Nick Woodman and I are strapped into the cockpit of a vintage racecar on a winding, narrow road in California's Santa Cruz Mountains, taking cliff-side turns at 60 miles per hour and rocketing up to 100 on the straightaways. Strapped to each of our chests are tiny high-definition video cameras. There are two more cameras on the doors, pointing in at us; one over our shoulders, pointing at the instrument panel; one mounted to the dashboard, pointing at my face; one under the nose of the car, to capture the road whizzing by; one attached to the front of the roof; and another looking up over the roof via a pole mounted to the rear end. The car is a Ford GT40, a replica of the legendary vehicle that won the 24 Hours of Le Mans rally race four times in the 1960s. It's the property of GoPro, the company that makes the cameras we're using. Woodman is the CEO and an accomplished amateur racecar driver (and surfer, mountain biker, motorcyclist, and all-around thrill junkie).
We approach a blind turn, and the engine emits a loud brap as Woodman guns it around the corner and down the hill, and the back end of the car fishtails out behind us in a slightly sickening way.
"This car wasn't road-legal until a couple weeks ago—I've never taken it up here with a passenger!" he yells over the engine noise. "I think we need to stiffen up the suspension." Then he hammers the gas again.
I've been trying to stay cool, but my mind is a blur of headlines in the tech press about a wild-man CEO and a journalist plummeting into a ravine to their deaths. I give in after about 15 minutes. "OK, you're starting to scare me," I tell him.
I've given him the sound bite he is looking for—the cameras are rolling, after all—so he slows down a bit, and we cruise the rest of the way through the mountains, through the biker town of Pescadero, and out to Highway 1, where we turn off at Pigeon Point, a clearing near a lighthouse on the cliffs over the Pacific Ocean. A film crew is waiting for us there with two electric motocross bikes from a company called Zero (the bikes are also strapped with tiny video cameras) and an elaborate remote-control helicopter (for overhead shots).
Woodman wanted to bring me here for three reasons. One, GoPro is a company that's deeply invested in storytelling (primarily in the form of extreme-sports videos), so he suggested we do part of our interview here, with a dramatic backdrop and some adrenaline-pumping action between questions. We had been at the company's office all day, just up the road in Half Moon Bay, but as the sun dipped enough to provide the magical golden light of late afternoon, it was time to switch venues and turn on the cameras.
Two, Woodman, who's 36 and looks a lot like Ed Helms playing a surfer, wanted to show me he's a risk taker and authentic action-sports fanatic, as are most of the people who work for him. The word dude is thrown around a lot at GoPro headquarters, and executives like to head out for a morning surf session or trail ride before hitting their desks. (It's no accident that some of the country's best surf breaks are minutes from the office.) This cultural authenticity is key, he says, because it means the company's employees are well attuned to what's going to excite their customers.
And three, taking me to ride electric dirt bikes at Pigeon Point is important because it demonstrates a vital part of the company's product development history. To shoot a truly satisfying action video, the audio feedback is almost as important as the visuals. You need to hear, for example, skis crunching through snow to get the full effect of a gnarly descent. But capturing that noise is not as simple as turning on a microphone. In sports such as skiing, skateboarding, and cycling, the wind noise rushing into a camera's mike tends to overpower the sounds of the action. When the company was developing an early version of its signature HD Hero camera, Woodman set out to solve the wind-noise problem with the help of Zero bikes, which are nearly silent except for a low electric whirring. On a Zero, he was able to ride fast and record almost pure wind noise in a real-world environment (here at Pigeon Point), which in turn allowed the company to isolate the sound of wind and then design firmware that could all but eliminate it from recordings.
The point comes back to storytelling. Videos created with GoPro cameras (check out a selection of extreme GoPro videos here) can have a level of production value that rivals that of professionally created content. That's great from a technical standpoint, of course, but even more important are the viral possibilities that kind of content unleashes. The more authentic and immersive the video, the more viewers get sucked in and feel as if they're experiencing the moment themselves. "It's like a teleportation device," Woodman likes to say. GoPro thinks not just about its customers, in other words, but also about its audience.
Let's back up. If you're not familiar with it, GoPro sells a line of wearable, mountable, and affordable HD video cameras that make all kinds of previously impossible shots much easier to capture. About 2 inches wide, the cameras don't look like much more than tiny gray boxes, but they pack a surprising amount of power and versatility—especially for their $300 price tag. An ever-increasing array of flexible harnesses, mounts, and other accessories allows users to attach the cameras to just about anything and shoot high-definition point-of-view action footage.
At this point, you've almost certainly seen video that came from a GoPro camera, even if you didn't know it. A Facebook friend might have shared the clip of a mountain biker in Africa being flattened by a sprinting gazelle; it has drawn 12.4 million views on YouTube since going viral in October. Or maybe you saw the bird's-eye-view video of a seagull picking up a camera and making off with it (2.8 million views) or a skier touching off an avalanche in the Alps and flying away from it with a parachute (2.1 million views). Every two or three minutes, a new piece of GoPro–created content is uploaded to YouTube, and Woodman credits those videos—whether produced by its army of customers or by the company's 20-person in-house media team—with much of the company's runaway success.
In the past two years, GoPro's growth has exploded, and the cameras' uses have spread far beyond the action-sports world. GoPros are being used on dozens of reality-based TV shows. Scientists are sending GoPros into near space and deep underwater. A GoPro was mounted on the rescue pod when the Chilean miners were rescued in 2010. The list goes on—surgeons, oil companies, the U.S. military—and one of the company's challenges is tracking it all in order to support it.
Two years ago, there were 14 employees at headquarters in Half Moon Bay; today, there are 150. The cameras are available in about 10,000 stores—lots of local sports-enthusiast shops but also REI, Best Buy, and Amazon. GoPro's closest competitor in the wearable-camera space, Contour, reported $15 million in revenue for 2010, and Woodman claims GoPro now holds 90 percent of the wearable-cam market, after growing well over 300 percent in 2011. Digital-imaging industry analyst Chris Chute of market research firm IDC estimates GoPro's 2011 revenue at $250 million, on sales of 800,000 cameras worldwide. He calls GoPro "the fastest-growing camera company in the world."
Perhaps even more impressive than the revenue growth is the passion GoPro's users have for its products, as expressed by the flood of GoPro videos spreading across YouTube and Facebook. GoPro's Facebook fan base grew from 50,000 to more than 1.3 million in 2011 alone. To put that in perspective, Contour had 56,000 fans at the end of 2011. Canon USA had 135,000, and Panasonic USA had 134,000. But it's not the size of its Facebook fan base that sets GoPro apart; it's the level of engagement of those fans.
"I think we have the most socially engaged online audience of any consumer brand in the world," Woodman says. The company uses a metric it refers to as a BARE (for brand audience rate of engagement) score to track the activity of its Facebook audience. The score is simply the number of fans Liking, Posting, Commenting, or otherwise interacting on the GoPro Facebook Wall divided by the total number of fans. (Facebook makes this calculation easy by posting a metric called Talking About This; see "The BARE Truth.") In mid-December, GoPro's BARE score was 5 percent. By comparison, Lady Gaga's was 0.9 percent and Fox News's was 1.9 percent. Among brands with a million or more followers, you would be hard-pressed to find one with a higher rate of engagement.
All right, you say, but what does that engagement mean for the business? Can the company directly track the revenue impact or leverage those users for more camera sales? Here the answers get a bit fuzzier, and Woodman is comfortable with that. "That's a big difference between GoPro and other companies," he says. "The first thing we get excited about isn't, What will this do for our business from a revenue standpoint—or, really, from any traditional business standpoint? It's, How stoked are our customers and fans?"
To understand GoPro's success as a social brand, you have to start back before the company's founding in 2002. After graduating with a degree in visual arts from the University of California, San Diego, Woodman started his first company in the dot-com go-go days of the late '90s. funBug was a venture-backed Web marketing company, and it went bust with the rest of the market in 2001.
"I feel like I went through the Great Depression," says Woodman. "All these companies are being successful around you, you're on that track, and then the market collapses, and you're out of a job. You're trying to save your investors' investment, and it doesn't work, and you sell the company for nothing. It was brutal."
He knew he still wanted to be an entrepreneur, but he vowed to bootstrap his next operation: "I didn't want to take anybody else's money. I wanted to do something small that could be profitable from the beginning, and grow that way—and never need someone to write me a check to keep the business going."
He left California to live out of a backpack and surf in Australia and Indonesia for five months, first with his friend Ruben Ducheyne (who now heads up GoPro's customer support operation) and then with his girlfriend, Jill Scully (now his wife, Jill Woodman). It was in Australia that the idea for GoPro began to take shape. Woodman was frustrated that pro surfers tended to be the only ones who could get good images of themselves surfing—because you needed a professional photographer or videographer willing to bob around in the water documenting you. Surfers addressed that problem as best they could by using the buddy system and carrying cheap, disposable film cameras that came with a waterproof housing and glorified rubber-band wrist strap—but that usually ended with the cameras banging them on the head or getting lost in the water.
Woodman's solution was simple: Create a wrist strap that held a disposable camera firmly in place against your arm. When you were ready to shoot a picture of your surfing buddy, you'd just pivot the camera up into place, get the shot, then snap it back down. What surfer wouldn't want that?
"We all kind of laughed at the idea," says Ducheyne. "He's going to make a wrist strap?" It hadn't even occurred to Woodman that he would eventually also make cameras. He fashioned a crude prototype for the strap and took it with him everywhere on his surf safari for testing.
Woodman had saved up about $20,000 from funBug, but by the time he made it to Indonesia, he knew he would need more money if he wanted to get serious about starting the business when he got back to the States. One day, Jill came back from a shopping excursion in Ubud, Bali, and showed Nick a bead-and-shell belt she had bought for $2.50. She was an aspiring jewelry designer and told him about her ideas for making the belt even cooler.
"Nick's always had a 'Go big or go home' kind of philosophy," Jill says, "so he asked me to take him to the market to see about buying more belts and incorporating my designs. We get there, and he's like, 'We'll take 600 of those, 600 of those, and 600 of those.'" He also bargained the price down to about $1.90 per belt. When the couple got back to California, after waiting two months for all the belts to be made, they spent another three months driving up and down the coast and living in Woodman's 1974 VW bus, stopping at street fairs and concerts to sell the belts. "We'd get as much as $60 for a belt," Jill says.
The belt profits gave Woodman enough cash to start GoPro. He borrowed another $35,000 and a sewing machine from his mom, and got to work making his first product—a process that took two years, while he lived with his dad in Sausalito and Jill moved to Santa Monica.
By 2004, Woodman had a product to market—not just a wrist strap but a still film camera to attach to it. (He had discovered that the legal and logistical issues around working with a bunch of camera companies were more complicated than just buying and modifying a simple camera.) Nick and Jill moved into a cottage in the redwood forest near Pescadero, where Nick set about working 16-hour days at the computer and the sewing machine, testing new fabrics for the next-generation product, designing marketing materials, writing patent applications, and starting to build up a network of retailers.
"There was fabric everywhere in the house," remembers Jill. "We had to sleep with the camera on, because if there was ever a sore point, that wouldn't be acceptable. He needed to find the perfect tightness and perfect fabric, so it didn't make you sweat, didn't make you sore. It was all-consuming." By this point, Jill was working full time in sales, and Nick's friend Neil Dana was doing sales from his home up the coast. Their first breakthrough moment was at their first trade show, the 2004 Action Sports Retailer show, where they got an order for 100 units from a Japanese distributor.
A bigger breakthrough came two years later, after the company started making a rudimentary digital video camera. Woodman had always harbored a dream of being a racecar driver, and once sales of the digital camera were going well enough, he indulged himself by going to racing school at Infineon Raceway, in Sonoma. The school tried to rent him a mounted camera for $100. Woodman said no, thanks, strapped his GoPro wrist cam to the car's roll bar, and had his eureka moment: The company would make mounts for its cameras so people could point them back at themselves.
The company bought a Lotus Exige sports car, and Woodman started testing all kinds of mounts for vibration and noise and other details. "He absolutely loves that Lotus," says Dana, who is now a director for GoPro's international sales operation. "He'd spend all day going 130 miles per hour around the Infineon track. He was basically the product test engineer, and he would get whatever tools he needed to test in real-world environments. If we had taken VC money early on, it would have been hard to justify a lot of those things. He wanted the freedom to be, like, I'm going to do it this way."
It was an extravagant investment of money and the CEO's time, but it started to pay off in sales to core enthusiasts in markets well beyond surfers. When the company launched its first high-definition video camera, in November 2009, sales hockey-sticked—and the flood of user-generated videos online wasn't far behind. "We sat back as a company and said, 'Oh, my God, people are really freaking out,' " remembers Woodman. "Soon we realized it was accelerating beyond anything we were doing on the marketing or merchandising side, so it was pretty clear that people sharing their own content was driving the awareness of GoPro."
The company had also started attending trade shows in all the action-sports, motor-sports, and consumer-electronics markets, and began to give cameras away to attendees. "You'd have people walking all around the show wearing our cameras," says Dana. As word of the giveaways spread, Woodman decided to make a bigger deal of them by gathering friends of the company in front of his booth at 3 p.m. each day of a show.
"Are you fired up?" he would yell to the assembled, borrowing a routine from his high school football coach.
"Are you fired up?"
It was infectious, and the crowd of corporate buyers milling around soon began to join in the chorus. Woodman would announce that whoever yelled the loudest would get free cameras, and then he would lead everyone in a chant of the company's name: "GoPro! GoPro! GoPro!" The commotion would bring the rest of the show to a halt as everyone wandered over to see what was going on. GoPro landed its accounts with Dick's Sporting Goods and REI that way.
It wasn't long before the company's growing profile led Best Buy to come knocking, in early 2010. GoPro had reached out to the retail giant several times but had never gotten a response. Now, though, people who had learned about GoPro online were going into the stores and asking for the cameras. Best Buy has a specialty-product division that responds to such requests and tests new accounts in anywhere from 10 to 100 stores, so the company offered GoPro a shot that way. Sales outperformed expectations, and by May 2011, just weeks after Cisco decided to shutter its Flip camera business, GoPro had shiny white point-of-purchase displays topped with flat screens in all Best Buy stores. In September, Best Buy gave GoPro its Bravo award for being a top new supplier.
Woodman is standing at a whiteboard in a conference room at GoPro's headquarters, where a slick highlight video of footage shot with the company's latest camera, the HD Hero2, plays on a five-minute loop on a big-screen TV. He draws a circle on the board and labels it with four words connected by counterclockwise arrows: Capture, Creation, Broadcast, and Recognition. Woodman likes to talk about the "democratization of professional content," and these are the elements that make that possible, he says.
Capture is what the cameras enable—shooting pictures and videos. Creation is the editing and production process that turns raw footage into a compelling piece of content. Broadcast is the distribution of that content to an audience. And Recognition is the payoff for content creators—spiritual recognition in the form of views on YouTube or Vimeo, Likes and Shares on Facebook, high-fives from friends, or financial recognition in the form of revenue sharing from YouTube or ad dollars from their personal blogs.
"If I'm a content creator, and I get recognition for my work, that's going to motivate me to spend even more time on my next production and make it even better," Woodman says. He points to the circle on the whiteboard. "If you take this circle and flip it on its side, it's going to go like this," he says, and starts drawing a spiral that coils upward. "This is our DNA. This is how we grow, and it's all driven by the content." The company's content strategy is a simple positive-feedback loop, in other words, and the theory is that each revolution lifts the overall quality of the content the audience is producing, the size of the audience, and the number of cameras and accessories sold.
To date, GoPro has focused its business mostly on democratizing the first step in the content cycle: capture. Now the company is training its focus on the rest of the cycle—creation, broadcast, and recognition. "We spent a lot of time recently thinking about, What are we really doing here?" Woodman says. "We know that our cameras are arguably the most socially networked consumer devices of our time, so it's clear that we're not just building hardware. You think about the implications of that and where it can go.…We're thinking of new ways to enable our customers to communicate through video and new businesses that spawn from that."
On the creation side, GoPro's media group manager, Bradford Schmidt, persuaded Woodman to acquire a leading digital-video software company, CineForm, in early 2011, right around the time GoPro released a rig that allows users to shoot in 3-D by calibrating two cameras to shoot simultaneously and create layered 3-D files. At the time, there was no such thing as a simple iMovie-like interface for regular consumers to edit 3-D video (primarily because shooting in 3-D was prohibitively expensive until GoPro's device hit the market). CineForm promptly designed a dead-simple user interface, and GoPro's users were a step closer to being amateur James Camerons.
On the broadcast side, GoPro is working out the details of a partnership with YouTube to create a GoPro network. "Within YouTube, there's no standardized metadata system for video files, like there are for JPEGs," explains GoPro's CTO, Stephen Baumer, "so there's no easy way for us to know that a user-generated video was shot with a GoPro, other than if it's been proactively tagged as GoPro by that user. To our delight, customers have been doing that to a huge degree, and it's been a big part of our success"—but no amount of tagging by users allows GoPro to get involved in the business of user-generated videos on YouTube. That will change in the first quarter of this year, when GoPro releases a Wi-Fi plug-in for its cameras that will allow customers to upload video directly from their cameras or via a mobile app. GoPro itself will then be able to tag the videos as they are uploaded, place them on the GoPro YouTube network (which it aims to launch at the same time as the Wi-Fi plug-in), and begin to monetize all that user-generated content.
Which brings us to the recognition piece of the content cycle. Once user-generated videos become part of a structured network, the company can create more elaborate incentive systems for its customers to do ever more and better work. GoPro already dabbles in these kinds of incentives by, for instance, selecting the coolest user videos to be included in television ads. But the GoPro network will create opportunities for users to get paid for the number of views or shares their videos get on YouTube. Users could agree to run pre-roll video or overlay ads that link to GoPro, for instance. And in the process, GoPro would essentially turn its users into a massive worldwide sales force.
Suddenly the question of how GoPro tracks and maximizes the revenue impact of the content produced on its cameras becomes less fuzzy. In 2011, the company saw its revenue per user from YouTube-generated traffic double. Once more of the user videos actually link to GoPro and users have an incentive to send the company traffic, it's not hard to see that number growing quite a bit faster still.
There's one other piece of evidence that GoPro's content operation directly boosts sales: those point-of-purchase displays, each of which is topped with a flat-screen TV showing GoPro highlights. Walk into your local REI, and you're likely to see someone standing there just staring at the screen. "They've increased sell-through at the store level five times over," says Dana. "We call them our GoPro ATM machines."
Last May, Woodman broke his pledge not to take on venture capital. On the same day GoPro announced it was entering all Best Buy stores, it announced a "substantial" strategic investment from five firms, including Steamboat Ventures, the VC arm of Disney. Woodman says GoPro hasn't touched the money; it's there as a war chest. As the company widens its market, it's increasingly possible that the larger digital imaging companies will move into the space and risk turning awesome little point-of-view cameras into a commodity.
The best way to protect against that, Woodman says, is to build a moat around the company in the form of its content ecosystem. "At a certain point, the services that you build around the hardware become more important than the hardware itself," he says. The company's new investors have deep connections in the technology and entertainment landscape, and they are helping GoPro advance its relationships with media companies. The impending YouTube partnership is part of this initiative, as are other relationships in Hollywood and beyond.
Among filmmakers, GoPro cameras are already a standard piece of most production kits. Lucasfilm used GoPro cameras for the upcoming film Red Tails, about World War II pilots, and countless Discovery Channel productions and news shows use the cameras to film wildlife, rescues, and storms. "It's been a game changer for us," says Ernie Montagna, equipment manager for Original Productions, the company that produces reality-TV hits such as Deadliest Catch, Ice Road Truckers, and Ax Men. His crews attach GoPro cameras to crab pots underwater or to the sides of ships in rough seas.
One of the most innovative media partnerships so far was spurred by a skunkworks project that Schmidt, the media group manager, created for ESPN's X Games. Using the same technology that allows two cameras to be strung together to shoot in 3-D, Schmidt designed a 48-camera array that captures "time slice" images. Picture a video of a skateboarder on a halfpipe ramp, but when he does a midair trick, the motion stops, and the shot pans around to show the athlete from all angles. The effect previously cost at least $100,000 to pull off and required a crane and hours of setup; Schmidt's camera array can pull it off for a few thousand dollars (the price of that many cameras), with one person operating it.
Once again, it comes back to GoPro thinking about its audience. Rather than relying solely on user-generated content, it's betting that slickly produced videos of pros using its cameras to do amazing things will inspire regular people to get out there even more. The company recently started a sponsorship program for extreme-sports athletes and hired a former top Red Bull marketing executive, Paul Crandell, to head the effort. There are about 70 athletes signed up so far, and the idea is that GoPro not only will enable them to pull off jaw-dropping stunts (by helping fund them) but also provide the platform for people around the world to gawk at them. Schmidt is thinking about other ways to string multiple cameras together to create unique effects for partners (imagine hundreds of synced cameras positioned throughout a stadium during a concert, for instance). Woodman is looking forward to GoPro's new Wi-Fi plug-in enabling live streaming of events. Crandell is already looking beyond athletes and thinking about signing up surgeons, scientists, and security companies. And the content wheel spins ever faster.