Marketing

Three Lessons in the Wipeout of Contour Cameras


Windsurfing captured by a mast-mounted camera

Photograph by Skip Brown/National Geographic Society/Corbis

Windsurfing captured by a mast-mounted camera

For almost a decade, Contour made point-of-view cameras used by skiers, surfers, and other thrill seekers looking to capture their activities. Shaped like short, stout flashlights, the durable gadgets easily affixed to the equipment of adrenaline junkies. They looked sleeker than rival products made by GoPro and drew rave reviews from gearheads and camera buffs alike. Outside magazine even chose a Contour camera as one of the “perfect things” in its recent gear-buying guide. The problem for Contour was that list—and virtually every list of its kind—was topped by GoPro as best in class.

Now, Contour is apparently quitting the point-of-view cameras battlefield, leaving GoPro with one less obstacle in its path toward a potential IPO.

Contour’s executives and financial backers have been mum about the rumored collapse of the company, but some details emerged this week in a blog post by co-founder and former Chief Executive Officer Marc Barros—part thank-you note, part angry screed, and part Teddy Roosevelt-style “man-in-the-arena” inspiration. It suggests the company he helped launch was ultimately outgunned by GoPro. He laments “the passing of Contour” and describes “the pressure as a number two brand to keep up with a market leading force.”

A report in the Seattle Times said the company had laid off about 60 employees. All of the products on Contour’s website are currently listed as “temporarily out of stock,” and its Seattle headquarters is reportedly shuttered. Calls to Contour’s headquarters went to voice mail and were not returned. Barros returned e-mails but declined to comment beyond what he has written on his blog.

GoPro, in addition to making cameras as slick or slicker than anyone else, rounded up major money from heavyweight venture capitalists. Most recently, it sold a 9 percent stake to Foxconn (HNHPF) for $200 million in December. That kind of cash allowed it to spend heavily on marketing, sponsoring athletes like Olympic snowboarder Shaun White and even getting its camera strapped to steely stuntman Felix Baumgartner for his famous Stratos space jump.

Contour ran a much more modest operation. “I saw the gap widening, but never changed our strategy,” Barros wrote in an April post that hinted at dire straits.

Point-of-view cameras are designed to record glorious feats as well as dangerous crashes, capturing footage of athletic stunts for review. The closing of Contour offers an opportunity for gadget-making entrepreneurs to replay the fallen company’s run and look for pitfalls that stand out in retrospect:

1. The target market may be a lot narrower than it seems
POV camera makers have tried to win mainstream buyers with ads showing people strapping cameras to shotguns, cat toys, and babies. But at the end of the day, there is no shortage of cheap, handheld video cameras aimed at folks who aren’t into action sports—and many of us even carry them around in our pockets and use them to make phone calls. Barros griped about the “Tele-Tubby” look of GoPro products, but with a shape closer to that of traditional cameras, GoPro may have won more buyers who weren’t wearing helmets and careening off of mountains.

2. If an idea is truly great, someone else is working on it, too
Contour was born in 2004 when Barros and Jason Green, classmates at the University of Washington, cobbled together a helmet camera for ski trips. That was the same year GoPro founder Nick Woodman was paddling into San Francisco surf with beta versions of his own camera. Both companies had solid products, good connections, and plenty of hustle. Woodman, however, seemed to pull away from Contour in 2011, when he landed orders from Best Buy (BBY). In 2011, Contour had about $27 million in sales, according to Inc. magazine, but GoPro was already into nine-figure territory by that point.

3. Success draws established competitors
In the brutal startup world, a quick profit is bittersweet. It’s proof of concept to investors as well as bigger rivals. In Contour’s case, success drew the attention of Sony (SNE), a company with far greater resources and experience in the camera business. Sony released a Contour-like model called Action Cam about a year ago. The list of things that are a challenge to an outfit like Contour and a breeze to a company like Sony is long: financing, distribution, marketing, partnerships, etc.

Today, annual revenue at Woodman Labs, GoPro’s parent, is approaching $600 million, and Woodman laughs at the idea of an IPO below $2 billion. The company controls 14 percent of the digital camcorder market, according to IDC. And Cnet calls its latest iteration, the Hero3 Black Edition, the best “sports camera” on the market. But Woodman shouldn’t get too comfortable. There’s already talk of Google Glass (GOOG) being a GoPro killer.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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Companies Mentioned

  • HNHPF
    (Hon Hai Precision Industry Co Ltd)
    • $7.36 USD
    • 0.16
    • 2.17%
  • BBY
    (Best Buy Co Inc)
    • $31.03 USD
    • -0.42
    • -1.35%
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