Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How GoPro Survived Its Own Near-Death Spiral
Transcript
- Lucas: If you were building a hardware startup in 2014, GoPro was the dream. Founder Nick Woodman had turned a camera you strap to your helmet into a cultural icon. The company went public at 24 dollars a share in June of 2014, and within three months it hit 87 dollars — a market cap of over 13 billion dollars. Luna: And then it all fell apart. Lucas: Fast. By 2016, GoPro was losing money every quarter. The stock was trading below 10 dollars. Analysts were talking about a fire sale. Woodman himself said it felt like the company was 'on the edge of a cliff.' So today, I want to look at how GoPro pulled back from that edge — not through a miracle product, but through a series of hard, unglamorous decisions. Luna: I remember reading that the Hero4 launch in 2015 was a dud. But what actually went wrong? Lucas: The Hero4 was a decent camera, but it wasn't enough of a leap. Meanwhile, GoPro had been chasing new categories — they launched a drone called the Karma in 2016, and it was a disaster. The battery would disconnect during flight and the drone would fall out of the sky. They had to recall 2,500 units. That recall alone cost the company tens of millions of dollars. Luna: So they were bleeding money on a bad product while their core camera sales were flat. Lucas: Exactly. In the fourth quarter of 2016, revenue dropped 40 percent year-over-year to 540 million dollars. They posted a net loss of 115 million dollars. And the cash pile was shrinking fast — from 650 million in early 2015 to under 300 million by the end of 2016. Luna: That's a burn rate that kills most hardware companies. Lucas: It does. And Woodman knew he had to act. In January 2017, GoPro announced a restructuring. They laid off 15 percent of their workforce — about 200 people — and shut down the entertainment division that had been producing ski videos and surfing clips. They also killed the Karma drone entirely. The message was: we are going back to being a camera company. Luna: Was that the turning point? Lucas: It was the first step. But the real test was whether they could release a product people actually wanted. And that came in the fall of 2017 with the Hero5 Black. It wasn't revolutionary — it was just a really good, refined action camera with image stabilization and voice control. And it sold well. That holiday quarter, revenue jumped to 340 million dollars, and GoPro posted a profit for the first time in two years. Luna: So the lesson is: stop trying to be everything, and make the core product great again. Lucas: Exactly. But there's another piece that's less obvious. GoPro also changed how they priced their cameras. They started selling the Hero5 Black at 399 dollars instead of the usual 499. They accepted lower margins in exchange for volume. And it worked — unit sales grew 25 percent that quarter. Luna: That's a hard decision for a founder who built a premium brand. Lucas: It is. But Woodman realized that if they didn't move units, they'd run out of cash. They needed to rebuild the installed base before they could upsell accessories or subscriptions. Luna: And that subscription piece — GoPro Plus — how important was that? Lucas: It became a steady revenue stream. GoPro Plus launched in 2017 at 4.99 per month and gave users unlimited cloud storage for their footage. By 2019, they had over 250,000 subscribers. That's small, but it's recurring. And for a hardware company that used to live and die by holiday season sales, that recurring revenue smoothed out the cash flow. Luna: It's interesting — the subscription model is usually associated with software. But GoPro made it work for hardware by tying it to a real pain point: 'where do I store all my 4K video?' Lucas: Right. And they kept adding features. In 2020, they launched GoPro Subscription at 49.99 per year, which included unlimited cloud storage, a 50 percent discount on accessories, and even a camera replacement program. By 2021, they had over 1.6 million subscribers. That's nearly 80 million dollars in annual recurring revenue. Luna: That's significant for a company that was doing around a billion in revenue. It's like a cushion. Lucas: It is. And it allowed them to survive the 2020 pandemic, which actually helped them — because people stuck at home started filming backyard stunts and hikes. Their revenue in 2020 was 880 million, down just 5 percent from 2019. That's much better than most consumer electronics companies. Luna: So they went from a near-death experience to a stable, smaller company. But is the lesson for founders: 'you have to be willing to shrink to survive'? Lucas: I think so. Woodman had to admit that the drone bet failed. He had to admit that the entertainment division was a distraction. He had to cut staff and drop prices. Those are all painful for a founder's ego. But he did it, and the company is still around. As of mid-2026, GoPro has a market cap around 1.5 billion dollars — not the 13 billion it once was, but it's profitable and it's not going away. Luna: And that's something a lot of startups don't achieve. They either hit a home run or they go to zero. GoPro found a middle path. Lucas: That middle path is hard to walk because it requires humility. But it's worth talking about because most companies aren't going to be the next Apple or the next Amazon. Most will hit a wall and need to figure out how to get past it. Luna: You know, there's a parallel here to something I've noticed in this show's audience. A lot of you are building companies or products yourselves, and you're constantly making decisions about where to focus. If this conversation — or any of our conversations — has helped you think about your own business in a clearer way, that's exactly what we hope to do. Lucas: Yeah. And we're able to keep these episodes ad-free and deep-dive because of listeners who support the show directly. If you've gotten value from episodes like this one on GoPro, or the ones on Stripe or Canva or Duolingo, and you want to help keep them coming, you can buy us a coffee at buy me a coffee dot com slash fexingo. It's a small gesture that goes a long way for us. Luna: And it genuinely lets us spend more time on the research for episodes like this. So thank you to anyone who's already done that. Lucas: Alright. Back to the story. So after the 2017 restructuring, GoPro had a few more years of ups and downs. But one thing they did that I think is instructive is how they handled the transition to the Hero7 and Hero8. They didn't try to reinvent the wheel. They just iterated. Luna: Small improvements, rather than a big swing. Lucas: Exactly. The Hero7 introduced HyperSmooth stabilization — which was actually a game-changer for vloggers. The Hero8 had built-in mounting fingers so you didn't need a separate frame. Each generation just solved one or two real user problems. That's a very different strategy from the drone era, where they tried to create a whole new category. Luna: And the market rewarded them. The stock went from around 4 dollars in 2019 to over 10 in 2021. Lucas: Right. But it's been volatile since. The lesson isn't that they found a perfect formula. It's that they found a sustainable one. They're not the high-flying stock they once were, but they're also not a cautionary tale. They're a survival story. Luna: And I think that's a story worth telling more often. We hear so much about unicorns and billion-dollar exits. But most founders will face a moment where they have to decide: do we double down on a failing bet, or do we cut and refocus? Lucas: Nick Woodman chose to cut. And that's why we're still talking about GoPro today.