SAN MATEO, CALIFORNIA
Action camera innovator GoPro is scaling back. Fourth-quarter earnings were $340 million, down from the $470 million target. Shares, which peaked shortly after the 2014 IPO at $93.70 were hovering over the $5 mark; and holiday sales were bleak. In response, GoPro cut another 250 from its workforce, which now numbers 1,000, the first 250 being cut in March. On the administrative side, contracts were severed with two executives, and CEO Nicholas Woodman has accepted a salary of $1. Most colorfully, GoPro is getting out of the drone business. The release of the drone, Karma, was first delayed, and then Karma had to be recalled after two weeks due to defects including sudden loss of power. Analysts note GoPro’s history is not unlike that of other electronics hardware startups. The advent of apps, 3D printing, and e-commerce proved conducive to entrepreneurial startups. But to survive, tech businesses need to outcompete companies that soon dominate the market with cheap knockoffs. Having research, development, and marketing resources on the scale of Apple doesn’t hurt, either.