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The Accidental Capitalist
  • April 17, 2013 : 04:04
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Chouinard began climbing on small rock piles around southern California and then moved on to hobo summers in Wyoming's Tetons, driving there in a 1940 Ford he'd rebuilt in auto shop. One summer he and a friend ate cat food and slept in an old incinerator they'd cleaned out. "I can sleep anywhere," Chouinard says. At 17 he fell in with a hard-climbing bunch of Yosemite beatniks who were using soft-metal pitons, the spikes from which safety ropes are hung, to make the first climbs of the great valley walls. Chouinard, an obsessive toolmaker, got busy on a better mousetrap. He bought a junkyard forge and anvil, installed them in his car and began making harder, reusable pitons out of chrome molybdenum, a material that made it possible for climbers to remove the pitons from the cracks after climbing past them. European pitons cost 20 cents each and had to be left in the rock. Chouinard's harder spikes cost $1.50 but were reusable, and the enterprise began to pay for his climber's lifestyle.

These were the glory days of Yosemite climbing. The great granite faces of El Capitan, Half Dome and others still stood unclimbed. "We didn't know if these things could be summited or not," says Chouinard, looking back on the most perilous of the early big-wall efforts. "We had to face the fear of the unknown. We just went for it." He and the others reveled in the fact that climbing rocks that could kill you accomplished nothing. "It was the 1960s," he says. "We climbed out of rebellion." They called themselves "conquistadors of the useless."

One of his most famous first ascents pushed him to his absolute limit and left him hanging in a hammock 2,000 feet up on the sheer, blank face of El Cap, his fingers so swollen he couldn't tie a proper knot, out of food, out of water, hallucinating. The route was called the Salathé Wall, after a legendary Yosemite climber and blacksmith.

Chouinard and climbing partner Tom Frost, carrying the minimum supplies they thought they'd need, spent nine days hammering, carving a way up—"becoming one with the rock in a way you don't get when you're up there for just a few hours or a few days," he says. "You're hungry and freezing and it becomes like you're in the mountain. I love the big walls for that."

About the hallucinations he says, "There are different ways to get there, that deep Zen moment, but they all take a lot of time and effort. I've experienced it in the shed, at the forge, the repetitive pounding out of pitons one after another, then throwing them in a barrel. After a while the barrel starts to glow."

The tin shed he's talking about still stands among Patagonia's other buildings in Ventura. He and Frost rented it from a meatpacking company and incorporated as the Great Pacific Iron Works. They expanded their catalog into soft goods, including rugby shirts, jackets and shorts, as well as the climbing hardware, and in 1972 incorporated as Patagonia. The first employees were a dozen climbing friends. Becoming a businessman has been a long struggle for Chouinard, who to this day calls businessmen "greaseballs" or "pasty-faced corpses in suits." Working with money, he likes to say, is "getting doo-doo on your hands," and Patagonia's early success embarrassed him in a way.

As Chouinard writes in his 2005 autobiography, Let My People Go Surfing, "The typical young Republican's dream of making more money than his parents, starting a company, growing it as fast as possible, taking it public and retiring to the golf courses of a leisure world has never appealed to me. My values are the result of living a life close to nature and being passionately involved in what some people would call risky sports. My wife, Malinda, and I and the other contrarian employees of Patagonia have taken lessons learned from these sports and our alternative lifestyle and applied them to running a company."

He takes great pride in being contrarian. "If I'd done all the things the business people have told me to do, I'd have gone out of business a long time ago," he says. "The only fun is breaking the rules and making it work. And since I own the company and have no stockholders, I can do what I want."

In fact, there was a moment about 20 years after he started the company when its runaway success came perilously close to sinking the business and forced Chouinard to put both hands deep into the doo-doo. Company earnings were $80 million, and it took galloping expansion to keep up with demand for the clothing.

"Those were the toughest times we ever went through," says Stanley, who as head of marketing was in charge of putting together the highly praised catalogs. "It was 1991. We had very strong sales and were committed to growing. We launched new product lines. We had almost unlimited credit with the bank, and we were using it. Then the country went into recession, and our bank wasn't prepared and we weren't prepared. There was a cutoff of credit. We had too much inventory and not enough inventory control, and we had to let 20 percent of our people go."

Chouinard still suffers from the memory of firing 120 people, many of them old friends. "It was absolutely a feeling of failure," he says. "It was certainly my fault. I took my eye off the ball, and we just got lost going for growth. Since then I've done everything differently."

In 2001 the good that Chouinard built into his business became a program called 1% for the Planet, which mandates that one percent of company sales go to small environmental activist groups. Last year that amounted to $750,000 for Patagonia, not including the contributions from individual stores, which now number 60 worldwide. Today the program has expanded to include 1,300 other companies, which have contributed more than $45 million since its founding.

In the early 1990s Chouinard decided to examine the pollution and energy use involved in producing Patagonia's clothing line. The company looked closely at the four major fabrics and all the dyes being used. It began to recycle plastic soda bottles to make fleece jackets. And in 1994 it made the risky decision that the only kind of cotton it would use in its clothes would be organic.

"It wasn't easy to make the transition," says Chouinard. "Cotton had been grown for most of its 4,000-year history without the use of all the poisonous chemicals currently in the process. But we found there weren't many organic-cotton growers in the world. It's very labor intensive, and we knew it was going to be expensive."

Patagonia's cotton T-shirts cost an average of $10 more than conventional cotton shirts. Patagonia customers, however, have been willing to pay the price.

Ventura is a beach town about 70 miles northwest of Los Angeles, and Chouinard chose it for his tin-shed forge because the local waves were good. He's been surfing here since 1958. He and Malinda own a house on the water, but these days he does most of his surfing about an hour and a half north at a place he calls the ranch—100 gated acres of pristine coastal hills dotted with huge old oak and eucalyptus trees where he built his dream getaway. It's a small three-bedroom house with a view of a perfect reef break 100 feet below that is accessible only from the private land or by boat. The 1,500-square-foot house was built to extreme green standards: Nearly all the wood and stone is recycled, and 600 toxic materials Chouinard says are ordinarily used in home construction were painstakingly excluded.

It's a handsome, comfortable place so energy efficient he's never had to heat or cool it. When I ask him how much it cost, he says, "The materials were nothing—broken sidewalk and old railroad-trestle beams. But the labor," he rolls his eyes, "I don't even want to know."

Chouinard had returned to Ventura for two reasons: because Patagonia's board of directors (which includes Yvon and Malinda and their two children, Fletcher, now 38, and Claire, 33) scheduled a meeting, and because Claire was about to deliver his first grandchild.

I've been to the headquarters property they call the campus half a dozen times over the years. I've watched it grow from two buildings to five, but the feel of the place remains pretty much what it was 30 years ago. The fuel-efficient cars in the parking lot have surfboards and kayaks on roof racks for when the surf is up. The company flex-time policy allows employees to pursue their sports. Young staffers, dressed mostly in Patagonia, move without hurry past a sandbox and a large, grassy play area for the 50 kids, 16 months to five years old, who are part of the company's child-care program. All the 300 employees here, as well as 1,300 others around the world, full and part time, have health insurance. Women make up more than half the staff. Chouinard, who has two older sisters, says, "I think women are smarter than men, more intuitive, more loyal."

"The most amazing thing about this place," Vincent Stanley tells me the morning I arrive in Ventura, "is that it hasn't changed in 40 years. When I got here in 1968 it was this tiny culture of 20 climbers and surfers, and it had this feeling for equality and excellence that has survived into a company of 1,500 people with a very sophisticated management process. I think it's because Yvon and Malinda's spirit, and what they consider important, hasn't changed. And the day care," he points to three women shepherding 15 preschoolers across a lawn, "which Malinda is instrumental in, is a big part of the reason for the feeling of community. It's hard to be hierarchical around kids. They soften the culture, keep us honest."

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read more: News, business, interview, issue may 2013

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