The following article is the text that I use for the Great Business Stories podcast on this topic. To listen to the podcast, click on this link or alternatively listen to Great Business Stories on Spotify or Apple Podcasts.
What if I told you that one of the most successful companies in outdoor apparel was founded by a blacksmith who once lived off porcupine meat and sold climbing gear out of his car? And that this same man later built a billion-dollar brand by asking customers not to buy his products, sewing political slogans into clothing labels, and then giving the entire company away—not to his family, but to the planet? This same man, even when he was worth over a billion dollars drove a beat-up Subaru, didn’t own a savings account, and once considered borrowing from the Mafia to save his company?
Welcome to the story of Yvon Chouinard and Patagonia — a company born in a tin shed, raised on anti-consumerism, and transformed into one of the boldest business experiments of the 21st century. Buckle up.
The Forge, the Frost, and the Rise of Patagonia (1938–1989)
Yvon Chouinard was born in 1938 in Lewiston, Maine, to French-Canadian parents,and raised in Southern California, as a teenager he fell in love with falconry an interest that unexpectedly led him to rock climbing when he learned to rappel down cliffs to reach hawks’ nests and by 15 he was spending most weekends climbing
Realizing that the expensive European climbing pitons (spikes driven into rock) were ill-suited to California’s granite, by age 19, he had taught himself blacksmithing, operating from a chicken coop behind his parents’ house. Using a secondhand forge and anvil, he began hammering high quality out pitons and he had a ready market for them as climbing started to become more popular.
“I supported myself by selling homemade gear out of the back of my car,” Chouinard recalled, “supplementing my meager income by diving into trash cans and redeeming bottles for cash”. These were his dirtbag years- and by the way this is a phrase that Chouinard himself used to describe himslef—sleeping in surplus gear, eating porcupines that he killed with his ice axe, surfing and climbing. He became a well known climber- together with Royal Robbins, Tom Frost, and Chuck Pratt, he completed the first ascent of the North American Wall on El Capitan in Yosemite, after nine nights on the face.
From Tin Sheds to Manifestos
By the mid-1960s, Chouinard had partnered with his fellow climber Tom Frost who also happened to be an aeronautical engineer to form Chouinard Equipment, Ltd. The company operated out of a tin shed behind a slaughterhouse, producing gear so well designed that one ice axe ended up in the Museum of Modern Art. They became the largest supplier of climbing hardware in the U.S.
Then came a reckoning.
Their most popular product—pitons—was destroying the very rock climbers loved. In 1972, Chouinard and Frost made a decision as radical as it was commercially suicidal: they stopped selling pitons, which accounted for 70% of their sales. Instead, they launched an alternative: aluminum chocks that left no trace (inserted into cracks in the rock, and when a load is applied, they wedge themselves into place, providing a point of anchor). Climbers embraced the new ethic, and Chouinard Equipment’s reputation soared.
This principle-over-profit pivot would become a recurring theme in Chouinard’s life.
Rugby Shirts, Ruin, and Rebirth
In the early 1970s, what began as a side hustle—rugby shirts (he had come across them while climbing in Scotland and found that their thick collars were ideal as they stopped the slings and other climbing equipment from cutting into his neck) and corduroy shorts that he had made for himself—soon overtook hardware sales. Chouinard named the new apparel line “Patagonia,” inspired by a 1968 trip to South America. The first fleece sweater, made from material intended for toilet seat covers, became a hit.
Then disaster struck. In 1974, a massive Hong Kong order of rugby shirts arrived defective. The quality was abysmal. The cost nearly bankrupted the company. The fallout prompted Tom Frost and his wife Dorene to exit the business, selling their shares to Yvon and Malinda Chouinard in 1975.
The company emerged leaner, more focused. Quality control was tightened, inventory was reined in.
Surf When the Waves Are Good
In 1980, he appointed Kristine McDivitt as general manager. She was 17 years his junior and had grown up around his circle of surfer-climbers. Alongside Malinda, who managed design and operations, McDivitt helped give Patagonia structure. Yvon, true to form, disappeared for long stretches to climb, surf, or fish.
Chouinard’s leadership model became a kind of anti-model. At Patagonia’s Ventura headquarters, wetsuits hung by desks. Kids and dogs roamed freely. Employees wore climbing shorts to meetings—if they were in the office at all. “Let my people go surfing” wasn’t a slogan. It was policy. “We all needed flextime to surf the waves when they were good… or stay home and take care of a sick child,” he later wrote.
By 1984, Patagonia had an on-site cafeteria serving healthy, mostly vegetarian food, and a child-care center—a rarity in corporate America at the time. This blend of autonomy, outdoor culture, and unorthodox management wasn’t a gimmick. It was a deliberate attempt to prove that a company could thrive without becoming soulless.
Growth, Guilt, and a Reckoning
By the mid-1980s, Patagonia’s success was mounting, but so was Chouinard’s environmental commitment. In 1986, the company pledged to give 10% of profits—or 1% of revenue, whichever was greater—to grassroots environmental groups. This “Earth Tax” was virtually unheard of in mid-sized private businesses. But for Chouinard, the logic was clear. If business was partly to blame for the planet’s degradation, it had a duty to be part of the solution. This wasn’t positioning. It was ethos. Patagonia’s profits, he believed, should never be divorced from its responsibilities.
Internally, employees were encouraged to spend company time working for nonprofits. They were paid for it.
At the same time, the brand was innovating technically. Their fleece jackets—soft, durable, and made from recycled plastic bottles—became instant hits. Their clothes were engineered for performance but adopted broadly because they looked good and felt better.
Between 1985 and 1990, Patagonia’s revenues leapt from around $20 million to $100 million. The market was hungry, and Patagonia—still privately owned and distinctly styled—was leading the outdoor category. But inside the company, this meteoric rise triggered something close to dread. Chouinard saw what was coming: pressure from mainstream retailers, demands for cheaper goods, faster turnarounds, and mass-market dilution.
“By the late eighties we were expanding at a rate that, if sustained, would have made us a billion-dollar company in another decade,” he later said.
The brand had been built on scarcity, quality, and soul. Would it survive an attempt to scale up? The question hung heavy.
At the same time, Chouinard Equipment—the hardware company—was collapsing under the weight of liability lawsuits. As climbing grew in popularity, so did lawsuits from accidents. In 1989, Chouinard Equipment filed for Chapter 11 bankruptcy protection. A group of former employees and investors bought the assets and relaunched as Black Diamond Equipment.
“Our Experiment in Doing Business Differently”
By the end of the 1980s, Patagonia had become the company Chouinard never intended to build—and if there was ever a tension between principle and profit, Chouinard’s instinct was to side with principle—and figure out the rest later. So as it entered the 90’s at breakneck growth, and with Chouinard wondering whether they should lean into the growth or pull back- he didn’t get to make a decision- it was made for him- when a recession hit in §990, the company teetered on the edge of collapse. Bankers refused to extend credit. Chouinard, desperate, even considered borrowing from the Mafia at 18% interest before ultimately turning to friends to keep the business afloat.
“The late-’80s boom was nearly disastrous,” Chouinard admitted, “because it tempted us to stray from our principles. We were just growing for the sake of growing, which is bullshit,”
In 1991, the crisis forced Patagonia to lay off 20% of its staff—many of them close colleagues. “It was the worst thing I’ve ever had to go through,” Chouinard said, accepting full blame. But from this low came a radical shift. During a retreat in South America’s Patagonia region, Chouinard asked his leadership team the most essential question: “Why are we in business, anyway?” The answer reframed everything. Patagonia would now dedicate itself to building the best products while “caus[ing] no unnecessary harm,” and use business “to inspire and implement solutions to the environmental crisis”. This wasn’t a PR pivot. It was a reorientation of the company’s core DNA.
To match its mission with action, Patagonia formalized its “earth tax,” pledging 1% of annual sales—on top of existing profit donations—to grassroots environmental groups. “The capitalist ideal is you grow a company and focus on making it as profitable as possible. Then, when you cash out, you become a philanthropist,” Chouinard said. “We believe a company has a responsibility to do that all along”.
“Let’s Go Organic”
One of the most dramatic tests of this ethos came in 1994, when an internal audit revealed just how toxic conventional cotton farming was. The chemicals used were likened to “wartime nerve gas” in terms of the devastating impact they had on birds and other animals affected by it. Horrified, Chouinard issued an ultimatum: within 18 months, Patagonia would convert 100% of its cotton to organic.
The switch was costly and chaotic. Patagonia slashed its cotton line by 25%, profits took a hit, and suppliers had to be persuaded to change their practices. But by 1996, the company had done it. Every cotton item was made from organic fiber. Sales initially dipped, but then rebounded—and kept climbing.
Leading by Sharing
Rather than guard its innovations, Patagonia shared them. Its success with organic cotton helped spur Nike, Adidas, and Levi’s to follow suit.
In 2002, Chouinard co-founded 1% for the Planet, inviting other companies to commit to environmental giving. By the early 2010s, Patagonia had become what one professor called “the gold standard in corporate activism,” showing that a business could profit—and still stand for something.
“Don’t Buy This Jacket”: Patagonia’s Bold New Chapter (2010–2019)
On Black Friday 2011 the apex of American consumerism, it ran a full-page ad in The New York Times bearing the defiant headline: “DON’T BUY THIS JACKET.” Beneath the image of one of its bestselling fleece pullovers, Patagonia listed the jacket’s environmental cost — 135 liters of water, 20 pounds of CO₂, two-thirds its weight in waste. The point was blunt: think twice before you buy. “The environmental cost of everything we make is astonishing,” the copy read.
They were asking consumers to be better — to want less and rethink what they needed. It was a deeply subversive move. Sales jumped by 30% the following year. Predictably, it drew cynicism. Some saw it as marketing sleight of hand. “An awful lot like ‘Buy this jacket, not that other one,’” one observer quipped. But Patagonia embraced the paradox. They acknowledged the “feedback loop” of virtue and sales, and their double-digit growth raised fair questions about hypocrisy. But they leaned into the contradiction, and rather than dodge the topic, Patagonia made it public conversation — daring customers to hold them accountable.
It had always offered repairs, but in 2013 it launched the Worn Wear initiative to celebrate old, well-used Patagonia items and help customers trade or fix garments rather than replace them. In 2015 alone, Patagonia repaired over 40,000 items. Staff were trained to fix zippers on the shop floor. Customers could return beyond-repair items for recycling.
This anti-consumerist streak was now more than a message — it was an operational model. And it drew loyalty.
Built to Last — Legally
In 2014, Patagonia launched a $20 million venture fund to invest in like-minded start-ups, and ramped up political engagement. Rose Marcario was appointed CEO in 2014 and would become, in Chouinard’s words, “the best leader the company has ever had”. A former private equity executive turned Patagonia evangelist, Marcario helped quadruple revenues to over $1 billion during her 7 years in charge.
Under Marcario, Patagonia launched Patagonia Provisions (a regenerative food brand), expanded Worn Wear into a full resale platform, and invested in biodegradable fabric dyes, clean energy, and sustainable agriculture via its venture arm Tin Shed Ventures.
Internally, Marcario pushed for stronger labor oversight. When reports in 2015 surfaced of exploitative migrant labor in Taiwan, Patagonia hired Verité to audit its supply chain. By 2016, it had published a 46-page standard and required reimbursement for affected workers.
“The President Stole Your Land”
The 2016 U.S. election marked a shift. Patagonia — long a quiet supporter of environmental causes — moved to the front lines. When the Trump administration slashed protections for Utah’s Bears Ears and Grand Staircase-Escalante monuments, Patagonia’s website went black. One message remained: “The President Stole Your Land”.
By 2018, Patagonia was endorsing political candidates — backing Senate races in Nevada and Montana and Patagonia closed its stores on Election Day.
Financially, the company was thriving. Marcario donated the entirety of a $10 million windfall from 2017’s corporate tax cuts to environmental causes. “There is no business to be done on a dead planet,” she said.
“Save Our Home Planet”
By the end of the decade, Patagonia was an outlier — an unapologetically political, environmentally aggressive, privately held brand closing with $1 billion in sales while daring others to match its standards. And crucially for Chouinard, it had grown without losing its soul. As Chouinard liked to say, quoting Zen philosophy: “Profits happen when you do everything else right”.
“Earth Is Now Our Only Shareholder”: Patagonia’s Reinvention from Private Company to Planet-Driven Stewardship (2020–2025)
In June 2020, Marcario, stepped down after a transformational twelve-year run, 5 as CFO and 7 as CEO. Chouinard, then 81, praised her for expanding the company’s advocacy “in ways I could never have imagined” – from environmental lawsuits to mobilizing voter turnout.
That same summer, amid pandemic uncertainty and a bitter election season, Patagonia sent an unmistakable signal of its values. It began quietly sewing a message into the tags of its organic shorts: “Vote the assholes out.” The phrase – one Chouinard had used for years – was aimed at climate-denying politicians and reflected Patagonia’s willingness to use every inch of its brand for political expression.
Simultaneously, Patagonia joined a corporate boycott of Facebook over misinformation, demanding the platform “prioritize people and planet over profit.”
A New CEO, and an Intensifying Question: Who Will Own Patagonia?
In September 2020, Patagonia named Ryan Gellert its new CEO and a clear mandate: everything must “ladder back to our mission of being in business to save our home planet.”
As Patagonia sharpened its activism, the question of long-term ownership quietly loomed larger. Chouinard, increasingly troubled by the implications of passing on a $3 billion company, had spent years wrestling with succession. The family explored every traditional path – selling it, taking it public, transferring ownership to employees – and rejected them all. Chouinard feared that shareholders or new owners would dilute Patagonia’s values or compromise on its environmental mission.
“We’re Going Purpose”: The September 2022 Succession Bombshell
By mid-2022, the plan was in place. Chouinard had finalized a radical restructuring of the company’s ownership. Two percent of voting shares were transferred to the newly created Patagonia Purpose Trust — a legal guardrail designed to lock in the company’s values. The other 98%, the non-voting equity, went to the Holdfast Collective, a nonprofit dedicated to fighting the climate crisis. From that point forward, every dollar of profit not reinvested back into the business — roughly $100 million a year — would be handed over to the planet. Permanently.
It may sound unprecedented. But in parts of Scandinavia, it’s not. Companies like Carlsberg, Heineken, Novo Nordisk, Ikea, even Rolex, have followed variations of this model for years. In each case, the businesses are owned by foundations, which collect their profits and are run by independent boards. These boards don’t micromanage the companies — but they do ensure the original values are upheld. For many founders, this kind of structure isn’t just a values-based decision; it’s also a way to avoid the family infighting that tends to erupt around succession.
Chouinard’s open letter in announcing this plan was characteristically blunt: “Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth.” He called the move not “going public” but “going purpose.” “Earth is now our only shareholder,” Chouinard said in a message to staff and customers.
It was the culmination of his lifelong resistance to being a “businessman” and a rejection of the wealth accumulation model baked into most capitalism.
2023–2025: The New Structure in Action
Since 2023, Patagonia has been living this new model. Importantly, the new model has also allowed Patagonia to stay aggressive in business. The company continues to innovate and expanded its Worn Wear circular economy program. Decisions aren’t filtered through the lens of shareholder returns, but rather through impact and viability: is it good for the planet, and can it sustain the company’s work? If yes, Patagonia moves forward.
The New Frontier for Business
Chouinard, now in his mid-80s, remains quietly active behind the scenes. But his work, in a sense, was done. He had turned a $3 billion global brand into a non-extractive machine for environmental good. A company whose only shareholder is the Earth.
Chouinard featured on Forbes rich list with a net worth of $1.2 billion and I love his reaction to it. “Being on the Forbes billionaire list really pissed me off,” he once said. “I don’t have $1 billion in the bank. I don’t drive Lexuses.” And he doesn’t- he drives a beaten-up Subaru with a surfboard strapped to the roof- he doesn’t even have a savings account. For him, wealth is a failure, not a goal. Also being a businessman was never how he saw himself- when a reporter once pressed him that somewhere along the way he must have wanted to be a businessman, Chouinard exploded back: “Never! All I ever wanted to be was a craftsman.”
And that’s the thing that is most admirable about Yvon Chouinard, something that very few business people can say- he has remained faithful to the vision that started in a blacksmith’s chicken coop: build things of quality, made to last, do no unnecessary harm, and let your work and any of the profits that flow from it serve something larger than yourself.
Look, you may not agree with with some of Yvon Chouinard's beliefs, or how he chooses to run his business or what he does with his wealth- I do, but regardless, what you can’t deny is that he’s been 100% true to himself, to his values- and that’s so admirable and it what makes him and Patagonia a fascinating business story.
I hope you’ve enjoyed it as much as I have, and remember if you have any comments, any corrections or any story that you’d like us to cover, email us at: info@gbspod.com
All the best folks