The encyclopedia · Product & Design · Product decision · 2014–2018
GoPro's stock went from $86 to $12 — and its drone lasted four months
GoPro IPO'd at $24 and hit $86 in 2014. The Karma drone was recalled for falling out of the sky. By 2018 the stock was $12 and the drone was dead.
GoPro · DJI · 2016-10
What happened
GoPro, founded by Nick Woodman in 2002, created the action-camera category. Its IPO in June 2014 was a sensation — the stock opened at $24 and peaked above $86 by October, valuing the company at over $11 billion. GoPro was the camera of extreme sports, travel vlogs, and viral YouTube content.
In October 2016, GoPro launched the Karma, its first drone, priced at $799. Within weeks, reports emerged of Karma drones losing power mid-flight and crashing. GoPro recalled all 2,500 units sold. The Karma was relaunched in February 2017, but the damage was done: DJI, the Chinese drone maker, had captured the market with superior technology and lower prices.
GoPro discontinued the Karma in January 2018 — fourteen months after launch. The company laid off 250 employees and exited the drone business entirely. The stock, which had peaked at $86, was trading around $12. GoPro's revenue fell from $1.6 billion in 2015 to under $1 billion by 2019. The company that had defined a camera category could not define a second one.
Why it happened
- The Karma drone entered a market already dominated by DJI, which had superior technology, manufacturing scale, and price advantages.
- The mid-flight power failure and recall destroyed the product's reputation before it could build one — 2,500 units recalled out of 2,500 sold.
- GoPro's competence was in small, rugged cameras — drone engineering requires entirely different skills in aerodynamics, software, and battery management.
- The $86 stock price created expectations of perpetual growth that a single-product company in a niche market could not sustain.
The lesson
Creating a category does not mean you can create a second one. Drones required different engineering and DJI already owned it. The Karma's crashes were the symptom; overreach was the disease.
Aftermath
GoPro continues to sell action cameras but at a fraction of its peak valuation. The company has since focused on subscription services and software. DJI controls approximately 70% of the consumer drone market. The Karma is remembered as one of the most high-profile product failures in consumer electronics.
Sources
- GoPro — Wikipedia (IPO June 2014 at $24; peaked above $86; Karma drone launched October 2016; recalled after mid-flight failures; discontinued January 2018; 250 layoffs; revenue $1.6B 2015 to under $1B 2019)
- GoPro Investor Relations — GoPro Announces Karma Recall and Refund Program (8 November 2016; ~2,500 Karma units recalled; power loss during operation in small number of cases; full refund offered; no injuries or property damage reported)
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