Here’s a question that more than few consumer hardware startups are struggling with these days: should they try and raise money from a slew of wary investors or bring their projects to the public in hopes of a Pebble-style success? GoPro founder and CEO Nicholas Woodman sat with down with our own Matt Burns on the Disrupt SF 2013 stage to address that same question, and his message to would-be hardware startup founders is to strongly consider another option.
“Bootstrapping is a really powerful thing,” Woodside said. As long as you can bootstrap without sacrificing a competitive advantage or moving so slowly that you’re “eaten alive by competitors,” the benefits of being able to stay devoted to your singular vision can’t be overstated.
“Everyone has an idea over time of what the business should be, and during the formative period too many opinions could be disruptive,” he added.
Frankly, that’s easier said than done. Woodman was fortunate enough to have some supportive family members ready to help after a surfing trip begat an epiphany about the need for small, rugged, wrist-worn cameras. Between his mother and the savings he had left over from a previous venture, Woodman had about $65,000 to get GoPro off the ground (and subsequent $100k investments from his dad didn’t hurt), and some savvy product development and marketing deals have eventually helped sculpt GoPro into the company it is today.
But would that sort of approach apply for everyone? Definitely not. The spectrum of complexity is a vast one though, and some hardware projects will require significantly more capital before they can make the leap from wild-eyed notion to consumer-ready product. And that’s to say nothing of how lucky Woodman was to have family members who threw their own resources behind his new venture.
Of course, there’s often a tipping point in situations like this, and GoPro is no stranger to taking outside money. Back in late 2012 the company locked up a $200 million investment in a deal with Foxconn that valued the camera at a whopping $2.25 billion, but Woodman said the deal wasn’t so much about padding the company’s coffers as it was about building a relationship with a world-class OEM and the man who runs it. What’s more, GoPro was originally planning for an IPO before then which was deferred thanks to that hefty investment (though Woodman confirmed that an IPO is still in the works). Even so, Woodman believes that his bootstrapping experience was absolutely critical to GoPro’s growth, and pointed to one particular moment when the lack of accountability to investors fundamentally changed the company’s direction.
“As soon as we could afford it we bought a race car,” Woodman said. It’s not the sort of use of company resources that would thrill investors, but Woodman maintains and it led “to one of the biggest ideas we’ve ever had at GoPro” — taking those miniature cameras off the wrist and mounting it to “anything imaginable”. Needless to say, the gamble paid off.