Patagonia started with a mountain climber-turned-dumpster
diver who lived off 50 cents a day. It never cared about being cool or maximizing profits. Instead, it's always focused on being
socially and environmentally responsible. And yet, it's become a billion-dollar company and a status
symbol for the biggest and richest companies in the world. In 1938, Yvon Chouinard was born in Lisbon, Maine and raised
in a French-Canadian community that spoke little English. His father went to school for three years before
dropping out to work on his family’s farm. Later, he worked as a carpenter, electrician, and
plumber before moving to Maine to work in a mill. Growing up, Yvon was convinced he would
live a similar life to his father. But he never imagined to what extent. When Yvon was eight-years-old, his
family moved to Burbank, California. At school, he was bullied because he couldn’t speak
English and was the smallest kid in his class. So just like his father, he left and even ran away. Eventually, he transferred to a different school. But he still struggled to fit in because
of the language and cultural differences. He got Ds in every subject and had no friends. Most of his time was spent alone
outdoors — biking, fishing, or hunting. When he started high school, life became even more miserable. “I had pimples, I couldn’t dance, and I had no interest
in any of the subjects except for the auto shop classes. I had an ‘attitude’ and was always in detention. For being a troublemaker, I often had to write
lines like ‘I will not…’ 500 times or so.” It wasn’t until he discovered a local
falconry club that things changed. There, he made new friends and learned
how to train hawks and falcons. One of the members, Don Prentice, was a mountain climber. He taught Yvon how to rappel down
to the falcon aeries on the cliffs. Yvon and his friends quickly became obsessed with the sport. Often, they would hop on a train to San Fernando Valley
to rappel down the sandstone cliffs of Stoney Point. Neither of them had specialized gear or climbing boots. They wore sneakers or went barefoot. One day, they saw a man climbing up as they
were rappelling down a chimney on Stoney Point. They had never thought about climbing up until
then and asked Don to show them a few pointers. That year, Yvon drove up to the
Teton Range to learn how to climb. While he was just 16-years-old, he convinced some climbers
to allow him to join their climb up Symmetry Spire. At the time, he had no idea how to use pitons — metal
spikes that climbers place in rocks to anchor their ropes — but managed to learn as he went. From then on, he became hooked on climbing. Later, Yvon started hanging out at
Stoney Point and later Tahquitz Rock. There, he met a few other young climbers named T.M. Herbert, Royal Robbins, and Tom Frost. Together, they mastered Tahquitz and then moved onto Yosemite. After graduating from high school, Yvon attended
college but dropped out after two years. Afterwards, he worked as a private
detective for his brother’s agency. Not long after, he became more focused on climbing. In fact, he started thinking of
ways to make better quality gear. Pursuing this idea led to many years
of struggling and even dumpster diving. But later, it became the inspiration
for founding a billion-dollar company. When Yvon started climbing, there were
only a few hundred climbers in the country. All the gear that they used came from
Europe and was considered poor quality. For example, pitons were made to be used once since
Europeans saw climbing as conquering mountains. And often, hundreds of pitons were left behind
to make climbs easier for others to follow. Yvon believed better quality pitons could be reused
and that climbing should leave no trace behind. So he decided to make his own pitons and headed to a junkyard. There, he bought a used forge, an
anvil, and some hammers and tongs. Afterwards, he taught himself how to be a blacksmith. Yvon’s pitons could be used repeatedly and were a
lot stronger when compared to the European ones. After giving a few to his friends,
other climbers started asking for them. So Yvon decided to make more and built a shop
in a chicken coop behind his parent’s house. From the back of his car, he sold his pitons for $1.50 each. And while the European ones cost 15
cents, many were willing to pay for them. Still, Yvon made very little profit
and survived off of 50 cents a day. He often went dumpster diving and once
ate cat food when he ran out of money. Meanwhile, the demand for his pitons grew. Yvon could not keep up with the demand and partnered
with two fellow climbers, Tom and Doreen Frost. They redesigned nearly every climbing tool to
make them stronger, lighter, and more functional. Maintaining quality was their biggest priority
since faulty tools could lead to accidents. Soon after, protecting the environment also became a priority. When Yvon realized repeatedly hammering in and removing
pitons were destroying pristine mountains, he decided to stop selling them and offer an alternative: aluminum chocks. Chocks could be wedged by hand rather
than hammered in and out of cracks. They were lesser-known or trusted
than pitons since they were crude. So Yvon and Tom decided to make better quality ones. Making the switch from pitons to chocks
was considered a huge business risk. Most of the company’s revenue came from pitons,
and climbers were reluctant to stop using them. They weren’t convinced that chocks would work better. Yvon and Tom decided to show them it was
possible by climbing El Captain with only chocks. They also published their first catalogue that
featured a 14-page essay on the importance of clean climbing and how to use chocks. Within a few months of the catalogue’s release,
chocks were selling faster than they could be made. By then, Chouinard Equipment had become the
largest supplier of climbing gear in the U.S. Still, Yvon didn’t consider himself a businessman. To him, he was just a craftsman who found a way to pay
the bills so that he could afford to go on climbing trips. Despite this belief, Yvon came up with a new idea
that completely changed the outdoor industry. And while it turned his business into a
billion-dollar company, it broke a decade-long partnership and brought on bankruptcy. One winter, Yvon travelled to Scotland for a climbing trip. There, a colorful rugby shirt in
a window display caught his eye. It was blue with red and yellow stripes, had
a collar, and was made with tough material. Yvon decided to buy it since he thought the collar
would keep his gear slings from cutting into his neck. When he returned to the U.S., other climbers
started asking where they could get one. At the time, it wasn’t common for men
to wear colorful clothes outdoors. Often, they climbed in white dress shirts
and tan cut-off chinos from thrift stores. Still, Yvon decided to order some rugby
shirts like his and try to sell them. They sold right away. It was then that Yvon decided to start a clothing line. But he was concerned that it would affect Chouinard
Equipment’s image as a tool company and that his clothes would only be associated with climbing. So he launched his line under a different
company: Patagonia — named after the rugged mountainous region in southern Argentina. Yvon didn’t know anything about clothes. But like his other ideas, he learned by doing. “I immediately take a step forward and see how that feels. If it feels good, I take another step. If it feels bad, I step back.” Eventually, Yvon could not meet the demand for his rugby
shirts and contracted a garment factory in Hong Kong. Shipments for thousands of shirts were
late, and the quality was terrible. The shirts shrank horribly, and some
had three-quarter-length sleeves. Yvon struggled to sell them, and for the first
time, he faced severe cash-flow problems. He had no choice but to put off paying
suppliers since banks wouldn’t lend him money. At one point, his accountant encouraged him to
meet a mafia connection who wanted 28% interest. Yvon, Tom, and Doreen turned down their offer — even though
they had no other option and could barely afford to eat. One year later, Tom and Doreen reached their breaking point. They walked away from the company after
being partners with Yvon for a decade. Yvon and his wife, Melinda, struggled
to keep the company running. It wasn’t until they got a loan from friends and
promoted a young employee that things changed. Her name was Kristine Tompkins. In high school, Kristine was
known to have a rebellious streak. In fact, her teachers told her parents
not to bother sending her to college. Kristine went anyway and graduated from the
College of Idaho with a degree in history. Afterwards, she started working for Patagonia full-time. When Kristine was promoted to general
manager, she had no business experience. So she started asking people for free advice
and even called up presidents of banks for help. Fortunately, they did. “If you just ask people for help — if you just
admit that you don’t know something — they will fall all over themselves trying to help.” Under Kristine’s leadership, Patagonia was able to secure
better financing, and the company’s sales improved. Meanwhile, Yvon started designing
multifunctional technical clothing. The work led to tackling the bigger problem
of how to dress for high mountains, where unpredictable weather can be life-threatening. Patagonia’s first technical product was an insulated
rain jacket that covers most of the wearer’s body in bad weather while still offering freedom to move. Afterwards, Patagonia worked closely with
Malden Mills to develop a fabric that did not pill and imitated the soft fur of a chinchilla. It was named Synchilla and was used to replace
synthetic pile for Patagonia’s fleeces. The experience made Yvon realize that research and
development would be key to Patagonia’s future success. Later, Patagonia developed a type of polyester that wicks
moisture away and gives the wearer more freedom to move. It was named Capilene and was used to replace
polypropylene for Patagonia’s thermal underwear. Yvon made plans to launch both of
Patagonia’s new technical products quickly. It was considered a huge business risk since
Patagonia’s older products made up 70% of its sales. Many employees were concerned and urged Yvon to wait. Yvon refused to listen. In 1985, Yvon forged ahead with launching Patagonia’s
new Synchilla fleeces and Capilene thermal underwear. To his employees’ surprise, customers quickly realized
the advantages of both products and sales soared. “You can’t wait until you have all the answers before you act. It’s often a greater risk to phase in products because
you lose the advantage of being first with a new idea.” Later, Yvon came up with new colors for Patagonia’s clothing:
teal, cobalt, French red, aloe, seafoam, and iced mocha. Customers were shocked since they were used to only
seeing tan, forest green, or powder blue outdoor products. They even told Patagonia that they had become too brash. Not long after, their reaction
became the least of Yvon’s worries. Chouinard Equipment became the target of several lawsuits. None involved climbers or faulty equipment. Instead, they were brought on by people
who misused the company’s equipment. In one case, a man broke his ankle when
using climbing ropes in a tug-of-war contest. Later, a more serious accident followed. A man passed away after using a harness the
wrong way during a beginner climbing class. Litigators thought Chouinard Equipment and Patagonia
were the same company and tried to drain the corporation. Insurance refused to fight the lawsuits and settled out of
court — forcing Chouinard Equipment to file for bankruptcy. Fortunately, Patagonia managed to stay afloat. In fact, sales grew by 40% that year, and revenue
skyrocketed to $100 million the following year. But soon after, the company crashed as quickly as it grew. A recession hit the U.S., and dealers
cancelled their orders from Patagonia. Yvon cut back on production, dropped
new products, and froze hiring. But it still wasn’t enough to save the company. Patagonia’s primary lender was in financial
trouble and cut its credit line — twice. Yvon had no choice but to lay off more than 100 employees. “That was certainly the single
darkest day of the company’s history.” Yvon realized the company’s crisis was
brought on by being overly focused on growth. So he vowed to slow down and prioritize being
more socially and environmentally responsible. Yvon also realized that sustainable manufacturing is an
oxymoron since all processes use resources and pollute and that America’s throwaway culture was worsening the problem. To him, the solution was continuing to make long-lasting
products so that customers would purchase less. "Patagonia will never be completely socially responsible. It will never make a totally
sustainable, non-damaging product. But it is committed to trying." From then on, Patagonia took more business risks to
prioritize its values — even if it cost the company. It started to use organic cotton, invest in more
sustainable materials, offer free repairs, and even discouraged customers from buying its products. Patagonia also continued to donate 10% of its
profits to small environmental groups annually and started a venture capital fund to help startups
that prioritize social and environmental returns. The company also remained progressive
with its workplace culture. It was one of the first in the U.S. to offer onsite daycare, maternity and paternity
leave, and a flexible working schedule. Yvon also encourages employees to drop
work and go surfing when the surf comes up. In the past, Inc. Magazine criticized Yvon’s plans to turn
Patagonia into a model for the future and even wrote its time has likely passed. But since then, the company has reached
new and unexpected levels of success. Patagonia managed to grow during the 2008
financial crisis, reach $1 billion in sales, and become a muse for high-end designers. Later, the company’s co-branded vests became a
status symbol on Wall Street and in Silicon Valley — leading to nicknames like Patagucci and Fratagonia. At one point, Patagonia fielded 60
requests for co-branded vests a day. True to its word to slow down growth, Patagonia limited
co-branded vests to companies that align with its values. And while many were shocked and said the
company would lose money, Patagonia announced sales surpassed $1 billion that year. In an interview, Yvon shared why Patagonia continues
to reach new and unexpected levels of success. “I know it sounds crazy, but every time I have made a
decision that is best for the planet, I have made money. Our customers know that and they want to
be part of that environmental commitment." This is the story of how a mountain climber-turned-dumpster
diver built a billion-dollar company by being socially and environmentally responsible. For more inspiring stories about today's most successful
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I wish I had started Patagonia.