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.
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