Patagonia | Dirtbag Billionaire: How Yvon Chouinard Built Patagonia, Made a Fortune, & Gave It All Away w/ 20-Year Business Reporter & Best-Selling Author, David Gelles

Audio Transcription

Transcribed with Cockatoo

(Speaker 10)
Behind the world -renowned company famous for outdoor clothing and gear is 83 -year -old Yvonne Chouinard, a climber, surfer, and lifelong environmentalist who just gave away his estimated $3 billion business born from blacksmithing in a shed.

(Speaker 3)
Some shows don’t need a celebrity narrator to introduce the show, but this show does. In a world filled with endless opportunities, Why would two men who have built 13 multi -million dollar businesses altruistically invest five hours per day to teach you the best practice business systems and moves that you can use? Because they believe in you, and they have a lot of time on their hands. They started from the bottom, now they’re here. It’s the Thrive Time Show, starring the former US Small Business Administration’s Entrepreneur of the Year, Clay Clark. and the entrepreneur trapped inside an optometrist’s body.

(Speaker 3)
Dr. Robert Zunder. Two men, eight kids, co -created by two different women. Thirteen multi -million dollar businesses.

(Speaker 5)
We started from the bottom, now we’re here. We started from the bottom and we’ll show you how to get here. Started from the bottom, now we’re here. We started from the bottom, now we’re here.

(Speaker 3)
We started from the bottom, now we’re here.

(Speaker 2)
Now we’re at the top, teaching you the systems To get what we got, Colton Dixon’s on the hoops I break down the blue system and the good rules As the Fox Squad, I’m out, so if you see my wife and kids, please It’s the C -N -T, up on your radio, and now Folks, on today’s show, we have an entrepreneur, an author, a man who is a researcher, and he has decided to put his energy and time into writing a book about Dirtbag Millionaire. The book is titled Dirtbag Millionaire, basically the story of how Patagonia was built. We all know the brand, but where did it come from? Who founded it? Why is that a good thing?

(Speaker 2)
What life lessons can we learn? What business lessons can we apply? With that being said, David, welcome onto the Thrive Time Show. How are you, sir?

(Speaker 1)
Thank you. I’m great. And it’s dirtbag billionaire with a B. That’s one of the extraordinary things. This guy didn’t make just millions. He made billions in the most unconventional way you could imagine.

(Speaker 2)
I said millionaire and it’s billionaire? Did I say, I said millionaire?

(Speaker 9)
Twice.

(Speaker 2)
I felt like I said billionaire, but I didn’t. I said, okay, folks, dirtbag billionaire folks.

(Speaker 8)
Think about it. Billions.

(Speaker 2)
Okay. So David, let’s, before we get into the hot stuff here, first off, let’s clarify the billion million thing. We got that. And then a lot of people want to know, how do we pronounce your last name? Like what’s the best way? People are looking at the name going, you know, I think I’ve seen this guy’s work somewhere.

(Speaker 2)
I’ve probably read his article somewhere. What’s the proper pronunciation of your last name there, sir?

(Speaker 1)
Yeah, it’s David Garris, hard G. And the way you pronounce the founder of Patagonia’s name is Yvon Chouinard. Yvon Chouinard. He was a French Canadian guy, came out of nowhere from the woods, didn’t speak English until he was 10 years old. And yet here he is on the Forbes list of all places.

(Speaker 2)
So as we look at the book cover, I think everybody who’s an entrepreneur says, I’d love to be a billionaire or build a billion dollar business. But you in your book, my understanding is you get really into the where it started, how we grew it. So let’s start off at the beginning. What got you intrigued about the story of Patagonia? Why did you decide to devote copious amounts of time into researching the story and ultimately creating a great book?

(Speaker 1)
Well, I’ve been a business reporter for more than 20 years now. and I’ve covered charlatans. I’ve covered successful altruistic billionaires. I’ve covered big companies. I’ve covered startups, but I never covered a company like Patagonia. This is a corporation that is simply just a paradox.

(Speaker 1)
It’s a clothing company that has ambitions to save the planet. It’s run by a billionaire who has absolutely no taste for money, and it’s run not only by him, but by this cadre of mission driven hippies, who spend their time in Southern California, surfing as much as they can, and yet somehow find the time to revolutionize the way supply chains are run and donate all their profits towards environmental activism and large scale conservation. And so if that’s not enough going on, you know, you dig into these people’s lives. And they’re also just great adventure stories, love stories, people die in this book. And so it is one of the iconic tales, I argue, of modern corporate America.

(Speaker 2)
How did the founders of Patagonia sell their first products? Like how did that happen at the very beginning? Was it in a living room somewhere? Was it in a garage?

(Speaker 1)
Where did it start? It was out of the trunk of a car. Yvon Chouinard got his start making, not t -shirts and jackets, but by making climbing equipment, things like carabiners and these little metal spikes called pitons. And he made them on an anvil that he bought from a junkyard. He would hammer these items out on his own on this anvil, shove it into his car and drive from climbing site to climbing site in Yosemite and the Grand Tetons in Wyoming, selling these wares out of the back of his car like a used salesman.

(Speaker 4)
So he’s in his car.

(Speaker 2)
What kind of car was he driving?

(Speaker 7)
What kind of car?

(Speaker 1)
It was a refurbished, uh, 1950, I believe Ford, um, that he got up and running. He, he put it together himself. This thing was literally strapped together with duct tape and bubble gum. When the tires blew out, he actually stuffed the tires with a, because they had so many holes in them.

(Speaker 2)
How did, I guess, when did this idea of selling the product in the car turn into a thing? When did it gain momentum? When did it gain some traction beyond just a dude selling stuff out of his car?

(Speaker 1)
In the 1970s, they started getting some real traction, not selling just climbing equipment, but starting to make and sell their first meaningful pieces of clothing. They were innovating with waterproof jackets, they were trying to figure out better insulation, ways to keep themselves warm when they were out there doing these very ambitious climbs, these adventures into the backcountry. But it was really in the 1980s that the business took off and they started going from a couple million dollars a year in sales to tens, and then hundreds of millions of dollars a year in sales.

(Speaker 2)
And that’s sort of when the Patagonia company, as we know it today, came to be. And this company, there’s so many other companies competing with Patagonia. They’re not the only competitor out there. How did they, over time, over years and years and years, begin to separate themselves in the marketplace?

(Speaker 1)
What was their way they differentiated theirself in a very competitive market space? I would say there are three ways they differentiated themselves over the years. The first was just with really quality and innovative products. They were, especially back in the 80s, real leaders in finding new blends of synthetic and organic materials, new ways to wick away moisture. You know, when you think about the modern layering system that you would use if you go skiing with a base layer, a mid layer and a shell, That’s really something that Patagonia, the company, innovated in the 1980s.

(Speaker 1)
So that was the first. They were just good at making the products they made. The second, I would say, is marketing. They never did a conventional job of marketing. They never bought billboards in big cities or took out lots of magazine ads. But they found really creative ways to both use their own customers as part of their marketing campaigns and actually turn to them for photos as early as the 1980s.

(Speaker 1)
So I sort of think about them as the originators of user generated content, which is something we hear a lot about today. And the third piece, I would say, is their commitment to environmental activism. This is a company that from the very early days was spending its profits on grassroots environmental activism and large scale conservation. And they leaned into that messaging. They made it known to their customers that if you buy a Patagonia jacket, we’re going to spend a meaningful amount of these profits trying to protect the earth. And that engendered a huge amount of brand loyalty with a lot of people.

(Speaker 2)
Now, we interviewed a couple weeks back the founder of Hobby Lobby, and I would say if the founder of Hobby Lobby was on debate stage with the founder of Patagonia, they probably would have very different political views. But both of them have unapologetically shared their faith or their values, and they’ve tried to take the profits and put it into causes they believe in. I think a lot of entrepreneurs are hesitant to do that because you might lose half the marketplace or whatever the percentage is. What has been the approach that Patagonia’s had to apologetically or unapologetically sharing their worldview and putting their profits into their causes?

(Speaker 1)
Well, I think you’re so right to call out the fact that even though Yvonne Chouinard and the Patagonia crew may be left leaning on a lot of political issues, they are really aligned with many people on the right as well, who are working to stand up for what they believe in and put their money, their energy, their time behind it, and sort of unapologetically own that as a part of who they are. And what’s so remarkable is that a lot of the issues that the Patagonia crowd cares about, protecting the natural world, preserving public lands, keeping our air and water clean. These are issues that find a lot of appeal on both sides of the aisle. And so one of the remarkable things when the Axios -Harris poll comes out every year of the most respected brands, Patagonia is often right at the top, number one, two, or three. And what’s unusual is that they are respected by Democrats and Republicans alike.

(Speaker 1)
Because some of these issues, again, clean air, clean water, protecting public lands, making sure that nature isn’t totally destroyed, those are bipartisan issues. And you even hear that from the current Trump administration. Now, as it relates to you, you started researching this, the founder of Patagonia, you began researching the brand. Is there anything that you found as you were researching that you did not expect to find? Anything you thought to yourself, wow, I had no idea I would find that. I had no idea that I would find out that Patagonia for many years was a major supplier to the U .

(Speaker 1)
S. military. I mean, you know, again, the ethos, the impression we have of Patagonia is that these are a bunch of crunchy hippies sort of wiling away their day smoking weed and surfing in Southern California. But Yvon Chouinard himself is a veteran. He served in Korea. And when the United States government came to him in the early 1980s and said, hey, you’re doing some innovative stuff with American -made technology.

(Speaker 1)
We’d like to know more. He leaned in. And for decades, Patagonia, I discovered, and I was the first one to report this, Patagonia was one of the primary suppliers of kits, of battle kits for American soldiers. operators. So when you talk about SEAL Team 6 and Delta Force for many, many years, and I’ve talked to the operators who wore these kits, they were wearing Patagonia as they went into battle. And that just blew my mind.

(Speaker 2)
And that whole narrative is told in the book, Dirtbag Billionaire. And we talked about it a little bit after we clarified the millionaire billionaire thing. And I want to make sure people know it’s a billionaire, OK, billionaire with a billion. OK, once we clarified that, we talked about how we gain traction. But when did it when did Patagonia gain massive traction or widespread adoption or or maybe mainstream acceptance?

(Speaker 1)
When did that happen? Yeah, I mean, I think it was the 1980s when you saw revenues, sales go from the tens of millions to the low hundreds of millions. 1990s, early 2000s were, you know, making our way up the ranks of the hundreds of millions of dollars in annual sales. But it’s really just been in the last decade or so, you know, after that famous don’t buy this jacket ad on Black Friday of 2015, that Patagonia sales have approached and now eclipsed a billion dollars a year. And again, that was the fact that it was a bigger market, the brand is better known. But one of the things that happened along the way is that Yvon Chouinard himself, the founder, became a billionaire.

(Speaker 1)
On the Forbes list of billionaires, he found himself there, and that drove him crazy. And that set in motion this crazy process that I document in the book, that led to him and his family actually renouncing their shares. And so when Yvon Gennard heard the title of this book, Dirtbag Billionaire, he was really pissed off, not because of the word dirtbag. He calls himself a dirtbag. That’s a compliment in his book. But he was pissed off because of the word billionaire.

(Speaker 1)
He never wanted to be known as a billionaire.

(Speaker 2)
In fact, he is no longer one today because of the charity that he’s indentured in. Now, I’m going to switch gears and focus on you for a second. You’re a bestselling author, and at some point you weren’t a bestselling author.

(Speaker 1)
When did you become a bestselling author? For people out there that are not familiar with your journey or your background, when did you gain traction as an author?

(Speaker 2)
Yeah, well, three years ago, my previous book, The Man Who Broke Capitalism, that was a New York Times bestseller, so I guess that was when I became a bestselling author. Did your mom call you and say yes, or do you call your mom and say look I did it did anybody? Acknowledge it from your because I either had to be people that believed in you as a young man But it’s very rare to become a best -selling author.

(Speaker 1)
Did you remember who you first called or who or who maybe first called you? I sure do. I remember where I was. I remember I was sitting in my living room. I was actually about to fly to London. I think I was headed to the airport in just an hour or so after that.

(Speaker 1)
I was with my wife when I got the call. This isn’t quite like winning the Nobel Prize, but I do remember where I was when I got the call. And it was very exciting. And I think that’s right.

(Speaker 2)
I think I probably hung up from that call and then immediately called my parents. So you’re a bestselling author. You’re working on this book. What inspires you? to be a non -fiction author, researcher guy, because for every page of that book that we read, it might take us a minute to read the page. There’s hours that goes into researching, crafting, editing.

(Speaker 2)
There’s so much that goes into wordsmithing and putting together a book that is cited like yours. What’s your passion for this?

(Speaker 1)
What drives you? I think there’s a couple of different issues. I think the first is that I have an innate desire to engage in this work. It’s not art. I’m not making paintings on an oil canvas. And yet, for me, this is sort of my version of it.

(Speaker 1)
I love it. I love the process of learning and researching and talking to people and discovering. And I actually take great pleasure in the actual craft of trying to string together a narrative. It’s not always perfect. Some people might not like it, but I enjoy it. And so there’s a certain amount of personal satisfaction that I derive just from the process.

(Speaker 1)
And I’m fortunate that other people are able to support me in this work. And then there’s the actual engagement with the subject, which is to say, I said it at the top, I’ve been a business reporter for 20 years. I care about these issues. And I do, after all this time, have a certain perspective. I sort of have a view on what kinds of business practices I think make a better world. And what kinds of business practices I don’t think make a better world.

(Speaker 1)
And in my nonfiction writing, in my books, I’m able to articulate that worldview and to try to make an argument to my readers about why I think someone like Yvonne Chouinard, who’s not perfect and Patagonia is not perfect, had a pretty amazing and I think commendable impact. on the world, whereas the subject of my previous book, The Man Who Broke Capitalism, which was all about Jack Welch and GE, I argue, I would say quite persuasively, have had a really deleterious impact on the modern economy.

(Speaker 2)
And so those are the big, big sort of sweeps of history issues that I like engaging in in my work. Final two questions I have for you and I appreciate you carving out time and your busy schedule for us is when you’re when you’re editing your book How many times do you have to edit your book, you know for the authors out there? How many times are you editing that thing before you go?

(Speaker 1)
Okay, it’s ready to be released. How many times more than I can count, you know more than a dozen I mean, yeah, I don’t know so many I You know, I’d make more money driving an uber than I do being a non -fiction book author. The amount of hours, and you alluded to it, is just tremendous. It is an extra full -time job, on top of my job here at the New York Times, on top of my job being a dad of two great kids, that I do for three and a half years to get these things into the world. But I do it because I love it.

(Speaker 2)
I can’t even count how many times I had it. Now, David, somebody could go right now onto Amazon, and they could go, man, I could buy a regrettable burrito. I could probably auto ship some sort of frozen burrito to my house right now from Amazon. I could buy some Sharpies. I could get really anything on Amazon. I could buy a lot of things.

(Speaker 2)
There’s a lot of books I could buy. I could get a detergent. Why should somebody invest the money in picking up your book? I’m going to pull up the book on the screen here as you kind of formulate your thoughts on this. But somebody could say, you know what? Clay, there’s so many things I could buy.

(Speaker 2)
There’s so much crap that I could buy that I don’t need, that I do need. There’s bestsellers. There’s a tab here, holiday gifts. There’s so much distraction.

(Speaker 1)
Why should everybody invest the money to pick up a copy of your book, Dirtbag Billionaire? Dirtbag Billionaire. is a book that has something for everyone. And I really mean that. You know, yes, on the face of it, it’s a business book. And so if you’re an entrepreneur or if you run a company or if you’re interested in capitalism, there’s plenty in there for you.

(Speaker 1)
But it’s also a very human story. It’s about a story, it’s a story about an individual man who was an adventurer. It’s a story about him and his relationship with his wife of decades, who had a formative effect on this company and this culture, and shaping the lives of women and working mothers. It’s a story about his friendship with another great American entrepreneur named Doug Tompkins, and the degree to which they pushed one another, at the end of the day, to the edge of death. There are adventure stories in here. There’s stories of patriotism in the military.

(Speaker 1)
And so this is a book that is, yes, about one man and one company, but it’s also about our country and the world we live in and the natural world. And the last thing I’d say in closing is it’s a deeply personal book to me. You know, in writing this, I got the opportunity to travel all over the world, fishing with Yvonne Chouinard in Paris. Argentina and Wyoming, surfing with big wave surfers in Chile, working with farmers in the field in Minnesota.

(Speaker 2)
And so you get in Dirtbag Billionaire, this very diverse view of what American capitalism looks like well beyond the stock ticker that you see on CNBC every day. Well, I appreciate you for choosing to not become a male model and choosing to be a best -selling author because there’s just so much richness that the world’s gaining from your research. Again, thank you for your time. Thank you for carving out time for us. I really do appreciate you, sir.

(Speaker 1)
And we’ll talk to you soon.

(Speaker 6)
Thanks so much for having me.

(Speaker 4)
Bye -bye. Clay, you’re an entrepreneur. I’m an entrepreneur. And as they say in Stoic, the obstacle is the way.

(Speaker 2)
And so if you let these pinheads get in your way, you’re in trouble. Robert, one of the things that you said on multiple interviews, multiple times, and every time you said it, I thought to myself, have I not been paying attention? Because it felt like new information to me. The first time I heard it, which is probably the 50th time I’d heard it, you said, octa, non -verba. And maybe the first time you said it, I was driving while I’m, you know, listening to the podcast while driving. And maybe I was half paying attention, but I, octa, non -verba.

(Speaker 2)
And then it was like a, almost like an angelic moment for me. And I, Okta non verba.

(Speaker 1)
And once I finally understood what it meant and what you were saying and how it could be used, I, I think it was a life changing for me and how I approach business.

(Speaker 3)
Could you explain Okta non verba, what it means and how our listeners can apply it? Clay, you gave me goosebumps, man. I’m glad it hit you as hard as it did.

(Speaker 4)
Okta non verba is the model of the U . S. Merchant Marine Academy at Kingspoint, New York. I I had appointments with Naval Academy and Kingspoint Merchant Marine Academy, and Merchant Marine Academy’s motto was Octononverba.

(Speaker 3)
In other words, don’t listen to what a person says, watch what they do. Clay, my honor, my honor to be on your show, and thank you for all you do.

(Speaker 4)
I hear The ripple effects from you are good ripple effects, you know what I mean? People rave about what they learn from you, so congratulations.

Transcribed with Cockatoo