♪ emily: like a shot of adrenaline spiking an extreme athlete's heart rate, gopro shares soared when it went public in 2014. founder and ceo nick woodman became the highest-paid ceo in america. gopro dominated the action sports camera market, branched out into media and content and even launched a drone, but in a spectacular turn of events, gopro's drones started literally falling out of the sky. the stock fell too, and the media strategy sputtered. there were layoffs, and gopro

tumbled down a road as a bumpy as its scary footage. but when we sat down with founder and ceo nick woodman in march 2019, gopro had stabilized, become profitable, and gone back to its roots, making cameras. joining me today on "bloomberg studio 1.0," gopro founder and ceo nick woodman. thank you for joining us. nick: thanks for coming. emily: and having us at pro headquarters. you have had some high highs and you have had some low lows. what do you think the best action sports metaphor is? is it, like, riding a big wave, wiping out, and getting back on the board? how would you describe it? nick: i think it is more of a climb. a free climb. i think free climbing, climbing without ropes is a good metaphor for being an entrepreneur. you start out with an idea, which is a bit of a cliff, but

you think "i got this. i can climb that no problem." you start climbing and once you get enough into the climb, into the pursuit of your idea, you get far enough along that you can't stop climbing, because it is too far down, but the question is -- do you believe in yourself? do you believe in the climb? do you believe in the idea? if you do, you have got to keep climbing. i started climbing in 2002, and some pitches have been straightforward, some pitches have been challenging, inverted, and you are hanging by one hand, but it has been a great climb, and it is going well now. emily: at one point, the company was worth close to $12 billion. now it is closer to $1 billion. it has been that way for a few years. do you feel like you fell off the cliff, or you were just hanging on? nick: it has been a climb with highs and lows, as you

mentioned, but mostly highs. to have achieved what we have achieved, still doing what we are doing, still be a leader in every market around the world and recognized as a real technical innovator in digital imaging as a whole, i am blown away by what we have accomplished with gopro, and the momentum is in our favor. emily: i love the optimism, but i am curious for you emotionally, how have you handled this? have you had moments where you felt pessimistic, where you felt like, "maybe i can't get to the top"? nick: oh, absolutely. i have gone through every human emotion. i don't think consumer interest in capturing and sharing your experiences will go away ever, so the opportunity for gopro is everlasting. even in the toughest times i would ask myself, is our work meaningful and is our work appreciated? and the answer has always been yes, we just need to adjust our

approach to solving these challenges for people, and we can thrive again. we have done that, and gopro is thriving again. emily: let's talk about where you came from, where the idea came from. you grew up not far from here in california. what kind of kid were you? were you surfing at, like, three years old? nick: [laughs] oh, i wish. i did not start surfing until i was about 10 or 11. i grew up 30 minutes from the ocean. i didn't know what surfing was until i saw magazine tear-outs on a friend's wall. i saw beautiful places, beautiful faces, beautiful waves. oh, my god. i want to be part of this. content got me started on that path. those magazine tear-outs on the wall. now we are leveraging content to inspire people to go out and pursue their own interests. emily: you studied visual arts and creative writing in college, which is not your typical silicon valley ceo. nick: yes, i didn't go to stanford. i didn't study business. but i have a creative

background. i have learned business on the go, but my creative background, you can see it in our brand and everything we do at gopro. in times where i don't know what to do, i rely on my creative training to help find the way. emily: you started a couple of companies out of school. they didn't quite get off the ground but sound pretty cool. nick: they had great names. [laughter] emily: empowerall.com. funbug.com. nick: empowerall.com failed. funbug.com failed. i had no inspiration what to do next, so i decided to take what money i saved up from my previous job and take a five-month surf trip around australia and indonesia. i am a big believer that if you follow your passions, you have your best ideas. wouldn't you know, i had my idea for gopro before i left for the

trip, which was a very crude body board strap that would hold -- i took a body board strap and reconfigured it to hold a camera to my wrist. so i could surf with it. it worked so well that i thought, "oh, this might be my business idea." emily: you and your wife were selling necklaces out of a van. you were living in the van. were you real beach bums? nick: we were entrepreneurial. we were making money. selling seashell belts out of a 1974 bus, it is anything but a bum. it was pretty cool. my girlfriend, who is now my wife, when we were in indonesia, we had a bunch of bead and shell belts made that we brought back to california with us, and we spent two months driving up and down the coast of california, selling these belts out of my 1970's volkswagen, and it literally served as the seed money, the bead money, for gopro.

i sold about $10,000 worth and used that to start the company. emily: this is one of the first cameras. nick: yes, that is the first gopro. emily: ok. nick: that sold for $20 in surf shops, snorkel shops. we built the gopro today off of this 35mm reusable film camera. emily: hang on. you are on this. your wife is on this. nick: yes. in the making of this packaging, i didn't have a budget to hire any models. that's me. that's me. that's my wife. emily: didn't you borrow a sewing machine from your mom to make the belt or something? nick: yes, i started gopro with $20,000 i had saved, plus $10,000 from selling bead and shell belts. that is $30,000. my mom loaned me $35,000 and the sewing machine. i launched gopro with $65,000 and the sewing machine, and then down the road over the next couple of years to build

inventory, my dad loaned me a couple hundred thousand. i paid my mom and dad back, and they both became shareholders in the company. so always pay your parents back. but the gopro that you know today was built on $265,000. we took outside investment along the way before going public, but we never spent the investment money that we brought in, so i can say that really we built this global brand and leader on $265,000. and i found this camera, the first gopro, on an early version of alibaba. and i reached out to the company that made it, but we could not communicate very clearly, and so we agreed to just email. their english was much better than my chinese, but i still -- i could not do it over the phone. i ended up making this first gopro without ever meeting the company that made it. i wired $5,000 for injection

molding. they turned out to be a legit company. emily: they sold it for three dollars, and you were able to sell it for $30. nick: $3.05. fob hong kong, which means, you know, when you take receipt of it at the port in hong kong, and then i sold these to surf shops, snorkel shops for $10, and they would sell it to the end consumer for $20. emily: when did you realize that this was the thing, that people really wanted this? nick: gopro was successful from the very first trade show, profitable from the very first trade show. i mean, we had no overhead. it was one employee, me. i can still remember, our first sale was to a japanese distributor. he bought a couple thousand units, and i thought, oh my god, i am successful right out of the gate. the first year, we did $150,000 in sales, and then the next year is $350,000, then $800,000, $3.5

million, $8.5 million, $19 million, $64 million, and then it just ran away. i have been very vocal about our need to come out with exciting, new products every year. ♪

emily: when you think about the success, and i think a lot of aspiring entrepreneurs debate this question and want to know, how much do you think was luck and access, and how much do you think was skill? nick: a ton of luck. timing is incredibly important in business. some people are able to identify market trends and time things really well, and they are fantastic at it. others, like myself, are just incredibly fortunate to have the right idea at the right time, and they merge that with a determination to make it happen.

i worked seven days a week, 365 days a year for the first few years, never took a single vacation, never took a break, never took a day off, and i sacrificed a lot of my personal life and some personal relationships to make gopro successful, but i was going to succeed no matter what. emily: in 2012, you took money from foxconn. you took an 8%, 9% stake in the company. that valued the company at $2.25 billion. that made you a billionaire. a long way from the van in australia. people called you the mad billionaire because you are adventurous, or something. did you like that nickname? [laughs] nick: it made for a good story title. i think i am enthusiastic and i love to explore and be adventurous and try different

things, so if that makes me mad, i am mad. emily: how did you handle that transition from, like, the guy selling necklaces in a van to one of the wealthiest ceo's in the united states? nick: ah, part of it felt like and still does feel like a disney movie. um, you know, one of the things i am most proud of is i am exactly the same i was when i was living out of a van -- i mean, look at me. emily: [laughs] nick: authenticity is one of the most important things in life, one of the most important things at gopro, and people know when you are authentic. our customers know when we are authentic. that is something that is really important to me. emily: you took the company public in 2014. a lot was made of how much money you were making, your foundation, how much you were giving to the foundation. there was a lot of controversy. do you think that was fair? nick: no, but i also understand how the world works, how media works, how the markets work, and

ultimately, it is not whether it is fair or not. it is just how you manage it. i try not to get too caught up in all of that. i am not here to do anything else than to be a terrific husband to my wife, terrific father to my children, tried to be a positive contributor to the world, and ultimately be the best ceo i can be for gopro, and i am proud of the work i am doing on all fronts. emily: so in 2016, that is when things started to change. there were layoffs. there were layoffs in 2017. what was happening inside the company? nick: we were trying a lot of new things. just because you are successful in one area does not necessarily mean it translates to success in another. i use an analogy just because you are an all-star pitcher doesn't mean you can play quarterback. in an effort to grow gopro beyond our initial success, we tried things that made a lot of sense. emily: at one point, you were like, "we are going to be a

media company." nick: that's right. and i still think we have a lot of opportunity in these areas, and more, but we didn't have the right approach, we didn't have the right skill set, and i think we took on too much, too soon, and we would have been better served, i believe, to stay -- hindsight is 20/20 -- but to stay focused on our core purpose. our core purpose in the world which is to help people capture and share experiences that would otherwise be difficult to do. now we are back to that, and wouldn't you know the business is growing again? we are on track for profitability again. emily: you also got into drones. that, at the time, also made sense, but then the drones started falling out of the sky, and it was caught on gopro. what went wrong there? nick: it was a big deal because of a very simple problem. there was a hinge that holds the

battery into its compartment. the hinge was made out of plastic, and it would deflect over time and lose its retention over time. the battery would back out from vibration. you only have to have a battery back out a little bit to lose power. once we replaced that hinge with a metal hinge, problem solved, but our challenge in the drone space wasn't because of that initial product failure, it was because the consumer drone market -- we are a consumer company, a consumer product company -- the consumer drone market isn't as big as everybody thought it was going to be. we looked at it and said not enough of our customers want these. there is not enough profit to be made. it is too expensive to be in. let's get out of the business. emily: so how did you decide to go back to your roots, to focus on making cameras, making a good camera, which is why the company took off? nick: after 2.5 years of teenage

years of finding our way, we reflected on what made us so successful in the first 12 years of our business, and we recognized that during those years, we were laser focused on solving the problem of how to help people capture and share their active lifestyle. that is all we did. and so we decided to go back to that winning formula and go back to the same product strategy and go to market strategy that was so successful during those years. 2018, we had very good quarterly performance, meeting or beating guidance every quarter, and we reestablished our reputation as a predictable business, and that is continuing into 2019, we are -- that is something we are really proud of. emily: you are not doing this in a vacuum. there is competition, sony, various chinese companies doing what you do or trying to do what you do. how do you continue to differentiate your core product

when there are folks out there that are trying to make it cheaper and better? nick: reinvent it and push the limits every year. i have been vocal about our need to come out with exciting, new products every year. that was one of the lessons learned, was that in years where we did not come out with something new and exciting for our customers, sales dropped. one of the reasons that we maintained our leadership position in every market that we sell in around the world is because we are relentless in developing new innovation and new products, and i think we are running at a pace that is difficult to keep up with. you mentioned some of our competitors, they have not come out with new products in the last two or three years, and i think we are just wearing everybody out. cameras that going to europe or cameras that are destined for asia will still be produced in china, but the u.s.-bound production in mexico helps us to avoid any threat of tariff. ♪

emily: there was the threat of tariffs between the united states and china, and you decided to move some of your production out of china. nick: that's right. emily: tell me about that. nick: we are moving our u.s.-bound camera production to mexico, but we are keeping rest of world production of cameras in china, so cameras that are going to europe or cameras that are destined for asia will still be produced in china, but the u.s.-bound production in mexico helps us to avoid any threat of tariff. emily: you saw the trade tensions happening and said, "we are not going to get caught in this." nick: we have a saying at gopro, "we don't want to be a deer in headlights. we want to be the ones driving the truck." we are not going to hit the deer, either. don't worry about the deer. but we definitely don't want to be the deer. we said let's go research where else we would build our products.

we landed on mexico. through our research, we learned there were financial benefits, logistical benefits to doing so anyway, regardless of tariffs or no tariffs, so whether or not the tariff threat to our product category becomes real, we are happy to be moving our u.s.-bound production to mexico. emily: you invited me here to speak about my book, which is called "brotopia" and is about the challenges women face in technology, and your team was up front about their own cultural issues they were trying to work through. all of this was happening as you were trying to turn the company around. talk to me about how you worked through those cultural issues inside your own company. nick: i was fortunate that since the founding days of gopro, i have had some powerful women in the business. my wife, she is employee number three, and my two sisters, and

they were pretty vocal in the early days about, you know, that gopro being founded in an action sports culture and so forth, it was very easy to gravitate towards a sort of a more male-dominated voice and imagery and so forth, but then even with their influence along the way, i remember reading some employee posts and hearing a bit internally, the term was gopro have got a bit of a bro-brah culture. what that meant was, unless you were a guy, or you were friends with your manager, it was going to be hard to advance through the ranks of the company. after the first time that i heard that, we went to work on that. and that is really important to us, because not only do we need to be diverse, because it is important for the health of the company internally, it is also

important for the health of the company as a consumer product brand. emily: right. nick: because our customers are so diverse. emily: do more men buy gopros? nick: yes, they do. emily: do you think you have served the women market well enough? nick: no, we can always do better. the markets that we serve are male-dominated, so that skews the sales. we are, as of a year ago, roughly 70% male, 30% female customer base. it has improved. emily: so what have you done to tap the female market? nick: as a brand in all of our marketing, it is really important to celebrate and showcase female accomplishments, whether athletic or culinary or musically or artistically, and not just be the male-dominated brand that we were in our early days. it has been good for our business. but even more importantly, our

whole brand purpose is to celebrate all that is diverse and positive in the world and leverage gopro as a platform to inspire people to live positive and inspired lifestyles. to do that effectively, we have got to be diverse in that celebration. emily: you have mentioned you are open to selling the company. are you still open to selling the company? i work at bloomberg. i have to ask that question. nick: [laughs] yeah. as the ceo of a public company, every ceo of a public company is open to selling the business if it is what is right for the business and what is right for shareholders. this is not what i spend my days thinking about or our team spends its time thinking about. we are focused on building the strongest, most profitable gopro possible, and i think we are doing a terrific job of that. emily: if i remember correctly, you have got three kids? nick: three little boys. emily: i have three boys, too. nick: all right. emily: i remember that because when we did our first interview,

you were talking about your kids. nick: i was telling you how to film them. with a phone, you film the top of your kids' head. with the gopro, you get it their eye level, and it is a beautiful thing. emily: what is your advice to your kids? what lessons do you want to impart to them? nick: stay authentic to yourself. don't do something because somebody else thinks you should do it. follow your own dream. follow your own passion. i think our interests are our roadmap to our lives. our interests are what compel us to get out of bed every morning, get off the couch, and move in a certain direction. some of us don't listen to the voice inside of ourselves, and we do what other people think we should do, and then we wonder why we don't find fulfillment or happiness, so i try to instill my kids with the confidence to follow their heart and their mind, and that will lead them to

where they should be in the world. emily: all right, nick woodman, ceo and founder of gopro, thank you. nick: thank you. ♪

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jonathan: from new york city for our audience worldwide, i'm jonathan ferro. bloomberg "real yield" starts right now. ♪ jonathan: coming up, the president unleashing higher tariffs on china and there could be more to come. a rush of supply into global credit markets. issuers getting ahead of potential further escalation. soft inflation adding to trade tensions, adding fuel to rate cut bets. we begin with the big issue, a wall of uncertainty met with resilient optimism. >> i don't think we should be moving from an exuberance to a panic mode. >> let's say we ha