Catching up with Cotopaxi's founder, Davis Smith, END. discuss the brand's ideology of "doing good" and the impact of positive action in the modern world.
"A lot of my childhood was connected to this special place", Davis Smith remarks on the Cotopaxi volcano just outside Quito, the capital of Ecuador. "When I was thinking about what this brand represented and the vision I had for it, I wanted the name to be connected to a place that meant something to me and linked back to what inspired me in the first place to make a difference in the world. "
For Davis, place is eternally tied to the approach he employs with his brand, Cotopaxi. The place where he grew up, South America, was also the place where he first began to understand the disparities caused by poverty. As a child and young adult, Davis wondered why his life was different - the answer became apparent as he grew older and began to understand the way of the world, and it was this initial thought that would drive his direction into building a business with doing good as a primary goal. Founded in 2014, Cotopaxi was established with the fundamental principle of giving back to the world at its core - with 1% of their revenue put towards alleviating poverty and supporting community development across the globe. Specialising in outdoor apparel and gear, the Salt Lake City-based brand captures the essence of outdoor exploration, pairing it with a positive attitude and the ideological framework that pervades everything the brand sets out to do - to "Do Good".
Inspired by a desire to do good through business, co-founder and CEO Davis Smith has found himself turning his skills as an entrepreneur into a means for instigating positive change. From his youth growing up in South America, Davis had forged a deeper understanding of the disparity between the privileged and those in poverty. Entering the business arena with the notion of doing good and giving back always in his mind, Cotopaxi was built on the foundation of his dedication to helping the world through business.
Sitting down with Davis Smith via Zoom, END. discuss what led to the creation of Cotopaxi, how the ideology of "Gear For Good" filters through all aspects of the brand and how to help to change the world for the better.
When I was four years old, my family moved to the developing world, so I spent all of my childhood, and a lot of my adult life, living in countries that are known for their poverty. One of my earliest memories was seeing children that were my age, three or four years old, with nothing, on the sides of the street – and at that age I didn’t really understand why. Pretty quickly I started to understand how lucky I was – I wasn’t better or smarter or more deserving than these other children, or anyone else, I’d just been born in a place that had given me different opportunities. From that point, that was something that really motivated me – the idea of finding a way to make a difference in the world. To be honest, I wasn't sure how to really do it. I looked at the non-profit world and thought that maybe I should work in that sector. I did an internship when I was studying for University with a non-profit in Peru, and had a wonderful experience, but when I went back to University, I had a mentor who had been a successful entrepreneur who had gone on to create a non-profit that taught entrepreneurship to people in the Philippines who were living in poverty, teaching them how to escape poverty through entrepreneurship. It was really inspiring to me, and I tried to convince him to let me work for him, to help expand his program from the Philippines to Latin America. He instead convinced me that I should become an entrepreneur myself, telling me that’s how I would be able to make a more substantial difference to the world. I spent ten years building a couple of different businesses, all the while feeling somewhat disappointed that I hadn’t figured out a way to fulfil this thing that I thought about every day - how do I make the world a little bit better, more just and more equal? When I was living in Brasil, working on my last business, I had the idea – what if I had a business and a brand that could make a difference, where we could use our profits to sustainably alleviate global poverty? To me, that seemed a lot more interesting than a non-profit, where we would have to continually fundraise. This way, we could create the money ourselves – and in the meantime we could use the brand to inspire people and move people to do good with us. That was really the dream behind creating Cotopaxi.
Yeah, exactly. From the very beginning, even before I knew what products we would sell, a "what" to the "why", I knew that it would be a benefit corporation, a company that is trying to show that capitalism can be better. Every system, whether it is socialism or capitalism, has good and bad. It’s not black and white, one is not inherently good and the other evil, it’s figuring out how we balance these things in the right way. Capitalism has some amazing elements to it, but it is also incredibly destructive to our planet and it can leave people behind in an effort to maximise profits. I felt like there was a better way to do things, to find a better way through business and to make the world a better place. What we’ve been able to show over the last six or so years that we’ve been in business is that this model works. We don’t have to choose between doing the right thing, doing good and using our profits to help others, and having a sustainable business. You can do both. My hypothesis that I told investors when I was fundraising for this vision and idea, was that consumers, especially young consumers, would be willing to switch brands and would want to support brands that identify with their values. What we’ve seen is that that is the case. Yes, there are more costs to doing things the right way, to manufacture an item in the right way, to pay people living wages, to build everything the way that it should be – but in the end these positives offset those costs.
We don’t have to choose between doing the right thing, doing good and using our profits to help others, and having a sustainable business. You can do both.
I tried to think about what kind of business I could build that would make a large impact. To do that you have to choose a business that can become very large, with a large total addressable market. I had to identify a market that was very large, an opportunity that could become a billion dollar business, because that is how I could really end up making a difference. That’s how you can then positively impact millions of lives. Secondly, I needed to find an area that I was passionate about – I love the outdoors, I grew up spending a lot of time outside. My dad was a bit of an adventurer – we made our own raft and floated down the Amazon river, fishing for piranha, going and surviving on uninhabited islands, spearfishing and eating coconuts. I thought that was normal behaviour as a kid, but it was pretty amazing. I still do a backpacking trip with my dad and my brothers every summer – it’s something that I am still passionate about. So I looked at the outdoor industry and thought that people who have this connection to the outdoors or have travelled, have connected with something bigger than themselves, and I felt that they would really understand this mission – so that’s why I landed on this space.
I felt that it was really important that this mission was at the core of who we were and not just an afterthought on the periphery of the brand. A lot of companies have corporate social responsibility programs, and once they’ve made a lot of money they start to think about these sort of issues. This isn’t a CSR program, it’s very much at the heart of the brand. We thought about how we could inject that into every aspect of the customer experience and to every aspect of our culture and supply chain. For example, if you order a backpack or a jacket from Cotopaxi on our website you will receive a handwritten thank you card that is written by a refugee in their native language who is working for us, as they’re still learning English after they’ve been resettled. This is their very first job, in Salt Lake City, Utah, where we’re based. Alongside their work, they can join a job club that we’ve created, with the International Rescue Committee, where they can learn how to create a resume, how to do a job interview and how to follow up after it.
We also have a line of bags called the Del Dia, which came from two problems we identified at our factory. The first was that there was a tonne of waste material – we use the same factory as a lot of the big outdoor brands that you might think of, and in that process of cutting and sewing bags and packs, there is an enormous amount of waste. We wanted to find a way of using that material. The second thing we saw was that the sewers in this factory love their jobs - on average they’ve been there eleven and a half years – they’re paid well, treated fairly and have a great working culture with volleyball and basketball clubs. But one of the problems was that these talented sewers never had any say in designing the product themselves, they just made what they were told to sew every day. We wanted to change that, so we went to them and asked them to design the bags, using any remnant material that they wanted to, with the only rule being that no bag should be alike – every single bag had to be one of a kind. So they were able to have more creative freedom in their roles.
Ultimately, we’re trying to think about the impact we have on people in every aspect of the company. The great thing is that this isn’t top down – this isn’t me saying that this is what we’re gonna do, it’s laying the vision for our entire team and saying this is what we represent, this is what we stand for, making everyone in the company a keeper of the flame. The refugee card writing program came from one of our junior employees, who was just out of college. The Del Dia project came from one of our designers. When you empower people and tell them what the mandate of the company is, whatever job you have, the job is also to figure out how to make the lives of other people better – whether it’s inside or outside of the business. It comes from everyone within the organisation.
I don’t think it’s particularly radical. I remember reading a book by Milton Friedman in a college economics 101 class, which basically spoke about the role of capitalism and the role of a business, which was to focus exclusively on maximising shareholder value and profits. At the time, as a young person, it made sense, but as I got older and was operating a business, I started to feel very differently to what I had learnt at University. So I can understand how it is a radical shift from what many of us were taught. At the end of the day, though, I don’t think it is that radical – we’re all human and have empathy and compassion for others. When you start thinking about it, it just makes a lot of sense, and it feels good. In every way, this seems like a better way of doing business than what we’d been taught. When I think of what the world looked like two hundred years ago, in 1820, 94% of the world was living in extreme poverty – living on under $1.90 a day, in today’s dollars. When I was born in 1978, that number was very different, it was down to 40%. When I graduated from high school it was 20%, last year it was under 9%. This year is of course very different, and it’s likely that we’ll have unwound most of the good that has been done over several decades. However, I’m an optimist, I believe that humanity can do better, fight together to change things. A lot of this change has happened as a consequence of capitalism and the opening of markets. But as I mentioned before, it’s also so destructive. You look at waterways around the world and they’re completely different. Beautiful rivers are full of black sludge and garbage, you go to remote beaches and find plastic swept up from the ocean. These are things that we have to do better with. While we are making progress on one front, we’re making a very negative impact on another. We’ve got to find a way to balance these things better.
Because change is hard, I suppose. We’ve seen that with 2020 – it’s very uncomfortable to have to change and do something differently. But I think that what this year has also shown us is that sometimes change makes us find a better way of doing things than before. What we need is a shift in leadership – the younger generations understand this and are more passionate about it than older generations. Millennials are very passionate about these issues, I have a lot of hope that they will make this world better because that is what they think about, that’s what drives them – they generally aren’t driven by money or power, they want to make the world better and I’m really inspired by that.
The foundation is something we created 18 months to two years ago now – we created it for a few different reasons. Firstly, no matter what happens to me, I’ve built something that would be committed to giving back no matter what. The foundation allows us to do that with something that is permanent and linked to Cotopaxi the brand in a permanent way too. The second reason is that before the foundation, we were giving in largely the same way – we were giving grants and investing in our supply chain. The foundation allows other businesses and individuals to support us. Before, we didn’t really have a way to receive donations – if a customer was really passionate about the brand and wanted to donate $5 with their purchase, they couldn’t. We weren’t a non-profit so we didn’t have a way to receive donations like that. Once we’d set up the foundation, it allowed people to contribute alongside their purchase towards a cause that they were passionate about. That’s been a huge deal for us – this year alone hundreds of thousands of dollars have been donated by customers via small micro-donations towards Covid relief for refugees or towards the NAACP to help race relations in the United States. Issues that we and our customers are really passionate about. That’s been really important for us.
I think that the first thing that people need to do is to hold brands accountable – and frankly they need to hold each other accountable too. We need to do a better job about thinking about the way we consume, whether it’s single use plastics or going to buy the cheapest clothing. Yes, it’s inexpensive but the cost to the planet is much higher and it's not reflected in the prices that we pay at the cash register. We need to help inform people. There is also a tendency, in the modern day, for people to be very judgemental of people who are not doing things in the way that we consider to be “right”. We need to give people the benefit of the doubt, and to assume good intent and to help educate. If we’re passionate about something let’s put time towards it, let’s help educate people, let’s volunteer. For the second part of the question, I think it’s about identifying something that you’re passionate about – everyone has their own unique passions. For some it might be environmental, for others it might be poverty alleviation, for others it might be working with refugees. Identify something you’re really passionate about and go and spend a little bit of time every week on that issue, immersing yourself in those issues. What I’ve found as I’ve done that is that it has brought me more joy than anything else that I’ve ever done.