The Other Side of GoPro's November 30, 2016 Announcement
COW Library : : Ronald Lindeboom : The Other Side of GoPro's November 30, 2016 Announcement
When GoPro management rolled out their press release on November 30th announcing that Black Friday sales demand was strong with "Solid Holiday Demand In The U.S. For GoPro HERO5," what was disclosed elsewhere in the press release seemed to bring to a boil the feelings of some investors, employees, customers and tech watchers who felt they were watching the unravelling of one of the strongest tech companies in recent years.
Taken at face value, it would be easy to read the November 30th news as an admission that GoPro was in dire straits. This, as further down in the press release, GoPro announced that their president, Tony Bates, was leaving and that GoPro would be losing about 15% of its workforce, cutting 200 full-time jobs in the wake of the closure of their entertainment division. The GoPro product line would also see models culled to leave only the most successful models.
Admittedly, those inescapable items followed the cheeriness of the headline with a disquieting thud, and were seen to be about as dark as the Black Friday sale alluded to in the press release.
THE INTERNET GOES WILD
While the title declared that Hero5 sales were strong, it was what lay further down in the release that proved troublesome because it didn't follow the glow of the titular spin. Because of this glaring disconnect between the headline's bright announcement and the perceived doom-and-gloom that followed, It didn't take long for the initial boil to come to a full rolling boil as it made its way across the Net. Many hoisted GoPro onto the petard of their own success and more than a few broiled GoPro in the juices of a perceived arrogance that they attributed to GoPro's rare degree of success. It was a visceral emotional reaction like few I've seen in 25 years of being on the Internet.
Was all the rancor justified? In fairness, I am not convinced that it was.
Many antagonists seemed to be pointing to things that they clearly didn't understand, things that are not all that uncommon in business. Markets change and shift and companies do their best to adjust and take advantage of those shifts. Humans run companies and decide the course, and not every decision flies. Some crash.
Do short-term setbacks mean that the company is doomed? No, things often turn around, especially if a company has a strong customer base, manufacturing arm and a means to move product -- all of which GoPro has in ample measure.
Apple is probably the greatest example of the turn-around phenomenon in the world of tech, though there are many others that could be pointed to, as well. Let's compare a onetime Apple to what GoPro is currently experiencing…
APPLE OF THE MID-TO-LATE 1990s
It has long been said that great companies are not made because they make no mistakes, they are made by what they do when a mistake is made. The Apple of today is far different than the Apple of the late 1990s. Like GoPro, that Apple had tried to expand into markets and product lines that simply didn't work. There were entire product lines that were tried and failed: LCs, Performas, and the licensing of its OS was cannibalizing Apple's own sales, thanks to companies like Power Computing, Motorola, Daystar and others.
There are many other ideas that Apple tried which ended in failure, and there are many business books that portion the blame and name names. Much of the story is too ugly to write about on a beautiful Saturday afternoon, so I'll leave that to your own research and reading. Suffice to say, Apple may be the biggest company in the world today, but in the late 1990s they were the greatest example of squandered opportunity and what not to do in business.
The ride was a painful one but often the most valuable lessons are the painful ones. "You don't forget your scars," as my father used to say. GoPro's founder and CEO, Nicholas Woodman, is undoubtedly drinking from that painful experiential cup right about now. I have little doubt that his scars will remind him of the lessons, going forward.
GOPRO GROWING INTO MARKETS AND PRODUCTS THAT DIDN'T WORK
In some ways, GoPro's recent troubles are not unlike Apple's problems in the 1990s, problems which are the outcome of drinking from the same well: the desire to dominate the market and grow by covering as many bases as possible, adding to that that you are not doing it in a vacuum and your competitors are doing their best to excel in their own efforts -- while the market itself is a dynamism outside the control of any company and has its own developing desires and needs.
But to their credit, GoPro cut away their failed experiments a lot sooner than Apple did, and for that, many investors, employees and customers have to be glad. Add to that, GoPro's founding visionary is still its CEO and that means that customers and investors can expect a degree of consistency in both the company and its products.
NOT ALL FAILURES ARE FAILURES
One thing my father taught me well, was that those who never try to do anything new, never fail -- failure is often the end result of attempting great things and pursuing new ideas.
While I have little doubt that many of GoPro's critics will focus on Tony Bates, GoPro's president who will be leaving the company at the end of the year -- what many will forget is that under his leadership, GoPro has compounded growth and has built a formidable customer base that can buy the company's cameras at most all major US retailers including Amazon, Walmart, Best Buy, Target and many others.
Today's brand conscious buyers trust GoPro and that trust, along with the major retail channels that Tony Bates will leave behind, means that a more streamlined GoPro will be quicker, more focused, and likely much more responsive to their core customers.
While some forget the very disruptive and visionary nature of the first GoPro cameras -- cameras that brought some of the most innovative and original footage ever seen -- like Apple, GoPro has a customer base that is dedicated to GoPro cameras and like the diehard customers who refused to abandon Apple at its lowest moments in the 1990s, GoPro's customer base is one that has that same sense of commitment to the tools they use and have a genuine emotional connection to.
Yes, to those paying close attention, their lens distortion and artifacting could drive a discriminating cinematographer nuts, but GoPro cameras have been capturing some remarkable footage and adding breathtaking footage to the chronicle of life on Earth.
WHAT ABOUT THE HUMAN COST OF GOPRO'S LAYOFFS?
I feel terrible for the 200 people who lost their jobs in all this and I am sure that both Nicholas Woodman and Tony Bates do, as well. I know many people in business and contrary to many media reports, very few business leaders I know are the cut-throat type who would throw away people to squeeze another nickel for the bottomline. (Yes, they exist but in all my consulting work and relationship building that I've done over the last four decades, I've yet to meet many of that ilk.)
People forget the 85% of the people who will be surviving the cuts and stranger still, and others still will fail to consider the fact that a company like GoPro now employs vast numbers of people who beforehand, did not have those jobs. That seems to be forgotten in the emotion of it all. Again, not every plan works and the costs of failure is sometimes measured in human costs.
The news from GoPro on November 30, 2016 had to be hard news to the company and its people who had not long before watched the idea that was GoPro rise as few companies have. It seemed they could do no wrong and their cameras were everywhere, doing things that no camera had done before. That and the 85% of the company's workforce who will remain at their stations seems to be getting lost in most all of what I've seen online.
Photo, courtesy Wikipedia.org
Few companies can grow without making mistakes. Like our children, they stumble and get up, and they learn from their mistakes. Experience is a hard teacher but it is a great teacher. I have little doubt that Nicholas Woodman will learn his lessons well, people who care often do. I have watched from a distance as Nicholas has built an incredible company on an idea that took off like some of those whose lives his cameras documented.
Years ago when I taught a business class in central California, one of the classes dealt with the subject of uncontrolled growth -- a thing that I proved in my class was tougher to overcome than under-capitalization. It is tempting to see things like the growth of the drone market and to see your products used in drones, and want to get involved yourself. But if that is not your core business, you better leave it to the pros. GoPro learned that hard lesson pursuing the Karma drone. Sometimes, admitting you took the wrong turn and direction takes more courage and leadership than pretending that you didn't.
That GoPro stumbled is not surprising to me, what is surprising is that they had such a remarkable unbroken string of success until 2016.
Now it's time to get back to work and take the lessons learned into the next chapter. I am sure that Nicholas Woodman and the team at GoPro will do just that.
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