Cotopaxi says its focused mission is so appealing that 3,000 people have applied to a job posting
Entering a crowded space is never easy. But Davis Smith, founder and CEO of outdoor clothing and accessories retailer Cotopaxi, believes he’s found a differentiated approach to a competitive market.
“One of the things I talked about [early on] was that we’re not going to win by creating another brand that competes for the top of the mountain — the hardcore people,” Smith told the audience at the wealth Impact Initiative, a conference for executives responsible for ESG issues, held this week in Atlanta. “We win by welcoming more people into the industry.”
From the start, Smith says his mission has been not just to create an inclusive outdoor brand, but to create a company that does good while making money. The Utah-based retailer known for its brightly colored vests is a certified B Corp (a company committed to reporting on its impact on all stakeholders, not just shareholders). To this end, Cotopaxi encourages its employees to spend 10% of their working hours outdoors or doing community service. The company also allocates 1% of its annual sales to provide grants to nonprofit organizations worldwide, with a focus on education, health, and community building, among others.
Smith believes this ethos has led to positive growth for Cotopaxi, which has enabled it to spend less than usual – for a direct-to-consumer brand – on customer acquisition. The CEO also says Cotopaxi’s reputation and mission-driven DNA has brought advantages in recruiting. (Earlier this year, the company posted a job opening for a junior graphic designer and received 3,000 applications.) But initially, when the company was founded in 2014, it was a struggle. According to Smith, “In the first five years, we gave away more money than we made.”
That wasn’t a particularly attractive proposition for investors, at least not at first.
“I ended up introducing about 100 different angel investors, impact investors, and VCs and keeping a spreadsheet of each conversation,” says Smith. “[I got rejected] 70 times, 80 times, it was a lot. And to be honest, it was a little discouraging. But I was so firmly convinced that this brand had to exist.”
Eventually, Kirsten Green of Forerunner Ventures joined as Cotopaxi’s first investor. Others followed—interestingly, all of Smith’s early investors were women. More recently, in September 2021, Cotopaxi raised an additional $45 million in funding, bringing the funds raised to date to just over $77 million.
“I think you get better returns when you have purpose-driven businesses,” Smith says. “But I have to say, it wasn’t always easy.”
Cotopaxi has stood out from the crowd in other ways – or at least some of the crowd. When asked if his company wants to be the next “financial office uniform,” Smith said he wouldn’t fight it and welcomed the opportunity for more partnerships.
“Patagonia has basically told everyone we will no longer put a bank’s logo on our jacket or vest, and I understand and respect why they are taking that position,” Smith said, referring to Patagonia’s announcement last year that this is the case would no longer add company logos to its products. (His fleece vests in particular were popular with venture capitalists.)
“Our approach is a bit different. I’m a perpetual optimist and I just think, ‘Let’s welcome people to join us for good.’ So instead of saying, ‘No, we won’t do anything for you,’ we say, ‘Please do it with us and let’s make a difference together.’”
Our new weekly Impact Report newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today’s leaders – and how best to address these challenges. Subscribe here.
