The Exchanges

Q So what, what scale did you reach with the baby business, and then what ended up going wrong?

A The first, uh, first year we did over a couple million in revenue, two or three million in revenue. And, uh, over the next, uh, few years, two, three years grew to, uh, maybe twenty million in revenue. So, you know, the, the business scaled, it grew. What we messed up was that we started, then we thought, okay, now we validated this business. Let's go scale it. Let's hit, let's hit the gas. What we missed was there's a, Uh, there's, I think a focus that needs to happen on efficiency before you go hit the gas. You need to make sure the business is actually making money, that it can actually truly scale, which scale means like you're, you're actually accelerating your growth faster than you are your expenses. And in that business, we didn't do that. You know, we, we validated that there was a business and there was a need, but we actually didn't build the efficiency that we needed to be able to be profitable as we scaled. So as rapidly as we scaled, we accelerated Losses, which meant go raise more money, and that's a painful process to be in.

AI assessment note: “over the next, uh, few years, two, three years grew to, uh, maybe twenty million”

Q better, better, um, early investor than, than her. Um, Uh, Davis, I'm curious. I mean, you, you, you note that you got a lot of these questions. The world doesn't need another outdoor brand. You know, why did, did you have a, um, a love for the outdoors? Had you grown up in the outdoors? Was it something that was a personal passion? Was that part of the origin here?

A Absolutely. I love the outdoors. My, my dad is an adventurer and, uh, we, I grew up spending a lot of time in the outdoors, camping, backpacking. Uh, we'd go, uh, you know, these different countries that we lived in. We, we, you know, we made our own raft and floated the Amazon river and fish for piranha. We'd go survive on little uninhabited islands and make our own spears and spearfish and eat coconuts to survive. Like I just, I loved adventure. I love the outdoors. I love travel. And so, uh, so I kind of was able to merge this love for the outdoors and this passion and desire to go do good and, and kind of blend these two things together.

AI assessment note: “Absolutely. I love the outdoors. My, my dad is an adventurer”

Q mean, because you, this, This 36 hour sprint in which the, the vision for the company on spools is inspired by this personal, personal mission, this, this, this need to do good in the world, to fulfill your own potential, to change other people's lives. Um, so will you talk a little bit about the mission of the company and, and how that fits with running it as a business?

A Yeah, so the mission that we have is to eradicate, I, I believe that it's possible to eradicate extreme poverty in my lifetime. Uh, in 18, 2200 years ago, uh, 94% of the world was living in extreme poverty, and when I was born, it was around 40%, and when I graduated from high school, it was like 20%. Now it's under 10%, so we are eradicating extreme poverty, and I want to be a part in this movement. I was showing that business can be a force for good. Uh, capitalism can be done better than it has been. Uh, it's this amazing tool that's lifted so many out of poverty, but it's, it's also, it's a little broken. You know, there's, uh, there's things that aren't quite right about it. And so what can we do better? And I really believe there's a way to, to help take capitalism in this better direction. And so that was the, that was the vision for this brand. And so we're, uh, you know, we donate, uh, we donate one percent of all of our revenues. Uh, which to be clear, a lot of times is many years that was actually more than we made. We maybe weren't even making money, but we're still giving money away. And, uh, you know, as we all know, I think people that don't understand business think, oh, that's like nothing, you know, one percent, that's nothing. But if Amazon did that, I think that's like all, that'd be all their profit or something, you know? So, uh, you know, it's, it's, it w…

AI assessment note: “the mission that we have is to eradicate, I, I believe that it's possible to eradicate extreme poverty”

Q I mean, what, what a way to scale, right? To, to mentor the next generation of leaders. Davis, when you accepted, um, the, the call to go back to Brazil and lead a mission, um, you had to replace yourself as CEO of the company. Uh, how, how did you go about doing that?

A Yeah. Um, you know, so when I, I remember when I started Cotopaxi, uh, you know, met with a small group of people in this little cabin in Utah and told them, you know, my vision. I remember telling them, I, I don't, I think we need to build on this bigger than any of us because I'm not going to be the right CEO forever. And so I'd always kind of known that in the back of my head, even though I wanted to be, I really did want to be the CEO for it because I loved it so much. But, um, what I, what I looked for in my replacement was, um, someone that first of all was aligned with Our values that really understood why we were building this and what mattered most. I wanted someone that would stay true to that. And then, of course, someone that had much more experience than me that had taken something from our scale and had built something much bigger. And, um, the way that I went through that process was I, I actually, I shared it on, on social media that I was looking for somebody and, um, Um, you know, went through a process of finding, you know, some really amazing people. Um, and so, uh, it's not easy to replace yourself because, uh, as a, as a founder, because you just, you're so deeply connected to what, you know, to what you built. And, uh, and at the same time, it wasn't hard to see that there were other people much more qualified, qualified than me. Uh, I think what I, what …

AI assessment note: “what I looked for in my replacement was... shared it on social media”

Q I'm sorry that that happened. And I'm, I'm glad you also were able to learn the lessons from that and apply them going forward. So let's talk about Cotopaxi. Um, Where did the idea come from? Let's just start there. Where, where and when did this idea spark for you?

A Well, I mean, this is just one of the, is such a fun story. So, you know, I'm living in Brazil and I'm having this experience, you know, building that business that was, that was painful, especially this relationship that was kind of unraveling before my eyes. And, um, I was, my entire life, I had known I'd wanted to find a way to help people. Uh, when I was 19, 20, 21 years old, I actually was a missionary for my church in Bolivia, for the Church of Jesus Christ of Latter-day Saints, uh, and those two years were so transformational for me. I remember, uh, I was actually just reading my journal the other day, uh, during that time period, and 10 days before I went home after this two years, I was in this little market, um, and we were eating lunch, uh, very simple, just rice, boiled potatoes, and I think, like, Liver or something. I mean, just like very, not nothing. No, this is not Michelin star kind of restaurants, you know, but, um, and as we're eating.

AI assessment note: “when I was 19, 20, 21 years old, I actually was a missionary”

Q And then how, how do you decide where the one percent of profits go is, is what's, what's your process for figuring out how to make sure that that money is being spent as optimally as possible?

A Well, there was, there was a learning curve. You know, when we started the business, I was the one that oversaw our impact work because I was so passionate about it, and I'd been involved in some nonprofits around the world and in Latin America specifically that I was really excited about. For example, there was an orphanage that I visited and would frequently visit when I was, when I was in Bolivia as a missionary. I went there on Christmas Day. It was my first Christmas away from my family. I was, Incredibly lonely, and sad, and kind of, honestly, probably a little self-absorbed, thinking about myself, and you know, how much I miss my home, and that afternoon, a couple of other missionaries had organized for us to go to this orphanage, and after going there, it was like, how could I possibly feel sorry for myself? Like, what a, what a gift to be here, and so that orphanage meant a lot to me, and so that was one of the first places we, we started helping, and we had a few other Uh, places that I was really passionate about, but a year into the business, we, I, I hired a chief impact officer, and she came in. She'd worked for Salesforce. Uh, she basically said, okay, tell me about how you're doing this, and I said, oh, I was so proud to tell about this orphanage, and she's like, that's horrible. I'm like, she's like, so wait, how, you just send the money? Like, you just send th…

AI assessment note: “a year into the business, we, I, I hired a chief impact officer”