Fitbit Inc (NYSE:FIT) had its IPO on Thursday and there was clear strong demand for the firm’s stock. Shares rose strongly as the fitness band-maker looked to convince investors that it could hold on in the connected hardware world while firms like Apple Inc. (NASDAQ:AAPL) levy huge pressure. GoPro Inc (NASDAQ:GPRO), which debuted last year, is likely the firm to follow.
GoPro went public on June 26 of 2014, almost exactly a year before Fitbit’s IPO on Thursday. The firm saw the same rush for shares on IPO day and went through a huge surge in value before dropping like a rock. A similar pattern may be seen through the next few months at Fitbit.
Building a lifestyle brand, not a lifestyle product
Since it went public shares in GoPro have risen by a total of more than 85%. That’s an impressive return for a person that ought shares on day one. The firm got there by keeping a strong hold on its core market, but also showing that it can build a brand able to conquer other markets.
GoPro, with its range of cameras, caught a trend in a rising desire to capture exciting life events and sports. The firm took that, and turned itself into the go-to company for recording and sharing everything from scuba-diving to surfing to skate-boarding. Fitbit will need to do the same. The firm needs to move beyond the wearable tech market as soon as possible.
GoPro is planning to break into more than one new market in the next six months. The firm is going to build its own drone, and it’s going to start selling a simple array that will allow users to capture VR experiences. Those will be viewed with the Facebook Inc (NASDAQ:FB) Oculus Rift or another VR headset and processed with Google Inc (NASDAQ:GOOG) Project Jump software.
Building a lifestyle with Fitbit
GoPro has built a strong exciting brand, and Fitbit needs to do the same. The firm needs to have deals in place with tech firms that will promote its products, and it needs to build a strong brand that will allow it to sell products outside the fitness tracker space.
Jonathan Roosevelt, head of Roosevelt Capital, said he had bought into the firm because he believes in its future. He told CNBC on Thursday, “What Fitbit recognizes is they have to continue to establish brand leadership,” in order to keep the 85% share of the fitness tracker market it holds.
He said that the firm’s CEO James Park was well known to him, and he’ll be looking for new products in the not-too-distant-future. “I used to work with James Park in a company and he is the best strategic mind I have ever met in technology. And I am confident he’ll stay in finding, continue to innovate and release new products.”
That’s the key as Fitbit tries to grow. The firm needs to move beyond the strong, but vulnerable position it has in its core market. That’s what GoPro did to prove to the market that it could grow, and it’s the way forward for small firms in the internet of things.
Lifestyle branding like that is something that large firms like Apple and Google have a hard time doing. Breaking down their brands is bad for overall business, allowing firms like GoPro and Fitbit to take the reins in key niche markets.