Dec 15, 2023 · 1h 12m · news
Davis Smith: From Selling $6M of Pool Tables to Scaling Cotopaxi to $150M in Revenues | E1095 · 20VC with Harry Stebbings
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In this insightful podcast episode, Cotopaxi founder Davis Smith sits down with Harry Stebbings to discuss his journey from bootstrapping a multi-million dollar pool table business to scaling a purpose-driven outdoor brand, sharing deep lessons on venture capital, work-life balance, and why true happiness lies in serving others.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 17.4% of the talking time here. How this is scored →
Harry as informed peer 3.2 Guest teaching 3.6 Guest disagreement 1.9 Harry pushing back 3.2
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 45:28 Rejecting the No-Balance Thesis
Davis explicitly refutes Harry's assertion that building a truly great company requires sacrificing work-life balance, citing Cotopaxi's top 1% trajectory achieved while prioritizing family and service.
Hardest push from Harry ▶ 25:46 Challenging VC and Founder MisalignmentHarry refuses to accept Davis's idealistic framing, pressing him on how VC expectations for rapid returns and liquidity inherently conflict with a purpose-first founder.
Biggest teaching moment ▶ 37:54 Refuting Pessimism with Global Poverty DataDavis corrects Harry's pessimistic assertion that humanity is becoming more self-centered by citing long-term statistical evidence showing global extreme poverty dropping from 94% to 8.5%.
Harry holds his own ▶ 34:30 Explaining VC Fund Lifecycle ConstraintsHarry demonstrates deep venture expertise by detailing institutional fund mechanics, explaining why standard 10-year fund lifecycles prevent VCs from providing permanent capital.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| How a Nomadic Childhood Shaped Davis's Mindset | 3 | 2 | 1 | 1 | Harry opens by observing a common trait among top founders moving frequently during childhood. Davis agrees and elaborates on how standing out as an outsider shaped his empathy and entrepreneurial mindset. | |
| Bootstrapping and Financing the First Venture | 2 | 3 | 1 | 3 | Harry presses Davis on whether getting married young and hitting $6M in sales caused him to miss out on youth partying. Davis clarifies that getting married early and having a baby grounded him with responsibility rather than regret. | |
| Why Davis's Sense of Purpose Never Wavered | 2 | 2 | 1 | 2 | Harry asks if Davis's sense of purpose ever wavered. Davis explains that social impact has always been his primary drive, leading him from pool tables to Wharton and then launching Baby.com.br. | |
| Scaling Baby.com.br and Relationship Strain | 2 | 4 | 1 | 2 | Davis recounts the painful fallout with his cousin and co-founder at Baby.com.br. He educates listeners on why founders should select skill-matched partners rather than family or close friends. | |
| The 36-Hour Birth of Cotopaxi | 4 | 3 | 2 | 4 | Harry challenges Davis's definition of brand as core values, offering Maya Angelou's quote about how a brand makes people feel. Davis politely incorporates Harry's framing while maintaining Cotopaxi's mission-centric identity. | |
| Creating a Great Product Before Social Good | 3 | 4 | 2 | 4 | Harry cuts through PR talk by bluntly asking what proportion of customers buy Cotopaxi for mission versus product style. Davis candidly agrees that product comes first, sharing early advice from Warby Parker's founder. | |
| The Power of Salesmanship and Vision | 4 | 3 | 2 | 3 | Harry references a Twitter debate on founder talent recruitment and directly asks if Davis's Mormon missionary experience helped him develop sales skills. Davis explains how two years of missionary work in Bolivia shifted his focus toward service. | |
| Why Wealth is the Wrong Entrepreneurial Focus | 6 | 4 | 3 | 6 | Harry draws on his experience as a VC to challenge Davis on whether a non-wealth-driven founder is misaligned with venture capital expectations around exits and liquidity. Davis argues that building a multi-billion dollar business to eradicate poverty aligns goals, though admitting structural tension exists. | |
| Stepping Down and Quest for Permanent Capital | 3 | 4 | 2 | 4 | Davis reveals he is stepping down as CEO to serve a church mission in Brazil and describes failing to raise 10-year permanent capital. Harry asks pointedly what Davis did wrong in that process. | |
| How Purpose Acts as an Investor Filter | 4 | 5 | 2 | 4 | Harry asks if purpose-driven initiatives alienate mainstream VCs. Davis highlights a distinct pattern where female VC partners consistently led Cotopaxi's funding rounds, suggesting women better understand mission-driven business models. | |
| Fundraising Hardships and Venture Capital Realities | 5 | 4 | 2 | 3 | Harry explains the institutional realities of VC fund lifecycles (10 years plus extensions) to illustrate why VCs struggle to offer permanent capital. Davis shares lessons on handling high rejection rates and conveying $1B market ambitions. | |
| Global Progress and the Vacuum of Inspiring Leadership | 4 | 5 | 3 | 4 | Harry puts forward a cynical perspective that society is growing more self-centered and isolationist. Davis counters directly, citing historical data showing global extreme poverty fell from 94% in 1820 to 8.5% today. | |
| Surviving and Rallies Through the Pandemic | 2 | 3 | 1 | 3 | Harry asks if employees resisted temporary pay cuts during the pandemic. Davis explains how company-wide pay cuts avoided layoffs, maintained giving commitments, and were fully reimbursed with bonuses after pivot sales in face masks. | |
| The Trade-Offs of Doing the Right Thing in Business | 5 | 5 | 4 | 7 | Harry aggressively asserts that building a generation-defining company is impossible with work-life balance, daring Davis to name one counterexample. Davis forcefully disagrees, citing Cotopaxi's top 1% performance while maintaining family and spiritual commitments. | |
| Effective Philanthropy and Strategic Giving | 3 | 4 | 2 | 3 | Harry notes billionaire perspectives on how difficult effective philanthropy is. Davis explains that brands should not build vertical giving programs themselves, but instead partner with established impact experts. | |
| The Founder's Journey: Cotopaxi's CEO Transition | 3 | 4 | 2 | 4 | Harry questions whether Davis actually needed to replace himself as CEO. Davis explains his board's reasoning and describes running the search himself to hire Damien Wong. | |
| Corporate Mission and Equity Distribution | 4 | 5 | 3 | 3 | Harry asks if Patagonia has lost its outdoor roots to corporate fleece culture. Davis defends Patagonia's values but criticizes founder Yvon Chouinard for remaining sole owner rather than distributing equity to staff. | |
| Intentional Parenting, Family Culture, and Marriage | 2 | 4 | 1 | 2 | Davis shares how he applied corporate culture tracking tools like Office Vibe and explicit value frameworks to structure his family culture. | |
| Quick Fire Round: Content Recommendations and Public Markets | 4 | 3 | 2 | 3 | Harry highlights public market collapses in consumer brands like Allbirds and Warby Parker. Davis acknowledges public market volatility and explains why Cotopaxi would wait until reaching $500M scale before considering an IPO. | |
| Quick Fire Round: Inspiration from Historical Explorers | 1 | 2 | 1 | 1 | In the quick fire round, Davis selects polar explorer Ernest Shackleton as his ideal dinner guest, citing his leadership during extreme hardship. | |
| Quick Fire Round: Embracing Discomfort and Future Vision | 2 | 3 | 1 | 1 | Davis reflects on the intense personal and emotional hardship of his ongoing mission work in Brazil and outlines his long-term goal of inspiring business leaders toward social impact. |
Statements from this episode (42)
Smith: Entrepreneurs misunderstand the scale required for venture capital
“I think a lot of entrepreneurs don't understand how big and ambitious the idea needs to be to go raise venture capital.”
Harry Stebbings: Most successful founders moved frequently during childhood
“One of the biggest commonalities in the most successful founders that I interview is that they move a lot in their childhood.”
Davis Smith: Entrepreneurship creates more societal impact than non-profit work
“And he instead convinced me that I shouldn't do that, that I should really, if I wanted to make a difference in the world, that I should become an entrepreneur.”
Smith financed early pool table business via eBay customer pre-orders
“What we decided to do is when we listed them on eBay, we said, 10 week lead time, custom made, hardwood pool table, 10 weeks. You know, a lot of people probably are like, there's no way I'm waiting 10 weeks, but other people are like, hey, I'm building my hous…”
Smith: PoolTables.com was entirely bootstrapped without venture capital
“My cousin and I you know, we'd spent about six years building this pool table business. It was bootstrapped, you know, no venture money, very early digitally native brand”
Davis Smith raised $4.5 million for Baby.com.br off a PowerPoint
“We raised like four and a half million dollars based on a PowerPoint.”
Baby.com.br grew to 300 employees within 18 months of launching
“We grow to like 300 employees in like 18 months.”
Davis Smith: Pick co-founders based on skill fit, not family or friends
“I tell entrepreneurs, why don't you go identify your idea? Why don't you go figure out what you want to go build and then go find the best person in the world to go help you solve that problem. It probably is not going to be your cousin. It probably isn't goin…”
Baby.com.br raised around $40M in venture capital
“At that point, we'd raised around forty million dollars in venture capital.”
Davis Smith: Cotopaxi's initial concept was created in 36 hours
“I sat on the couch all night the next day and the entire following night. So, 36 hours on this couch. And during that period, and I took detailed notes, I still have the journal entries on my computer, and I basically had the entire idea for Cotopaxi.”
Smith: Consumers will not buy products solely for social good
“People that's wonderful, but people are not going to buy, buy your product because you're doing good in the world. You need to first create a great product. And he was absolutely right. So I really do think that's first, like you have to go build a great produ…”
Smith compensated early Cotopaxi hires with equity contingent on fundraising
“Give them a little bit of equity. And we figured out some creative structure around compensation. If we ended up fundraising, if we didn't fundraise, it was like, I didn't have to pay anything. So they were taking a little bit of risk with me, but because of t…”
Davis Smith: The Greatest Entrepreneurs Are Incredible Salespeople
“The greatest entrepreneurs are incredible salespeople. They know how to sell. They know how to sell a vision. They know how to sell an idea. They know how to sell a product. And so you're selling every single day as an entrepreneur. And I think that starts wit…”
Bain Capital bought out Cotopaxi's early investors
“Bank capital, they bought out a lot of our early investors and those early investors made a fantastic return.”
Cotopaxi tripled revenue in two and a half years post-Bain investment
“We've more than tripled our revenue, you know, since they've invested two and a half years ago.”
Smith: Cotopaxi grew nearly 100% the year before he stepped down
“We'd grown a hundred percent almost the year before.”
Smith pitched over 100 investors seeking 10-year permanent capital for Cotopaxi
“I pitched over a hundred different investors, lots of family offices.”
Smith pitched 100 investors before Kirsten Green backed Cotopaxi's seed round
“I pitched a hundred investors to get our first investor, you know, Kirsten green at forerunner. She backed us. I pitched a hundred investors in our first to raise that seed round.”
Cotopaxi raised a $3M seed round at a $7M pre-money valuation
“We raised three million dollars and had a, so a seven pre, 10 post.”
Smith: Every major Cotopaxi funding round was led by female investors
“Our first major investor, Kirsten Green, Our second major investor, Ellie Wheeler from Great Craft. Our third major investor, Brooke Harley. Our last investor with Bain Capital, Cecilia Chao. There's a trend. Women are leading rounds in our business.”
Smith: Female investors understand purpose in business better than male investors
“I really believe that women better understood and understand purpose in business than men did.”
Davis Smith: Ten investor rejections is far too few when fundraising
“If you only pitch it 10 times, you need to go do this a lot, lot more.”
Davis Smith: VCs require a path to $1B in revenue
“Venture capital is not going to fund that business. You need to go build something that's going to do a billion dollars in revenue.”
Smith: Cotopaxi grew 50% during recent fundraising process
“And even in the last 12 months since I started that fundraising process, we've think businesses increased 50%.”
Smith: Very few venture investors commit to long-term 10-to-15-year timelines
“Very, very few investors are committed to that kind of timeline. They're all, everything's so short term minded”
Davis Smith: Board members Kirsten Green and Cecilia Chow help close key hires
“I go get Kirsten green or someone from our board, Cecilia Chow from bank capital to go jump on a call. And it's like, you know, they, I can help, I can attract and retain talent better.”
Cotopaxi's slowest growth year in a decade was 2020 at 40%
“Our slowest growth year in the last 10 years was actually 20 20. We grew 40% that year, but we were profitable, significantly profitable, and it was because we tightened our belt in such a big way.”
Cotopaxi Donated 3% of 2020 Revenue to Impact Work
“We gave three percent of our revenues that year to impact work.”
Smith predicts Cotopaxi will become a multi-billion dollar business
“Are we a multi-billion dollar business? Not yet, but we will be.”
Smith: Cotopaxi ranks in top 1% of startups from past decade
“If you look at, you know, the percentage of businesses that have started in the last 10 years, we are in the top one percent.”
Smith: Founders can build great businesses without torching work-life balance
“Yes, you can have balance and you can still build an extremely efficient and great business that's doing great work. You don't have to put in a 120 hours a week, a hundred hours a week and not have any balance. And torch, you know, family relationships and eve…”
Davis Smith: Brands shouldn't manage their entire philanthropic vertical in-house
“In fact, I'd say you shouldn't own the vertical entirely to give effectively. I think you specialize in what you're great at.”
Smith ran Cotopaxi's executive search himself against Bain Capital's advice
“And I started a process being capital gave me a handful of search firms to go talk to. I talked to four or five of them. I didn't want, I didn't hire any of them. And I decided I'm going to go run the process myself. And bank capital was like, that is a mistak…”
Smith relinquished Cotopaxi CEO title to recruit Damien Huang
“The only problem is he wanted to be CEO. He didn't want to be president. He didn't want to be my right hand. And I had some other options that were really great right hands that would have been happy being president forever. And at the end of the day, I did, I…”
Smith: Patagonia erred by keeping all equity with founder Yvon Chouinard
“I think the one thing that I'd love to do better though than what I've seen Patagonia do and this is coming from someone with deep admiration for Yvonne Chouinard and for Patagonia. I guess if there was a criticism I'd have is why after 40 years was he the onl…”
Smith: Cotopaxi will build employee wealth rather than join a foundation
“And I actually think it's a win for Cotabaxi to, like, I don't want to give the company away to a foundation. I actually want to create something that can create wealth for many people within our organization, and that can allow them to go pass on this to thei…”
Cotopaxi Uses OfficeVibe Daily to Measure Company Culture via Slack
“One of my favorites is actually a company called Office Vibe. It sends out polls through Slack, which we use Slack, and I measure Literally every day, I'm tracking and measuring our culture, and I can try, I can slice the data based on gender, based on tenure …”
Smith opens Cotopaxi to public listing or M&A exit options
“I was so convinced 12 months ago that I would never take this company public, that I didn't want to sell it to anyone. I just wanted to stay independent and private forever. And I'd say I've changed my mind. I don't, I'm open to all options.”
Smith: Cotopaxi needs $500M revenue and $75M EBITDA before an IPO
“But I think at the right time, let's say the, you know, let's say Cotabaxi is, you know, five hundred million in sales and has you know, 75 or eighty million dollars in EBITDA. At that point, it's like, it's stable. You know, the business is stable. I think th…”
Davis Smith takes annual island survival trips with no food
“Every year I do a survival trip or two where I go survive on an island, bring no food, spearfish, eat coconuts, build a shelter.”