The Exchanges

Q When you started to do this, and you had to hire employees, and you had to form a company, and you had to deal with payroll, like, did that start to scare you?

A Oh, yeah. Yeah, that was pretty scary, and, uh, we made a lot of mistakes, and in fact, we were so successful in the late eighties and stuff that, uh, we were growing too fast. We were growing 50% a year, and, uh, you can't do that for very long before you run out of money, basically. On retained earnings, you can't do that, and so we were all ramped up to grow 50%, and we only grew 25 or something, which doesn't sound bad, but When you've built all the inventory for, for that, and you don't make it, it's pretty rough. And then there was a recession then, and, and, ah, the banks wouldn't give us any more money. In fact, I had to lay people off, which was really hard because we're a family style business. We knew everybody working there, and That was really tough.

AI assessment note: “Oh, yeah. Yeah, that was pretty scary, and, uh, we made a lot of mistakes”

Q So how did you guys branch out from, from climbing gear to clothing?

A Well, I was on a climbing trip to Scotland in the winter. I was walking by some shop, and I saw a rugby shirt in the window, and I thought, wow, that's pretty cool. It's, you know, it was real colorful. It had blue, and red, and yellow, and made really tough, so I thought, wow, let's make a really great shirt for climbing. You know, the collar kind of keeps the gear slings from cutting into your neck, and you know, at that time, active sportswear for men was basically gray sweatshirts and sweatpants. That was it. I mean, men did not wear anything colorful. And so I started wearing this, climbing, and everybody was going, wow, where'd you get that? And so kind of the lights came on. I thought, well, maybe I ought to import a few of these from England and see if they'll sell. And sure enough, they sold. And then I started making some climbing shorts and pants, and one thing led to another, and I realized it's a lot more profitable than making pitons.

AI assessment note: “maybe I ought to import a few of these from England and see if they'll sell.”

Q So how did you guys branch out from, from climbing gear to clothing?

A Well, I was on a climbing trip to Scotland in the winter. I was walking by some shop, and I saw a rugby shirt in the window, and I thought, wow, that's pretty cool. It's, you know, it was real colorful. It had blue and red and yellow, and made really tough, so I thought, wow, let's make a really great shirt for climbing. You know, the collar kind of keeps the gear slings from cutting into your neck, and, you know, at that time, active sportswear for men was basically gray sweatshirts and sweatpants. That was it. I mean, men did not wear anything colorful. And so I started wearing this, climbing, and everybody was going, wow, where'd you get that? And so kind of the lights came on. I thought, well, maybe I ought to import a few of these from England and see if they'll sell. And sure enough, they sold. And then I started making some climbing shorts and pants, and one thing led to another, and I realized it's a lot more profitable than making pitons.

AI assessment note: “I thought, well, maybe I ought to import a few of these from England”

Q What's interesting is that, is it like you did not know anything about clothing?

A Yeah, right. I didn't know anything about clothing. Um, I learned everything by kind of If I get an idea, I immediately take a step forward and see how that feels. If it feels good, I take another step. If it feels bad, I step back. You know, it's different than people with a scientific view where they think everything out to the nth degree before they make a move. So I, I learned by just doing. You know, one of the first products we made was a pair of climbing shorts, and I made the pattern for it. I knew nothing about pattern making. I just took a pair of Shorts apart, and I kind of looked at it, and I, and then I wanted, you know, make a really tough pair of shorts, so I used canvas from outdoor furniture or something, and I had this Korean woman working for me, and she had to sew it on a walking foot machine, which is the kind of sewing machine that you use for sewing leather, because the fabric was so thick, and And when she was done with them, she stood them up. They stood straight up. So we named them stand-up shorts, and, uh, you know, it took about 50 washings to break them in, but we still make those shorts, but, you know, of course not as heavy as they were.

AI assessment note: “Yeah, right. I didn't know anything about clothing. Um, I learned everything by”

Q You have no college degree, you don't have a business degree, you're not, like, you are not a businessman, but you are. I mean, you became one, and I've, I've read that you call, you've called yourself a reluctant businessman, but do you feel uncomfortable with that title?

A No, not at all, because I think what I did is, once I decided I was a businessman, I decided to really study up on it. I studied every book I could on Japanese management styles and Scandinavian businesses, and because I, I thought there had to be a different way of doing business, and I still wanted to only work for part of the year myself. You know, I, I take off from June until November. I'm gone. I, I got a place in Jackson Hole, and I go fishing every day, and I call in maybe three times in the five months that I'm gone. You know, people know that if the warehouse burns down, don't call me. What can I do? You know what to do.

AI assessment note: “No, not at all, because I think what I did is”

Q But I mean, you still must live by, by certain rules, right? I mean, I mean, is there like a, a philosophy that, that kind of guides you?

A Well, I've been a student at kind of Zen Buddhism most of my life. I believe in, you know, the more you know, the less you need. I've been fishing, fly fishing, with one fly. I mean, one type of fly in different sizes. And I've limited myself to that for a whole year, and I've caught more fish than I've ever caught in my life. I realized that all of these hundreds of thousands of different fly patterns and different colors and shapes and everything are totally unnecessary. You can replace all of that with knowledge and technique, and it's a good lesson for me, and the hardest thing in the world is to simplify your life, because everything pulls you to be more and more complex, and so I think what I learned from fly fishing is that if we have

AI assessment note: “Well, I've been a student at kind of Zen Buddhism most of my life.”

Q What's interesting is it, is it like you did not know anything about clothing?

A Yeah, right. I didn't know anything about clothing. Um, I learned everything by kind of If I get an idea, I immediately take a step forward and see how that feels. If it feels good, I take another step. If it feels bad, I step back. You know, it's different than people with a scientific view where they think everything out to the nth degree before they make a move. So I, I learned by just doing. You know, one of the first products we made was a pair of climbing shorts, and I made the pattern for it. I knew nothing about pattern making. I just took a pair of shorts apart, and I kind of looked at it, and I, and then I wanted, you know, make a really tough pair of shorts, so I used canvas from outdoor furniture or something, and I had this Korean woman working for me, and she had to sew it on a walking foot machine, which is the kind of sewing machine that you use for sewing leather, because the fabric was so thick, and And when she was done with them, she stood them up, they stood straight up. So we named them stand-up shorts, and, uh, you know, it took about 50 washings to break them in, but we still make those shorts, but, you know, of course not as heavy as they were.

AI assessment note: “Yeah, right. I didn't know anything about clothing.”

Q You have no college degree, you don't have a business degree, you're not, like, you are not a businessman, but you are. I mean, you became one, and I've, I've read that you call yourself a reluctant businessman, but do you feel uncomfortable with that title?

A No, not at all, because I think what I did is, once I decided I was a businessman, I decided to really study up on it. I studied every book I could on Japanese management styles and Scandinavian businesses, and because I, I thought there had to be a different way of doing business, and I still wanted to only work for part of the year myself. You know, I, I take off from June until November. I'm gone. I, I got a place in Jackson Hole, and I go fishing every day, and I call in maybe three times in the five months that I'm gone. You know, people know that if the warehouse burns down, don't call me. What can I do? You know what to do.

AI assessment note: “No, not at all, because I think what I did is”

Q of the people that we talk to on this show are motivated by, you know, wanting to change an industry, or change the way business is done, or to change the world, or to make money. You know, and I think everybody would agree that they wanted to make money. That isn't you. Where did you, and where do you find the motivation to make this company run and thrive?

A Well, you know, one of my favorite quotes is, if you want to understand the entrepreneur, study the juvenile delinquent. Because they're saying, you know, this sucks, I'm going to do it my own way, and I have a background of I was always the shortest guy around. I could play sports pretty well, you know, team sports, but when it came time for a actual game, I would fumble the ball, and I realized that the best thing to do is invent your own sports, then you can always be a winner, and so that's what the entrepreneur does. They, they just say, this is wrong. I'm going to do it this other way, and if you want to be successful in business, you don't go up against Coca-Cola and You know, these big companies there, they'll kill you. You just do it differently. You figure out something that no one else has thought about, and you do it a totally different way, and, and so breaking the rules, uh, you have to be creative, and that's the fun part of business, actually. I love breaking the rules.

AI assessment note: “breaking the rules, uh, you have to be creative, and that's the fun part”

Q Why do you think it happened? Was it just bad luck? Was it just the economy, or was it, was there a strategy that didn't align with-

A I think we were, we were just going for growth. You know, not saying no. It's just, uh, growth can creep up on you. I mean, we were just opening more and more dealers. We were opening our own retail stores. You know, nothing goes forever. And in fact, that's why the faster a business grows, the faster it dies also. And so, Once we got out of this, we decided to put ourselves on a growth program so that we would be in business a hundred years from now. So all decisions from then on were made as if we're going to be here a hundred years from now. So it's slowing down the growth, saying no to a lot of opportunities, and just being more responsible.

AI assessment note: “I think we were, we were just going for growth. You know, not saying no.”

Q But how, how are you able to do that?

A Well, you know, I, I heard a great thing on NPR, actually, about this woman at Stanford who studies ants, and she said that, you know, ant colonies don't have They don't have bosses, and everyone knows what their job is, and they get their job done, and compare that with dictatorships. And so a lot of companies are top-down management, and it takes a tremendous amount of effort to run those. So what we decided to do is just hire motivated, young, independent people, and leave them alone. And, I mean, I wrote a book called Let My People Go Surfing, and it's all about, we have a policy that when the surf comes up, You drop work and you go surfing. I don't care when you work, as long as the job gets done. And, uh, you know, I've had other companies come to me and say, oh, I love that idea. I think I'll institute it in my company. I say, forget it. You'll fail. Because you have to start with the very first person you hire. And I've had a psychologist, uh, study our, our employees, and they said, oh, I gotta tell ya, your employees are the most independent I've ever seen in any company. In fact, they're so independent, they're, Unemployable anywhere else.

AI assessment note: “what we decided to do is just hire motivated, young, independent people, and leave them alone”

Q When you started to do this, and you had to hire employees, and you had to form a company, and you had to deal with payroll, like did that start to scare you?

A Oh, yeah. Yeah, that was pretty scary, and, uh, we made a lot of mistakes, and in fact, we were so successful in the late eighties and stuff that, uh, we were growing too fast. We were growing 50% a year, and, uh, you can't do that for very long before you run out of money, basically. On retained earnings, you can't do that, and so we were all ramped up to grow 50%, and we only grew 25 or something, which doesn't sound bad, but When you've built all the inventory for, for that, and you don't make it, it's pretty rough. And then there was a recession then, and, and, ah, the banks wouldn't give us any more money. In fact, I had to lay people off, which was really hard because we're a family-style business. We knew everybody working there, and That was really tough.

AI assessment note: “Oh, yeah. Yeah, that was pretty scary, and, uh, we made a lot”

Q But I mean, you still must live by, by certain rules, right? I mean, I mean, is there like a, a philosophy that, that kind of guides you?

A Well, I've been a student at kind of Zen Buddhism most of my life. I believe in, you know, the more you know, the less you need. I've been fishing, fly fishing, with one fly. I mean, one type of fly in different sizes. And I've limited myself to that for a whole year, and I've caught more fish than I've ever caught in my life. I realized that all of these hundreds of thousands of different fly patterns and different colors and shapes and everything are totally unnecessary. You can replace all of that with knowledge and technique, and it's a good lesson for me, and the hardest thing in the world is to simplify your life, because everything pulls you to be more and more complex, and so I think what I learned from fly fishing is that if we have

AI assessment note: “I've been a student at kind of Zen Buddhism most of my life.”

Q But how, how are you able to do that?

A Well, you know, I, I heard a great thing on NPR, actually, about this woman at Stanford who studies ants, and she said that, you know, ant colonies don't have They don't have bosses, and everyone knows what their job is, and they get their job done, and compare that with dictatorships. And so a lot of companies are top-down management, and it takes a tremendous amount of effort to run those. So what we decided to do is just hire motivated, young, independent people, and leave them alone. And, I mean, I wrote a book called Let My People Go Surfing, and it's all about, we have a policy that when the surf comes up, You drop work and you go surfing. I don't care when you work, as long as the job gets done. And, uh, you know, I've had other companies come to me and say, oh, I love that idea. I think I'll institute it in my company. I say, forget it. You'll fail. Because you have to start with the very first person you hire. And I've had a psychologist study our, our employees, and they said, oh, I gotta tell you, your employees are the most independent I've ever seen in any company. In fact, they're so independent, they're Unemployable anywhere else.

AI assessment note: “what we decided to do is just hire motivated, young, independent people, and leave them alone.”

Q Yeah, so, like, what about you? How many, uh, how many Patagonia jackets do you have?

A You'd be surprised. All my stuff is years and years old. I'm, I'm sitting here talking to you. My pants are probably seven or eight years old. My shirt is, uh, probably the same. But, you know, it's, it's kind of interesting. A friend of mine went to a garage sale in Jackson Hole recently, and, and there was this jacket that we made about 10 years ago, and it was purple, and it was in great shape. The woman wanted 30 dollars for it, so he offered her 15, she took it. Then he went on eBay, And a guy from Japan said, hey, I'd like to buy that jacket. How much do you want for it? Oh, you know, make me an offer. So how about 750? So actually, um, these things keep their value.

AI assessment note: “You'd be surprised. All my stuff is years and years old.”

Q Yeah, so, like, what about you? How many, uh, how many Patagonia jackets do you have?

A You'd be surprised. All my stuff is years and years old. I'm, I'm sitting here talking to you. My pants are probably seven or eight years old. My shirt is, uh, probably the same. But, you know, it's, it's kind of interesting. A friend of mine went to a garage sale in Jackson Hole recently, and, and there was this jacket that we made about 10 years ago, and it was purple, and it was in great shape. The woman wanted 30 dollars for it, so he offered her 15, she took it. Then he went on eBay, And a guy from Japan said, hey, I, I'd like to buy that jacket. How much do you want for it? Oh, you know, make me an offer. So how about 750? So actually, um, these things keep their value.

AI assessment note: “You'd be surprised. All my stuff is years and years old.”