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What do hyper-creatives, emergency room nurses, and CEOs have in common? Dr. Aaron Blackledge has identified a particular neuro-chemical pattern. Do you have "entrepreneur brain?"

Aaron Blackledge doesn't like to stand still. He possesses kind of mindset that is often too fidgety to stand the tedious process of going into through education. So instead of settling into higher education, Blackledge doubled down and completed his pre-med in nine months. He decided to open Care Practice in the Mission District of San Francisco in 2008 with the goal of shaking up traditional doctor's offices: Instead of relying on insurance referrals, he swarmed social media with information about the clinic, treating its opening like a buzzy new restaurant launch. The formula was a hit with the area's start-up crowd. Thee and half years later, he's seen more than 8,500 patients. And treating these largely tech-savvy and entrepreneurial-minded clinets has revealed a common thread about how the entrepreneurial mind works—and how to treat it. He spoke with Tim Donnelly in advance of delivering a talk Saturday at Summit Series, entitled: "The Entrepreneur's Mind: Understanding Our Most Powerful Resource."

How did you go from medical student to entrepreneur?
I was a young doctor that had worked in the system. I had come from art school, I was a hypercreative, I had gone to medical school because I had thought "if I have an M.D. I can pretty much go around and do whatever the hell I want." I was so frustrated with health care, I couldn't find out why health care was so non-intuitive. It made absolutely no sense how it was structured. All these different places I've worked from ERs to urgent cares to to hotel doctor to house call, and I was like, "OK screw it, I'm going to build a clinic that makes sense to me and I don't care what it takes." I really wanted to prove a point that a young doctor with no name-recognition, no funding, no backing, could do what people thought would be impossible.

What did you want to change about the system?
Go on Google, and search for a doctor's office. There's no doctor that's hired a graphic designer who is outside of their immediately family. Let's brand, and create something hip. Let's not take insurance but let's not charge a huge price point. Let's launch through social media platforms." We opened in 2008 right during economic Armageddon. Everyone was writing my obituary. We cash-flowed in about eight days and we had a full practice in three months. And people just couldn't believe it, how busy I was. But I had created this thing that become huge overnight.

Who was your typical client?
I had created the clinic for myself—for what made sense to me. At first I thought it was just really popular and it spoke to lots of consumers. But what it really did is it appealed to people like myself, hyper-creative people, people who can't stand to wait in lines, people who can't stand anything that's not intuitive, they use the internet for everything. They'll take their insurance card, they'll try to find a place, and they'll see me on Yelp and say, "Oh screw it I'm just going to go to this guy." We became really popular with entrepreneurs, programmers. We probably have 2,000 people that write code and probably at least 400 CEOs of tech companies.

What have you learned about the way an entrepreneur's brain works?
I'd always just gone and done something new and creative and innovate anytime it struck me. And building a brick-and-mortar business, suddenly I was dealing with stuff that wasn't innovative, and suddenly I was losing my physical activity level. I was fidgety. But I've never had this kind of success. Everything was perfect, I was living the ultimate dream doctor's job. And I knew inherently that if a giant boulder fell from the sky and destroyed my business and my entire life savings, I would be totally happy.

I was trying to figure out why this was. I had more and more tech people coming in, so I was dealing with more and more issues of hyper-creatives: Addiction, struggle, relationship problems, smoking, chronic fatigue, ADD. These are people who were burning themselves out. I had all these patients strating to come, people moving here from all over the world, diagnosed with ADD, trying to take Adderall. I don't understand this diagnosis. It makes no sense to me. The description is like written for a 12-year-old boy who can't get his homework done.

Wait, so everyone's on Adderall these days?
People are taking Adderall to write code all night. No one's following any instructions or using this stuff properly, everyone's borrowing stuff from other people in this entrepreneurial community. And it's really just a mess. I watched this PBS documentary on ADD and I was in shock. I realized "Oh my God, that's my brain, that's how my brain works." I don't meet any of the criteria for ADD, I don't have the dysfunction, I just related to that neurochemical pattern and what they were describing.

We asked: do you feel more comfortable sitting in traffic or sitting in a burning building? To which, 15 CEOs all around the table all said in unison, "in a burning building."

I was on a Summit Series cruise after that. I worked out a series of really obscure [potential symptoms] to question people about. I went on the boat with all these famous people and I was shocked to realize: It wasn't 20 percent of the people, it wasn't 50 percent of the people, it was like 85 percent of the people [who shared these characteristics]. It was like a parlor trick. I could totally freak people out and I could tell them about their struggle and I could say, "Well I bet you tried this." And they'd say, "How the hell do you know that? My wife doesn't even know that." We did an event in Seattle for CEOs a couple months ago. We asked: do you feel more comfortable sitting in traffic or sitting in a burning building? To which, 15 CEOs all around the table all said in unison, "in a burning building." When you have a rush of fight or flight, you get norepinephrine and dopamine in your brain, which actually calms you down.

This isn't just CEOs, though?
I realized I've created a clinic that attracts people like this. They are emergency room nurses, Navy SEALs, firefighters. All these subsets of people that fall under a specific neurochemical pattern. They'll actually be calmer than they are in their normal lives. A lot of the SEALs are very similar. They constantly need to be on mission doing something stimulating at all times. If they don't they feel discombobulated, constantly feel agitated, get in trouble, get in fights. They only feel serene when they're in the field under fire or under the danger of fire. I was like, "Wow, these are entrepreneurs." I'll go to Start-up Weekends and talk about this with a bunch of young hackers and stuff. Almost every time there will be some kid who will pull me aside out of the crowd and whip out his bars or something and say "I'm a year out of Afghanistan."

What can this teach us about treating entrepreneurs?
They're people that balance their neurochemistry by constantly doing something stimulating or innovative at all times. If you sat in a room with hyper-creatives and tech entrepreneurs, and asked, "How many of you can go to the beach and sit under and umbrella for more than 15 minutes?" probably 90 percent of them would say "no." And the 5 percent that said "yes" would not realize that they're not allowed to have three electronic devices working under that umbrella.

I have all these patients that have $15 million in the bank and are 27 years old, and they're running around in flip flops and T-shirts advising six companies, building a school in Ethiopia, running around the world. They can't stop. Boredom is like a torture for entrepreneurs. So they constantly crave stimulation.

I have all these patients that have $15 million in the bank and are 27 years old, and they're running around in flip flops and T-shirts advising six companies, building a school in Ethiopia, running around the world. They can't stop.

The most important thing for them: They're meant to be physically active. I encourage every one of my tech entrepreneurs to find intense activity that's both creative and social. Unfortunately some of them get off track and get into some of these triathlon things and ultra marathons. They lose some of the creative component and they run themselves into the ground. They're running three hours a day and working 12 hours, and they're just killing themselves. But if they're physically active in a creative social process they actually can achieve balance. This is the way their brains are designed, this is the way they're meant to be in the world.

How else can they achieve balance?
A lot of these people will do bike rides across states or go surfing in Nicaragua, all these crazy things, but if they're lost, everything is new. Everything is new process: Where's the bathroom? Where do I eat? It's incredibly stimulating for their brain. They can do relaxing things. They can sit and read a book. A lot of them really love to travel.

Hyper creatives, they leave work and they go home and think about work all night long. These people can't stop. None of these people can read instruction manuals. Their brain likes to anticipate and it makes them feel better to figure things out. So therefore I can't give tell them to do these 15 things and you'll feel fine, because they'll never follow instructions.

Chained to your desk? I've been there. If you're still stuck working for a giant company, you need to know these two things right now.

I owe a lot to Corporate America. My mom single-handedly supported our family by working a corporate job for almost 30 years. It paid her a salary that afforded my upbringing and provided invaluable benefits that are sometimes taken for granted like health insurance, a 401K plan, and a pension. I have also worked in Corporate America. During my tenure, I acquired tangible skills that I leverage everyday as an entrepreneur. Yet when I think about the times I felt most stifled, complacent, or doubtful about my capabilities on the job, these emotions occurred most during my time on the corporate grind.

The dynamics of Corporate America can be a double-edged sword for someone with an entrepreneurial spirit. On one hand, it provides you with critical training and baseline skills that can serve you well as an entrepreneur. On the other hand, if you have any ambition to introduce a concept that changes lives or how business is done, or if you simply just want to run your own show, there are two simple reasons why the corporate environment can eventually kill your chances of turning these desires into action:

• Corporate America Creates a False Sense of Security. With the surety of money and benefits, it's possible to become comfortable working in a role that may not use all of your talents. It's also viable that as you develop functional mastery, your impetus to excel in other areas wanes or you loose sight altogether of a scenario where your impact spans beyond the company environment. Coupled with ongoing tenure and the perks that come along with, the incentive to do anything but status quo quickly diminishes. God help any downturn or clash with a manager that, like at any corporate job, could cause the illusion to swiftly fade.

• The corporate climb is slow and at each rung you're reminded that there is so much still to do before reaching the next level. At most established corporations, formal decisions require several layers of approval before anything gets done. As one waits in line to get their project's time to shine, corporate training can actually program the employee to believe they must still "check more boxes" to demonstrate they've got the skills to do what it takes or be promoted to the next level. In turn, the employee begins to believe that they’re not ready to rise to the next level, let alone forge into a new venture where the outcome is completely opaque.

The good news is there are plenty of people who despite the aforementioned obstacles, take the leap of faith and pursue ventures, even some while simultaneously working for Corporate America. Yet to do this effectively, it's important to remember:

• Knowledge is power. the most important component is knowledge of "self." If you know there's more that drives you than taking a paycheck or living life comfortably, be honest with yourself and seek your passion, even if that means trying to figure things out after hours!

• Mitigating risk is key. While you've got a guaranteed salary, stack your chips! The money will come in handy one day—trust me. Get all of the cross-functional training you can in preparation for the day when you may have to do it all, when starting a business.

• You only live once. Our time on this earth is limited and way too short to doubt your ability to do great things, even if you don't know it all. There are several living entrepreneurs, from Andrew Mason to Mark Zuckerburg, that remind us what's possible, even with limited experience. So seize the moment and live each of your days to the fullest!

What wine inspires me to live my life to the fullest? The very same wine that Napoleon Bonaparte devotedly drank up until his final days, South Africa's Vin de Constance. Á votre santé!

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We're living in a world of beta tests and products that are released and then improved. How do you know when you're done and it's time to ship? Three entrepreneurs give their advice.

One of the hardest things for a start-up to decide is "When is my product done?" I've worked in many start-ups, and I am advising several start-ups now. Last week after my article about the Minimum Viable Concept, this issue came to a head at one company. The challenge of when to open the website or let the world through the door is a monster that many teams wrestle with. Paralysis by analysis can lead to missing a market opportunity. But, can you get another chance to make a first impression if your product is truly bad?

Adam Seifer, co-founder and former CEO of Fotolog.com, one of the oldest and most popular photo sharing sites on the net, said: "I frequently find myself trying to convince partners, advisees, etc., that one of the biggest risks a start-up has is to not launch anything at all—to get so caught up in talking about what you're going to launch and so fixated on details that it feels like you're making progress when instead what you're really doing is moving asymptotically closer to something that doesn't ultimately matter as much as you think it does."

Some companies have truly embraced the world of continuous testing, also called "using your customers as test subjects." Google's Gmail was listed as a "beta" or test version for about five years. Apple's "Siri" voice service is still considered a "beta" (and given that it works for me about half the time I'd say that is an accurate label.) But are these kind of tests for everyone?

"Not so fast," said Art Chang, CEO and Founder of Tipping Point Partners, a New York City-based "institutional entrepreneur" that serves as a seed investor and founder of software start-ups. "Siri is a 'feature' on the iPhone, but the iPhone works. Gmail is an extension of the Google brand, and though it started a little shaky, by the time it came out of beta, it was solid. If you're an established brand you can experiment, but for a traditional start-up, that first product represents a brand promise. So, it may be better to reduce features and functions to have a product that works really well, and does what it is supposed to do. Twitter and Evernote both started as very simple products, and expanded after they got the core right."

Seifer told me about a current project he's working on, launching "maybe next week. The team was really stuck for a long time noodling around on the same minor things and having the same hypothetical discussions. After I pushed and pushed to focus and get something complete—even though it's a simplified version of what we hope to become in the near future—it had a dramatic effect on our productivity. Having a first version of a site live and real allowed us all to buckle down, stop dealing in hypotheticals and stop deferring decisions, and possibly most importantly, start getting real feedback from real users and outsiders."

John Borthwick, CEO and Co-Founder of Betaworks, a kind of incubator/studio that builds and invest in companies, said "The whole idea of 'done' is a concept that we're getting rid of, because nothing is ever done. The name Betaworks is a play on 'a factory building stuff' but also emphasizes that Betas work. The world is about continually improving and evolving. I remember what Brian Eno said (in Wired in 1995) about unfinished products , and how you're constantly in the creation process. Before the user participates the product isn't done—they make it what it is. This old view that you create, publish and you're done, is outdated. You put something out, then users arrive, they comment and your thing morphs into something else, then you update and others engage—done is never."

Borthwick believes we are now learning how to live with unfinished products as a society. "The process of marketing and designing and getting feedback is changing. We're entering into a different era of what it means to be done. Examples include everything from Trader Joe's to Nike Customized shoes to fashion companies condensing cycle to idea to design to in store in a very short time. "

These entrepreneurs and investors believe there are ways to figure out a core of a product, launch it, and constantly iterate after that. Is this easier for software than hard goods? Initially I thought so, but then I remembered when razors had 1 blade instead of 5. Is it true that nothing is done until someone else tries it? When are you done? What helps you make that decision? Let us know in the comments.

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Chinese tech outfits are gaining steam against their Silicon Valley counterparts. Here's a look at a few rising start-ups you should know about.

Could Beijing become the next Silicon Valley? Despite red tape that makes doing business in China a real hassle for some entrepreneurs, it would be almost impossible to argue that China isn't becoming one of the next hot markets for start-ups. Last year, 138 venture-backed companies in China went public, raising about $21 billion, according to VentureSource. Impressive, no? Here's a look at seven start-ups every investor, entrepreneur, and small business should know about.

Diandian

A service similar to Tumblr, Diandian (which means "bit by bit" in Chinese) was founded by Jack Xu, formerly an engineer at Renren. As of June 2011, the number of Diandian registered users had surged to one million, which means Diandian gained 11 users every minute from April to June, according to Asian tech blog TechNode.com. "It took Twitter more than a year to have the same magnitude base of users," the site noted, "and 10 months for Facebook….Diandian grows as five times as the growth rate of Facebook."

Lashou

Americans aren't the only ones caught up in a group-buying frenzy. Lashou Group, China's biggest group-buying site, is gaining steam. According to SEC reports (the company has filed for an IPO) Lashou grew from about 53,000 users in March 2010 to approximately 16.8 million as of September 30, 2011. And, since launching just two years ago, approximately 6.8 million paying users had purchased over 43.3 million vouchers for services and product. "Given that China's Internet users reached 425 million as of the end of 2010, which represented 32.4 percent of the Chinese population," the filing noted, "…we believe significant market opportunities exist for our future growth."

Meituan

If Lashou is China's Groupon, Meituan is China's LivingSocial: it's group buying site founded by serial entrepreneur Wang Xing, who also founded the Facebook-like site RenRen.com. According to a recent press statement, Meituan.com's monthly growth rate has, without interruption, exceeded 20 percent since launch, with revenues nearing $40 million in November.

Douban

Douban.com may be the biggest site you've never heard. Launched in 2005, it's essentially a social network for people to discuss movies, music, and TV. With more than 7,000 musicians and about 5 million registered users, it ranks as the 109th most popular site in the world. We do discuss a lot of Chinese clones or 'mini-innovators,'" noted one blogger at TechRice.com, a Chinese technology blog. "Here, we're happy to highlight Douban as a true example of homegrown innovation."

Duducars

Founded in August 2011, Duducars may be new to the start-up scene, but its ambitions are high. The company is China's first car-sharing service; it's essentially a network of cars for people who need a vehicle anytime and anywhere. "This Zipcar-like service, with its combination of apps and RFID cards to unlock rentable vehicles (owned by the company), looks to be on-course for funding and growth in 2012," noted TechInAsia.com.

Unitedstyles

Unitedstyles, which launched in January 2011 and is based in Beijing, is a fairly disruptive idea: it allows users to create custom woman's apparel by sketching it out, adjusting, and sharing the design with Facebook friends. "When asked who their closest market competitor was," TechCrunch noted, company founder Marc van der Chijs "held that UnitedStyles was "totally new"; "There isn't a lot of innovation in business models in fashion."

8 Securities

Launched in October of last year at TechCrunch Disrupt in Beijing, 8 Securities is the first online investing tool in Hong Kong. It combines social elements (like tracking your favorite traders) with a trading portal where you can select markets, trading tools, news, and research. "Change does not come until the conventional way of doing things is disrupted for the better… and that is our mission," the company notes.

A Silicon Valley CEO tells how he learned that company values aren't a nice add-on. They're mandatory to holding your business together.

You've got the idea for a company and posess the necessary skills. Maybe you even have money, co-founders and a solid business plan, but one Silicon Valley CEO says there’s one additional, essential ingredient your new company might be missing: values.

You may think of things like mission, values and culture as nebulous but nice additions to the real nitty gritty of entrepreneurship, a distant priority when compared to sound planning and a good grasp of finances. Justin Moore, co-founder and CEO of data backup company Axcient, once thought that way too. When starting an earlier business, he explained in an interview, he thought: "I'll just hire great people and we'll have this cool, fun culture. We'll build this awesome technology and have this great company. Values are touchy-feely things and culture just happens. You hire great people, you have great culture."

Now he's a changed man. Why? "It doesn't work," he said simply of his old approach, explaining that his new thinking makes values central to his business philosophy:

At the end of the day companies are all about people. My passion is to build a market-leading, market-changing billion-dollar company. I’m passionate about building a company that changes the world in some way and it takes having incredible people who do incredible, exceptional things and work really closely together towards a common goal.

In my opinion [values are] the best way to hire really brilliant people and build an organization where you are a collective force, where your value as an organization is three, four, five times the value of the individuals because you work so well together and everyone raises everyone else's game. They are the best weapon that a company has in terms of hiring top talent, retaining top talent and motivating top talent to play to their absolute top ability and therefore succeed as a team, so that’s why I’m so passionate about it.

Moore clearly has strong feelings about values, but even if his passion has convinced you to make them equally fundamental at your company, a central question remains: How to go about actually doing that? With something as subjective and intangible as values, how can entrepreneurs actually ensure that their team shares a common sense of what they're aiming for and how they should behave along the road to that goal? Moore has three main suggestions.

Having a values-driven company doesn't just happen, according to Moore, who suggests that "early on in the company, if you're a single founder or you have multiple founders, get together, put a bunch of stuff on the white board that's important to you and really establish and narrow down clear values, a clear mission and that kind of culture you want to create at the start." And don't even dream of choosing values that you don't firmly believe in as attractive company window dressing. "You are the moral compass as the CEO," says Moore. "If you don’t truly believe them, if those aren’t literally the most important things to you, then people will cue off that because people are very perspective and you undermine the entire value system of a company." Also important according to Moore is focus. Forget a dozen values and keep your list to, at most, five, or no one will remember them (or take you seriously) anyway.

Real values mean you have to make tough choices, and make no mistake, that could come down to canning your star performer if they’re not playing by the company's values. "I don't care how good that person codes or how good a sales person they are, if they're not a team first player, if they don’t operate with integrity, if they don't fit our value system, I’m going to manage them out of the business," insists Moore.

"Reinforce values, culture, and the mission at regular touch points with employees—interview, onboarding, employee reviews, all-hands meetings, all-hands e-mails, on the walls," says Moore. So if you claim to be customer-focused, there should be e-mails going out regularly from the very top of the company congratulating those who live up to this value. Reviews need to reflect how well employees are living up to the team's value. Moore also has regular brown bag lunches with the reports of his direct reports to solicit feedback. He asks them: "How can we improve? What can we do better? What can we do better on culture? How can we improve the product? The ideas that come out of these meetings are amazing," he says.

Making the right hires is also critical to Moore who, despite having around a hundred employees to oversee, interviews every single potential hire. "I strongly believe in companies that are less than a couple hundred employees and not hiring at too crazy a clip that the CEO should interview everybody before they’re hired simply to screen for culture and values," says Moore. He urges interviewers at his company to listen to their gut instinct when it comes to cultural fit and values, and to employ a range of questions from several interviewers to crack the surface gloss of interview polish and uncover a candidate's true beliefs and behavior.

If all of that sounds like a lot of work for something as seemingly nebulous as values, Moore a bit of advice for you: "Remember it's all about the people and you should never be too busy to focus on values and culture."

Your genetic tolerance for risk, coupled with new productivity gains through smart technology, can help your company revolutionize its industry.

Mankind's most innovative, large-scale achievements: building the Pyramids of Egypt and the Panama Canal—even putting a man on the moon—were each accomplished with roughly the same number of people: 100,000. Luis von Ahn, the Carnegie Mellon professor who researched these epic projects, makes the observation that 100,000 may well be the practical limit on the number people it was possible to organize, using pre-Internet technology. Von Ahn is fascinated by the question: If we can put a man on the moon with 100,000 people, what can we do with 100 million?

I'm interested in the opposite question: If it took 100,000 people to put a man on the moon 40 years ago, how many would it take today?

The answer is certainly a fraction of that number: Elon Musk's SpaceX company is successfully sending unmanned vehicles into space with fewer than 2,000 employees. And many more of the best-known new companies in the United States today also employ very small staffs. Matt Ridley, author of The Rational Optimist, notes that the size of the average American company is down from 25 employees to 10 in just 25 years.

Most of the national discussion around the current U.S. recession has focused on the negative impact of this radical increase in productivity: our "jobless recovery." I think this is a pressing issue that industry and government need to address. But there is one simultaneous, positive impact on our society and economy from smaller company sizes that we should also include in that debate:

Scientists study fruit flies to gain rapid learning about genetic traits specifically because they are prolific, inexpensive to maintain, and adapt quickly to change. You could say the same about small companies today. For example: Years ago, two behemoths owned the photography industry, Kodak and Fuji. But innovation in photo sharing has been driven by the dozens of start-ups like Flickr, Ofoto, Photobucket, Picasa, Shutterfly, and now Instagram, that have launched over the past 10 years. Similarly, photo taking has been revolutionized by software and device companies such as Apple, RIM, Nokia, and Sony. It's my contention that rapid product development and market testing of their products and services—something not possible inside most big companies—is what's created the most value for the photo-sharing public over the past decade. And Kodak declared bankruptcy last week.

There are numerous other industry examples, and I'd welcome hearing from readers about their personal experiences. It's my contention that competition among a large number of small teams to solve important problems gives us, collectively, the best shot at getting to a right answer, the best product and the biggest breakthroughs.

It's my contention that competition among a large number of small teams to solve important problems gives us, collectively, the best shot at getting to a right answer, the best product and the biggest breakthroughs.

Astro Teller, who leads New Projects for Google, told a great story to the Mindflash.com staff recently that made this point brilliantly. A university testing incentives to innovation ran an experiment in which students in one pottery class were told their entire semester grade would be based on the quality of their final piece. Students in another class were told that 90 percent of their grade would be total weight of the clay they fired during the semester, and just 10 percent on the quality of their final piece.

The final pieces created by the second group were incomparably better, because those students learned more, went faster and explored more. The takeaway has to be that in an environment where we reward experimentation and reduce or eliminate the risk of failure, we get better outcomes—sooner.

Now, I readily admit that it's one thing to burn through a lot of clay, and another thing entirely to burn through people. The human and economic cost of assembling and dissolving businesses can't be ignored. But for those with the willingness and ability to try, fail and try again, these technology-driven productivity gains are driving each of us the opportunity to create something truly innovative for the benefit of all.

This was recently confirmed for me by a quick tag-cloud analysis I did of the biographies of about 100 of the country's leading technical, political and thought-leaders.The word appearing most frequently in their biographies? Former.

Success, if not handled properly, can lead to the demise of a business. Sustain long-term growth by following these steps.

A funny little thing happens on the road to success. Often the prosperity of the business can outpace the ability of the business to maintain that success. At this point most of you are probably wondering what am I talking about. Rapid success can lead to failure? Get real. But it can. And I have seen it repeatedly in all scales of businesses over the past few years.

How does it happen? Let’s say you bring a product to market. It is received well by the public. They begin to buy. You begin to make money. All is good. You begin to advertise the product more and to different segments. Maybe you even diversify and offer variants of the original goods or services to capture a greater market share. You make more money. You are happier than ever. You spend more on advertising. More money flows in. The cycle continues.

One day you get a disturbing memo from accounting. It seems the business is losing money. Not drastically. Not in leaps and bounds but slowly over time. Even though you are bringing in more money than you ever imagined possible there is a slow bleed causing your expenses to exceed, if ever so slightly, your revenues each month.

Your first reaction is typically one of disbelief and anger. Obviously, accounting has made an error. You explain to them your grand vision, how next month you are rolling out more products and services. How revenue has tripled in one year and will double again next year. The accountant looks at you with that blank stare and says the immutable truth of business and accounting: "Numbers don’t lie."

Often as entrepreneurs we become so focused on bringing the product to market, advertising the product, and selling the same that we fail to grow all aspects of the business in unison. As a result, while the business attains its ever-increasing benchmarks in sales it is growing upon an infrastructure that is not keeping pace with the growth of the business. Flaws in management systems slowly begin to be revealed. Quality control is not in sync with the growth. Eventually a tipping point is reached in which these flaws, caused by the failure of the business to grow its infrastructure at the same rate as sales and advertising, cause the system to collapse.

Don’t think this can really happen? It does, and to some of the biggest companies in the world. Over the past few years we have had dealings with one of the largest hand-held device manufacturers in the world. Since 2000 they rocketed to success riding a wave of innovative technology and cutting edge marketing. They went from being a scrappy start-up to one of the world’s leading hand-held device manufacturers with annual sales tipping the charts in the billions.

However, over the past two years this modern titan has experienced a dramatic fall. Sales have plummeted. Once the industry’s leading innovator, today they are, in large part, viewed as a one-trick pony whose time has come and gone. Their latest products come to market with little fanfare and even less consumer interest. Last year their devices, in large part, stopped working due to some technical glitch which took days, and in some cases, weeks to remedy. They have fallen so far from their lofty perch it is now rumored among the major financial papers that the company may be forced to sell off assets to avoid bankruptcy or face the inevitable later this year. Oh, how they mighty have fallen.

How could this happen to such a juggernaut of technology? Notably, within the course of our dealings with them we noticed a few flaws in their structure that inhibited our ability to effectively communicate with the company. In hindsight, these were symptoms of fatal flaws in an organizational structure that had simply failed to keep pace with the growth of the company.

For instance, for months we attempted to reach their online marketing department through various channels only to have our efforts constantly thwarted. Discussions at certain levels had to go through a bureaucracy which was maddening. Ultimately a deal fell apart that, in our opinion, would have been extremely lucrative for all parties. Why?

The answer did not reveal itself until months later when I was having lunch with the company’s general counsel. In short, he revealed that because their company had grown so large so quickly he did not even know who to call within his own organization to get us to the right people to close our deal. In short, he had no idea who to get on the phone to complete our negotiations. Every time he tried to find out he got passed around from department to department within his own company ultimately with no one offering to take responsibility to speak with us. In short, their structure had failed to keep pace with the growth of their company to the extent that even people within the company could not determine who was in charge of various aspects of the company.

Accordingly, despite a meteoric rise to the top of one of the world’s most competitive industries, the afore referenced company is now in a financial free-fall approaching its eventual demise. What can you learn from all of this? You must grow your organizational structure in proportion to your business. Here’s how:

1. Create a Scalable Management Model

As your business grows you must develop scalable management and quality control systems. In the beginning management and quality control is easy. Perhaps your business begins only as a solo entrepreneurial endeavor or one among just a few people. Everyone has a defined role and everyone knows what everyone else’s role in the company is. Nonetheless, as your business grows and duties become more segmented among new employees, a management structure must be put in place to ensure accountability against established benchmarks as well as to make sure quality control of your goods and services remains constant.

In this regard, each position’s duties and responsibilities should be defined in writing. An organizational chart should be constructed and maintained which clearly defines who is responsible for what, who reports to whom, on what subjects, and how often. If properly segmented over time you will see your organizational structure begin to resemble a pyramid with the CEO on top and increasingly widening rows of persons with specific defined roles thereunder.

2. Define a Quality Control System

As your company grows you must make sure that the quality of your goods or services is maintained despite its increasing size. As such, you must determine what elements should exist in a quality control system and then assign the responsibility of maintaining that quality to someone within your management model.

For instance, let’s say that you run a call center that, in the early days, existed with only a handful of people. At the beginning it was easy to make sure that everyone used the same scripts and delivered the same quality of customer service for your inbound clients. Yet as you grew it became less clear who was in charge of maintaining that level of customer service on the phones and, as a result, a systemic problem has now developed within your organization. Not all of your sales team are using the same scripts. There is inconsistency in call backs of inbound customers. As a result, your sales and margins begin to slip.

To combat this you must create a quality control system to make sure your systems are being performed on a daily basis and assign a manager in your organization to oversee the same. For every business quality control will differ. If you operate a call center those benchmarks may be overall sales as measured against knowledge of the product, responsiveness, etc. For example, a factory may need to make sure that the work being performed by assembly workers is consistent so that each product leaving their station is assembled perfectly, or within measured perfection, every time. But without a quality control system unique to your business the quality of your product will flounder over time.

Once established, a manager or management team must be specifically assigned to oversee the execution of the system. You need to be able to point to one person, or a team if you are large enough, and say that they are responsible and/or accountable for the quality of your company’s goods or services. This structure, like your sales force, advertising, and other segments of your business, should grow at the same rate as the rest of your business.

For instance, let’s say your business originally consists of an assembly factory with 20 workers assembling various parts of your products. Your initial quality control systems can be managed by one full-time manager. If you grow to 40 workers assembling more and more of your products it is reasonable to assume you will now need two quality control supervisors. If you grow to 60 workers you will need three.

Now the actual number will vary for every company. It suffices to say you must know that it has to grow as well alongside your workforce. And within that growth even those added quality control team must have its own division of responsibility with well-defined roles for quality control of the company.

3. Execute the Systems 100 Percent of the Time

Now that you have created a scalable management model with a defined quality control system it’s time to make sure it is executed to perfection.

Each person within the management and quality control team by now should know their respective duties and responsibilities. Even so, you must ensure that those systems and assignments are executed without deviation 100 percent of the time. To this end, especially for small and mid-sized businesses, we have found that it is very effective to use daily and weekly checklists to make sure individuals are performing their assigned tasks in a consistent manner.

For instance, a front-line quality control manager may have a daily checklist of five quality control matters to be reviewed on Monday, seven on Tuesday, three on Wednesday, etc. They are responsible on each of those days for performing those tasks and then recording that they have been completed. The manager above them has his or her own checklist of matters to do which includes checking with the subordinate manager on a daily basis to make sure that they performed all of their assigned tasks. It is a simple system but vital to making sure the systems that are created are executed and executed 100 percent of the time.

The person responsible for executing the front-line systems reports to their manager that they have been completed. That manager then reports to their supervisor that all tasks have, or have not been done as required. If all works properly, we are only speaking about a few minutes out of the top level manager’s day to deal with the reporting of the underlying systems. But it makes sure that all of those systems are running and running to perfection.

4. Listen to the Numbers. Numbers Do Not Lie.

Lastly, even when you set up the systems and grow management and quality control systems in pace with your organization’s growth you must still always be mindful of the numbers. Numbers don’t lie. If used properly, they will tell you where additional oversight or changes are needed within your organization to increase efficiency, sales, and quality.

Returning to our opening discussion, let’s say sales are great. They are growing at an unbelievable pace. Yet your accounting department tells you something is amiss. Something is wrong. Your expenses are outpacing your revenue growth. The numbers don’t lie and they will tell you more about the health of your business than anything else.

So what do you do when the numbers tell a story you don’t like? Use them. Use them to determine what the problem is. Create a system to fix the problem and then assign it to someone to manage and create the internal systems to ensure those systems are run to perfection 100 percent of the time.

The author of a new book offers a solution to those who can't stop stressing about their to-do lists: swap big verbs such as "implement" and "plan" for more manageable ones.

In many ways all-pervasive tech helps us be more productive. Who hasn't shot off that essential e-mail while standing in line or managed to locate that key figure buried in your files with a quick computer-aided search? But being forever plugged in isn't without its dark side.

From the restless impulse to continuously check your phone lest you miss that crucial after-hours message to the modern ritual of reaching for your laptop before your first cup of coffee in the morning, the ability to work at all hours makes it more difficult for many of us to ever stop stressing and feel content with what we've accomplished. You could always be doing more–and you feel it. So how can you break out of the grasp of your forever-expanding to-do list and start to feel content with your level of productivity?

Jason Womack is the author of a forthcoming book titled Your Best Just Got Better: Work Smarter, Think Bigger, Make More, which has 10 chapters worth of suggestions. Among them is a simple mental trick to help those who find themselves forever ruminating about the things they need to accomplish. Rather than lie in bed at night tossing and turning while you ponder how much you need to do to accomplish big, abstract objectives like implementing a strategy or planning your product launch, calm your mind by breaking these tasks down into more manageable, concrete verbs. Womack says:

If your to-do list has "big" verbs–by which I mean verbs that are mentally demanding or longer term in nature such as plan, discuss, create, or implement–replace them with action steps to just get started. That is, pick "smaller" verbs, by which I mean verbs describing tasks that are easier to start and faster to finish. This will save you time and reduce the sense of overload you're feeling.

We all want to enjoy what we do every day. We want to get better and better, both on the job and off, and yet, many people are too overwhelmed to make the key changes that will help them do so. There is no reason to remain mired in frustration.

People lose sleep over creating and planning but rarely over calling or drafting. So next time you’re tossing and turning maybe the solution is cracking your worries into simple actions using smaller verbs as a guide. Who knew better verbs might be a cure for insomnia and stress?

How a scrappy little camera company turned its customers into a stoked sales force and became a $250 million industry.

Nick Woodman and I are strapped into the cockpit of a vintage racecar on a winding, narrow road in California's Santa Cruz Mountains, taking cliff-side turns at 60 miles per hour and rocketing up to 100 on the straightaways. Strapped to each of our chests are tiny high-definition video cameras. There are two more cameras on the doors, pointing in at us; one over our shoulders, pointing at the instrument panel; one mounted to the dashboard, pointing at my face; one under the nose of the car, to capture the road whizzing by; one attached to the front of the roof; and another looking up over the roof via a pole mounted to the rear end. The car is a Ford GT40, a replica of the legendary vehicle that won the 24 Hours of Le Mans rally race four times in the 1960s. It's the property of GoPro, the company that makes the cameras we're using. Woodman is the CEO and an accomplished amateur racecar driver (and surfer, mountain biker, motorcyclist, and all-around thrill junkie).

We approach a blind turn, and the engine emits a loud brap as Woodman guns it around the corner and down the hill, and the back end of the car fishtails out behind us in a slightly sickening way.

"This car wasn't road-legal until a couple weeks ago—I've never taken it up here with a passenger!" he yells over the engine noise. "I think we need to stiffen up the suspension." Then he hammers the gas again.

I've been trying to stay cool, but my mind is a blur of headlines in the tech press about a wild-man CEO and a journalist plummeting into a ravine to their deaths. I give in after about 15 minutes. "OK, you're starting to scare me," I tell him.

I've given him the sound bite he is looking for—the cameras are rolling, after all—so he slows down a bit, and we cruise the rest of the way through the mountains, through the biker town of Pescadero, and out to Highway 1, where we turn off at Pigeon Point, a clearing near a lighthouse on the cliffs over the Pacific Ocean. A film crew is waiting for us there with two electric motocross bikes from a company called Zero (the bikes are also strapped with tiny video cameras) and an elaborate remote-control helicopter (for overhead shots).

Woodman wanted to bring me here for three reasons. One, GoPro is a company that's deeply invested in storytelling (primarily in the form of extreme-sports videos), so he suggested we do part of our interview here, with a dramatic backdrop and some adrenaline-pumping action between questions. We had been at the company's office all day, just up the road in Half Moon Bay, but as the sun dipped enough to provide the magical golden light of late afternoon, it was time to switch venues and turn on the cameras.

Two, Woodman, who's 36 and looks a lot like Ed Helms playing a surfer, wanted to show me he's a risk taker and authentic action-sports fanatic, as are most of the people who work for him. The word dude is thrown around a lot at GoPro headquarters, and executives like to head out for a morning surf session or trail ride before hitting their desks. (It's no accident that some of the country's best surf breaks are minutes from the office.) This cultural authenticity is key, he says, because it means the company's employees are well attuned to what's going to excite their customers.

And three, taking me to ride electric dirt bikes at Pigeon Point is important because it demonstrates a vital part of the company's product development history. To shoot a truly satisfying action video, the audio feedback is almost as important as the visuals. You need to hear, for example, skis crunching through snow to get the full effect of a gnarly descent. But capturing that noise is not as simple as turning on a microphone. In sports such as skiing, skateboarding, and cycling, the wind noise rushing into a camera's mike tends to overpower the sounds of the action. When the company was developing an early version of its signature HD Hero camera, Woodman set out to solve the wind-noise problem with the help of Zero bikes, which are nearly silent except for a low electric whirring. On a Zero, he was able to ride fast and record almost pure wind noise in a real-world environment (here at Pigeon Point), which in turn allowed the company to isolate the sound of wind and then design firmware that could all but eliminate it from recordings.

The point comes back to storytelling. Videos created with GoPro cameras (check out a selection of extreme GoPro videos here) can have a level of production value that rivals that of professionally created content. That's great from a technical standpoint, of course, but even more important are the viral possibilities that kind of content unleashes. The more authentic and immersive the video, the more viewers get sucked in and feel as if they're experiencing the moment themselves. "It's like a teleportation device," Woodman likes to say. GoPro thinks not just about its customers, in other words, but also about its audience.

Let's back up. If you're not familiar with it, GoPro sells a line of wearable, mountable, and affordable HD video cameras that make all kinds of previously impossible shots much easier to capture. About 2 inches wide, the cameras don't look like much more than tiny gray boxes, but they pack a surprising amount of power and versatility—especially for their $300 price tag. An ever-increasing array of flexible harnesses, mounts, and other accessories allows users to attach the cameras to just about anything and shoot high-definition point-of-view action footage.

At this point, you've almost certainly seen video that came from a GoPro camera, even if you didn't know it. A Facebook friend might have shared the clip of a mountain biker in Africa being flattened by a sprinting gazelle; it has drawn 12.4 million views on YouTube since going viral in October. Or maybe you saw the bird's-eye-view video of a seagull picking up a camera and making off with it (2.8 million views) or a skier touching off an avalanche in the Alps and flying away from it with a parachute (2.1 million views). Every two or three minutes, a new piece of GoPro–created content is uploaded to YouTube, and Woodman credits those videos—whether produced by its army of customers or by the company's 20-person in-house media team—with much of the company's runaway success.

In the past two years, GoPro's growth has exploded, and the cameras' uses have spread far beyond the action-sports world. GoPros are being used on dozens of reality-based TV shows. Scientists are sending GoPros into near space and deep underwater. A GoPro was mounted on the rescue pod when the Chilean miners were rescued in 2010. The list goes on—surgeons, oil companies, the U.S. military—and one of the company's challenges is tracking it all in order to support it.

Two years ago, there were 14 employees at headquarters in Half Moon Bay; today, there are 150. The cameras are available in about 10,000 stores—lots of local sports-enthusiast shops but also REI, Best Buy, and Amazon. GoPro's closest competitor in the wearable-camera space, Contour, reported $15 million in revenue for 2010, and Woodman claims GoPro now holds 90 percent of the wearable-cam market, after growing well over 300 percent in 2011. Digital-imaging industry analyst Chris Chute of market research firm IDC estimates GoPro's 2011 revenue at $250 million, on sales of 800,000 cameras worldwide. He calls GoPro "the fastest-growing camera company in the world."

Perhaps even more impressive than the revenue growth is the passion GoPro's users have for its products, as expressed by the flood of GoPro videos spreading across YouTube and Facebook. GoPro's Facebook fan base grew from 50,000 to more than 1.3 million in 2011 alone. To put that in perspective, Contour had 56,000 fans at the end of 2011. Canon USA had 135,000, and Panasonic USA had 134,000. But it's not the size of its Facebook fan base that sets GoPro apart; it's the level of engagement of those fans.

"I think we have the most socially engaged online audience of any consumer brand in the world," Woodman says. The company uses a metric it refers to as a BARE (for brand audience rate of engagement) score to track the activity of its Facebook audience. The score is simply the number of fans Liking, Posting, Commenting, or otherwise interacting on the GoPro Facebook Wall divided by the total number of fans. (Facebook makes this calculation easy by posting a metric called Talking About This; see "The BARE Truth.") In mid-December, GoPro's BARE score was 5 percent. By comparison, Lady Gaga's was 0.9 percent and Fox News's was 1.9 percent. Among brands with a million or more followers, you would be hard-pressed to find one with a higher rate of engagement.

All right, you say, but what does that engagement mean for the business? Can the company directly track the revenue impact or leverage those users for more camera sales? Here the answers get a bit fuzzier, and Woodman is comfortable with that. "That's a big difference between GoPro and other companies," he says. "The first thing we get excited about isn't, What will this do for our business from a revenue standpoint—or, really, from any traditional business standpoint? It's, How stoked are our customers and fans?"

To understand GoPro's success as a social brand, you have to start back before the company's founding in 2002. After graduating with a degree in visual arts from the University of California, San Diego, Woodman started his first company in the dot-com go-go days of the late '90s. funBug was a venture-backed Web marketing company, and it went bust with the rest of the market in 2001.

"I feel like I went through the Great Depression," says Woodman. "All these companies are being successful around you, you're on that track, and then the market collapses, and you're out of a job. You're trying to save your investors' investment, and it doesn't work, and you sell the company for nothing. It was brutal."

He knew he still wanted to be an entrepreneur, but he vowed to bootstrap his next operation: "I didn't want to take anybody else's money. I wanted to do something small that could be profitable from the beginning, and grow that way—and never need someone to write me a check to keep the business going."

He left California to live out of a backpack and surf in Australia and Indonesia for five months, first with his friend Ruben Ducheyne (who now heads up GoPro's customer support operation) and then with his girlfriend, Jill Scully (now his wife, Jill Woodman). It was in Australia that the idea for GoPro began to take shape. Woodman was frustrated that pro surfers tended to be the only ones who could get good images of themselves surfing—because you needed a professional photographer or videographer willing to bob around in the water documenting you. Surfers addressed that problem as best they could by using the buddy system and carrying cheap, disposable film cameras that came with a waterproof housing and glorified rubber-band wrist strap—but that usually ended with the cameras banging them on the head or getting lost in the water.

Woodman's solution was simple: Create a wrist strap that held a disposable camera firmly in place against your arm. When you were ready to shoot a picture of your surfing buddy, you'd just pivot the camera up into place, get the shot, then snap it back down. What surfer wouldn't want that?

"We all kind of laughed at the idea," says Ducheyne. "He's going to make a wrist strap?" It hadn't even occurred to Woodman that he would eventually also make cameras. He fashioned a crude prototype for the strap and took it with him everywhere on his surf safari for testing.

Woodman had saved up about $20,000 from funBug, but by the time he made it to Indonesia, he knew he would need more money if he wanted to get serious about starting the business when he got back to the States. One day, Jill came back from a shopping excursion in Ubud, Bali, and showed Nick a bead-and-shell belt she had bought for $2.50. She was an aspiring jewelry designer and told him about her ideas for making the belt even cooler.

"Nick's always had a 'Go big or go home' kind of philosophy," Jill says, "so he asked me to take him to the market to see about buying more belts and incorporating my designs. We get there, and he's like, 'We'll take 600 of those, 600 of those, and 600 of those.'" He also bargained the price down to about $1.90 per belt. When the couple got back to California, after waiting two months for all the belts to be made, they spent another three months driving up and down the coast and living in Woodman's 1974 VW bus, stopping at street fairs and concerts to sell the belts. "We'd get as much as $60 for a belt," Jill says.

The belt profits gave Woodman enough cash to start GoPro. He borrowed another $35,000 and a sewing machine from his mom, and got to work making his first product—a process that took two years, while he lived with his dad in Sausalito and Jill moved to Santa Monica.

By 2004, Woodman had a product to market—not just a wrist strap but a still film camera to attach to it. (He had discovered that the legal and logistical issues around working with a bunch of camera companies were more complicated than just buying and modifying a simple camera.) Nick and Jill moved into a cottage in the redwood forest near Pescadero, where Nick set about working 16-hour days at the computer and the sewing machine, testing new fabrics for the next-generation product, designing marketing materials, writing patent applications, and starting to build up a network of retailers.

"There was fabric everywhere in the house," remembers Jill. "We had to sleep with the camera on, because if there was ever a sore point, that wouldn't be acceptable. He needed to find the perfect tightness and perfect fabric, so it didn't make you sweat, didn't make you sore. It was all-consuming." By this point, Jill was working full time in sales, and Nick's friend Neil Dana was doing sales from his home up the coast. Their first breakthrough moment was at their first trade show, the 2004 Action Sports Retailer show, where they got an order for 100 units from a Japanese distributor.

A bigger breakthrough came two years later, after the company started making a rudimentary digital video camera. Woodman had always harbored a dream of being a racecar driver, and once sales of the digital camera were going well enough, he indulged himself by going to racing school at Infineon Raceway, in Sonoma. The school tried to rent him a mounted camera for $100. Woodman said no, thanks, strapped his GoPro wrist cam to the car's roll bar, and had his eureka moment: The company would make mounts for its cameras so people could point them back at themselves.

The company bought a Lotus Exige sports car, and Woodman started testing all kinds of mounts for vibration and noise and other details. "He absolutely loves that Lotus," says Dana, who is now a director for GoPro's international sales operation. "He'd spend all day going 130 miles per hour around the Infineon track. He was basically the product test engineer, and he would get whatever tools he needed to test in real-world environments. If we had taken VC money early on, it would have been hard to justify a lot of those things. He wanted the freedom to be, like, I'm going to do it this way."

It was an extravagant investment of money and the CEO's time, but it started to pay off in sales to core enthusiasts in markets well beyond surfers. When the company launched its first high-definition video camera, in November 2009, sales hockey-sticked—and the flood of user-generated videos online wasn't far behind. "We sat back as a company and said, 'Oh, my God, people are really freaking out,' " remembers Woodman. "Soon we realized it was accelerating beyond anything we were doing on the marketing or merchandising side, so it was pretty clear that people sharing their own content was driving the awareness of GoPro."

The company had also started attending trade shows in all the action-sports, motor-sports, and consumer-electronics markets, and began to give cameras away to attendees. "You'd have people walking all around the show wearing our cameras," says Dana. As word of the giveaways spread, Woodman decided to make a bigger deal of them by gathering friends of the company in front of his booth at 3 p.m. each day of a show.

"Are you fired up?" he would yell to the assembled, borrowing a routine from his high school football coach.

"Yeah!"

"Are you fired up?"

"Yeah!"

It was infectious, and the crowd of corporate buyers milling around soon began to join in the chorus. Woodman would announce that whoever yelled the loudest would get free cameras, and then he would lead everyone in a chant of the company's name: "GoPro! GoPro! GoPro!" The commotion would bring the rest of the show to a halt as everyone wandered over to see what was going on. GoPro landed its accounts with Dick's Sporting Goods and REI that way.

It wasn't long before the company's growing profile led Best Buy to come knocking, in early 2010. GoPro had reached out to the retail giant several times but had never gotten a response. Now, though, people who had learned about GoPro online were going into the stores and asking for the cameras. Best Buy has a specialty-product division that responds to such requests and tests new accounts in anywhere from 10 to 100 stores, so the company offered GoPro a shot that way. Sales outperformed expectations, and by May 2011, just weeks after Cisco decided to shutter its Flip camera business, GoPro had shiny white point-of-purchase displays topped with flat screens in all Best Buy stores. In September, Best Buy gave GoPro its Bravo award for being a top new supplier.

Woodman is standing at a whiteboard in a conference room at GoPro's headquarters, where a slick highlight video of footage shot with the company's latest camera, the HD Hero2, plays on a five-minute loop on a big-screen TV. He draws a circle on the board and labels it with four words connected by counterclockwise arrows: Capture, Creation, Broadcast, and Recognition. Woodman likes to talk about the "democratization of professional content," and these are the elements that make that possible, he says.

Capture is what the cameras enable—shooting pictures and videos. Creation is the editing and production process that turns raw footage into a compelling piece of content. Broadcast is the distribution of that content to an audience. And Recognition is the payoff for content creators—spiritual recognition in the form of views on YouTube or Vimeo, Likes and Shares on Facebook, high-fives from friends, or financial recognition in the form of revenue sharing from YouTube or ad dollars from their personal blogs.

"If I'm a content creator, and I get recognition for my work, that's going to motivate me to spend even more time on my next production and make it even better," Woodman says. He points to the circle on the whiteboard. "If you take this circle and flip it on its side, it's going to go like this," he says, and starts drawing a spiral that coils upward. "This is our DNA. This is how we grow, and it's all driven by the content." The company's content strategy is a simple positive-feedback loop, in other words, and the theory is that each revolution lifts the overall quality of the content the audience is producing, the size of the audience, and the number of cameras and accessories sold.

To date, GoPro has focused its business mostly on democratizing the first step in the content cycle: capture. Now the company is training its focus on the rest of the cycle—creation, broadcast, and recognition. "We spent a lot of time recently thinking about, What are we really doing here?" Woodman says. "We know that our cameras are arguably the most socially networked consumer devices of our time, so it's clear that we're not just building hardware. You think about the implications of that and where it can go.…We're thinking of new ways to enable our customers to communicate through video and new businesses that spawn from that."

On the creation side, GoPro's media group manager, Bradford Schmidt, persuaded Woodman to acquire a leading digital-video software company, CineForm, in early 2011, right around the time GoPro released a rig that allows users to shoot in 3-D by calibrating two cameras to shoot simultaneously and create layered 3-D files. At the time, there was no such thing as a simple iMovie-like interface for regular consumers to edit 3-D video (primarily because shooting in 3-D was prohibitively expensive until GoPro's device hit the market). CineForm promptly designed a dead-simple user interface, and GoPro's users were a step closer to being amateur James Camerons.

On the broadcast side, GoPro is working out the details of a partnership with YouTube to create a GoPro network. "Within YouTube, there's no standardized metadata system for video files, like there are for JPEGs," explains GoPro's CTO, Stephen Baumer, "so there's no easy way for us to know that a user-generated video was shot with a GoPro, other than if it's been proactively tagged as GoPro by that user. To our delight, customers have been doing that to a huge degree, and it's been a big part of our success"—but no amount of tagging by users allows GoPro to get involved in the business of user-generated videos on YouTube. That will change in the first quarter of this year, when GoPro releases a Wi-Fi plug-in for its cameras that will allow customers to upload video directly from their cameras or via a mobile app. GoPro itself will then be able to tag the videos as they are uploaded, place them on the GoPro YouTube network (which it aims to launch at the same time as the Wi-Fi plug-in), and begin to monetize all that user-generated content.

Which brings us to the recognition piece of the content cycle. Once user-generated videos become part of a structured network, the company can create more elaborate incentive systems for its customers to do ever more and better work. GoPro already dabbles in these kinds of incentives by, for instance, selecting the coolest user videos to be included in television ads. But the GoPro network will create opportunities for users to get paid for the number of views or shares their videos get on YouTube. Users could agree to run pre-roll video or overlay ads that link to GoPro, for instance. And in the process, GoPro would essentially turn its users into a massive worldwide sales force.

Suddenly the question of how GoPro tracks and maximizes the revenue impact of the content produced on its cameras becomes less fuzzy. In 2011, the company saw its revenue per user from YouTube-generated traffic double. Once more of the user videos actually link to GoPro and users have an incentive to send the company traffic, it's not hard to see that number growing quite a bit faster still.

There's one other piece of evidence that GoPro's content operation directly boosts sales: those point-of-purchase displays, each of which is topped with a flat-screen TV showing GoPro highlights. Walk into your local REI, and you're likely to see someone standing there just staring at the screen. "They've increased sell-through at the store level five times over," says Dana. "We call them our GoPro ATM machines."

Last May, Woodman broke his pledge not to take on venture capital. On the same day GoPro announced it was entering all Best Buy stores, it announced a "substantial" strategic investment from five firms, including Steamboat Ventures, the VC arm of Disney. Woodman says GoPro hasn't touched the money; it's there as a war chest. As the company widens its market, it's increasingly possible that the larger digital imaging companies will move into the space and risk turning awesome little point-of-view cameras into a commodity.

The best way to protect against that, Woodman says, is to build a moat around the company in the form of its content ecosystem. "At a certain point, the services that you build around the hardware become more important than the hardware itself," he says. The company's new investors have deep connections in the technology and entertainment landscape, and they are helping GoPro advance its relationships with media companies. The impending YouTube partnership is part of this initiative, as are other relationships in Hollywood and beyond.

Among filmmakers, GoPro cameras are already a standard piece of most production kits. Lucasfilm used GoPro cameras for the upcoming film Red Tails, about World War II pilots, and countless Discovery Channel productions and news shows use the cameras to film wildlife, rescues, and storms. "It's been a game changer for us," says Ernie Montagna, equipment manager for Original Productions, the company that produces reality-TV hits such as Deadliest Catch, Ice Road Truckers, and Ax Men. His crews attach GoPro cameras to crab pots underwater or to the sides of ships in rough seas.

One of the most innovative media partnerships so far was spurred by a skunkworks project that Schmidt, the media group manager, created for ESPN's X Games. Using the same technology that allows two cameras to be strung together to shoot in 3-D, Schmidt designed a 48-camera array that captures "time slice" images. Picture a video of a skateboarder on a halfpipe ramp, but when he does a midair trick, the motion stops, and the shot pans around to show the athlete from all angles. The effect previously cost at least $100,000 to pull off and required a crane and hours of setup; Schmidt's camera array can pull it off for a few thousand dollars (the price of that many cameras), with one person operating it.

Once again, it comes back to GoPro thinking about its audience. Rather than relying solely on user-generated content, it's betting that slickly produced videos of pros using its cameras to do amazing things will inspire regular people to get out there even more. The company recently started a sponsorship program for extreme-sports athletes and hired a former top Red Bull marketing executive, Paul Crandell, to head the effort. There are about 70 athletes signed up so far, and the idea is that GoPro not only will enable them to pull off jaw-dropping stunts (by helping fund them) but also provide the platform for people around the world to gawk at them. Schmidt is thinking about other ways to string multiple cameras together to create unique effects for partners (imagine hundreds of synced cameras positioned throughout a stadium during a concert, for instance). Woodman is looking forward to GoPro's new Wi-Fi plug-in enabling live streaming of events. Crandell is already looking beyond athletes and thinking about signing up surgeons, scientists, and security companies. And the content wheel spins ever faster.