How A Surfer Learned From 2 Massive Failures To Become A Business (Go) Pro

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How A Surfer Learned From 2 Massive Failures To Become A Business (Go) Pro

His third startup attempt made him a billionaire

How A Surfer Learned From 2 Massive Failures To Become A Business (Go) Pro

Photo by Brett Sayles from Pexels

What would you do if you had launched two businesses, both of which had flopped badly? One so badly that it was enshrined in the Silicon Valley hall of shame by being listed on the website

Most of us would throw in the towel and resign ourselves to taking a corporate job — our entrepreneurial spirits crushed.

But if you are Nick Woodman, you follow your passion for surfing, grab a few friends, and take a five-month surf trip around Australia and Indonesia.

And you come up with your next idea.

It was a case of third time lucky for Woodman, which led to him becoming a billionaire and being compared to Steve Jobs.

Woodman became obsessed with surfing while in high school. He even quit the varsity football team so he could sell surf t-shirts. He based this choice of college — the University of California, San Diego due to its proximity to the beach.

It would eventually lead him to business success, but it took a while.

As soon as he graduated from college, Woodman founded his first startup, a website called EmpowerAll.com. The idea was to sell electronic goods for a markup of $2 or less. It would have to rely on a high volume of traffic and sales to generate decent profits.

Strike one.

Undeterred by his first failure Woodman came up with a new idea. A gaming and marketing platform called Funbug, which would allow users the chance to win cash prizes.

Woodman managed to raise $3.9 million in startup money for his new business and launched Funbug in 1999.

Nick launched Funbug in 1999 after raising the necessary capital while working as a private equity firm tech analyst. It was in the glory days of Silicon Valley before the dot-com bubble burst, and Woodman was well connected. His father, Dean Woodman, helped broker Pepsico’s acquisition of Taco Bell while his stepfather Irwin Federman served as General Partner of U.S. Venture Partners.

Despite the business pedigree and the capital Funbug was also a bust. It lasted less than two years before being immortalized on f**ckedcompany.

Strike two.

Woodman and his surfer mates lived in a van as they surfed the best beaches Downunder. They had dreams of becoming professional surfers —, but to ‘go pro’, they needed video footage of their surfing skills. And there were no suitable devices.

Woodman began to think of ways to strap cameras to surfers’ wrists so they could film themselves and others in action. He tested different ways to strap cameras to his wrist before his entrepreneurial brain kicked into action again.

He would develop the whole product — including camera and a casing in addition to the strap.

The idea of the Go Pro was born.

In 2002, Nick returned home to California and borrowed $200,000 from his father to develop prototypes. Together with his wife Jill, he also started selling necklaces to raise extra capital.

They bought the necklaces in Bali for $1.90 and sold them for $60 — a much better markup than Woodman’s original electronics website! He would drive up and down California’s beaches selling his necklaces from his 1971 Volkswagen dubbed the Buscuit.

When not selling necklaces from a VW, he would work on a sewing machine borrowed from his mother. He would design different straps and test what worked best. At night he would stay up late to speak with factories in China regarding camera parts.

Fear of failure had him working up to 18 hours a day, seven days a week, for months on end. He set himself a target of four years to turn his business into a success.

By September 2004, Woodman finally had created his first 35mm film camera. Armed with his new cameras, he attended the San Diego Action Sports Retailer show. When a Japanese company ordered 100 Go Pro’s at the event, Woodman’s business was off and running.

He spent the next few months getting his cameras into surf stores and even appearing on the QVC shopping channel. Watch the video below for a glimpse of business history.

From QVC, Woodman managed to get the product into Recreational Equipment, Inc. (REI) — one of America’s largest outdoor recreation retail groups. The product then took off as extreme athletes such as racecar drivers, skydivers and skateboarders purchased the cameras for filming themselves.

These athletes began uploading their videos, creating a viral word-of-mouth campaign that drove sales. Go Pro finally made it into the ‘mainstream’ when it landed on the shelves of Best Buy.

Sales continued to increase, and in 2014 with a globally recognized brand and state-of-the-art product line, it was time to take Go Pro public. It proved to be one of the most successful tech IPO’s of the year and pushed Woodman to billionaire status.

By September 2014, he had a net worth of over $3 billion, and he was the highest-paid CEO in America. He was just 37 at the time.

It’s tough to become a billionaire. It’s even harder to stay one — as Woodman found out.

Go Pro went from 700 employees at the IPO launch to 1600 18 months later, and their costs began to spiral. This resulted in layoffs and two years of losses following the IPO.

Even more, telling was the loss of focus and direction. GoPro had built its success on the back of its unique product, but it was feared that there was a significant risk in competitors replicating and improving on their cameras.

This was coupled with the belief that GoPro’s future lay in being a media company. This was largely spurred on by investors who knew that media companies are worth more. As Woodman said, “we couldn’t have a conversation about GoPro without everybody wanting to talk about the media side of the business.”

They began to spend more and more on their video shoots and production. Budgets went from $10,000 a shoot to $100,000 a shoot as the company tried to prove it was a media company to investors. They developed over 30 TV series and had ideas of releasing their own streaming platform.

Most of the shows never made it out of production, and the streaming platform was never launched, depriving the world of the opportunity to GoPro and chill.

GoPro shares slumped from a high of $100 and a company valuation of $10.1 billion to around $10 per share.

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Author: Ash Jurberg