The big screen in the GoPro cafeteria isn’t showing ESPN or flashing news headlines. Mannequins sporting the company’s distinctive wearable cameras flank a screen where a running loop of customer clips gives the building a quiet soundtrack of windy whooshes against a view of the world you’d normally see only if you hurled yourself out of a plane.
But it’s not all extreme sports and daring feats. One of the longest clips in the set is called Baby vs. Sleep, and features an adorable tyke who is determined to play in a jumper despite nodding off, often in mid-bounce. (He has more than 200,000 views on YouTube.)
It’s not the kind of marquee footage you’d expect from a company that makes cameras and mounts specifically for people who don’t want to fuss with their smartphones while they rappel down cliffs. But GoPro doesn’t only want to be the camera company for daredevils. Mostly it cares about capturing a certain enthusiasm for life, or as chief executive Nicholas Woodman likes to call it: stoke.
“We never really relied on focus groups or much research,” said Woodman who mocked up the first prototype of a GoPro mount on his mother’s sewing machine so he could film himself surfing. “We’re guilty of building products for ourselves.”
Sure, that sounds a little arrogant. But building products for himself and ignoring the rest of the world has been one of the keys to Woodman’s success since he founded GoPro 13 years ago.
If he’d paid attention to what the world had to say about cameras, after all, he may never have built GoPro. The video camcorder industry has imploded as the rise of the smartphone pitched it into junk drawers across the country. (When was the last time you saw someone carrying a camcorder on vacation?) Rather than go down with the Sonys, Sanyos and Panasonics of the world, GoPro roared to success with a $427 million initial public offering in June, valuing the company at $3 billion.
In three months, the stock has more than tripled its $24 per share IPO price, despite bumps in the road. The first came after its debut earnings call: It reported $244.6 million in quarterly revenue, a 38 percent increase from a year ago, which beat analyst expectations but failed to live up to post-IPO hype. Early this month, investors were infuriated to learn that IPO underwriter JPMorgan had allowed Woodman to gift $450 million in shares to a family foundation before stock restrictions were lifted — sending share prices down as much as 14 percent.
Last week, it stumbled again on reports by analysts that despite being bullish on GoPro, they say retail investors were inflating share prices.
None of which is to say that demand for GoPro’s cameras is on the decline. Retail analysts say its newest models — a $500, $400 and new budget $130 model — have been flying off store shelves since they went on sale a week ago.
Other camera makers should have such problems. After all, anyone might have thought to strap a camera on a headband. What does GoPro have that the others don’t? In a word: marketing.
Nearly all the GoPro clips that “go viral” — clips of Felix Baumgartner skydiving from space, lions hugging scientists, or a fireman resuscitating a kitten — are the product of a team of content folks at GoPro who scour the Web for perfect clips, buy the rights from the people who shot them and produce them to show off a maximum level of awesomeness.
That makes GoPro’s media strategy nearly as important, if not more so, than its gadgetry. Yes, gadget sales still account for all of the company’s revenue on the balance sheet, but it’s impossible, Woodman said, to not also think of GoPro as a media company.
As he sees it, GoPro could already be a new kind of media business that essentially markets itself in what people around the office refer to as a “virtuous cycle.”
“Even if we weren’t to monetize the GoPro channel [on YouTube] in a traditional sense,” he says, “we still monetize it in the sense that it’s the best way to drive GoPro sales.”
It’s a neat trick, and one that experts say GoPro has perfected.
“GoPro is one of a class of companies that has people reach out to their tribes as a marketing device,” said Rita McGrath, an associate professor of management at Columbia University, who likened the firm to other companies with a strong sense of identity such as Under Armour.
The people at GoPro get who they’re selling to because many, including Woodman, are also core consumers. The parking lot at headquarters is dotted with mud-splattered cars sporting equipment racks and company bumper stickers. Meeting rooms bear names such as “Porsche” and “Ducati.”
Employees filing off the firm’s commuter buses have an unofficial uniform: a variety of scabs and scrapes that peek out from company-branded sweatshirts and carabiner-laden backpacks.
That concrete knowledge of its market gives GoPro a sense of authenticity that resonates with consumers.
“There’s something very Steve Jobs-like to that approach,” said Michael Pachter, a Wedbush Securities analyst. “And we respond to it. The product is pure. They sell it as a pure play, and we get it.”
Preserving that credibility drives everything at GoPro. GoPro goes for specific targets — other companies that carry a bit of the edgy in their DNA, too. Virgin America carries an in-flight GoPro channel, one of its most popular. The company also recently struck a deal with Microsoft’s Xbox Live entertainment service to carry GoPro clips that gave it a door into 48 million living rooms. U.S. Xbox viewers watch an average of 29 minutes of footage per session, meaning they’re watching roughly 10 or 12 clips per sitting, said Paul Crandell, GoPro’s vice president of marketing, who joined the firm by way of Red Bull.
It’s also aggressively courted celebrities — mostly athletes, but also musicians and other entertainers — to shoot first-person video to show fans what it’s like to be in the gate at the top of an Olympic slope or on-stage at a stadium concert.
In many cases, GoPro doesn’t have to work hard to get celebrities to sign on as spokespeople; the people they want are already part of the tribe.
“Me and my friends were actually probably the first. I mean, we like claiming we were the first to make a snowboard GoPro,” said Sage Kotsenberg, an Olympic gold medalist and GoPro marketing partner. As part of his deal with the company, he straps a camera to his leg, his head, his chest and goes out to shoot “crazy video” for GoPro’s marketing team from time to time.
It’s not hard for him, he said, because he’s almost always got a camera on hand, regardless of whether or not he’s been asked to shoot something. “Sometimes they’ll call and ask, ‘Oh, can you take it out today?’ ” Kotsenberg said. “Well, yeah. It’s already in my pocket.”
Still, getting the footage of everyday people is just as important as the high-profile celebrity endorsement — that everyday element is part of what experts say makes GoPro stand apart.
One thing GoPro has in its favor is its timing, said Norman Hollyn, a professor at the University of Southern California’s film school. Companies that came before, such as Flip, hit the market before smartphones made people more comfortable with the idea of shooting and editing their own film, taking selfies and sharing them with the world. GoPro hit at the right time and also let people film point-of-view shots from personal angles that were previously either impossible or very expensive to shoot.
“The cool thing about the GoPro was how it was so easy to create a view that most people had never seen before — or if they had it was in a Hollywood-style point of view — and this enabled them to speak in their own ways,” Hollyn said.
Placing videomakers, and therefore audience members, in the driver’s seat counts for a lot as GoPro markets its products, because it tells people that they, too, could have exciting lives.
“All of their videos are aspirationally focused,” said Liz Miller, the vice president of marketing for the CMO Council, the trade group for chief marketing officers. “No one is jumping out of a plane every day, but I now believe that I could.”
The combination of cool videos and getting people to want to copy the cool videos is GoPro’s main plan for expanding its appeal, something that many analysts have said is necessary for the company to survive in the long term.
After all, there’s nothing to stop other camera companies from slapping a mount or a magnet to their products to chase the action market. Polaroid recently threw its hat into the ring with a 2-inch cube camera; on Thursday, even smartphone maker HTC announced its own waterproof, mountable camera.
Chris Chute, who researches the camera industry for the International Data Corporation, said this niche is not terribly appealing for many of the world’s top camera makers. Samsung, he said, has shifted its focus to the mobile market. Nikon and Canon, he said, have refocused their brands on professional-level cameras, and don’t want to compete with cameras that start at $200.
Other companies such as Garmin, which makes navigation systems, or start-up Ion have moved in with action cameras, but lag behind in brand recognition and have nothing like the social cachet of GoPro.
That boutique, organic feel counts for a lot, and can insulate GoPro against competitors. ”You take a generic company like a Sony or a Canon and they don’t have the target market down as well,” McGrath said.
GoPro also has clear first-mover advantage, said Pachter of Wedbush. High-end electronics consumers — gadget nerds, in other words — have “a brand culture,” he said. Maybe the GoPro market is limited to wealthy people with active lifestyles, he said, but there’s plenty of money to be made there.
“GoPro would be happy if they only sold 1.5 billion cameras,” he quipped.
Which brings us back to that bouncing, sleepy baby. It doesn’t matter that he’s not strapped to a parachute. To Woodman and GoPro, what’s compelling is that the babe loves what he’s doing as much as the skydiver whooping her way down to earth at terminal velocity.
“Clearly not everyone’s a camera user,” said Crandell, GoPro’s marketing chief. But, he said, he’s pretty confident that people will always like watching things, and that GoPro will have a market as long as people find new, cool ways to use the camera. “Those who do use the camera are going to share passions with the world and those that don’t will love to watch the passions of others.”
And new ideas of applications may again come from Woodman, who said he’s learning firsthand about how GoPro can expand out of the extreme sports market based on how his own life is changing.
“When I started GoPro, I was 26. I’m now 39.” he said. “While some of my risk-taking days are behind me, I’m still having new life experiences, and we’re still focused on the capture of life in all these new ways.”
Case in point: This summer, Woodman had his anterior cruciate ligament repaired after blowing it out on the slopes. He went in for surgery just after the company’s initial public offering.
Ever the evangelist, Woodman asked his surgeon if he wanted to wear the GoPro during the surgery.
The physician agreed, saying it could be a great education tool. And, truth be told, Woodman said, he also thought it would be cool to conduct surgery with a camcorder mounted to his forehead.
“He wanted to do it on his head,” Woodman said. “He was so stoked.”