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Down But Never Out - Garmin Edition
A personal favorite comeback story
Hey, I’m Ben! I write weekly about how to grow products and companies. I go deep on growth strategies, how to build products users love, and what actionable lessons can be learned from what best-in-class companies are doing and industry experts are saying.
Happy Tuesday, everyone!
Today I want to talk about one of the companies I respect the most: Garmin. There are two primary reasons I respect them as much as I do: (1) despite being a WHOOP superfan, I can admit that they make excellent products, and (2) they pulled off an incredible pivot into wearables.
The Garmin we know and love today looks a lot different from when it was founded in 1989. As Garmin was originally focused on GPS navigation products, those of us that grew up with mapquest printouts all over our passenger-side floor heralded a Garmin unit as the navigation holy grail. lThe ability to know how to get anywhere, anytime, was peak convenience.
The value of the convenience Garmin’s GPS products brought was not lost on the markets. In 2007, the company generated $2.5 billion in sales from their GPS products, which pushed them to a lofty $25 billion valuation. This jubilation was short lived, though. 2007 was a notable year for two other reasons: (1) Steve Jobs brought the iphone to market and (2) the housing crisis was about to turn off the music on the stock market.
It was the worst-case scenario for Garmin. The market was tumbling and everyone now had access to a GPS in their pocket at all times. Their primary product line was no longer a “must have” and their stock was punished for it, dropping 90% from their peak.
For many companies, this would have been the end. I, admittedly, thought at the time that it would be the end of Garmin as well. How do you come back from having your primary product made obsolete overnight?
Garmin launched the first Forerunner in 2003 but it was bulky, expensive to manufacture, and not a priority product line. All of that changed when the iPhone cratered Garmin’s GPS sales. Then COO (now CEO), Cliff Pemble, recognized that their wearable product lines had potential and just might be the thing that saves the business.
When he took over as CEO in 2013, he noted that the cost to produce wearable devices had gone down dramatically and companies like Fitbit had been growing quickly. He decided to double down, positioning Garmin as the company that catered to the hard-core athletes and performance-focused individuals, a market that still loves Garmin’s product today.
As you can see from the stock chart above, Garmin has clawed its way back towards its previous valuation. It took a long time but it reached, and even surpassed, that lofty level (granted it did so during a fleeting period of market euphoria). Garmin is a great example of a company that was down but never out and bounced back despite hard times. They could have let the crippling blow of their main product becoming obsolete be the nail in their coffin, but instead, they adapted, diversified, and endured.
The current market conditions are hard. There’s no denying it. I have a lot of friends that have been laid off or that work for companies that are struggling. The important thing to remember is that you might be down, but you’re never out. Just look at Garmin.
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