Follow your passion. Is that profitable career advice? Or a one-way ticket to life as a starving artist, gamer, or writer?
According to Nick Woodman, founder and CEO of the American technology company GoPro, your passions are your most reliable guides in life and in business. Nick started creating his product after watching amateur photographers like himself struggle to take pictures while surfing the waves in Australia and Indonesia. Today, the business pulls in more than $1 billion in annual revenue.
While Nick may have achieved success by following his passions, you probably know many other entrepreneurs who have followed their passions straight into penury. You know it takes more than passion to lift an entrepreneur from a failed company to an internationally successful one. Nick knows that, now, too. After GoPro nearly went belly up in 2017, Nick admitted that long-term success required a big dose of realism as well as passion and a thirst for adventure. Here’s the story of GoPro and its founder:
A Snapshot of Nick Woodman’s Childhood
Nick Woodman was born on June 24, 1975 in Menlo Park, California. His mother, Concepcion, was of Hispanic descent, and his father, Dean, was a Quaker who co-founded the investment bank Robertson Stephens. Concepcion and Dean divorced during Nick’s childhood, and his mother married Irwin Federman, a Jewish man who served as General Partner of U.S. Venture Partners. While Nick earned his billion-dollar fortune through his own ingenuity and effort, his background certainly gave him a leg up in business. Dean Woodman helped broker Pepsico’s acquisition of Taco Bell, and Irwin Federman presided over major corporations.
Nick graduated from Menlo School in 1993 and went to college at UC San Diego because it was close to the beach, a major qualification for a dedicated surfer. Initially, the school denied Nick’s application, but he pressed them until the decision was overturned. While in college, Nick roomed with a guy named Neil Dana whom he later hired as GoPro’s first employee. Nick promised Neil that he would give him 10% of any money he made from selling GoPro shares.
Seven years later, that promise would cost Nick $229 million after Neil proved a great salesman and GoPro a great company. In the early days, however, no one knew that the two college roommates would end up among the world’s wealthiest entrepreneurs. They just knew the two guys loved adventure.
Early Failures in Entrepreneurship
“When I got out of college,” Nick later said, “I gave myself till I was 30 to invent a product. If I couldn’t do it by then, I would just get a real job. And that fear – the fear of a real job – motivated me to be an entrepreneur.”
Sure enough, after graduating from UC San Diego, Nick founded his first startup, a website called EmpowerAll.com. The idea behind the site was to sell electronic goods for a markup of $2 or less. The site failed to launch, and Nick shut it down quickly. His second entrepreneurial effort made a bigger splash. It was a gaming and marketing platform called Funbug, which gave users a chance to win cash prizes. Nick launched Funbug in 1999 after raising the necessary capital while working as a private equity firm tech analyst.
Funbug started in the days before the dot-com bubble popped. People still believed anything on the internet must be a great investment, and funders practically begged Nick to take their $3.9 million in startup money. By April 2001, however, Funbug had gone bust. The company was memorialized on f**ckedcompany.com, a list of the dot-com era’s biggest busts. “I failed and deserved to be on f**ckedcompany,” Nick said later. “I mean nobody likes to fail, but the worst thing was I lost my investors’ money and these were people that believed in this young guy that was passionate about this idea.”
Nick took the failure personally. He knew he needed to ask himself the hard questions about what he was doing and why. And he knew the best place to do that: on a surfing trip.
The Surfing Trip that Started GoPro
Now 26 years old and married to Jill, his college sweetheart, Nick planned a five-month surfing trip around the coasts of Australia and Indonesia. He invited a group of his closest friends to join him, and the guys lived in a van while searching for the best surf spots around the coasts. Every time they found the perfect swells, they hoped that someone could capture their moves on film. If they were ever to get a chance to “Go Pro” as surfers, they needed proof of their skills.
No one ever caught the shots they needed, but the experience gave Nick an idea. Instead of going pro as a surfer, he would go once more into the marketplace. Only this time, he had an idea he cared about, a product people would buy, and the connections to pull off a successful startup.
In a few months, Nick had developed a comfortable, wearable camera that surfers could strap to their bodies and take into the waves with them. Borrowing $200,000 from his father and a sewing machine plus $35,000 from his mother, Nick began experimenting with prototypes for the straps. He and his wife Jill made extra money for the project by selling shell necklaces he’d bought in Bali for $1.90. They charged $60 a necklace and raked in $10,000 plus another $20,000 from the camera straps.
Their company finally launched in 2002 under the name Woodman Labs. The products quickly evolved from straps and shells to technology, and in 2004, Woodman Labs released its first camera system, which used 35mm film. It was an immediate success.
Riding the Wave of Success
The company’s beginnings may have been humble, but it’s growth was dramatic. Nick quickly followed his 35mm camera with a version that could take digital stills and 10-second videos. Surfers snapped up the whole line of products. In 2006, GoPro — the new name of Woodman Labs — took in $355 million in annual revenue. Ten years later, that number would hit 1.62 billion.
GoPro’s extraordinary growth drew the world’s attention. Kodak, long the heavyweight champion of the camera industry, had taken a legendary fall, so no one believed in cameras as a business anymore. Yet here was Nick Woodman practically printing money and doing it with wearable cameras.
GoPro went public in 2014, and Nick became an instant billionaire. In a matter of months, his wealth hit the $3 billion mark. Now the highest-paid CEO in America, Nick bought a 180-foot yacht, a Gulfstream G5 jet, homes in Montana and Hawaii, and a fleet of vintage sports cars. But in two years, his love of man toys and his flashy spending habits would prove to be his and GoPro’s undoing.
The Problems Start
The company adopted its founder’s flashy spending style. “We went from around 700 employees at the time of the IPO to 1,600 in 18 months,” said C.J. Prober, a former Electronic Arts executive who later took over as GoPro’s COO.
Overstaffing wasn’t GoPro’s only misstep, either. In June 2015, GoPro unveiled its Hero4 Session, the latest iteration in its product line. The simple product was riddled with problems. At $399, it was way overpriced. Plus, its simplistic design befuddled users, and the lack of marketing behind the product meant it never gained traction. The company’s executives had believed the strength of the GoPro brand would drive any item they released even without a marketing campaign. They were wrong. GoPro dropped the price of the Hero4 by $100. Then by another $100. It made little difference.
At the same time, corporate expense budgets swelled. New ideas got started but never completed. By the end of 2015, GoPro had to announce its first unprofitable quarter. More unprofitable quarters followed. Share prices sank.
Nick knew the problem: “We went from being thrifty and scrappy and efficient and wildly innovative to being bloated and–what’s the opposite of thrifty? It was undermining the strength of our brand and deconstructing everything we had built.“
GoPro was building a new flagship product that Nick believed would turn his company’s fortunes around. But the project, a drone named Karma, got delayed. Then it got delayed again. Potential customers didn’t know what was wrong, but GoPro couldn’t seem to juggle its products, get them launched, or maintain the quality of its previous offerings.
A class action lawsuit accused the company of making false and misleading statements and failing to disclose flaws in its drones. The suit also said GoPro overstated customer demand and made materially false and misleading public statements.
Then, the layoffs came in late 2016. They came again in March 2017. All told, more than 500 people — 25% of GoPro’s workforce — lost their jobs. More than 40% of those were working at the VP level or higher. Fox Business named Nick one of the worst CEOs of the year. It was clear the company was headed for a crash landing if things didn’t change. Fast.
The challenges GoPro faced in 2016 and 2017 forced Nick to restructure his leadership style. For years, GoPro’s company meetings had operated more like pep rallies with crowds of employees cheering on the charismatic young founder. After the fumbles and failures of 2016 and 2017, however, the GoPro staff saw a new, more somber leader take the stage. For two hours, Nick addressed their fears and concerns, not just their successes and joys.
He also took a more realistic position on corporate growth and development. “We used to try to hit home runs every year,” Nick said. “(Now) we would rather hit singles, doubles, and triples consistently.“
Nick’s new attitude lined up with a more grown-up and mature version of the company he founded. Today, GoPro has rebounded somewhat. The company’s stock hovers around $2.72 a share, up a little from its worst days but a long way from the heady times when it stood at more than $80. Some analysts think GoPro can make a comeback by focusing on its core products and delivering the practical, innovative items its customers want to buy. Time will tell. Nick himself is worth about $800 million now, also a far cry from $3 billion but still putting among the wealthiest people in the world.
Nick’s Advice on Life, Entrepreneurship, and Success
Now in his mid 40s, Nick is no longer the starry-eyed young entrepreneur who ran a small business from the back of a van then transformed it into a multi-billion dollar enterprise. He knows now that passion will get you started, but it won’t carry you or your business through the long term.
Nick shared his hard-earned wisdom with INC:
The Future of GoPro
In an article with The Gate in early 2020, Nick said his company was going to focus on serving users and developing software that suits them. He also talked about new product ideas, though he was cagey about specifics. Whatever GoPro produces this year and next, consumers can surely count on a return to the authenticity, simplicity, and eye-catching adventure products that build the brand’s enormous success in the first place.
What else would you expect? The company was founded by a man who once said, “When I have a difficult decision to make, I imagine myself as a 90-year-old guy looking back on his life. I imagine what I’ll think about myself at that point in time, and it always makes it really easy to go for it. You’re only going to regret that you wimped out.“