When GoPro launched in 2002, the company quickly captured the interest and money of adventurers and extreme sports junkies looking to capture their great moments on a durable, rugged action camera. While the company’s initial launch product was a camera strap allowing users to strap a camera on themselves, it wasn’t until 2006 that the company finally launch the GoPro Hero ruggedized camera that could be clip on, fastened to, or attached to any number of sports equipment and helmets. The product instantly resonated with his target audience and Nick Woodman (CEO of GoPro) equally as quick, established additional models to cater to not only extreme sports enthusiasts but also normal people looking for a device to help capture their special moments. By 2011 GoPro became the fastest growing camera company selling an estimated 800,000 cameras a year.
2015 marked a decidedly poor year for GoPro, as the company, still selling more cameras than ever, was experiencing a dramatic drop in revenue by nearly 31%. On top of that, GoPro’s stock dropped to half of its original 2014 value, leading to speculation that the company was unable to reach markets beyond their core customers.
While this is alarming for any company, Nick Woodman and GoPro are taking a decidedly exciting and genius move to pivot the company completely from a hardware-centric focus to that of software ecosystem complemented by GoPro line. This sounds like a bold move, but it is essential to keep the company alive. GoPro is set to grow with today’s software as a service (SaaS) market and offer not just the capture portion of a moment but the editing, viewing, sharing and streaming of all your great moments. Over the past 3 years, GoPro has acquired a number of mobile app and software companies, grew a software division to a 100 plus employee powerhouse, launched two powerful mobile editing apps, and will be releasing a desktop editing experience connecting your movies, pictures, GoPro devices, and the rest of your connected devices under one single ecosystem. Here are 5 reasons why this pivot will benefit GoPro tenfold and any other device centric company on the fence on developing their own ecosystem of software and services.
1. GoPro can realize and improve its initial vision of its core product
From the onset, GoPro’s vision was to bring users a way to capture their greatest moments ,in video and picture, with a small, simple to use camera that could withstand abuse. While the GoPro and its many iterations successfully handled these challenges, they failed at giving their customers a platform where they can view, edit and share their captured moments. GoPro had left their users with nothing but a hard drive full of video files.With GoPro’s new software like Splice and Review allowing you to edit your videos easily, the company is now integrating itself in the complete capture, edit, viewing, sharing element of the experience. GoPro is now in a prime position to realize their initial vision and bring a new level of accessibility that they never achieved
2. An App Ecosystem offers GoPro a huge competitive advantage
Sony Action Cam, Sioeye Iris, Garmin VIRB — the competitor list for GoPro has been steadily growing every year since 2006. From a lower price tag and different video capture capabilities, to additional peripheries that are compatible with the devices, GoPro’s competitors have a variety of advantages and disadvantages when compared to the company’s Hero line. The app ecosystem that GoPro is developing creates a competitive advantage much akin to the Apple App Store. Offering additional value-added services and apps via a dedicated ecosystem not only allows GoPro to be involved in all elements of capturing video, but also develop a relationship with new and old customer’s offering new innovative features they can’t get anywhere else.
3. Apps and software offer new revenue opportunities beyond the initial sale
GoPro has had year over year positive sales growth but still managed to post a revenue decrease by nearly one-third from the previous year. By focusing on the initial one-time purchase of GoPro Heros, the company has limited its potential revenue from subscription services, app purchases and more that could offer untold revenue generation and customer device personalization. As GoPro continues to develop more apps and onboard third party developers, the question will arise; how will developers be paid? The answer lies in the development of an entire app ecosystem with full monetization options to appease developers and allow customers to buy and subscribe to new apps and services with their devices.
4. The move to software will help the company improve its hardware
Analytics is a powerful tool that no company should ignore. Up until recently, GoPro never tracked the data of their users, resulting in a poor understanding of how their customers used their GoPro cameras. With their recent tracking of their uses, the company found that users take far more pictures than they originally assumed and prefer to shoot on resolutions higher than the standard 1080p standard. Taking analytics further to see how GoPro users interact with the company’s ecosystem enables them to continuously evolve and improve the GoPro experience. Better yet, utilizing analytics can allow GoPro to market to their customers in personalized ways, based off of what apps they use, and how and where they use their GoPro.
5. The move to a software platform removes the company from the confines of the hardware business
One of the most interesting aspects of GoPro’s app development has been the fact that Splice and Review, as well as their upcoming desktop app, do not require a GoPro device. While traditionally this has been seen as a missed opportunity to sell products, software as a service has skyrocketed the past few years, highlighting the importance of service over hardware. Camcorder ownership has recently dropped nearly 28% among teens, whereas 2013 saw an increase of 40%. By establishing GoPro as more than just hardware, the company can avoid the chaotic rise and fall of the hardware market by offering revenue generating services and subscriptions beyond the GoPro Hero. With a line-up of apps and software established for GoPro and a whole ecosystem coming down the line, the company is set to expand its appeal, generate new revenue streams, and redefine the camera market like it did 14 years ago.
The blog piece featured statistics, quotes, and GoPro company details from a Verge article on June 2, 2016 titles “GoPro needs a Hero”. To read the original article please go to: http://www.theverge.com/2016/6/2/11837018/gopro-storyteller-desktop-app-video-editor-ceo-nick-woodman-interview