By Nelson DeMestre | Associate Analyst at NAOS Asset Management
The NPR ‘How I Built This’ Podcast with Yvon Chouinard, the founder of Patagonia, is definitely worth listening to. Yvon, a distinctly unique billionaire company founder, largely egoless, and student of Zen Buddhism speaks at length of conservation and his search for quality and practical clothing.
What's interesting is how he speaks as if the rise of his clothing brand was almost an accident, a product of his frustration at the lack of quality outdoor gear available in the market. At the time, mountain climbing was still a nascent industry, with only 250 mountain climbers in the entirety of the United States.
Yvon first taught himself blacksmithing in his backyard, forging two steel pitons an hour and sold them for $1.50 each, versus the $0.15 single use European products. The difference was his product lasted and were true quality, enabling his market share to grow to 80% rapidly. His tools were cheap so he could travel across America, selling his products from the back of his car. By 1970 he had become the largest climbing equipment supplier across the U.S, moving then to rugby shirts as climbing gear that were so comfortable and popular, they couldn’t make them quick enough to satisfy demand. In essence, the success of Patagonia can be explained by the Plato adage: “Necessity is the mother of invention”.
Today Patagonia is one of the world’s largest outdoor brands, whose focus is strongly geared towards ESG concerns. Patagonia are committed to repairing customer items, unlike some profit-driven peers, as they see conservation as a top priority. In terms of its modern management techniques, Yvon has gone on to write a book called “Let My People Go Surfing” which speaks to a culture that promotes self-starting, openness to individuals time schedules and the importance of creativity. He emphasises that culture must start with the firm’s very first hire, as its people make up what the businesses DNA will look like.
Link to podcast