Nick Woodman is crying.

Red-tailed hawks wheel around the sky outside the wall of windows of the GoPro founder's hilltop office in San Mateo, California. A few miles east and far below, the San Francisco Bay twinkles in the late-September light. Mementos of a life spent surfing around the world, driving racecars, and hanging out with his heroes, like surfing legend Kelly Slater, line the credenza behind Woodman's desk.

A day ago, the 42-year-old Woodman stood center stage in the planetarium at the California Academy of Sciences and introduced his company's latest cameras and services, along with virtual-reality videos projected onto the room's domed ceiling to show off all the new tricks the products can pull off. Today, a bit bleary from the festivities that followed, Woodman is opening up about the long, difficult journey that led to this launch--one that saw his publicly traded company's stock bottom out below $8 a share, down from the high of $98.

After a decade of breakneck growth, GoPro held one of the most successful tech IPOs of 2014, which earned Woodman comparisons to Steve Jobs. But the past two years have been a cautionary tale: botched product rollouts, sweeping layoffs, a giant new initiative shuttered. The company was profitable each year following its bootstrapped launch, but it has lost money every quarter from the end of 2015 until the third quarter of 2017.

The nadir came in late 2016. That September, after a devastating year of setbacks, GoPro announced a long-awaited new product, a drone called the Karma. Within a few weeks of the release, drones were losing power midflight and falling from the sky. The product intended to herald GoPro's triumphant comeback was, literally, crashing to the ground, and sooner or later one would hit somebody. Maybe a child. That thought, amid a long retelling of company woes, is what makes Woodman break down.

The company that he dreamed up on an extended 2002 trip to Australia and Indonesia because he wanted to film himself surfing, that created an entirely new product category and the world's best-selling camera, that made him and his best friends who joined the company early on fabulously wealthy--that company was now a punch line, and maybe a threat to safety. As of the autumn of 2017, GoPro has delivered three solid quarters in a row--growing revenue, cutting costs, meeting or beating guidance--and it claims it will return to steady profitability in 2018. Still, Woodman makes clear, the past few years have left scars.

"The hardest thing is that it was such a long slide," Woodman says. "If you gaffe it here or there, everybody does, right? But when you're sliding down the hillside and wondering when you're going to be able to stop, and at times you're not even sure why you're sliding in the first place, and then you factor in that you've been so successful for so many years, you're just like, 'Wait. Where did we start to suck at this? What is going on?'"

GoPro really started to take off in the early years of this decade. Point-of-view videos shot by GoPro cameras attached to surfboards, ski helmets, bike frames, and pets suddenly became ubiquitous on YouTube. Nobody had ever seen footage like this; it was a new, dizzyingly personal, and mesmerizing art form.

Back then, Woodman talked about a virtuous cycle that, he believed, fueled the company's growth. As people saw more GoPro videos online, they'd become 
inspired to buy GoPro cameras. The more that happened, the more videos would be created and shared online. The product created its own advertising, in other words, and Woodman intended to keep that going as much as possible. He also made clear that, to spin the virtuous cycle ever faster, GoPro would eventually have to 
become a media company, he figured. It was a great marketing concept. It was also a trap that would nearly kill his company.

Fast-forward to 2014. Woodman and one of his oldest GoPro pals, Bradford Schmidt, went surfing at Greyhound Rock, a legendary break near Santa Cruz. Schmidt, who had met Woodman in Indonesia on the trip that seeded the company, was GoPro's creative director, in charge of building out its YouTube channel and creating inspiring promotional videos. Now the company was considering investing heavily in media, and building an online platform for original, professionally produced video--akin to its own version of Hulu--to further stoke camera sales and build a whole new revenue stream around the content.

"Are you sure you want to do this?" Schmidt asked Woodman as they sat on their boards waiting for a wave.

"If we don't," Woodman said, "we're always going to sit and wonder why we didn't."

There was another important motivator. In the run-up to the IPO, the debate about GoPro's valuation coalesced around two arguments. One camp argued that GoPro's products could be easily replicated. The other camp argued that GoPro's unrealized potential as a media company was huge. (Media companies' stocks often trade at higher multiples than those of hardware companies.) When the stock took off, eventually valuing the company at nearly $15 billion, that second argument became the prevailing wisdom.

"We couldn't have a conversation about GoPro without everybody wanting to talk about the media side of the business," Woodman says. And--in an apt reminder of how going public can warp a company's mission--by whipping up all the excitement about the media opportunity, GoPro created an imperative to pursue it, or else not live up to investors' expectations. "It wasn't only like, 'We should accelerate the build-out of our media business so we can maintain the stock price,' " Woodman remembers. "When your business is on fire and you have a high valuation, you want to take responsible advantage of that."

On top of that, GoPro's virtuous cycle had been driven primarily by users' videos, even though offloading camera footage, editing it on a computer, and then sharing it on social media was, at best, cumbersome. The company knew that it needed to build better software to address those issues, but creating it was no simple task. "We had to build an entirely new software team," Woodman says. "It was a major reset, and was going to take maybe two years to get the software to where it could start to contribute to this vision. So if we wanted to pursue a media strategy, we were going to need to shift to more professional content."

In 2014 and 2015, GoPro hired more than 100 staffers to bulk up this nascent entertainment business, including a former CBS 
executive to run it. The company started spending millions of dollars to develop a slate of documentaries and TV-like series.

Then the core business started to sag.

The legend of GoPro revolves around Woodman and his surfing buddies figuring it out on the fly. "There were about three of us in engineering," remembers Meghan Laffey, the company's 33-year-old VP of product, who started almost eight years ago. "We used the contract manufacturers' engineers." When she discussed formal product testing with Woodman, she says, he demurred, preferring to strap a camera to somebody's surfboard or dirt bike--"just doing fun stuff with it."

"We didn't know our ass from our elbow," Woodman admits. "We just had ideas. I remember going to meetings with the CEO of the manufacturer of our first digital camera, and I would just be blunt, like, 'I don't know how to do this, but if I explain to you what I want to do, can you help me figure it out?'"

As the company grew, it hired more engineers and generally became more sophisticated. But before its IPO, and even afterward, it still didn't always know what it didn't know. The quarter before its IPO, GoPro reported a year-over-year sales decline: It had oversold cameras to retailers in the prior quarter, which led to fewer reorders in the following one. "Poor inventory management," Woodman concedes now. "We were still building out the infrastructure of our business."

Nevertheless, 2014 was a huge year for GoPro, with the fourth quarter alone hauling in $634 million, a 75 percent jump from the year prior. Even better, Woodman felt, he would soon wow the world with GoPro's smallest and simplest camera yet.

On July 6, 2015, GoPro unveiled the Hero4 Session, a little waterproof cube with no screen and a single button. Its price: $399, the same as the far more powerful Hero4 Silver. Session was originally conceived as a $199 entry-level product. "But using it was so exciting and so simple," Woodman recalls, "I felt this is the ultimate GoPro"--so he priced it like a premium product. Woodman was so confident that he didn't make a big marketing push for the Session, figuring it would just go viral.

He was wrong. The camera was so simple as to be hard for new users to figure out. The lack of marketing meant little buzz. And the price was way too high. GoPro dropped it by $100 in September, and then by another $100 in early December.

"Everybody loved everything we were doing," says Jeff Brown, GoPro's SVP of communications, recognizing a classic case of hubris. "We thought we could just throw the thing out the door and charge $399--they'll buy it because it's a GoPro."

When GoPro's valuation took off, so did Woodman's. Published reports say he owns about 30 percent of GoPro's shares (and 77 percent of the voting shares); by September 2014, he was worth well over $3 billion. That year, he was the highest-paid CEO in America, according to Bloomberg. Over the years, he's bought a 
180-foot yacht, a Gulfstream G5 jet, homes in Hawaii and Montana, a fleet of vintage sports cars. He's always unapologetically loved toys and adventures, so while all that rich-guy stuff might look gross on someone else, on Woodman it looked like whom he'd always been­--just a bigger and badder version. "I'm being myself," Woodman says, "living a big life and bringing friends and family along. If I drive a shitty car to work, who am I kidding?"

The company established some lavish spending habits too. "We went from around 700 employees at the time of the IPO to 1,600 in 18 months," says C.J. Prober, a former Electronic Arts executive who took over as COO earlier this year after several years building GoPro's software strategy.

"It made us look like we were completely incompetent."

In the media division, Brad Schmidt remembers, budgets increased 10-fold: "All of a sudden, we go from trying to get $10,000 to go do a shoot to somebody saying, 'Well, how about $100,000?' The company invested a massive amount." (Woodman won't divulge how much, other than to say "too much.") Variety reported that the company was developing more than 30 series--including a travel show called Beyond Places, a family show called Kids Save the World, and a reality show about New York City motorcycle cops. The plan was to release them on the streaming platform the company was developing, and charge for premium programming, such as live events.

The platform never launched. Neither did most of the shows. In the fourth quarter of 2015, GoPro announced its first unprofitable quarter since the IPO. Its share price sank to around $10--about a 10th of its onetime value--where it's hovered ever since. Woodman finally started worrying about all the money he was dumping into media. "It was becoming clear this was increasingly expensive and, god, it would be nice to be investing this money into the core business."

Most important, the shows didn't stoke the virtuous cycle that Woodman had always relied on to sell more cameras. "From the beginning," Schmidt says, "it was like we were empowering people to get up off the couch to use the cameras: 'We're gonna show your videos on YouTube. We're gonna supply you with a camera that enables you to do it yourself.' When it went to the entertainment platform, we were creating content for you to watch passively."

As GoPro continued to be unprofitable in 2016, Woodman realized something. "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." But when it comes to the entertainment division's failures, he blames only himself. "Ultimately, the responsibility falls on me to coordinate focus and our investments, to rationalize it back to the core business. I didn't do a good job of that. I'm the one who put the cart before the horse."

Still, GoPro continued barreling toward unveiling its entertainment initiative by the end of 2016. Woodman felt he had a roster of new products that would reignite the camera business. GoPro had acquired several small software outfits that would make it easier to edit videos and built a service that made it simpler to offload footage from a camera. It had a new flagship camera in the works that would be waterproof without a separate case, and it was building its Karma drone, which would launch the company into a hot new market that many were predicting would rule the holidays that year.

When the release date finally came that September, Woodman ran onto a stage at the Squaw Valley Ski Resort near Lake Tahoe, high-fiving a screaming crowd stocked with GoPro-sponsored athletes and influential lifestyle vloggers who get free GoPro cameras. The past two years had battered the formerly charmed brand, but now he'd show the world that the company still had that old GoPro magic.

Except it didn't. A few weeks later, GoPro acknowledged "production issues" with its new Hero5 Black flagship (it was leaking when underwater, Woodman says now) and had to scramble to fix the flaw. Ultimately there were fewer Hero5 Blacks on shelves for the crucial holiday season. Days later, a customer posted a YouTube video showing a new Karma drone plummeting to earth midflight. "It was hovering and just crashed," the customer wrote under the video. "Battery was fully charged any [sic] everything." At GoPro headquarters, 
an executive rushed into Woodman's office to tell him they'd received multiple similar reports, and the company scrambled an emergency boardroom meeting.

Only a few thousand drones had shipped, so they knew the situation was containable. But since nobody had a clue what was wrong with them, there was no quick fix. The only option was a total recall, which they issued within a few hours. "This wasn't like somebody's camera was freezing up and they're not getting the shot," Woodman says. "It was a [four-pound] drone that could fall out of the sky and hit a kid. And as soon as you say that, you're just like ... " He chokes up and pauses to compose himself. "You pull it. It was like, 'Fuck.'

"That launch and the perception that GoPro was rocking again," he continues, "it was so good for morale. And then to have our reputation falling out of the sky, coupled with the Hero5 Black problem--it was absolutely crushing. It made us look like we were completely incompetent."

Teams of employees flew hundreds of the recalled drones above the company parking lot for weeks, and eventually learned that a simple plastic latch was coming loose, causing the battery connection to slip out of place. That meant the problem was easily fixable. But the Hero5 Black issue, too, stemmed from a lapse in quality control. The camera wall was only 0.2 millimeter thick in one spot, Woodman says, and water pressure blew it out. The real cause of both problems, he continues, was that "the teams were killing themselves to launch the products on time. We were doing too many things, and it was taking too long to make decisions because management was juggling too many projects at once." Brown puts it more bluntly: "We knew that if we didn't figure out some way to reorganize, the company was just not going to survive."

Weeks after the Karma recall, GoPro announced layoffs. Then, in March 2017, a month after the Karma was finally reintroduced, came a second round of layoffs. All told, around 500 people were fired--more than a quarter of the company. The entertainment division was shuttered, though a few dozen company stalwarts stayed on. Management took a big hit too: More than 40 percent of the people at VP level or higher departed, says Prober.

Before the IPO, GoPro had been a fairly simple operation, with sales, marketing, engineering, and design teams working on all of the company's products. After the IPO, as GoPro tried to build new businesses, the company moved to a more siloed structure, where multiple divisions--software, hardware, media--ran largely as separate business units. This bred more bureaucracy and made communication and collaboration difficult--which, Prober contends, enabled some mistakes. With the layoffs, GoPro went back to its earlier, flatter structure. "We decided to simplify everything and get back to the business that we knew and loved as a private company," Woodman says.

"I'm the one who put the cart before the horse."

"We talk all the time about how a business really is like a person," he continues, "and that if you are trying to live up 
to other people's expectations, you're going to live a miserable life. If you're trying to be something you're not, everybody's going to know it, and nobody's going to think highly of you for it. And the truer that you can be to yourself, the better chance you have of fully realizing your potential. As soon as 
I was able to think of [restructuring] in those terms, it was just like, 'OK. Well, here's what we've got to do.'"

Woodman started sharing his contrition with the entire company. Previously, GoPro had held quarterly all-hands pep rallies, called hangs, but now the company added more subdued monthly affairs, with Woodman standing in front of a few hundred employees (the rest watched online) giving a speech and then taking hard questions for as long as two hours. "Nick is so charismatic, he has such a positive vibe," says his old buddy Schmidt, "that it was hard to watch him sit for 30 seconds and try to compose himself to find the words to encourage people."

There are indications that the new strategy is working. The Hero6 camera shipped to retailers early and was ready for sale the day it was announced. The company produces far fewer videos than a year ago, but they perform better. "The mean video views is up 65 percent," Prober says.

Woodman credits more realistic goals. "We used to try to hit home runs every year," he says. "We would rather hit singles, doubles, and triples consistently." It's not as sexy as breaking into entertainment, but it is how you lead a more grown-up company toward measured, long-term growth.

Woodman knows it will take time for GoPro to mend its reputation. "Say you have a friend who goes off the rails and isn't very reliable," he says, "and then he or she comes to tell you, 'I recognize I've not been a great friend, and I'm changing that.' You'd be very appreciative, but you'd be super suspect of that individual for a long time."

Making a convincing case starts with the products. At the launch event this past September, the company announced many upgrades to its Hero camera, including a custom-designed chip that enables more stable and higher-resolution action shots. It made offloading, editing, and sharing videos easier than ever, thanks to a clever automatic editor that stitches clips together for you. And it announced a new spherical camera called Fusion, which can pull out any still or moving image from the spherical footage--a feature called OverCapture that essentially makes it possible to shoot in multiple directions at once and frame your photo or video after you shoot it. Which is a serious bit of innovation.

And yet the company faces many challenges. The worry for GoPro used to be that other electronics companies would create cheaper action cams that might eat away at GoPro's lead. That's happened. Today the bigger threat may be to GoPro's core mission. Woodman has long talked about how his company helps people "capture and share their lives' most meaningful experiences," but now that idea is everywhere. Smartphone cameras are better than ever, Snap unveiled Spectacles in late 2016, and Google announced a wearable camera called Clips that aims to help people passively film their lives--and those are just a few recent developments.

Woodman argues that GoPro doesn't compete with smartphone cameras, but rather makes "untethered lenses" for phones. That is, GoPros are accessories that unlock possibilities for tech-enabled amateur auteurs. He foresees new forms of cameras and storytelling tools that change what's possible--as the original GoPro did, and the new Fusion's OverCapture does.

It's a future Woodman will have to invent without all of his buddies around him. Since the IPO, most have retired and returned to the surfing life, just with a lot more money. "There are points when I look at what they're doing and say, 'Wow, that looks pretty good,' " Woodman admits. "But I can tell that I'm doing what I'm meant to do right now. It feels good to be part of this team that's turning GoPro around. This is my baby." He's surfing too. The waves are treacherous. But he's still standing.

 

Nick Woodman: What I've Learned

Company miscues and unforgiving public markets have taught Woodman bitter lessons. What are his takeaways from his wild ride?

Be cautious when talking about the future 
"Be very careful about sharing ideas about where you want to take your business tomorrow, because it's the tomorrow that everybody is going to become fixated on. They're not going to appreciate enough who you are today, and you're going to have immense pressure to realize tomorrow faster than you otherwise would have. You may inadvertently shift focus from what's making you so successful today. Be warned that if you fail to continue to execute on today, you may not be around for tomorrow. That's what happened to us."

Being great at one thing doesn't mean you're great at all things
"One of the big lessons is that when things are going really well, you can be lured into thinking that everything's easier than it is. Because you're doing a really good job, you think you must be smart and good at this stuff. So, why can't we go do this other thing? The reality is that you can't expect your experience in your core business to translate. Just because you're a World Series-winning pitcher doesn't mean you can go play quarterback."

Stick to what you feel most strongly about
"It comes down to how much authentic passion you have for something. When I look back, I don't think that we had the authentic passion for being in the entertainment business. We did for being in the inspiration business. I learned never to pursue a business opportunity if it goes outside of what you, as an individual and as a business, have passion for. Because if it's not authentic to you, your instincts start to falter."

Simpler is better
"As an individual, how you organize your day affects your productivity. As a company, how you organize your teams and your communication affects your efficiency. What we did was, we structured ourselves as a much bigger business. But complexity breeds complexity, and we learned that when the organization is structured that way, you're not as nimble. You're not as athletic. When you have fewer lines of communication, things are less likely to break or get lost in translation."

From the Winter 2017/2018 issue of Inc. Magazine