The rugby shirt that started Patagonia

The story of "Patagonia," the iconic outdoor brand, started with a rugby shirt.

In 1970, during a trip to Scotland, founder Yvon Chouinard was looking for a shirt to wear while rock climbing. He purchased a simple rugby shirt and found it to be far more robust and durable than any existing alternative at the time. Back in the U.S., he was in for a surprise — because all of his climbing friends wanted the shirts, too. Following this high demand, Chouinard decided to found "Patagonia" a few years later, in 1973.

A Bold Pivot from Hardware to Clothing

Looking back, this seems like an obvious decision now — but it was a risky one back then. Chouinard already had a business with his friend Tom Frost: over the course of just five years, they had become the largest supplier of climbing hardware in the United States. Moving into clothing — a topic they had no experience with — was a bold move.

And indeed, in 1975, the long-time partnership with Frost had come to an end.

From Fastest Growing to First Major Crisis

Patagonia, however, was thriving. The company grew steadily throughout the 70s and 80s and was even named "Fastest Growing Company" by Inc. Magazine.

But Patagonia had a problem: it had only ever experienced good times. It wasn't prepared to weather the storms that any business has to face, sooner or later. In 1991, the recession caught the company off guard. It had to pay a price for this rapid but unsustainable pace of growth: Patagonia needed to lay off 20% of its workforce, which were in many cases friends and friends of friends.

Earth as the Only Shareholder

When founders go through rough times like these, it often makes them better businessmen. But it also tempts them to compromise on their values. Not Chouinard. During all this time, his dedication to minimize the company's environmental impact has never wavered. And in 2022, he proved how dedicated he really was: Chouinard transferred his ownership of Patagonia (valued at $3 billion) to a specially designed trust that would use future profits to help fight the climate crisis. "Earth is now our only shareholder." Chouinard said.

The Paradox of Purpose Over Profit

This unwavering dedication to the environment was often labeled as a weakness on Chouinard's part. What greater success might he have achieved if he had focused more on revenue and profits? But he sees things differently: "Every time we've done the right thing for the planet, we've made more money."

Here's a perfect example: a 2011 ad campaign, titled "Don't Buy This Jacket." It explained the environmental cost of buying a Patagonia product and urged people not to buy a new one. Instead, people could buy used Patagonia clothing — or not buy at all and reduce their consumption. The campaign proved Chouinard's point perfectly: despite putting the environment before the product, Patagonia's revenue increased by almost 30% in that same year.

I remember this so well because it left an impression on me, too. That year, I had no choice but to replace an old jacket. (I'm not a very fashionable guy… if we ever meet in person, you'll know what I mean). Want to guess which brand I chose?

———

When researching Chouinard's story, I was surprised that he describes himself as a "reluctant businessman." His dedication was not to revenue and profit. It was always to craft, people, and environment. At first glance, one might be surprised that he was so incredibly successful nonetheless. But I wonder if it's the other way round: if he wasn't successful despite this reluctance, but rather because of it.

By refusing to make profit his number one goal, he instead focused on creating the best product possible — for his customers and the planet. Arguably a far better product than if he had set his eyes on revenue and profit instead.

In an interview, a reporter presumed that "somewhere along the way you must have wanted to be a businessman." Chouinard's response was as clear as it was decisive: "Never! All I ever wanted to be was a craftsman."

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