MALE_1: Joining us now is Nick Woodman.
MALE_1: He's the CEO and he's the founder of Go Pro.
MALE_1: Nick, great to have you on the show.
MALE_1: Thanks for joining us today.
Nick: And thanks very much for having me.
MALE_1: So, did, did promo,
MALE_1: the highlight reel that you guys created
MALE_1: from essentially a user generated content,
MALE_1: this is a huge departure
MALE_1: from what you've done in the past.
MALE_1: Why this time take content from your customers?
Nick: Well, hero seven black,
Nick: uh, has a breakout new feature called hyper smooth.
Nick: It's the best ever in camera video stabilization.
Nick: And what that means is it makes it easy for
Nick: an average user to capture
Nick: really professional looking content,
Nick: to the point where we thought it would
Nick: be really fun to challenge our customers.
Nick: Owners of hero 7 black to go out and
Nick: shoot this year's [NOISE],
Nick: uh, highlight reel for us, you know, typically,
Nick: our internal media team goes and shoots or highlight
Nick: reel and they're professionals
Nick: and they know how to get the right shot,
Nick: uh, but to really prove how, uh,
Nick: easy heroes 7 black makes it to get stunning footage.
Nick: We asked our customers to do it and we, as you mentioned,
Nick: we were paying them a million bucks that they get to
Nick: share and the resulting video is insane
Nick: and I don't think that we're going to
Nick: shoot a highlight video
Nick: again internally when our customers
Nick: can view such an amazing job doing it.
MALE_1: Do you think that GoPro can see a second wind
MALE_1: if you will of trying to become a media company?
Nick: [NOISE] Ah, that's not an initiative for us,
Nick: although in many ways our brand is
Nick: synonymous with, uh, incredible content.
Nick: Uh, our brand is really built on top of
Nick: our customers capturing and sharing
Nick: amazing experiences with their GoPro.
Nick: Uh, so, in this way,we are a media brand.
Nick: It's just that instead of generating revenue, uh,
Nick: by selling advertising, uh,
Nick: we generate revenue by selling cameras.
Nick: Uh, so, it's a- it's
Nick: a unique approach to the business and we're really
Nick: focused on scaling the amount
Nick: of amazing user generated content,
Nick: uh, that, that, uh,
Nick: is shot on GoPro and,
Nick: and using that to build our brand internationally.
MALE_1: Nick is speaking of this amazing content,
MALE_1: you guys got 25,000 submissions for this highlight video.
MALE_1: How did you narrow it down?
Nick: [NOISE] Well, it- it's not easy because,
Nick: um, we have some of
Nick: the most active and passionate human beings
Nick: on Earth as our customers.
Nick: They're travelling the world, they're
Nick: doing really interesting things.
Nick: Ah, as you can see from the- from
Nick: the highlight reel, uh, and it,
Nick: it makes for an interesting challenge to
Nick: pick the best of the best and for sure
Nick: there are so many amazing clips and
Nick: amazing moments that didn't make- make the cut,
Nick: but now we have a GoPro Awards program, where,
Nick: uh, the majority of marketing that you see
Nick: film GoPro is actually shot by our customers.
Nick: Unless it's a studio product shot of the camera, um,
Nick: the- any visual that you see in our marketing is shot on
Nick: a GoPro and more often than not it's
Nick: actually shot by our customers,
Nick: and we pay our customers when they
Nick: do share their content with us when we use in marketing.
Nick: So, even if the customer shopped didn't make it in
Nick: the highlight reel there's a good chance you're going to
Nick: see it showing up at [inaudible 00:03:07] some Ansen.
MALE_1: Uh, Nick, I am a GoPro customer, uh,
MALE_1: I do own one of the devices, but look,
MALE_1: the big thing that I often kind of quip with right
MALE_1: now is trying to figure out how
MALE_1: you're producing these devices,
MALE_1: how you're manufacturing them,
MALE_1: the most recent news of
MALE_1: course that you announced the plan to
MALE_1: move most US bound camera production out of China,
MALE_1: uh, can you tell us more about what went
MALE_1: behind that decision? [NOISE].
Nick Woodman: Well, ah, you know there's a risk of being
Nick Woodman: included on a terrorist list and having our products ah,
Nick Woodman: that we import into the US for resale and
Nick Woodman: the US being subject to attacks.
Nick Woodman: Ah, and that forced us to,
Nick Woodman: we're not currently on the list
Nick Woodman: and so, there are, there are that's,
Nick Woodman: that's not currently impacting our business but the ah,
Nick Woodman: concern of that happening, ah,
Nick Woodman: served as a catalyst for us to consider ah,
Nick Woodman: new approaches to our supply chain ah,
Nick Woodman: that could both prevent us
Nick Woodman: from being taxed, but also could ah,
Nick Woodman: perhaps be a more efficient way of,
Nick Woodman: of producing our products period
Nick Woodman: and be better for our business.
Nick Woodman: And we determined that tariff or no tariff,
Nick Woodman: there are opportunities to
Nick Woodman: produce our product more efficiently ah,
Nick Woodman: and it's just smart diversification for our business.
Nick Woodman: And so, ah, we are by summer of 2019,
Nick Woodman: we're going to be moving the majority of
Nick Woodman: our US-bound camera production out of China.
Speaker 1: Should American consumers-
Nick Woodman: We still, we still will be producing ah,
Nick Woodman: our international bound products in China.
Nick Woodman: Cause we've got a lot of great manufacturing
Nick Woodman: partners there and ah,
Nick Woodman: that's an important part of our business.
Speaker 1: Well, let's talk a little bit more
Speaker 1: about the business because in
Speaker 1: the latest investor letter ah, you wrote,
Speaker 1: "We expect to achieve profitability in
Speaker 1: Q4 and for the second half of 2018."
Speaker 1: That was on November 1st.
Speaker 1: Are you still on track for
Speaker 1: profitability for this quarter?
Nick Woodman: Yeah. I can't provide an update to
Nick Woodman: that guidance, ah, but ah,
Nick Woodman: what we have shared is that we- we do believe that ah,
Nick Woodman: we will be profitable for
Nick Woodman: the fourth quarter and for the second half of the year.
Nick Woodman: That's still our goal.
Nick Woodman: Ah, and we've been having a very good Q4 ah, so far.
Nick Woodman: The launch of the HERO7 line
Nick Woodman: of cameras is very successful.
Nick Woodman: HERO7 Black ah, is the- has been the
Nick Woodman: best selling new GoPro in our history since launch.
Nick Woodman: And we had a very strong ah,
Nick Woodman: Cyber Black Friday and
Nick Woodman: Cyber Monday period. So, so far so good.
Nick Woodman: We still have the rest of December,
Nick Woodman: which is a really important period of sales for us ah,
Nick Woodman: but we're feeling good about entering ah,
Nick Woodman: exiting strong and entering ah, 2019.
Nick Woodman: Ah, we shared that we believe will be
Nick Woodman: break-even or profitables in Q1.
Nick Woodman: So, that's a great start,
Nick Woodman: a much better start than we've had in any years at GoPro.
Speaker 2: Ah, a great start indeed and,
Speaker 2: and congrats to see you on the team on the success that
Speaker 2: you are seeing with the HERO7 Black, ah,
Speaker 2: but what's to say that we won't see
Speaker 2: the same inventory issues later on
Speaker 2: down the line that we've seen with some
Speaker 2: of the previo- previous models?
Nick Woodman: Well, GoPro's previous ah,
Nick Woodman: inventory challenges were related to either product ah,
Nick Woodman: challenges, a- a product
Nick Woodman: that wasn't right for the market ah,
Nick Woodman: or pricing that was too high.
Nick Woodman: And so, we've learned that lesson.
Nick Woodman: We understand that we need to come out with
Nick Woodman: new products every holiday season to
Nick Woodman: excite people and there's very specific price points
Nick Woodman: that we need to hit if we want
Nick Woodman: to sell through as much ah,
Nick Woodman: product as we plan.
Nick Woodman: And so, this year we got that right, lesson's learned.
Nick Woodman: That's why we're having a, a strong Q4 to date.
Nick Woodman: It's why we have the guidance that we've provided.
Nick: And, you know, the-
Nick: the reason why we shouldn't expect that again
Nick: this time is because we've got
Nick: a plan that's based on learning from our mistakes.
Nick: It's working and, ah,
Nick: we're proving that there's significant
Nick: demand for our products when we've
Nick: got exciting new products at the right price point.
Speaker 1: Nick, in the past you've, ah,
Speaker 1: expressed that you've been open to being
Speaker 1: acquired by a larger company,
Speaker 1: are you still in a position right now where you're
Speaker 1: interested in open to being acquired?
Speaker 1: And if yes, what company would that be?
Nick: [LAUGHTER] Well, what I can't tell you is, ah,
Nick: it's any CEO's job to be open to
Nick: the idea of combining forces with another company, ah,
Nick: if that other, ah,
Nick: company can help you scale your vision and-
Nick: and grow your business in
Nick: a way that you- you couldn't do it alone.
Nick: So, of course that's
Nick: something that would be- we would be open to.
Nick: It's also my job to provide return to shareholders,
Nick: and if we can provide a better return to
Nick: shareholders as a part of another company,
Nick: and of course that's something that we would consider.
Nick: Ah, but what I'm happy to report is that,
Nick: our own strategy to restore growth and
Nick: profitability to GoPro is working.
Nick: We're really excited about
Nick: the current products that we've got out in the market,
Nick: and we're really excited about
Nick: our future roadmap as well.
Nick: So, it's- it's- it's
Nick: a lot of fun right now at GoPro to
Nick: be having a strong first quarter,
Nick: and we are really looking forward to 2019 as well.
Speaker 2: Nick, In terms of surfer, I'm a snowboarder.
Speaker 2: We both have heard
Speaker 2: the message of GoPro which resounded with us,
Speaker 2: but beyond this market of extreme sports and
Speaker 2: other athletics where you see
Speaker 2: a lot of people really gravitating towards the product,
Speaker 2: what industry could this be applicable to next?
Speaker 2: Are you thinking health care,
Speaker 2: especially as we've seen
Speaker 2: some consumer tech companies really lean into that?
Nick: You know, our research shows that there
Nick: is so much untapped opportunity in
Nick: serving in GoPro serving as
Nick: a solution for active people around the world.
Nick: Now our core mission, ah,
Nick: remains the same too- and that is to help active people
Nick: capture and share experiences that
Nick: they wouldn't otherwise be able to without a GoPro.
Nick: So, in this way we're really here to
Nick: serve doers in the world.
Nick: People who are- who are out
Nick: there doing stuff that have a passion,
Nick: have an interest, and they're
Nick: pursuing it and they want to capture and share it.
Nick: Ah, in the total addressable market
Nick: that we've identified,
Nick: we- we only actually have, ah,
Nick: a little bit more than 50 percent awareness
Nick: of GoPro amongst those consumers.
Speaker 1: Right.
Nick: So, there's a lot of opportunity to grow
Nick: awareness of GoPro especially internationally.
Nick: Ah, then also hyper
Nick: specialized GoPro for those consumers
Nick: around the world that really,
Nick: ah, need us the most.
Nick: So, rather than try to go abroad and try
Nick: to get into different industries and so forth, ah,
Nick: we're more focused on doing
Nick: a better job of driving awareness,
Nick: and super serving, ah,
Nick: customers around the world,
Nick: that could benefit from the solutions that we provide.
Nick: There's still a lot of growth opportunity there.
Speaker 1: All right Nick Woodman, CEO of GoPro.
Speaker 1: He's also the founder, he's the guy
Speaker 1: who invented the GoPro.
Speaker 1: Thank you so much for joining us.
Speaker 1: We appreciate your time.
Nick: Thanks very much. Right back at you.
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