Example of a Bootstrapped Company
GoPro, Inc. (GPRO), which was formerly Woodman Labs, Inc, is an American corporation that develops, manufactures, and markets high-definition personal cameras. The company manufactures small, body-worn cameras that record the user’s experiences. These cameras became popular among sports enthusiasts because of their ability to record hands-free, high-definition footage.
Nick Woodman, an American from California, conceived the idea of a wrist strap that could tether already-existing cameras to surfers. His inspiration came after a 2002 Australia surfing trip where he was hoping to capture quality action photos of his surfing. But he found he was unsuccessful as an amateur photographer because he could not obtain quality equipment at accessible prices. He tested his first makeshift models but came to the realization that these were not good enough, therefore concluding that he would have to manufacture the camera, its housing, and the strap himself.
The initial money Woodman raised to found the company—$10,000 dollars in bootstrapped cash—came from selling bead and shell belts out of his VW van. He moved back in with his parents at age 26 and worked many long hours to develop his product. He scraped by doing many different types of work—from emailing to truck driving—so that he could design his product, which he did by hand because he didn’t have enough computer design experience to do so electronically.
In 2004, the company sold its first camera system, which was a 35mm analog camera, which eventually evolved to digital. As new adopters discovered the product, the cameras branched out from the surf scene to be used for auto racing, skiing, bicycling, snowboarding, skydiving, base jumping, white-water rafting, and skateboarding.
Sales Drive Growth
The company consistently grew revenue and in 2014 GoPro went public with an initial public offering (IPO) valued at $2.96 billion.1
Although it took 10 years for GoPro to reach its zenith, there had been a great deal of aggressive marketing, social media strategy, as well as constant consumer technology advancements going on throughout this time. And, of course, the company benefitted from being in the right place at the right time by taking advantage of a situation when smartphones were making traditional digital cameras and camcorders obsolete.
However, Woodman was not a success the first time around. Previously, he had built two companies. The first was a website called “EmpowerAll.com,” selling electronic products. The second, “Funbug,” (funded to the tune of $3.9 million) was a gaming and marketing platform. Both failed. Determined to succeed, Woodman came back a third time to pursue his dreams with GoPro.
The Ups and Downs of Business
It’s important to note that like all businesses, a company that starts out as a bootstrap venture will face the same headwinds that all companies face once they mature past the early stages. GoPro is no exception to this. Since trading at a high of around $93 a share in Oct. 2014, the company’s stock has plummeted to around $12.59 a share as of June 2021.2
The business model that made the company successful began to falter when GoPro faced competition from other action-camera companies and from the new technology that made smartphones the camera of choice for many consumers. Over the years, GoPro’s competitive advantage over its rivals has decreased. Going forward, the company looks to recapture market share by introducing new cameras that feed the demand for high-quality social media content.