"Business Review" by Gao Dongmei | Wen
GoPro is a legend in the imaging industry, which forced traditional Japanese imaging equipment manufacturers such as Sony and Nikon to sneak into the sports camera market, and also awakened China people such as DJI, Xiaomi and Z CAM to share the delicious food in the imaging industry.
However, legends are sometimes like the king of night shows. After the hangover of singing and dancing, they are forced to face their true identity and feel confused about the future.
Due to the limited market capacity of sports cameras, the content transformation and drone business failed to achieve the expected goals, such as DJI, Xiaomi and Apple. From top to bottom, GoPro not only failed to break through the narrow market segment in business, but also lost points in the original field, resulting in losses for years and relying on multiple rounds of layoffs to cut expenses.
Today, GoPro's share price fluctuates around $5 for a long time, which is a great drop compared with the peak of nearly $65,438+000 per share. The company's market value has also shrunk to 5% at a high point, and it is unlikely to return to the peak.
1
Break a good card
Speaking of GoPro, everyone is familiar with it. In the early years, people who participated in skydiving and bungee jumping on TV programs wore a small square machine on their heads, and there was no dead angle to follow 360 degrees. That small machine, that is, the manufacturer of sports cameras, is GoPro. Such a narrow product range has been pushed to the extreme by GoPro, which is popular all over the world.
However, in recent years, GoPro has been in trouble. On June 2nd, 65438 10, US Eastern Time, nick woodman, CEO of GoPro, announced in a conference call that he would postpone the shipment of some new cameras and lowered his financial target for the second half of the year. As soon as the news came out, GoPro shares plunged more than 20% to $4.28 after hours, and finally fell 16.57%. The total market value has dropped from the peak of 20 14 years1300 million dollars to only 790.6 million dollars today.
In this "life-and-death" conference call, GoPro predicted that the revenue in the second half of the year will be between 680 million and 7.1500 million dollars, the growth rate will be reduced from the previous forecast of 9% to 12% to 6% to 9%, and the profit will be adjusted from the previous forecast of 0.37 to 0.49 dollars per share to the current 0.33 to 0.39 dollars per share.
The reason is that the production of Hero 8 Black, a sports camera product with high hopes, has been delayed, and the expected delivery time will be changed from the planned third quarter to the fourth quarter. Hero 8 Black is a new product released by GoPro as the "strongest sports camera" this year after the release of Hero 7 Black last year. The price is 399 US dollars, which is aimed at more high-end consumers.
Originally, with the rise of short videos, the national vlog era has created new opportunities for GoPro, and the rotating motion camera market is expected to make it bright under the circumstances of content transformation and substandard drone business. However, GoPro not only played a good hand, but also missed almost the last chance to turn over.
Since 20 18, GoPro has been in a haze all the way, and the news of "being acquired" and "stopping production" has been heard many times. In fact, as early as 20 15, the company appeared the situation of "increasing income without increasing profit". The net profit of that year decreased by 7 1.79% year-on-year, leaving only $36 million. In 2065,438+06, the net profit decreased by 26.82% year-on-year, and the loss reached $4,654,380+09,000.
In a single quarter, Q2 revenue increased by 3.4% year-on-year, and its net loss narrowed to $65,438+$65,438 million, compared with $37.3 million in the same period last year, with a gross profit margin of 35.8%. In the face of favorable conditions, GoPro also raised its revenue forecast by 20 19, and showed the trend of its adjusted profitability, but these favorable conditions failed to appease the market.
Some well-known analysts don't buy it. "We don't recommend stocks before the next upgrade cycle of GoPro this fall", reaffirming the neutral rating and lowering its target share price from $6 to $5.5. Since June this year, shareholders of GoPro have frequently "short positions". Just when the market needed confidence, on August 5th, Ahmad Taylor Tyrone, the director of the company, sold his 465,438+089 shares.
These news continued to cause the stock price to fall, which eventually led the company to hit a new low of $4.365438 +0. In fact, it can be seen from the stock price performance in the past period that the company's operation has not been able to continuously calm the market sentiment. When the stock price fell from 1 to the bottom, it rose to the highest point of $7.65 in May, an increase of more than 70%, but then it fell back. When the financial report was released on August 2, it fell by more than 12%.
This company, which led the trend in sports photography by itself, has been trapped by internal troubles and foreign invasion for a long time, and it is still difficult to break through the previous bottleneck, and then the pursuers came. Why did GoPro, once the king of sports cameras, get to where it is today?
2
Be a hero
GoPro's road to prosperity is a story of American garage culture being packaged and sweeping the world. Nick woodman, the founder and CEO of GoPro, was born in a typical American middle-class family, and GoPro is his second startup. Fortunately, nick woodman didn't give up after the failure of his business. Otherwise, people will joke that entrepreneurship cannot be inherited.
Because his two fathers were Silicon Valley figures of their time. My biological father is a broker who is good at investing in mergers and acquisitions. He once helped PepsiCo buy Taco Bell, a Mexican-style restaurant chain. This company later formed Parkson Catering Group with KFC and Pizza Hut. Stepfather served as the director of SanDisk and Mellanox, and successfully led semiconductor company MMI out of bankruptcy at the end of last century. Later, the company merged with AMD to become a semiconductor giant, and its reputation still echoes in Silicon Valley.
Unlike the stories of many entrepreneurs in Silicon Valley, Woodman, who grew up in the heart of Silicon Valley, did not fall in love with programming because he had a computer at home when he was a child. Woodman's middle school teacher commented that he was "extremely confident since childhood, not afraid of authority, with average grades, but he loved sports, especially surfing, an extreme sport".
In order to surf, he even gave up the school arranged by his parents and read only the University of California, San Diego, because it is close to the beach and he can surf at any time. Woodman, who studied visual arts in one of the best science colleges in the United States, was most impressed by the university: "We wake up every morning to surf, then go to class, and then go surfing".
Woodman's parents didn't put obstacles in his way for surfing, a high-risk hobby. If I hadn't pursued my passion for surfing … I would never have had the idea of making a wrist camera. After graduating from college, restless Woodman chose to start a business. He founded Funbug, an online game service company with a keen sense of smell, and successfully obtained $3.9 million in venture capital. Regardless of the direction of entrepreneurship or the pace of financing, Woodman's entrepreneurship looks extremely reliable.
However, unexpected things happened, and Funbug finally closed down in the Internet bubble after 2000. This is a big blow to Woodman, who has always been extremely confident. In order to dispel his depression, he went to Australia and Indonesia for a five-month surfing trip as his last adventure to bid farewell to his youth.
After this trip, Woodman decided to be satisfied with the comfortable and monotonous life of the middle class. Unexpectedly, fate played a joke on him and took a sharp turn.
During that surfing trip, Woodman once wanted to become a professional surfer again, which required shooting some blockbusters. "Is there a high-speed camera that can resist seawater erosion and be fixed on the arm to clearly record the surfing process?" "With the smart wristband, you can fix the Kodak disposable camera on your wrist so that you can operate it when the perfect wave comes." This wonderful idea has been welcomed by friends who surf together.
Back in California, Woodman did not live a stable middle-class life as his parents hoped. Instead, he went to Moss Beach, a few mountains away from Silicon Valley, locked himself at home every day and made every effort to build his first prototype product. He can't wait to build a product that can record the heroic moments of extreme sports fans, which is not available in the market.
In order to realize his idea, he didn't go back to work as an office worker. Woodman works 18 hours a day. He even tied a hump cup half Gatorade and half water on his back to reduce the number of times he went to the kitchen to drink water.
Soon, the prototype of the product was completed. But there are still financial problems to be solved. Woodman, together with his girlfriend at that time and his wife now, knitted 600 pieces of Indonesian handicrafts with a price of $65,438 +0.9 each into beads. After returning to the United States, he drove a Volkswagen with a price of 1974 dollars and sold it at a price of 60 dollars each along the road from northern Canada to southern Canada, thus raising the first start-up capital of the new company 10000 dollars.
Together with the previous deposit of $20,000 and his mother's loan of $35,000, the company has a start-up capital of $65,000 and the first fixed asset-a sewing machine rented by Woodman's mother. They used this sewing machine to produce the company's first batch of hand rope accessories. Later, after his father invested $6,543,800 twice, Woodman and his colleagues studied how to sew old diving suit materials together and drill holes (connecting systems) in plastic raw materials, while looking for cameras that could be authorized and modified on the Internet and at trade fairs.
On Alibaba, which was just established at that time, Woodman found a supplier. In 2004, the other party sold him the first mass production machine using 35mm film for 3 dollars and 5 cents. He sent his plastic shell to the Shenzhen foundry. After receiving the solid model, it took several months to revise and improve it, similar to the scheme of injecting batteries into the driving recorder and changing the optimization of keys.
Later, he named the company GoPro, which means "to be a professional (athlete)", and the sports camera product was called HERO, which later led to the slogan Be a hero that GoPro still uses today. In September 2004, the Hero 35mm camera, the first camera developed by GoPro, came out. Although it is a film camera, it can support reuse.
Woodman sold his first product at a sporting goods fair in San Diego. Later, he sold the Hero sports camera to surfing and diving shops at a purchase price of $65,438+00, and then sold it to surfers and divers at a price of about $20. In this way, Woodman found his first core users.
Thousands of products ordered by a Japanese customer made GoPro make its first big money. In 2005, GoPro cameras achieved sales of $350,000. In 2007, GoPro introduced a video camera, and in 2008, it introduced a camera with a wide-angle lens. In 20 10, the hero HD camera came out, which can shoot 1080P HD video with 127 wide-angle lens. In the same year, GoPro's sales reached $64 million.
Here, I want to emphasize that there are various reasons for GoPro's success. Whether it's a casual wanderer or a keen business sense, whether you dare to do it or not, whether you are supported by your family or even bravely looking for a solution and OEM in China, the key to its success is the American cultural environment. Because if you are in China, as long as you are not a rich second generation or an official second generation, people who have been wandering outside for half a year after unemployment will generally be abandoned by their wives and scolded by their parents, and there is no chance to start a business at all.
In addition, Americans' cross-border awareness and overall view are also worth learning. Without design, they need to find suppliers in Taiwan Province province and factories in Shenzhen to outsource, then make their own packaging, book booths and sell the upgraded driving recorder at the price of entry-level SLR.
three
From "small" to "big"
The original intention of GoPro is to bring photographers into the picture in extreme sports and create a unique perspective and way of seeing the world. Since the camera was fixed on the wrist, GoPro has successively designed products with petite, firm, anti-fall and anti-shake characteristics, and has long adopted ultra-wide-angle, 1080P high-definition cameras, paying attention to waterproof, shockproof and corrosion resistance, which are suitable for various scenes.
Around the shooting scenes of extreme sports, the company has built a complete product system such as digital cameras and video cameras. The product can be worn on the wrist, head or chest of surfers, and can also be fixed on peripheral equipment such as bicycles, skateboards and diving suits. Whether it's high-speed sports or surfing and diving, Hero camera can shoot well.
In March 2009, GoPro officially entered YouTube, using the cool video shot by Hero camera as a signboard advertisement, which made consumers flock to GoPro products. Moreover, all kinds of extreme sports stars leave the country, and in world-famous sports events, GoPro cameras are used instead of old cameras to increase publicity, and marketing methods are very trendy.
The market gap and the demonstration effect of sports celebrities have promoted the rapid growth of sales of previous generations of hero cameras. Focusing on the extreme demand of extreme environment, Woodman took GoPro to the extreme and took risks in the niche market of extreme sports photography. Love allows him to make something good enough at all costs, which is why he can grasp an unexplored demand and "pierce the sky with one needle".
In addition to capturing images with hardware, GoPro also provides users with software tools to manage and edit content, which can be easily shared on social networks and video content platforms and shared by more people. When people see these contents and are moved by the concept of "being a hero", they will buy more products, and then there will be more contents, and so on.
In 20 13, GoPro users uploaded videos equivalent to 2.8 years in length on YouTube. In 20 14, the average daily upload of short films with the word GoPro on YouTube has reached 6,000 times, with a cumulative audience of 654.38 billion and a viewing time of more than 50 million hours. This has turned GoPro from a small hardware into a cultural trend:
Only people who are cool enough will buy this product and shoot a cool enough scene. Only when the video is good enough, users will actively upload and share it. The content screened out in this way is undoubtedly fascinating.
Therefore, when other companies are thinking about how to reduce the cost to low enough, how to improve the cost performance ratio, how to control the production capacity and how to build a service system every day, GoPro has chosen an atypical road: how to attract more people by sharing the high-quality content uploaded by enthusiasts. Gather high-quality users with high-quality products, and high-quality users will produce high-quality content to attract more people's participation, thus forming a strong cultural identity and user community, and then roll up a big snowball through the Internet with good content as the medium. This was the development routine of GoPro at that time.
Soon, GoPro, a small portable fixed waterproof and shockproof camera, became a household name. At that time, its popularity and the coldness of digital cameras became two worlds in the technology market. Since Apple launched the first iPhone capable of shooting videos in June 2009, more and more functions have been integrated into smart phones, and the global digital camera market has begun to face the cold winter. However, GoPro is getting better and better because it focuses on high-speed camera shooting in extreme environments and Internet-based content sharing.
What makes GoPro have the potential to leapfrog to world-class enterprises is the global ecology established through financing acquisition. On March 30th, 20 1 1, GoPro acquired CineForm and obtained the ownership and use right of its 444 video codec. The decoder can speed up the processing of high-definition and three-dimensional images without sacrificing image quality. After the acquisition, this technology was applied to HERO cameras.
20 1 1 in may, GoPro received $88 million investment from five venture capital companies. At the end of 20 12, Taiwanese businessman Guo Taiming invested 200 million US dollars in GoPro in exchange for 8.8% of the shares, making its valuation reach 2.25 billion US dollars. This not only makes Woodman a billionaire, but also makes GoPro the most powerful supply chain partner in the global hardware ecosystem.
By 20 14, the technical level of GoPro products has reached a higher level, which can provide fixed-lens high-definition cameras with a lens width of 170 degrees, and two or more cameras can be paired to produce 360 video. This year, Woodman hired tony bates, a former Microsoft executive, as the president, and conducted a technology IPO called "one of the most successful in history".
GoPro's initial public offering is listed on NASDAQ. It sold 654.38+78 million shares of the company at a price of $24 per share, and successfully raised $427.2 million. On the day of listing, the company's net worth was $2.95 billion, which was not sought after by Google and Facebook. After that, GoPro's share price once climbed to a high of nearly $ 100, and Woodman gained a reputation comparable to that of Jobs.
four
Business transformation trap
In the first year, GoPro sold 6.5438+0.5 million heroic sports cameras. Next, the record-breaking speed is getting faster every year. The year before 20 13 went on the market, GoPro sold more than 3.8 million units a year. But danger is brewing in the most secret places. It can be said that Woodman and his colleagues, many of whom were friends who surfed together in those years, have no idea about how the company can continue to develop.
On the first day of listing in June, 20 14, the company's share price rose sharply, and the highest market value reached1300 million US dollars, but the good times did not last long. In the following days, GoPro's share price plummeted. This is because, in a period of time before and after listing, Woodman made up his mind to make the content into a decent business.
In the preparatory stage of listing, Wall Street bankers told Woodman two things: First, hardware entrepreneurship is a very dangerous industry, and GoPro products and models are easily copied by competitors; At the same time, the market value of a content company at a certain point in time is often higher than its real value at that time.
As a result, GoPro has more than 7.2 million likes on Facebook, more than 2 million fans on Instagram, nearly 65,438+0,000 fans on Twitter, and played a total of 450 million videos on YouTube, ranking first in brand channel influence and so on. These contents are proudly listed in the prospectus of 2065.438+04 as a strong proof of its potential to enter the content industry.
With the commitment to enter the content, the market value of GoPro has exceeded $10 billion, and it is still rising. At that time, Woodman owned about 30% of the company's shares, and relied on the dual shareholding mechanism to have the vast majority of voting rights, worth more than $3 billion. In 20 14, his annual salary was $235 million, ranking first among all companies in the United States.
The prospect of doing content has inspired these surfers, who are famous for their passion, to do an original thing at all costs after starting their business for ten years, even though they have become billionaires. Even in order to expand the success of content, this hardware-based company insists on not making hardware itself.
Because the rise of GoPro originated from people's recording and sharing, Woodman felt that he had enough reason to believe that more video content shot by GoPro could further promote consumers' desire to buy, so he decided to develop content media business. To this end, Woodman said to the outside world more than once: "We are a content production company, and hardware is only an aid."
Since the second half of 20 14, GoPro has been recruiting for the development of media business and provided a large amount of funds to support this project. Less than a year and a half after listing, the company's employees soared from 700 to 1600.
However, what Woodman didn't expect was that this doubled number of employees not only failed to bring about the successful expansion of the content media business, but became a heavy burden. As more hardware manufacturers begin to join the sports camera market, more cheap products have seriously impacted GoPro's base camp, but its very important content media business has made slow progress.
In the end, from the fourth quarter of 20 15, GoPro suffered its first loss since the IPO, and its share price also went down all the way. In the face of continuous losses and hard-to-see content business, GoPro is still reluctant to break its wrist, but it is getting deeper and deeper on the road to recovering losses. In 20 16, 100 employees were laid off, accounting for about 7%, and the situation has not improved.
In the case of falling stock prices, GoPro had to lay off employees and reorganized and closed the media content business department on February 20 16. At this time, GoPro's share price was less than $ 10, and its president, tony bates, also left his job to seek another development.
As a GoPro focusing on the niche sports camera market, it is necessary to expand its business and try diversified development in the face of difficulties. Therefore, after the media content business failed, GoPro turned to the market and launched a seemingly confident drone project. But perhaps Woodman never imagined that the drone had become the last straw to crush GoPro.
In fact, GoPro began to set foot in the drone market as early as 20 13. At first, GoPro tried to cooperate with the budding DJI. GoPro's camera and DJI's drone are a golden team. However, this group, which was widely regarded by the outside world, failed to reach a cooperation because GoPro was too greedy.
According to reports, GoPro asked for 2/3 of the profits from the cooperation, and did not give DJI much leeway. Such unreasonable demands made the two sides break up in discord. After parting ways with DJI, GoPro also tried to seek cooperation with another Chinese drone company, Zero Intelligence Control, but it ended in vain because of profit problems.
As the saying goes, if you don't die, you won't die. GoPro, who hit a wall twice, chose to go it alone. 20 15 may, GoPro announced that it was developing a four-axis folding UAV named Karma, which is expected to be released in the first half of 20 16. However, due to the delay of design and development, the release of Karma skipped several times, and it was not officially released until September 20 16, and this release became the beginning of Karma's nightmare.
After listing, Karma frequently experienced explosion accidents due to battery failure. Only 16 days after listing, GoPro announced the recall of all Karma drones. Because of such a failed appearance, Karma "Glory" was selected as one of the "Top Ten Failed Technology Products in 20 16". Karma re-listed in February, 2065438+2007. At this time, the portable drone market was already dominated by DJI Mavic.
Due to Karma's high price and previous "wonderful" performance, users have lost confidence in this product and even GoPro. Finally, after a year of hard work, GoPro once again announced layoffs and abandoned the drone project. At this point, the "heaven" dream of the sports camera was completely broken.
After the content business and drone business failed one after another, GoPro turned to return to the sports camera hardware market. Before Hero 6, GoPro used Anba chips. At that time, a large number of low-end sports cameras in China, such as sjcam and Ant Camera, all used Anba or cheaper chip solutions, and every time they reached 80% or even higher experience at the price of GoPro 1/3, which made GoPro feel great pressure.
After planning to return to the hardware market, GoPro began to use the self-developed chip GP 1. Once the new product was launched, it really attracted a lot of attention. Hero 6 has indeed raised the ceiling of sports cameras a lot, and the better shooting quality and brand premium have rekindled the hope that "Hero 6 is the reappearance of GoPro" for some extreme sports enthusiasts. However, the turning point of God appeared again. Hero 7 and Hero 8 are still using GP 1, and the enthusiasm of users has been poured cold water. Some people joke that this is to inherit the previous fever and collapse, right?
The development of GoPro has expanded a number of stabilizer accessories manufacturers such as Feiyu and Zhiyun. Official accessories are too expensive, and GoPro users will transfer their demand to these accessories manufacturers. Accessories manufacturers also live up to expectations, constantly iterative technology, cheaper and better than official accessories, resulting in no one interested in GoPro's official accessories.
This lack of attention to R&D makes GoPro worse than Lenovo, which takes the route of "trade and technology". In its heyday, GoPro did not plan for the future, buying these parts factories or defeating them technically. Now the technology of parts factory has accumulated well, and the situation of GoPro in recent years is inevitable.
five
The root of decline
Then, looking back, let's see why Hero 8, known as "the strongest in history", can't save GoPro's decline. Is it because the product is not good enough? Obviously not. So far, GoPro is still the leader in the sports camera market. The fundamental reason for GoPro's decline is that it has found the wrong direction to open up a new business curve in the case of shrinking main business market.
GoPro's main sports camera market is a very niche market. Only those professionals who like sports, travel and are willing to share records are the main users of GoPro, but now there are only a few people who can take GoPro to the ground at any time and take beautiful photos. An impulse of the general public can hardly form a long-term and sustainable user stickiness. In the end, more ordinary users have to choose to shelve.
In the early days, GoPro did not form a monopoly advantage in the sports camera market. With the maturity of smartphone shooting and imaging effect and anti-shake and moisture-proof experience, more and more manufacturers have entered the market, and similar cheap substitutes have gradually flooded the market, further compressing GoPro's already narrow living space. In particular, Osmo Action launched in DJI this year, with years of technical accumulation in the film and television industry, the front screen design and RockSteady stabilization technology of this product have brought new vitality to the market and become a strong opponent of Hero cameras.
In terms of products, GoPro refused to make great efforts. There is no obvious difference between the basic design of Hero 8 and Hero 7, and the upgrade of parameters is not great. We continue to use GP 1 chip. In addition to DJI, aggressive mobile phone manufacturers have also evolved mobile phone camera technology into video technology, which directly poses a threat to GoPro cameras.
On the other hand, GoPro's competitiveness has been continuously weakened due to problems such as high pricing, insufficient innovation and uncertain policies. The unique super wide-angle advantage of sports cameras has also been caught up by mobile phones, which have larger cmos, better algorithms and better processors. GoPro cameras can also surpass sports cameras in image quality, leaving only the advantages in traditional extreme sports.
From the perspective of opening up a new business curve, the problem with GoPro is that ambition exceeds ability. "In order to keep GoPro growing and jump out of the limitations of hardware companies, we have tried many new and reliable new businesses. But looking back at that time, our ideas and toolboxes for entering the content business had great shortcomings and suffered too much pressure prematurely. " Woodman said in an interview.
Because of its commitment to investors, GoPro's content business spends money like water. A video costs $65,438+00,000, and GoPro will increase the budget to 65,438+00 times, reaching the highest production level in the world. At a certain point, the production plan of the newly established entertainment team accumulated more than 30 content items, covering extreme sports, children's entertainment, travel, reality shows, etc., all of which were shot with GoPro's sports camera and produced by the GoPro team.
20 16 March, GoPro announced the acquisition of two mobile video editing applications, Replay and Splice, with the total price of cash and stock150,000 USD. The above two transactions account for about 22% of GoPro's cash reserves. Later, Quik, which was widely acclaimed, was introduced, but it has not been updated for a long time. Next, in 20 17, after the market differentiation and continuous decline, GoPro launched panorama camera fusion, a competitor of insta360.
But at this time, insta360 has launched a variety of panorama camera, updated many generations of products, no matter the price, size or experience, it does not lose GoPro, and even has better technology. Therefore, the launch of the first generation of GoPro fusion did not arouse too much splash, and the insta360 one and nano series sold well in the market.
Today, when Sony, Nikon and Xiaomi, which entered the sports camera market under the influence of GoPro, quickly turned around and no longer took the extreme sports market as a breakthrough point to find new markets, the confused GoPro was still struggling with sports cameras. If Woodman can't find a new blue ocean, will he give up the struggle and surf happily or go back to being a middle class?
six
label
The decline of GoPro has both its own factors and market bottlenecks. At that time, GoPro can be said to have seized the market gap of sports cameras and made a generation of legends. However, with the upgrading of the hardware configuration of smart phones, high-end digital cameras are waterproof to a certain extent. Where can sports cameras give users sufficient reasons to buy?
For hardware products, to go on for a long time, technology and research and development are the last word. However, Woodman is not a person with a technical background, and GoPro is not a technology-driven company. Coupled with the impact of two unsuccessful transformations, the ups and downs of GoPro can give some enlightenment to those intelligent hardware companies that ignore R&D and seek listing. Even in the Internet era, the product strength of hardware is still a hard indicator for the survival of enterprises.