEO less than 25% of its NET profit.

By 2014, GoPro began to lose $373M a year. Shareholders quickly pulled out, and GoPro spent the next 4 years pulling themselves out of the red.

By 2017, GoPro had completely cut its media team, and laid off over 25% of its employees.

Here are my top 3 takeaways from the rise and fall of GoPro:

#1 - Not everyone is meant to be a CEO.

Just because you have an idea or are the visionary for a company, that does NOT mean you should be overseeing the day today.

Another example of this is the founder of Shopify. The founder knew he did not have the skills to manage a big corporation.

So, he demoted himself to COP and hired a CEO.

#2 - Stay In Your Lane

GoPro became famous with their small camera model that’s attached to your wrist/ helmet/ etc.

Not drones.

As we saw with Chick-fil-A and Loom, it’s always best to focus on one thing to differentiate yourself from the competition.

GoPro had great momentum with its cameras and should have kept its edge as a market leader.

#3 - Don’t look at where they are. Look at what they did to get there.

Redbull did not start out hiring a full media team. Neither did Youtube.

Both grew an audience, allowed others to post on their platform, them slowly produced high-quality content.

NEITHER of them hired a full team and dumped over 68% of their net profit into it.

When you want to be where someone is right now (success, finances, or accomplishments)…Don’t copy what they do today.

Copy what they did to get there.