Transcript Episode 30 Yvon Chouinard
It all started when…
On Yvon Chouinard of Patagonia
Featuring Patrick Hanlon
Live Date: May 28, 2018
MP: Hello & welcome to the Moonshots podcast. It’s a very special episode 30. I’m your co-host, Mike Parsons, and as always, I’m joined by the man himself, Chad Owen.
CO: Hey Mike. So for Episode 30, we are very excited to bring on yet another illustrious guest, Patrick Hanlon. So why don’t you introduce Patrick to all of us, Mike?
MP: Well, Patrick is somebody that I’ve known for many, many years. He is a prolific author. His signature piece, one might say, is the book Primal Branding. Please check your Amazon stores for the book and he has produced numerous iconic advertising campaigns. He’s worked with brands like Levis and Pepsi and well you name it, he’s worked with them and he’s all about how you create this spirit of community that is story and narrative-driven, and how to have a positive impact on the world. It’s my pleasure, Patrick, to welcome you to on the show! Hello!
PH: Hey, it’s good to be here. Thanks for having me.
MP: You are so very welcome. And when we chose to have you on the show, we have to give our listeners a bit of an inside tip. It was because we have one of probably the greatest living brands by one of the greatest entrepreneurs so we are very pumped to unleash your thinking onto what has to be one of the greatest brands. But I think, Chad, we should stop the suspense. Who are we going to dive into this show?
CO: Yvon Chouinard of Patagonia.
MP: And he is pretty amazing and then I must say when I did the research for this show, he went from pretty amazing to right up there. I mean I gathered these clips and research and found myself wanting to work for Patagonia. Chad, what makes Patagonia and the work from Yvon Chouinard so special?
CO: Well, I don’t want to give everything away before we get to the clips here, but I’ll just say I’m always thrilled and excited to kind of veer off the technology innovation path and find someone like Yvon at a company like Patagonia. But Patrick, I’m curious from you, what has been most surprising or interesting to you about Patagonia in the last few years, or maybe just as you’ve watched it over the past forty years.
PH: Well, I just wanted to say first, that I’ve listened to a lot of these shows - not all of them grant you - but I’m so glad that you brought me into this one because I’m a fan. I’m a Patagonia fan. I might even be part of the tribe. I don’t climb, don’t necessarily camp that much anymore, but I sure fall into the aesthetic and the belief system, definitely. So what I thought was outstanding - I hadn’t read the book, Let My People Go Surfing, which is a primer for anyone who wants to look at any purpose-driven brand. And what fell out of that for me, I think, was how totally, we talk about being authentic, we talk about being organic, we talk about all of these things, and here was a guy who didn’t really want to become a businessman or entrepreneur; it just kind of fell into his lap. He was just making better things. He was forging his own chucks and pitons and realized that in the course of climbing these mountains, they were also destroying them by going up the same routes over and over again. And so rather than hammering these things into the side of the mountain, he invented new ways and what they called clean climbing. And that’s kind of been the model ever since.
MP: Yeah. It’s perhaps one of the biggest things he has to offer in terms of learning, is you said it - he’s authentic. This guy built products in a way he thought was best for him, for the customer, for the employee, and I think our listeners are going to find he’s a very folksy, straight-shooting kind of a guy. He doesn’t have all of that elaborateness you might find from a Silicon Valley exec, but you’re so right. I mean this guy is - Chad, this guy is the real deal.
CO: I mean, yeah, he went from dirtbag to founding and running a billion dollar company with over 2500 employees. And we’ve got a great introduction from a Patagonia employee, just to give you, the listeners, a sense of how far the company’s come and what they’re doing today. So here’s a primer on Patagonia from one of their own:
PATAGONIA EMPLOYEE: Patagonia’s based in Ventura, California, mainly because there’s a great surf break there. It is right now a little less than a billion dollars, about 2500 employees across the world. Patagonia was founded 40 years ago by a French-Canadian climber, Yvon Chouinard. From the beginning, Yvon set out to create an “un-company.” We wanted to create a place where people could make money and do the things that they wanted to do and live full lives. We hire people at Patagonia, whether it’s the corporate office or in our retail stores, who are interested in and love the spaces that they live. We look for a passion for caring about the environment. And if we’re doing things that force the store manager to be in the back room all the time, or our employees to only be on the floor behind the cash wrap, then we’re doing something that is antithetic to the culture and the purpose and why we’re here in the first place. Culture matters and you know when it matters most when you stick to it in the great times and the really challenging times. And so when I think about the history of Patagonia, obviously right now are very good times. But the decisions that we make, even in the bad times, because there were bad times in Patagonia. 2008 was kind of not a great time for Patagonia and a lot of companies, but we didn’t cut healthcare. We didn’t cut onsite childcare. We didn’t cut training and development. That’s the test of true culture, is when the decisions you make are consistent, whether business is really, really good, or really, really challenging, and I think that’s why our employees stick with us at just ridiculously low rates of turnover. An element of the Patagonia culture is this irreverent, unconventional approach. So if everyone else is turning right, Patagonia is definitely the company that will turn left from an unconventional approach to the democratization of work.
MP: It’s like everyone’s turning right and they’ll take left. What you heard there was, for me, a very timely reminder on having purpose is the start of making life very clear as a business person because you just ask yourself, does this action, or what is the decision to make, that best reflects our purpose? And we can hear how contrarian they are. They didn’t cut all of those extra value add services, which is how some companies would look at them; they maintained them during tough times. And to me, this is a very powerful lesson in going out into the world to try and achieve a greater good and to have positive impact and you can see that their success, which is so important to recognize - they’re in the world of fast fashion, where the likes of H&M and Zara pride themselves on turning product into store in less than two weeks. These guys are taking their time to build timeless products. And we’re gonna hear so much in the show about how they created the company, how they came up with these incredibly powerful set of ideas that fuel the culture of the company, and we’re gonna hear about some of their philosophies and approaches and how they just think about people as a whole and it’s - it’s very important stuff and it’s very good that we’re doing this because we’ve not had someone so strong on culture and doing Wel by doing good. I think this is a big fuel injection for the cultural barometer within organizations, Chad. I think this one’s gonna be unique, indeed.
CO: Yeah, I’m excited. And don’t forget, we’re gonna ask Patrick all about Let My People Go Surfing, the book that Yvon wrote a while ago. Patrick, I’m curious - as we get into the show, what are some things that you’re kind of looking to learn from Yvon as we unpack some of these clips?
PH: Well, I think that Mike just steered us toward one, which is the whole reference to H&M and the instant fashion thing, fast fashion. And how Patagonia is not - they’re a clothing company, but they’re not really a fashion company. As a matter of fact, in their mission and values, the concern over transitory fashion trends is specifically not a corporate value. So they’re not going for the - they’re not going to be at Fashion Week.
MP: So true. You will never find them there because they’ll probably be a bit too busy catching waves out in front of their office.
PH: Exactly, so having values is one thing, but then sticking to them through the dark times is another thing.
MP: Yeah. And we see in the up and down of corporate culture startup life, we’ve all been presented with situations where you’re just doing a double-take, and going, “What?” And when someone does something that’s so contrarian to the values they might espouse, this is where you know I think the cast is dyed about good companies, maybe companies that are going to fail, and it’s definitely the moment of truth to decide great companies. Now, we’ve heard so much about how contrarian they are, how they’ve got this incredible courage to do things, and a lot of this stems from Yvon Chouinard, the Founder. And he has this contrarian, fearless, courageous style about him, this essence - it’s more than style; he has this essence. And this first clip we’re gonna play to you is part of a whole series we’ve got about how the company came about and the sort of mentality and approach it took from him. So let’s now have a listen to his thoughts on what the essence of being an entrepreneur is and how it might not be what you expect. So here’s Yvon Chouinard.
YVON CHOUINARD: You know, one of my favorite quotes about entrepreneurs is that if you want to understand the entrepreneurs, study the juvenile delinquent. Cause you know, they’re saying, this sucks [laughs] and I’m gonna do it my own way.
CO: I love that clip because it goes back to his heritage as a climber. he was a self-professed dirtbag of the 60s and 70s and it’s just fascinating to me how he stumbled into what would become Patagonia. So as before, he’s kind of - he’s saying we’re like juvenile delinquents saying oh this sucks, so we’re just gonna do it our own way. And I’ve never heard entrepreneur described in that way, but I love that metaphor.
MP: Yeah. He’s got that thing - he’s almost a bit Branson-esque. A bit contrarian, counter culture, bringing that into the entrepreneurial world. Pat, I’m interested to know from you - when you think about this sort of contrarian approach, do you see this a lot in successful founders and leaders within organizations? Is this a characteristic that when you’re writing about creating a movement, do you think this plays a role in how he’s amassed such a huge community of brand lovers?
PH: Well, I think that in this case, yes. The quick answer’s yes. And in the beginning, the people that had worked at Patagonia, they only worked there long enough to - according to Yvon anyway - they worked there long enough to make enough money to go off on another trip to Chile and go surfing. Or go mountain climbing in the Alps. And then they’d come back and drift back. It was very hard to keep people committed, I guess. Committed is probably the right word. And so when you have a band of renegades like that, it’s kind of hard to run a business, but yes, I think everything kind of flowed out of that. Of course you have all the - Apple started in a garage, Hawaiian Tropic started in a garage also with Ron Rice stirring the goop with a shovel. So not everyone went out for investor funding, seed funding and everything and Patagonia actually had a problem getting loans.
MP: Yeah. The interesting juxtaposition or what might not be a natural bedfellow to this - renegade, I love that, Pat - this Renegade characteristic, is that they’re actually product obsessed. So just because they’re free-spirited doesn’t mean they don’t have the discipline to knuckle down and design great products. And we all know that solving a problem is at the essence of entrepreneurship and your product has to be obsessed with solving problems of its customers. So what’s very nice is they might be renegades, they might be contrarians, but they have enormous aptitude to delve into the problem their customers have. The great news there? They happen to be their own customers because they’re all outdoors people, which I think is another pattern that we can decode in their success. But now let’s have a listen to Yvon talking about how we can get into problem-solving and how where the products really come from. So let’s have a listen to this.
YC: Well, I never wanted to be a businessman. I was a craftsman and I was a climber and I just, every time I’d go into the mountains, I’d have ideas on how to make the gear better. The ear was pretty crude in those days. It was all made in Europe. And so I just got myself a forge and an anvil and a book on blacksmithing and i taught myself how to blacksmith and that led to making these pitons and eventually ice axes and crampons and all the gear for mountain climbing. And I never did it thinking that it was a business. At first, it was just making the stuff for myself and friends, and then friends of friends, and then pretty soon I’m making two of these pitons an hour and selling them for $1.50 each. Well, not too profitable, right?
CO: Yeah. I love how his life was dependent upon the product that he was making. So if he wasn’t already obsessed enough with it, here he’s creating and innovating on and iterating on this product that he’s using to hang from El Capitan and other mountains that he’s climbing. And it was really out of necessity for him and he kind of jokes at the end that he was selling them for not much money and it started out of - he had his own anvil and forge-
MP: And taught himself! I mean, Chad, he just gets in there and says, “I taught myself how to be a blacksmith.” I mean sounds easy to say, but like, I wouldn’t even know where to start. And just the idea - you’re dealing with all that fire and iron. I mean this is a world away for me. Maybe my digital world is just not analog enough, but that just seems like, wow, and he seems so matter of fact about it, doesn’t he?
CO: Yeah and I’m curious, Patrick, you mentioned Hawaiian Tropic. I’m curious if you know of any other kind of founding stories that kind of started this messily, if you will.
PH: Sure. Almost all of them. Henry Ford, making his automobiles,
MP: Yeah. The Ford story is epic, but Chad, I will take you back to one of our shows - when Virgin Airlines started, it was on the back of a smeared chalkboard with Richard Branson saying I need to get to this island, I’ll charter a plane, $25/flight from island-to-island. I mean solving a problem, taking the initiative, not being in your head and scared of failure. They just jump right in and they learn it, they pick up the tools and go for it, don’t they?
CO: Yeah. And he didn’t stop. He started with these climbing pitons but soon branched out into essentially everything that he used as a climber and as an outdoors person, all the way to pants and shorts, this really cool kind of fuzzy wool-like fabric, but it was synthetic so that when you got it wet, you knew it would dry quickly instead of wearing wool and it staying wet for weeks on end. Essentially just creating the products out of necessity, as opposed to looking and seeing what’s popular on trend and doing that.
MP: Oh yeah, totally. And it’s so great - he just took the initiative, started making things for himself, and before you knew it, he’s a product designer. And what’s great about the next clip - fast forward a few years, and he wakes up and has this realization, oh my gosh, I’m a businessman, which is certainly something that he’d never set out to do. In fact, he talked often about business - no one grows up wanting to be a businessman because you know they’re basically all versions of Gordon Gekko. So this next clip is fantastic because this is what his reflections upon - as a businessman, but I want to give Pat this opportunity to reflect on just the relationship building products and before you know it, turning into a businessman. When you hear him talking about creating these products and you know the journey he’s on, what comes to your mind, Pat?
PH: Well, he really glances over something that’s really important. I think he talks about - he just made a slight mention of, “The products weren’t very good back then. The products really sucked back then.” There wasn’t the clothing and so forth. One of the things they talk about in the book and maybe I’m giving the book review away as we go, but they talk about cutting off a pair of chinos and wearing a white, button-down shirt they would pick up from the Salvation Army or someplace so they’d get it cheap and didn’t care if they roughed it up. But that’s the kind of stuff, whereas, they’ve always tried to build quality products and in order to make corduroy, he spotted some corduroy over in Scotland or someplace. The factory had closed and they had to call seven retired gentlemen away from the pub to start the machine up again! And these old craftsmen warned him, once the blades on this machine go dull, we’ll never be able to use it again. Because we don’t have the wherewithal to sharpen the blades anymore. And luckily the machine lasted seven more years. But that kind of dedication and just sort of brilliant, nonchalant start, who cares we’ll just make them anyway, as long as we can. Right?
CO: And essentially waiting for the customers to like beat down his door to make the thing.
PH: Yeah. Quality first and customers came later, whereas today of course we always want to ask the customer and get user studies and-
CO: Another story, he found this great rugby shirt, which if you’ve ever played rugby and wore a jersey, it’s this really nice thick material and it’s got a good collar and all of that and it was perfect for the climbers so that they didn’t get rope burns and their shirts weren’t torn to shreds.
PH: That replaced the white button-down, yeah.
CO: Yeah, but I think he had to - all of his friends and family were saying like we need these and so he had to hunt down the manufacturer of these shirts to go and do it. So like he never set out to create this great outdoors and apparel company. And this clip Mike is alluding to I think is a perfect summation of that and I couldn’t help but laugh when we heard it. So here’s Yvon kind of owning up to his fateful realization that oops, he’s a businessman now.
YC: I kind of backdoor-ed becoming a businessman. Because this is in the 60s and businessmen were all greaseballs in the 60s [laughter] You know this is a counter culture that we were in and we didn’t respect business. In fact, they were the enemy. And so one day, later on, I kind of woke up and discovered oh my God, I am a businessman! And that’s when I decided I better find out what I’m doing and started reading a lot of books on business and basically trying to create a business that we wanted to come to work in - all of us. I mean, it wasn’t just me, but all of us were all dirtbags.
MP: Yeah. What a powerful clip because the essence of that is, when he had the realization, he didn’t just dwell in it; he put himself to work and started reading books and studying what it meant to be a businessman. And this is exactly what he does with everything. You’ll remember that when he talked about building product, he just went out and learned how to be a blacksmith, he went out and read books. This is constantly what he does and this is by far the most powerful theme of all the successful innovators and entrepreneurs is they’re lifelong learners and what’s important here is it all comes off the back - his entrepreneurship comes off the back about what we heard was this to him, which seems quite natural, is this obsession with great product, this obsession with solving problems, and I think this is one of the biggest lessons we can take from him. It doesn’t matter if you’re high-tech, low-tech, whether you’re digital or analog, it really matters that you go out in the world and you solve problems, and that we’re learning constantly that entrepreneurship is a means for entrepreneurs to achieve their mission. So the mission is not to be an entrepreneur itself; the mission is to see positive impact in the world. And we’ve seen that time and time again, haven’t we, Chad?
CO: Yeah. And I think where we’ve seen it go wrong is where the entrepreneur is in it for the wrong reason. And I don’t want to name names, but I’m sure we can all think of either someone in our own experience or out there kind of in the news and the media that kind of got that equation backwards. And Yvon just embodies that mission and purpose first, product first philosophy so well.
MP: Pat, I wanted to ask you about this idea of learning. You’re an author, you’ve written several books, you write for some very prestigious magazines and so forth. What’s your practice of learning? How do you keep yourself abreast and how do you keep growing and where does that start for you?
PH: Oh, that’s such a hard question to answer, with all the splintered channels and everything that we have. I have several feeds that i go to every day and then I read constantly. I read more than I listen. One of my daughters is constantly on iTunes and so forth listening to books rather than reading them. I think there’s something to reading things still, so, I have some analog in me.
MP: Good on you. Reading is a beautiful thing and surely, the practice of writing - the fact that you know you have to bring an idea and put pen to paper, that must be a big part of your learning because ideas just get better when you write, don’t they?
PH: I think so. Yeah. I feel that way.
MP: For me, it’s the pressure to write and get your idea as clear as possible, invariably it makes what’s in my mind even sharper once I’m committing it to paper. It’s almost - I don’t know, there’s some growth of my membranes when I’m writing. It just clarifies, solidifies the idea, doesn’t it?
PH: You know, I didn’t realize this until I was pretty old, but I’m a visual person, so I need to see something on paper, I guess.
MP: So now we’re got this lens that we’re looking at Yvon Chouinard, the Founder of Patagonia, through. We know that he’s very contrarian, he’s a renegade as Patrick said, we know that it all started with making better climbing products for himself, and before he knew it, he was a businessman. But everything goes next level. There was a point in time where it was do or die for Patagonia, it was do or die for the entire company, and this was a classic tipping point in their history, and it was either going to go good or it was going to go very bad for them. And what we have here is him reflecting on this moment. And I just want to give a heads-up to all the listeners - make sure you tune into this following clip because there is so much inside of this because not only is it about learning and coming together, but it is about resilience and about turning adversity into opportunity. So let’s have a listen to Yvon Chouinard, Founder of Patagonia, on where the true origin, the essence of the Patagonia brand, where it came from, when, and how.
YC: Well, you know I’ve been on a lot of different expeditions and trips, but the longer they are, the more you get something out of them. And this was a six-month trip and so we left Ventura, California with an old van. This was Doug Tompkins and myself, and some other folks, and we loaded the van up with surfboards and skis and climbing equipment, bought an old Bolex 16mm camera, and took off surfing all the way down to Lima, went to Chile, and climbed volcanos and skied down them. That’s where I learned to ski! Crossed over the Andes and went over to climb Fitz Roy, a real famous mountain that had been only climbed twice and we did new route on it. And we made a film on the whole thing, and that’s when I fell in love with the country - the southern end of South America called Patagonia. And it affected Doug Tompkins a lot and myself and that’s why I named my clothing company Patagonia because I wanted to make clothing for those kinds of conditions, like Cape Horn and wild mountains and wild weather and yeah, so that was a big - that was 1968 and it was a wild trip. I mean, you know, you’d wake up sometimes sleeping on the ground in Guatemala with guns at your head! Had a lot of adventures.
CO: He makes it sound so simple. I think it’s kind of hard for me to believe that what we now know as Patagonia was discovered on a surf trip in a van down the western coast of North and South America.
PH: Yeah. There’s a lot of intensity there, but there’s also a lot of humility. Isn’t there?
MP: Actually, yeah that’s a good thought about Yvon Chouinard. He has - he reminds me a bit of Fred Smith from FedEx, you know, he’s thoughtful, he’s pragmatic, but never in any sense do you feel ego when they talk. You’ll notice he’s often thinking about - he’s always quick to credit others, he’s quick to attribute things to others and the thing you have to be careful with Yvon is it all feels so easy because I think he asks big questions and he’s looking for the essence of things. And I think we have to remind ourselves, it doesn’t come as easy to all of us as it seems to Yvon, but I think that-
CO: But he’s keeping it simple. I think it’s coming across as very easy because he has kept it so simple. And after we talk about the book, Let My People Go Surfing, I think we’ll get into the purpose and the dual mission that Yvon created for the company that he’s stuck with for forty years and I think that’s why there’s this easy confidence that comes through. I think that’s where it really comes from is the simplicity of what he’s chosen to do.
MP: Yeah, without a doubt. And this modern world of notifications, with artificial intelligence and machine learning, it is essential to keep it simple and I love how contrarian he is in that. And I think that we’ve already had such a gift in understanding the purpose, that renegade within him, that has created a billion dollar brand, it’s created a venture company, it’s created a food company, that is all geared to not only leaving the world as it was, but to actually leave it better than how he found it. And already that is such a noble and powerful cause, but it’s also helped him to build a great brand. And part of what he’s been trying to do in sharing his story is to inspire others to go do it as well. He only makes himself so accessible in order to provide some sort of road map for others. And I think at the very pinnacle of that road map was his book. So he penned together this book, Let My People Go Surfing, and without a doubt it’s such a well-reviewed and admired book. Its subtitle is The Education of a Reluctant Businessman, but I know we’ll have anything but a reluctant set of thoughts from Patrick on the book. Patrick, you read the book, you’ve heard some o the stories and the values that he’s brought to life in the book. Listening to him and reading this book, how would you position this book for anyone who wants to go and learn how to be an entrepreneur and innovator, to go out in the world. What’s in the book for them?
PH: Well, I think it’s a perfect example as I said earlier I think of being purpose-driven, but also it’s very astute in terms of persistence and being very serious, really. But even if it got serious, work had to be enjoyable on a daily basis. There’s a phrase in there that he gets to that says, “We all had to come to work on the balls of our feet and go up the stairs two steps at a time.” I mean that’s not only persistence, but that’s really the aggressive pursuit of something, right? And then there’s another thing in the book that he mentions that he wanted to keep the company in “Yarak,” a falconry term meaning that when your falcon is super alert, hungry but not weak, and ready to hunt. So that’s very intentional.
MP: How do you spell that word? That’s such an interesting idea.
PH: Yeah. [spells it out] Keep the company in yarak, which seems to be sort of a - I don’t know if that’s a zen state, but a purposeful, intent state of high alert, right?
MP: One of the things that strikes me, Chad, about him, is the enormous scope of his achievement. But the simplicity and calm in which he seems to do it. What strikes you about Yvon Chouinard’s disposition and approach that you think you could try and adopt when you’re going out, making great films and telling great stories about innovators. What do you learning from his, almost his style, of entrepreneurship?
CO: He’s like not tolerant of any assholes, pardon my French, working at the company. Just the phrase Let My People Go Surfing, I think it’s an amazing book title and it says a whole lot about his philosophy just in that phrase. If you weren’t hitting the waves with him, on the off days or after work, like you’re not someone that he would want there with him. And it goes back to what you’re saying, Patrick, they’re either surfing or working, but they’re totally impassioned and in the state of flow in both of those things. And I think seeking out and encouraging those people to come and work with him is a big part of his success.
PH: Well think about both of those things. They’re both highly active, you have to be totally on, right? You can’t be off when you’re shooting through the wave and you have to very mindful and present and intentional.
CO: Yeah. And you have to seize the opportunities. You can’t just paddle out there aimlessly; you have to be able to see the waves as they’re coming in and know when to drop in and catch the wave.
MP: Take a risk, huh.
CO: Yeah. It’s a beautiful metaphor and you were saying, Mike, before we hopped on the show, like listening to all of these clips, you just want to work for Yvon Chouinard and work for the people at Patagonia. And I think that is a really powerful aura and mythos that he has created.
MP: I would say what you guys were talking about is “Play hard, work hard.”
PH: Yeah exactly.
CO: With purpose. With purpose.
MP: And we’re so fortunate because what we’ve got coming up in the show is a whole bunch of insights around this purpose and I think there’s a lot to learn for us and for our listeners on how we can create purpose, not only for ourselves, for our teams, our organizations, the communities in which we live, plus just because Yvon Chouinard from Patagonia is full of lessons, we’ve got a number of insights around people and philosophy; it’s action-packed. And now, if you’re listening to this and you’re like what was that crazy word they used for keeping hungry? That and all the clips and links and references you’ll find at moonshots.io where you’ll get all the goodies, past shows, show notes, you name it. It’s all there on moonshots.io. So we’re through the origin of Patagonia. Chad, where should we start with purpose? What’s next?
CO: So I think we’ll pick up right on the mission and this is something from the research that we did, it seems that Yvon knew this from the very beginning, but this simple, dual mission that he set, I think was really what set them up for success. So here’s Yvon talking about Patagonia’s dual mission.
YC: Our original mission statement was “Make the best quality product” and we always felt that something is perfected not when you can’t add anything more to it, but when you can’t take anything away. It’s kind of the difference between an old-fashioned Cadillac that was so butt-ugly that they had to put all kinds of chrome brass(?) on it and stuff. Compared to a Ferrari in those days, which didn’t have any chrome on it. I mean it was just this beautiful lines(?) and so that’s always been our philosophy. But then you know, I thought we needed another part to our mission statement because really getting concerned about the natural world and I was very concerned about never having a company that was unsustainable. So we added in the second part, which says “Cause no unnecessary harm.” It doesn’t say “Cause no harm” because you know, there’s no way you can ever manufacture a product without causing harm. And according to the second law of thermodynamics entropy, you basically end up with probably more waste than you end up with in the final product. There’s no such thing as sustainability. There’s a beginning and end to everything as any Buddhist will tell you.
MP: Hmm. Less is more. Imagine having him in the room with one of our other-
CO: He and Dieter would get along so well.
MP: How Dieter would strip everything away until there was nothing left to remove.
PH: It’s really like being a sculptor.
MP: Yeah. Or working with clay - just breaking it down to its essence. I love that and I think in this - I mean if there was one thing in working with large organizations, trying to create breakthrough products, one of the things I see so much is what we commonly call the scope creep, which is putting more and more things into a product and the false sense of satisfaction that gives product designers. Like oh yeah we’ve got a button for this and a button for that. But if you actually look at the things we love, the kindle, the iPhone - so much of what those products do it simplicity and the removal of distraction. And I think that apart from having this mission of building great products and doing little harm, the essence is, if you wanted a product strategy from Patagonia, it’s “less is more.”
CO: I also think tying this great purpose to the mission was a very - and doing that explicitly - was a very good move on his part. Because I think it just creates this - Mike, you and I love talking about flywheels. I think that was one thing he did to get this flywheel of amazing people into the company. And that was recently formalized I think in 2010 or 2011 - Patagonia became one of the first, very large certified B corporations, you know, where it’s in their little bylaws that doing good and doing well is kind of married. It’s not just doing well financially, all of those things combine to really get this flywheel spinning so while it’s rooted in great products, it’s great products that in the process of being made, do as little harm as possible. And I don’t see how anyone can say no to that kind of proposition and working at that kind of company.
MP: Yeah. And what’s so powerful is we actually see this great product do little harm coming actually to life in this next clip because they talk about how they’ve created products that embody both of these things. So let’s have a listen to the journey that the company went on and how it thought about bringing polyester to the world.
YC: One thing that’s just happened very recently that is really exciting - it’s the most exciting thing that’s happened in the company in a long time - we’ve partnered with a Japanese mill, they just spent $100 million in a recycling plant where they’re going to recycle polyester. Now we’ve been making 40 different products, you know all of our fleece and stuff is made out of recycled soda pop bottles, but when you’re done with those products and they’re all worn out, you throw them away. But now, we’re telling our customers that when you’re done with your capilene underwear, which is polyester, you bring it back to us and - wash it first [laughter] especially the thongs [laughter]. And then we’re gonna bundle that stuff up and we’re gonna send it back to Japan and it’s gonna go to this plant and they’re gonna melt this stuff down and take it to its original polymer, and then make fiber, and then we’re gonna make more underwear out of it. So we’re gonna complete the circle - what Bill McDonough calls cradle to cradle - and it’s never been done with clothing.
CO: Yeah. Going from recycled material to article of clothing back to raw material and then back to article of clothing, is this just amazing cradle-to-cradle as he said, cycle, that is the exact opposite of what you were saying - the uniqlos, and the Zaras and the H&Ms of the world.
MP: Yeah. And what’s so exciting is that you can have a profitable business, you can do well by doing good. Because often, there’s this perception that doing the right thing, in the end, costs you a lot more. It’s not the profitable way. You have to be kind of greedy to maximize profits. But the truth is, many times it’s been found that Patagonia outperforms the garment industry and the sports equipment industry for profitability, but they actually have a positive impact on the world because they’re doing, for example, cradle-to-cradle polyester. I think this is this great intersection of they have this vision, these values, but the things they do, the things they make, actually reflect those and I think this is the essence of not only Yvon’s authentic nature as an entrepreneur, but Patrick, I think this is the key to why so many people love their brand. Because they truly do walk the talk.
PH: They practice what they preach. Right? And along with that brilliant quality, they have figured out this whole ecological vent to it. And they’ve been doing that since the beginning, really. They kind of fell into it. In the book, they talk about saving one of the salmon streams or rivers right outside their doors, really, 500 feet away from their office in Ventura, California. The local council was going to build some - mess up the river still more, and their reason for doing that was because the river was already dead. And so someone had done a study - some graduate student who’s now I believe still at Patagonia, they hired him and brought him in to do more studies and do studies in other places and from that, like I say, they just kind of fell into some of these things anyway. It seemed like the right thing to do.
MP: And they seem unflappable, like it’s just the right thing to do. It almost has this matter of fact feel about it, that they just do what they - what they say they’ll do. They practice what they preach. And I’m trying to think, Chad, out of all the shows we’ve done, has there ever been an entrepreneur that we’ve looked at and studied, that seems to have such a close alignment between values and actions, and creating a natural and a very sustainable business, seem so simple and clear-minded?
CO: No. I don’t think we have. The true entrepreneurial genius I think from Yvon is taking this deep love and desire to do good for the environment and not just doing things to make the environment better, like saving the rivers and setting aside parklands and donating I think it’s 1% or over 1% of all of their sales - not profit, but sales, total gross sales, to a couple hundred or a couple thousand organizations on top of all of those things. He’s actually designing the business model of Patagonia to be sustainable. So here’s Yvon explaining his thinking on well, doing activities and things for environment isn't enough. We need to actually make the business itself and the business model sustainable into the future.
YC: You know, American style of business is you’re supposed to grow this business as fast as you possibly can. You don’t have to make a profit, you just show lots of growth so that you can have an IPO, sell a bunch of stock to some suckers, and then you know, you retire to seize your world and play golf the rest of your life. Well, I don’t believe that is right. I’ve always felt that if the farmer has his responsibility, well so do I as an owner of a company and so we decided to put our company in a path to where we wold be here 100 years from now. So all the decisions made are for the long-term, which means we can’t grow 15% a year. We decided to grow at a natural growth and so natural growth means when the customer tells you that they’re frustrated buying your stuff, that they just got the catalog and you're already sold-out, that you just need to make more. But we don’t advertise on inner city buses to try and get gang kids to buy our black down jackets instead of Timberland or North Face. The reason we got into trouble in the first place is that with the synchilla, we were selling stuff to people who wanted it, but didn’t need it. Whenever you’re in that situation, you’re a victim of the economy. The economy’s gonna go up and down and you’re gonna go up and down like a yo-yo. And particularly if you really follow the fashion trends, and then you’re really in a scary situation.
MP: I love that because what he pinpointed there is this sort of dangerous, almost it feels like a Ponzi scheme sort of danger. If you’re chasing growth, selling to people who want but don’t need your product, means that as soon as tough times come, those people disappear. And that’s what happened. He tells the story of they were expecting 50% growth, they only got 30 because the economy changed, and they got into all sorts of trouble. I love this sustainable, natural idea of only selling to those who truly need and want your product, and what this does is it means you don’t have to blast them with bus ads, billboards. You don’t have to interrupt them and try and convince them because they’re already convinced that they want your product and it just feels like such a natural way of doing business. Patrick, have you ever heard of other brands that are just this natural about only wanting to sell to people that need their product?
PH: Yes, yeah. And I think that what he’s talking about is against this whole obsession to scale, which Silicon Valley has sort of embedded into business as usual, unfortunately. But yes, the first one that leaps to mind is Ford. Ford was originally made - Henry Ford was a farmer, was a farm boy. He wanted to make automobiles. Automobiles were already being made when he started out, but they were being made for wealthy people. The $150,000 Tesla leaps to mind. And they were making [indecipherable] and pierced arrows and so forth for millionaires. Henry Ford wanted to make a car for ordinary people so ordinary people like him could buy one, have one. And so he started his company, ironically he was working at - he knew that he wanted to make a combustible engine, he needed a spark plug. He went to work, where? For Thomas Edison at the local GE plant, General Electric plant in Detroit. Henry Ford was quickly made a supervisor and the funny thing is that Henry would punch in at Thomas Edison’s company and he would go back home and work on his automobile. And one day, he got in an argument with his bankers one night who wanted to sell automobiles to the wealthy, and he expletive deleted, he walked out and they renamed that company Cadillac, the bankers did. And Henry went on to make his Ford, Ford Motor Company. I think another one might be Levis because Levis was made - you know the advertisements were two horses or mules trying to pull the jeans apart and it was all about quality - not about style. Style was a function of, I mean the design was a function of utility.
MP: To me, it’s very exciting to imagine a company building products that are so quality-driven that solve such a big problem that marketing moves from being this sort of hand-to-hand combat with the consumer of trying to convince them. You would almost argue a lot of advertising and marketing is almost trying to trick the consumer to consume this product. What a pleasant way to imagine being a Chief Marketing Officer, when all you’re about is presenting this quality product to the people who know and love you and to tell them about what problem you can solve next for them. That seems like a marketing paradise. I wonder for how many companies this really exits today.
CO: Yeah, not many. This last clip I think was my favorite out of all of them, precisely because that is what I want our kind of capitalist society to be is more focused on the needs as opposed to the wants. I think this constant demand generation by advertising and marketing, I think just fundamentally is unsustainable in the long run. I mean sure it looks great on the earnings reports, but startups and companies that have to spent $9.75 to get a customer that pays them $10, I just think that’s fundamentally unsustainable and a company like Patagonia that’s so focused on just building products that people need, it’s really refreshing and I want to see more companies held to that high standard.
PH: Well look at Twitter right now. They’re right in that hole.
MP: Tell us more about that.
PH: The whole obsession to scale. I mean they’re not growing as quickly as they once were and they’re in a bit of trouble perceptually right now. Aren’t they trying to pivot their way out of it? I mean we’ll see. I don’t know when people will be listening to this podcast, but as of right now, they’re in trouble. Let’s see how they get out.
MP: Yeah, no, that’s so true. So what we can see here from this whole purpose of building great products and not doing harm means that they, in the end, deliver products that have so much positive effect that it just breeds this natural group of people that want the product and need it at the same time and Patagonia has no need for growth hacking, scale hacking, they can just continue on this beautiful wave of momentum and flow that is created by this high sense of purpose and keeping themselves accountable for it.
PH: Yeah. I’m just going to say, it’s so counter-intuitive right now, because everyone’s obsessing about the customer and what is the user studies and so forth, but not so much here, Patagonia is obsessing about the quality, they’re obsessing about the product itself. If they can make the product, that’s great. Our customers will find us.
MP: Yes. And you can take companies like Apple and Amazon, who might not come with this “doing well by doing good” purpose, but the shared attribute of success is solving problems for customers and obsessing about it. And this unlocks this momentum, this flywheel, and in the case of Patagonia, their flywheel is that they now have their own venture firm called Tin Shed Ventures, they have their own food company, they are on this massive mission. But none of this mission is accomplished if you don’t have good people that act in the right way. And for the last part of the show, we’ve got a couple of great clips that really go directly like laser-focused into what they’re doing with people and culture and how they make the underlying environment for great people to do their best work within the organization. Now, we’ve talked a little bit about the book, we’ve talked a little bit about how the company came to be, the way they hire people and the empowerment that they give them is at the heart of their success. It’s autonomous, highly skilled, highly committed people. So let’s now have a listen to - let’s get inside of this story and find out how they do it, how they create this great culture, how they hire people, and how they, in the end, let them go surfing.
YC: You know, we wanted to be able to take off a month or two and go on an expedition and do that two or three times a year or more. So that’s the name of the book, you know? That’s where I got the name for the book because we’ve had a company policy that, you now, one of the lessons of surfing or powder skiing or any of those kinds of sports is that you don’t go surfing next Tuesday at two o’clock because you may show up there and it’s flat or blown out and you’re a loser! [laughter] So we have a company policy that when the surf comes up, everybody drops their work that is a serious surfer and they go surfing! [laughter and applause] You just gotta be careful you don’t have 100% of your employees surfers! And that means you’ve got to hire very responsible people and then let them get their work done whenever they feel like, you know? As long as it doesn’t impact other people and the work gets done, I don’t care when they work.
CO: How many CEOs and founders and managers have you ever come across that have that same attitude? I can’t think of any.
MP: Yeah. It just seems to fly in the face of conventional wisdom, doesn’t it? It just - where people are, I think providing a lot of value add services in the office place to try and keep them there more, if Yvon Chouinard is like guys get out of here, go have some fun! Go fulfill your dreams because I know you’ll be a happier, healthier, more productive person for me, it’s - I mean he seems almost so natural with this and obviously it comes from his own renegade characteristics, he doesn’t even seem to realize how contrarian he is! I mean, Patrick, can you think of other contrarian leaders that have achieved this success?
PH: Well, sure. You mentioned one earlier: Richard Branson. Right? Of course. Steve Jobs of course. Ron Rice of Hawaiian Tropic of course. Oprah Winfrey, I think in her own way, of course. But here, it’s all about hire people you want to hang out with, right? In all of their things that he was talking about, they do run off and have their sessions, intense ones it sounds like, about who they are, why they come to work in the morning, why they do what they do, but still have a fun culture, still be the purpose-driven, the ecology, all of these things are just sensible things that if you are hiking, surfing, you are pretty close to nature. You’re in it and you can see if you’re damaging the wall or the crevice that you’re going up and pounding spikes into, pitons into and everything. And you can see when you’re walking down, running down a path or surfing, you know, plastic bottles floating out in the water, out in the surf and so forth. And I think once you are still that close to nature, some of this stuff makes so much more sense than if you’re sitting in a cube somewhere.
MP: Yeah. I think there’s such beautiful alignment between their values and the products that they make, it becomes so easy to manage people accordingly. But I think the one thing we have to realize, there is a secret sauce in how they do all of this. And you cannot possibly just walk into any workforce and say, “Hey guys, go surfing.” This next clip is where Yvon really kind of puts a point to the characteristics that underlie this whole philosophy and how they can built great products, do very little harm, and how they can let people go surfing. So let’s have a listen to Yvon Chouinard talking about autonomy.
YC: None of us liked authority. We really disliked authority, and none of us wanted to tell other people what to do. So our management system is kind of like an ant colony. You know, an ant colony doesn’t have any bosses. The queen just lays there and lays eggs. There’s no bosses
in an ant colony, but every single ant knows what his job is and gets it done. And they communicate by touching feelers and that’s about it. And it’s kind of like a SEAL team. If one guy in the SEAL team says, “Oh I don’t know about this thing we’re going on, I’m just gonna hold back a little bit,” it doesn’t work. Every single person in that SEAL team has to agree this is what he’s gonna do and if the leader gets killed, the next guy takes over. If he gets killed, the next guy takes over, it’s leaderless, really. And that’s our management style. So I hire very independent, very self-motivated people who believe in what we’re trying to do and I leave them alone. And in fact, I had a psychologist came one time and studied our company and said, “Gee I gotta tell you.” We did psychological profiles on a lot of people to see, to make sure the right brained people were working on the right brained jobs and stuff like that. But said, “I’ve got to tell you, your people are the most independent people I’ve ever seen in a company. In fact, they’re really unemployable anywhere else!” [laughter] Good thing you gave them jobs!
MP: I love that they’re so autonomous they couldn’t work anywhere else!
CO: Yeah. I kind of like to joke that ten years into my entrepreneurial journey, I’m fundamentally unemployable. Not because I don’t have any skills, but I think it’s because I have such a high drive for autonomy, which is why a company like Patagonia is so fascinating and maybe I would consider working for a company like them. But the thing that’s missing from this clip for me, is how do you identify those people and how can you be sure that you’re working with someone that has the intelligence to work autonomously and take care of their area of responsibility. I can only imagine how arduous and personal and interpersonal the hiring process is at Patagonia.
MP: Cause the trouble with autonomy is you ask anybody, hey, do you want to be in a more, do you want to have an autonomous job and everyone’s like yeah that sounds amazing! And then it’s like, you know, be careful what you ask for there. I would want to ask you and Patrick, you are both very autonomous, productive individuals, writing books, making films, sometimes with big teams, sometimes you’re leading the charge by yourself. What is at the essence at that characteristic for you, Patrick? Where does this autonomy start? What’s the filter? How do you find it?
PH: Yeah, I would say that it has to be self-motivated. You have to be self-motivated and want to get something done and do something. Yeah, I’m completely unemployable. I can give you a list of people to contact to verify that. But just to support what we’ve been saying, Kris McDivitt Tompkins was Roger McDivitt’s younger sister and when she was in high school, she had a quote unquote rebellious streak. But when she was graduating, Kris’ counselor told her mother, “I know you’re planning on sending Kristine to college - don’t bother.” And Kristine later became General Manager and CEO of Patagonia for 13 years. And so those are the people from out of the beach culture, the surf culture, mountain culture and so forth - all independent people. And I mean it’d be fascinating to find out how you motivate someone like that. I did not find that in the book. But I’m sure they have lessons, or there are things to be learned, lessons for all of us there.
MP: It’s quite remarkable to imagine how a system can deliver so many great products over so many decades with all of these highly autonomous people that are given the choice to go surfing when they wish - I actually think the proof is there. I think that Yvon Chouinard has actually demonstrated that if he’s been in business since ’68, if he’s written the book, he’s got a
venture company, a fashion and garment company, he’s got a food company, I think we can safely assume that this does work if you hire autonomous, self-directed people on a mission who all share this greater mission of building great products and doing as little harm as possible. I think what sums up Yvon so brilliantly is this humility and simplicity by which he goes about it and the scale of the success we’ve all been talking about is something that we’re so aware of. That’s why we chose him to do this show, that’s why he’s up there with the Nikes and the Apples for us here at the Moonshots podcast. But the craziest thing is how humble he is that in this next clip, which is our last clip of the show, it’s only just dawning upon him the scale of the impact of his life’s effort of the brand of Patagonia. It’s only dawning upon him the impact that he’s had on the world. So without further adieu, let’s have a listen to our last clip of the founder of Patagonia, Yvon Chouinard.
YC: You know, we’re a relatively small company, but we have an incredible amount of social power around the world and it’s only dawned on me recently that we have this and therefore, we probably have the responsibility to use that power and not just hire other people to do the right thing and stuff. So it’s changed the way our company operates, instead of just giving money away to a bunch of NGOs, which we still do, but we’re doing a lot more stuff ourselves. We’re influencing, we’re being asked to to go Washington almost every week now to give advice on dam removal and that’s pretty amazing. And yeah I’m pretty stoked about the climbs I did on El Cap. You know, they were really important for me at that time, it built the character that I am now, probably. But I’m starting to be pretty proud of the company, too.
MP: How humble is he, man?
CO: I would hope he is! I love how he still says he was stoked about his El Cap climbs. It’s like you can take him off the rock face, but you can’t take the dirtbag out of him! It’s really great.
PH: Well there are a couple of things out of that, I think there’s an intensity and intelligence and integrity there. But it’s kind of like leave the fun in and don’t be a greaseball.
MP: Yeah, he really has that clear thing of here’s what I want to be, here’s what I don’t want to be, and by creating great products, by serving customers, by really solving the problem with a product you can rely on and hopefully for life, you can have this very natural, sustainable business, where people are empowered. Not only are your customers empowered by your products, but the people who work for you are empowered and no wonder everybody wants to get a piece of Yvon Chouinard and Patagonia. They summon him to Washington DC and beyond. I think that in listening to him, what we’re hearing is somebody who is so down-to-earth, but don’t let that fool you, deeply, deeply motivated. He’s a renegade, he’s on a mission, and even after all the success of Patagonia, he has said no, it’s not just good enough to leave the world as you found it, he’s like my legacy and everyone’s legacy should be to leave it in a better place than we found it. So he’s already lifting his game again, which Chad, I mean I think this is pretty inspiring for this guy who’s out there surfing, he’s +70 years of age, and he’s still climbing metaphorically speaking, big mountains.
CO: Yeah. The 10x that I’ve uncovered in these clips is really around creating something that people need, as opposed to focusing on what they think people want. I know Patrick, you were kind of talking about this, how companies are now obsessed with user studies and focus groups and asking people what they want, this idea of like buying a product and never having to buy another one ever again because it’ll be recycled and replaced and repaired for life is, I don’t see how you can get any better than that. I mean unless they figure out this nano block technology that like replicates the things after you buy them. That’s the only place I can see them going after this. And I think they do stand alone in the clothing and fashion and retail category because of that product obsession and removing all barriers in the customer’s mind of why they need it.
PH: Yeah. I think that, you know, in the end, he’s still the village blacksmith, you know, building better things. Simple, well-made, last a long time.
MP: Yeah. So simple, so true, but it takes so much hard work to do. But I can tell you guys that this podcast has not been hard to produce with you, Chad, and our special guest Patrick Hanlon. I walk out of this and I’m thinking, if I ever create another company, if I look at the companies that i’m involved with now, the bar has just been raised significantly after being inspired by Yvon Chouinard. For you, Patrick, what changes after studying Yvon Chouinard for you?
PH: Don’t be a greaseball!
MP: So true, so true. Don’t be a greaseball. And Chad, what are you walking away with?
CO: Again, going back to kind of their obsession with the product, like don’t assume that something that you didn’t think could be done before, can’t be done. So polyester clothing has never been recycled, so therefore we can’t do it. Well, actually, maybe not. Let’s look into it. Let’s scour the globe and find the best artisans. Or you know what, maybe we can’t make this corduroy anymore. Well actually, I’ve heard of this factory in Scotland that maybe they can do it. I think because Yvon came from this lifestyle where he was living out of a van with the clothes on his back and he was just climbing mountains, he had to be an extremely resourceful person. He bought his own forge and anvil and taught himself how to make his pitons. Actually this is interesting, he kind of in a way goes back to first principles and thinking, in a way that Elon Musk does, but from kind of a ground up point of view, instead of kind of this pointed out into the sky like Elon. He just - he doesn’t take anything for granted and doesn’t really hold any assumptions. So I guess that’s all to say I’m gonna question some things a little bit more and not take so many things for granted and think that they have to stay the same.
PH: Yeah, I want to add. Actually, I want to add something. You know, I’ve always felt like a juvenile delinquent, and so, “This sucks I’m gonna do my own thing,” has always been sort of in my brain. Anyway, but I really like this notion of the falconry term, the yarak, that you mentioned earlier. Being in a constant state of super alertness and ready to hunt. Yeah.
MP: Wow. Well, so, so fortunate to share with both yourselves and the listeners, guys. I want to thank Patrick Hanlon, author of Primal Branding, you have given us some primal thinking. You have inspired us, helped us decode what I think, Chad, has been one of the greatest entrepreneurs, one of the most exciting entrepreneurs we’ve done on this show to date, correct?
CO: Yeah, but before we let you go, Patrick, I just wanted you to have a chance to give a short little plug for yourself. Where we can find you online, etc.
PH: Oh sure. You can find me on amazon.com, Primal Branding is the first book. I should probably mention, put in a plug, it’s required reading at YouTube and the second book, The Social Code, is now an audible book and it’s only 40 minutes long. So a little bit shorter than this podcast. And I’m working on a third, so watch for that.
MP: There is another book on the way.
PH: That’ll be done and out in 2-3 months.
MP: Well thank you, Patrick, thank you Chad.
[last 2 minutes is where listeners can go online to listen, and chit chat about Brooklyn and Minnesota - I can transcribe this if you need me to!]