I had always avoided thinking of myself as a businessman I was a climber a surfer a kayaker a skier and a blacksmith we simply enjoyed making good tools and functional clothes that we and our friends wanted and one day it dawned on me that I was a businessman and would
probably be one for a long time it was also clear that in order to survive at this game we had to get serious I also knew that I would never be happy playing by the normal rules of business I wanted to distance myself as far as possible from those pasty faed corpses in suits
that I saw in Airline magazine ads if I had to be a businessman I was going to do it on my own terms one of my favorite saying about entrepreneurship is if you want to understand the entrepreneur study the juvenile delinquent the delinquent is saying with his actions
this sucks I'm going to go do my own thing since I had never wanted to be a businessman I needed a few good reasons to be one one thing I did not want to change even if we got serious work had to be enjoyable on a daily basis we all had to come to work on the balls of our
feet and go up the stairs two steps at a time we needed to be surrounded by friends who could dress whatever way they wanted and even be barefoot we all needed to have Flex time to surf the waves when they were good or to ski the powder after a big snowstorm or to stay
home and take care of a sick child breaking the rules and making my own system work are the creative parts of management that is particularly satisfying for me the original intent for writing let my people go surfing was for it to be a philosophical manual for the employees of Patagonia we have
always considered Patagonia an experiment in doing business in unconventional ways none of us were certain it was going to be successful but we did know that we were not interested in doing business as usual we have survived and even thrived for close to half a century ironically we have
become the large company that we never dreamed of nor wanted to become it took 15 years to write this book because it took that long to prove to ourselves that we can break the rules of traditional business and make it not just work but work even better
especially for a company that wants to be here for the next 100 years that was an excert from the book that I just reread and the one I'm going to talk to about today which is let my people go surfing the education of a reluctant businessman and it was written by Ivon
shinard I first read this book over five years ago it was originally episode 18 of Founders out of the hundreds of founders uh that I've studied so far for the podcast Ivon is definitely one of uh my favorite Founders you could tell just from that excerpt like his insistence on
living life and building a company that reflects his personality and his philosophies regardless of what other people think he should be doing is one of the most admirable traits that a Founder can have so I want to jump right into his early life most of the book is
and I hope I can convince you to to buy the book it's absolutely excellent most of the book is really his philosophy of building the company the history of the company so that's where I'm going to spend most of my time today I do want to pull out a couple ideas from his very
early life before we jump into the beginning of uh like the prehistory of Patagonia which is going to be him starting uh the shinard equipment company uh but I want he talks about his dad and we see the things that he admired about his dad influenced his approach to his work that he still
continues to this day he's 83 I think at this time and he's still working he says my father was a tough French French Canadian from Quebec Papa completed only 3 years of schooling before he had began working on the family farm at the age of nine in later years he worked as a
carpenter electrician and a plumber in addition to reading this book for the second time and I probably read my highlights on this book I don't even know maybe 20 30 50 times over the years I also relistened to he ion did this fantastic interview on the mediator
podcast uh it's I'll leave a link down below but it's a metor episode I think 188 Ivon shanard on belonging to Nature I've listened to that episode uh four or five times at minimum and the reason it goes so well together is because so there's so he gives added context in
that that interview that podcast interview of stories that are in the book but what he said in that interview was interesting and something he admired from his father he says my old man was a Tradesman he could build a whole house himself so this like Relentless extreme
Avon has like this Relentless extreme levels of self-reliance and resourcefulness he had it from an early age and he definitely used his high levels of resourcefulness to build a successful company which is going to come out multiple times in the book so he says you know my dad could build a
whole house himself and this is what he uh what he learned from his father I believe I inherited his love of hard physical work and an appreciation of quality particularly a fine tool so that word quality appears over and over again but I would say ivonne's North Star is
the quality of the product that you're making it's what he spends the most time in the book talking about that is a goal and a path that he refuses to deviate from in fact later on the book there's this great quote I think I'll share it later but I'm going to read it to you
now as well he says the first part of our mission statement make the best product is the the Cornerstone of our business philosophy make the best is a difficult goal it doesn't mean among the best or the best at a particular price point it means make the best period and
so we go back to where we are in the story we're saying hey this this deep appreciation for our for Quality actually came from my father the love of physical hard work and then he shares this crazy story one of the most profound memories of my Early Childhood
was seeing him sitting in the kitchen drinking a bottle of whiskey and proceeding to pull out some of his teeth with his pliers he needed dentures but thought the local dentist was asking too much money for the part of the job he could just do as easily himself and then the writing of this
book is very simple and easy to understand I'm just going to pull out like three sentences from his high school years that tell you everything about who he was in high school high school was the worst I was often I was always in detention I often had to write
lines like I will not 500 times or so so you know I will not curse or I will not you know skip school whatever it is but this goes back to his resourcefulness as a budding entrepreneur I would take three pencils and line them them up with sticks and rubber bands so I could do
three lines at once I learned at an early age that it's better so he's talking about he never played he was never interested in playing organized sports like baseball and football uh you know he'd rather be out nature climbing rocks uh CL climbing mountains kayaking
surfing and he says I learned at an early age that it's better to invent your own game than you can always be the winner and when I got to this section of the book it reminded me of it might be the best is probably the best paragraph in the entire book if you really want
know who he is as a person I'm going to read it later but I'm just going to read it now because it's hilarious actually quoting so usually when I read these books you know like I read something it's like oh it makes me think of this other book it's like I'm
reading this and made me think of other things he says later in the book I've read this paragraph I don't even know 50 times something like that it's hilarious and this is really going to tie into what he says it's like you know I'm just going to invent my own game I does not
believe in building an undifferentiated commodity product by any means right and so he says when I die and go to hell the devil's going to make me the marketing director for a Cola Company I'll be in charge of trying to sell a product that no one needs is identical to its
competition and can't be sold on its merits I'd be competing headon in the Cola Wars on price distribution advertising and promotion which would indeed be hell for me this is the punchline I'd much rather design and sell products so good and so unique that they have no competition and so now we
fast forward he's 19 years old remember the the the subtitle of the book The education of a reluctant businessman he becomes an entrepreneur at 19 reluctantly because he didn't think the quality tied back to that word the quality of the products that were on the
market were good enough so he is a mountain climber this is in the very very early days and so essentially he realizes hey I can't find high quality products my life literally depends on these products I need to make my own and then we we see what I mentioned earlier
it's like I just love these people it's like no I have a philosophy I have a point of view and I have a personality I'm going to inject that into my company I'm not going to deviate from that in 1957 I started teaching myself black smithing I wanted to make my own
climbing hard way to this day if people meet when when he meets people that don't know who he is and they say hey like like what do you do he said he calls himself a blacksmith he he thinks of himself as a Craftsman and he thought his trade in his craft was blacksmithing
he just got into clothing because black blacksmithing at the Quality levels he did was not profitable so he's like I got to sell clothes just so I can make equipment uh so I started teaching myself blacksmithing I wanted to make my own climbing Hardware at the time this
is the philosophical difference though and speaks to another thing that I love about Ivon is that he reads he's very well read he reads all the time he says at the time all climbing gear was European and the soft iron pittens I think it's pons actually petons uh were
meant to be placed once and left in position so that's what the European way of doing things he found this way completely disgusting he had a philosophical difference of the Europeans and it came from the authors that he was re that he was reading the European attitude toward climbing
mountains was quote unquote to conquer them all the gear was left in place to make it easier for others to follow we American climbers were brought up on reading the transcendental writers like Emerson theor and John Mir you climb the mountain or visit the Wilderness but you
leave no trace of having been there that idea right there that's like the fact that he has a philosophical difference is going to Ripple throughout his entire career like I don't like the way other businesses are built so I'll find a different way to do it and the the
really the like the the lesson behind that lesson is like why you do something why you're doing it affects every other decision that comes after and so it's in the first year of his career in the very early days of him being entrepreneur they realizes oh wait people always pay
for Quality his product is seven times more expensive than the the leading the leaders in the market and people still line up to the point where like he he automatically sell out everything that he's able to make I made these pons for myself and a few friends then friends of
friends wanted some I started selling them for $150 each you could buy European pons for 20 cents you had to have my new gear if you wanted to do the state-of-the-art climbs that we were doing and so at this time in his life he's pneumatic he's just finding he's
like where's the best mountain climbing we're going to go there where's the best surfing and what was hilarious is now you know I've read what 280 books since I read this for the first time and I like oh this is another billionaire who started out by selling
his product out of his trunk just like Phil Knight uh most of my tools were portable so I could load up my car and travel up and down the California coast from Big s to San Diego I would Surf and then I would haul my Anvil down to the beach and I'd start making uh petons
before Mo moving on to another surfing Beach I supported Myself by selling the equipment from the back of my car he is unbelievably poor at this time and there's just one sentence that illustrates that we ate cat food but living and surviving and then thriving like this actually taught him this
there's a lot of uh he takes a lot of lessons from nature I actually went back and read my show notes uh for the first time that I did this book and I was like oh this is actually really good I liked what Young David said for over five years so I'm just going to read it he
says throughout the book or I guess I said throughout the book he has a really beautiful idea of comparing business and organizing human labor to Nature part of this idea is he intentionally puts Patagonia through a lot of stress because he feels you need stress to grow
uh evolution is another for change only happens under stress so he says he's talking about who he was as a very young man we were like a wild species living on the edge of an ecosystem adaptable resilient and tough and so I already mentioned the fact that Ivon has this
like handful of philosophies and ideas that he just repeats over and over again and applies to all aspects of really everything that he's doing whether it's work or play he says I believe the way towards Mastery of any Endeavor is to work towards Simplicity the more you
know the less you need and so we're getting again this is you know we're probably two decades maybe a decade and a half from the beginning of Patagonia actually let's see he starts his equipment company in 1957 and then Patagonia 1973 so okay so yeah it's about 15 years but the point here is
that he has been always been and still is obsessed with Simplicity and quality and so he says quality control was always foremost in our minds because if a tool failed it could kill someone and since we were our own best customers there was a good chance that it would be
us and this goes back to what he is reading is influencing the building of his which I love it literally gives me goosebumps he says our guiding principle design stem from I'm going to actually not even attempt to pronounce this person's name I actually have one of his
books he's a writer and also one of like the like a pioneering Aviator actually yeah he wrote The Little Prince and this is a quote from him in anything at all Perfection is finally attained not when there is no longer anything to add but when there is no longer anything to take
away when a body has been stripped down to its nakedness now we go back to Ivonne studying Zen has taught me to simplify to simplify yields a richer result and so it goes back to this idea that Simplicity is complexity resolved it's not complexity ignored right at the
base of a mountain wall where you spread out all of your gear to organize for a climb it was easy to spot the tools made by shinard equipment our tools stood out because they had the cleanest lines they were also the lightest the strongest and most versatile Tools in use they were
also the most expensive when other design designers would work to improve a Tool's performance by adding on I would achieve the same Ends by taking away by reducing weight and bulk without sacrificing strength are the level of protection so the then when I the second
time I read the book as I when I got to that section I quoted another quote that's later on in the book that Ivon says I believe the way towards Mastery of any Endeavor is to work towards Simplicity and then Ivon goes back to this idea that he was a reluctant
businessman that he was he never started out to start a business right that was not his aim none of us saw the business as an end to itself it was just a way to pay bills so we could go off climbing trips the reason I'm reading that to you is because this is all this is the
prehistory of Patagonia Patagonia is the company that you know he's been I think he's it's been around for what 50 years now produce like this cult-like following and wind up making him you know if he's a reluctant businessman he's definitely a reluctant billionaire
as well but this is the point shanard equipment operated at a 1% profit margin and so he realized that was unsustainable and then he has a great line here then came my first idea for clothing and so he's like okay I'll start making clothing just so it can pay for the equipment and then his some of
his clothing takes off he has this this I'm going to read it to you now in fact I'm not even going to to wait till later he has this idea that the functional needs of the product should be a designed guidepost and so the first thing that he makes is this rugby shirt
people just like the way it looks he used it because it actually protected his neck and upper body from all the climbing he was doing so I'm going to go back to the rugby shirt in a minute but when I got to the rugby shirt it made me think of what he said the difference
between a Cadillac and a Ferrari and he says complexity is often a sure sign that the functional needs have not been solved complexity is often a sure sign that functional needs have not been solved take the difference between the Ferrari and the Cadillac of the 1960s
the Ferrari's clean line suited its high performance Aim so he clearly is admiring the Ferrari and he hates the Cadillac okay the Cadillac didn't even have any functional aims he didn't have the steering suspension torque aerodynamics or brakes appropriate to
its immense horsepower but then nothing about its design really had to work all it had to do was convey the idea of power and creature Comfort this made me laugh of a living room floating down the highway to the golf course so uh so to a basically ugly shape we added all manner
of useless Chrome gingerbreads like fins at the back and breasts at the front and this is the punchline and really speaks to what he discovered with the very first successful uh piece of Patagonia clothing but it also ties into his love of the Ferraris design and his distaste
for the Cadillac design in the 1960s once you lose a discipline of functionality as a design guidepost the imagination runs muck once you design a monster it tends to look like one too and so the year is 1970 he's in Scotland he's on a winter climbing uh trip and he
says hey I bought myself a regulation team rugby shirt to wear thinking would make a great shirt for rock climbing overbuilt to withstand the rigors of rugby it had a collar that would keep the hardware slings from cutting into my neck so the the hardware equipment that
he has roped around his neck right as he climbs up the mountain that usually Do's all these giant cuts and abrasions on the back and this also speaks to the fact that he has this inner clock let's go back to what Charlie Monger said to me at dinner right he's just like I just
did whatever I wanted to do I didn't care what other people thought if I thought it was a good path for my life then you know everybody else be damned he calls that inter clock uh Warren Buffett calls it inner scorecard Ivon has that he's had his whole life that's
still he still has it to this day but his whole point is just like no one else was wearing the rugby shirt mountain climbing he didn't say oh you know what that what happens it's like if I put this on what other people think he doesn't give a what other people thinks or what other people think so he
says I weren't around climbing and then all my friends ask where they could get one so he starts ordering these shirts he's like I could I could not keep them in in stock they just could they sold out immediately every time we got them and then this is where he realizes oh I
have a business here I began to see clothing as a way to help support the marginally profitable Hardware business at the time we had about 75% of the climbing Hardware Market but we still weren't making much of a profit and so remember the very beginning of the book
he's like listen this book took 15 years years to write because I was insistent on running a business my own way it took time for meble to prove that my ideas were actually valid and so a lot of this like the book is not that long so maybe not a lot but there's several pages of
detail like they're just in pain uh because they're like I've never run a clothing company before and so I just want to pull out a couple quotes to give you a good idea of what's happening it's funny how much uh like he's wrote down fighting with the bankers like Phil
Knight and Walt Disney and then getting an offer from the mafia which is is hilarious so they start the clothing company and they're going to run shanard equipment at the exact same time I think there's an overlap of like 10 I think he said he sells off the he starts patagon
in 1973 and then sells off the equipment company think in the late 80s so maybe 15 almost 20 years there but what happens is the clothing is so popular and so differentiated and it sells so quickly that they can't keep up with the demand and their Bankers aren't helping
them this is exactly like if you read shoe dog Phil Knight talks about this a lot and near lady is a Nike so he says because we've been growing so quickly and we were still not very profitable we had a severe cash flow problem we learned the hard way that there was a big difference between running a
blacksmith shop and being in the rag business the clothing business at one point our accountant even introduced us to the to a mafia connection who wanted 28% interest so they're they're striking out trying to get Banks to lend them money is what he's talking about and
this one line is a great summary to give you an idea of what's happening there were a lot of acid stomachs and sleepless nights so something that he did forever is he just hire CEO um and he he cuz he believes in this in in NBAs which is management by absence and I'll
get to that in a minute and so I think over their 40-year history I think they've had seven different CEOs and so one of the first CEOs is Chris MCD Tomkins and she has this great a great description of Avon right where he just essentially says okay you're hired I'm
going off because he would go off constantly he would never want to be in the office he's constantly surfing climbing mountains going on these extreme risk boards going all over the the the world but he's his own first customer so he's the one that says hey I
need equipment to survive in the cold or I need equipment to you know climb this mountain and so he uses like his first person experience and then goes back to the team and they design like he's the first customer so they design the highest quality gear for the the risk he
calls him risk sports for what he's doing but there's something that's happening at this point this is in 197 1970s and so she's hired but they're had at the same same time he puts her in charge they're having all this like difficult financing issue they don't
know what to do and she does something that's really smart this is also something I learned from Steve Jobs as well and this is what Chris says she goes uh ion didn't want to run the company he wanted to climb and surf so he gave me the companies and said here's Patagonia here's shanard equipment do
with them what you will I'm going climing and so what she does here is exactly what Steve Jobs did when he was a kid and throughout his entire life the way I would summarize this quote I'm this quote that I'm about to read to you is that Steve Jobs believed that asking
for help is a superpower and so Steve said I've never found anybody that didn't want to help me if I asked them for help I called up Bill huet the founder of HP when I was 12 years old he answered the phone himself I told him I wanted to build a frequency counter I
asked him if he had any spare parts I could have he laughed and laughed and laughed he gave me the parts and he gave me a summer job working at HP on the assembly line putting together frequency counters this is the punchline I have never found anyone who said no or hung
up the phone I just asked most people never pick up the phone and call and that is what separates the people who do things versus the people who just dream about them you have to act Chris acted so she gets she has no experience they don't hire anybody he calls them dirt bags which I it's a not a
pejorative it's like a compliment like they're all dirt bags they're like people that just love to be outdoors and they're just doing it for the they're missionaries right and so these people have no business training at all and they're just like okay well what do I do
here and this is what Chris says uh she says I had no business experience so I started asking people for free advice I just called up presidents of Banks and said I've been given these companies to run and I have no idea what I'm doing I think someone should help me and they
did if you just ask people for help if you just admit that you don't know something they will fall all over themselves trying to help that is exactly Chris is discovering in the 1970s is is exactly what Steve Jobs said when he was a kid and I think he was uh
this is this a quote actually was transcribing from an interview that he did it's called like the Lost interview and it was right before he came back to Apple in the late 1990s and so before I go back to this idea about the importance of the founder being their first company like the first
customer right there's so many Innovations the book is full of innovations that come directly from ivonne's experience right like he loves what he's doing there's a fantastic quote I or fantastic little story that's just in this uh the book is is he didn't
even not only didn't not run a business like anybody else he didn't write a book like anybody else uh there's all these like random stories interspersed through the p uh the pages the picture pictures in this book are absolutely incredible again I really hope you you buy the book
but you stumble upon these random stories of Ivon from friends and this is from Tom broka who was like this legendary I don't even know if Tom's still alive but he's like this legendary anchor man that is also like an outdoor Enthusiast and he goes ice climbing with
Ivon and listen this is just really trying to give you's personality which I just personally love because he's just a kogin but he's a lovable kogin he's not trying to hurt anybody else he was prompted with the question Tom is prompted with the question you know what
was your single toughest climb he says probably with my friends including pagonia founder Ivan chinard we did a glacier on Mount rineer I had never really done ice climbing before and they gave me a 30 and they gave me a 30 second lesson in crampons and ice axe use at one point
we were going across a very steep patch of black ice and if you slipped you would have gone down about 1,000 ft I said to Ivonne we should rope up here and he said no way if if you go then I go and I don't want to do that this is like catching a taxi in New York City on
a rainy day it's every man for himself and then now Tom says it's been helpful for me it's been helpful to me uh to be ion's friend he makes me think about things in new ways and so then we go back to this idea about the importance of being your own best customer uh ifon
is there like now they have a very sophisticated R&D department but at this point he is the R&D Department this is what I mentioned the book is full of Innovations like this this they all originate from the same place be your own first customer that's a note this is
what prompted that thought it does no good though to wear a quick drying insulation layer over cotton underwear which absorbs body moisture and then freezes so in so in 1980 we came out with insulating long underwear made of polypropylene a synthetic fiber that has
a very low specific gravity and absorbs no water and the reason that's so interesting to me is because he says I'm a confirmed Lite he doesn't not does not have a phone he doesn't use a computer he does doesn't like electricity he like literally is caught like scared of electricity and yet he his company
because of the need to be able to develop like they are forced to innovate like you're not going to survive in these harsh environments where he is without Innovation and so he's actually created a technology company even though he hates you know Electronics it's just
really funny to me this is he's this is still the same page so it just continues on but he it they do something smart it's like okay so I'm innovating because I'm My Own first my own best customer that's smart and then you teach everything you know this is Trader Joe's
did this exact same thing if you listen to the episode I think it was 188 of Trader Joe the the the main driver was not advertising say hey we're Trader Joe you can buy stuff here there's this thing called The Fearless flyer which essentially just like goes into deep
detail about the things they sell it's it's educational informational and then therefore if you're reading the people that finished that and read the whole thing they're going to buy the products and so you see Patagonia uses that exact same uh idea here using the capabilities
of this new underwear as the basis of a system we became the first company to teach the outdoor community Through essays in our cat in our catalog the concept of layering and very much like Steve Jobs used his own personal taste to decide what products Apple sh manufacturer uh
ion does the same thing with Patagonia he's like listen you cannot wait until you have all the answers before you act I had faith that the product was good and I knew the market and that concept that idea he repeats throughout the book let me read this is this is something
that comes out comes along later as well that's just absolutely fantastic he says there are different ways to address a new idea or project if you take the conservative scientific route you study the problem in your head or on paper until you're sure there's no chance of
failure he's not going to do that however you have taken so long that the competition has already beaten you to market the entrepreneurial way is to immediately take a step and if that feels good take another if not step back learn by doing it is a faster process
and what I love here is this is a feeling you and I have probably both experienced right where he's a reluctant businessman he never wanted to start a business but when you start something and people start loving it that like the high the greatest High in the world and
there's like this excitement around growth right the fact that the idea is working and he's experiencing that here from the mid 1980s to 1990s uh our sales Grew From 20 million a year to $100 million a year Melinda that's his wife and co-founder and I were not personally
any wealthier because we kept the profits in the company but the growth was exciting and so one of the way they kept the profits in the company was by insisting on doing things their own way so his wife it's like hey I know what it's like to have children like we are
going to pay for and provide child care in our company so if you're working I think they give uh both maternity and paternity leave and they did this like decades before other people did but then not only that when you come back with your baby like you could be working and
it's on site so if you want to come down and like breastfeed or if you want to come down and read a story or take a nap with your son or whatever the case is they do that and they just do it because like no one else was doing it at the time they said now a lot of uh their
suggestions have actually been like put into law but they're just like we we're doing this because we believe that it's right and we trust our own judgment uh we opened at Melinda's insistence on onsite Child Care Center at the time it was one of only 120 in the country today
there are more than 8,000 the presence of children playing in the yard or having lunch with their mothers and fathers in the cafeteria help keep the company atmosphere more familiar more familial more like a family I can't even pronounce that word more like a family
than a corporation and so as a result of all this growth we see one this is one of my favorite parts of the book he's like he's really really he's been in business for like two decades now and he's still like do I actually know do I truly know why I'm doing what I'm doing
and we see that like it takes a lot of self-reflection to realize like oh maybe I I say I do maybe I actually don't so it says uh we were growing the company was growing at a rate that if it we sustained it it would make us a billion- dollar company in a decade to reach that
theoretical billion dollar Mark we would have to be begin selling to mass merchants or department stores this challenged the basic design principles that we had established for ourselves as the maker of the best hardware can a company that wants to make the best
quality Outdoor Clothing in the world remember his North Star is all about not the best at a price point not one of the best like the best period right so that's what he's talking about here uh can we actually make the best outdoor uh clothing in the world be the size of
Nike can this is one of my favorite sentences i' never forgotten in the five years since I've read the book The First Time can a 10 Table Three Star French restaurant retain its third star when it adds 50 table can you have it all this question haunted me throughout the 1980s as
Patagonia evolved he's also being changed because he's a father he's got two children and he's realizing he's like oh wait he's got a ton of friends uh that have died in these risk Sports up until this point but once he had he has the company and he has his family he's like oh I I should I have to
readjust what I'm doing here so she I continue to practice my NBA theory of management management by absence while I wear tested our clothing and equipment in the most extreme conditions of the Himalayas in 1981 three friends and I set off an avalanche while trying to
climb a 23,000 ft high mountain in Tibet we were carried for500 ft and stopped 30 ft from an edge of a 300t uh vertical Cliff one of my friends died from a broken neck another had a broken back I had a concussion and broken whip ribs I had never had much interest in climbing
mountains over 25,000 ft and now with this accident having two young children my interest waned even more I was the outside guy responsible for bringing back new ideas a company needs someone to go out and get the temperature of the world so for years I would come home
excited about ideas for products new markets or new materials and so what I realized by reading the book the second time is like this this constant repetition of simplify simplify simplify comes because it was a mistake that he made by letting it get complicated so all this what I'm
describing you is having at the exact same time and he's like okay I need to find out like I need to know my why like we're growing too fast this is getting too complicated I could build a business that I don't want to be in anymore and his whole thing is like I just want to
be in Patagonia forever and not only do I want it to be in Forever is like I want it to live and survive after I'm dead he ends the he start ends the introduction saying hey I hope the company's here for another hundred More Years After I'm Gone Looking Back Now I
see that we made all the classic mistakes of a growing company we failed to provide the proper training for our new company leaders the stra and the strain of managing a company with eight autonomous product divisions and three channels of distribution exceeded our
management skills our organization chart looked like a Sunday crossword puzzle this is about the pain right the pain and the struggle and the sleepless nights and the acid stomachs the company was restructured five times in five years and no plan worked better than the
last one and so then realizes let's let's try to get a different perspective they go and talk to this guy they hire a consultant and this is actually funny because he's like okay we're gonna fly down to Florida we're going to see this guy named Dr Michael Kami who actually
ran strategic planning for IBM and was credited with help turning Harvey Davidson around that's how Ivon had heard about him so they fly down and they actually meet him and he's the small man in the 70s with a lot of restless energy and he lives on an enormous yacht and he wears a captain's
hat and so he's like okay before I could help you I I need to know like why you're in business I told him the history of the company and how I consider myself a Craftsman who just happened to grow a successful business I told him I'd always had a dream that
when I had enough money I'd sail off to the South Seas looking for the perfect wave we told him the reason that we hadn't sold out yet and they got a bunch of like acquisition offers and retired was that we were pessimistic about the fate of the world and felt a
responsibility to use our resources to do something about it Dr commi thought for a while and then said I think that's if you're really serious serious about giving your money away you'd sell the company for $100 million keep a couple million for yourselves and then you put the rest in a foundation
that Foundation could then give away $6 or $8 million every year here I then told him I was worried about what would happen to the company if I sold out and then he said so maybe you're kidding yourself about why you're in business it was as if the Zen master had hit us over
the head with a stick but instead of finding Enlightenment we walked away more confused than ever and so this goes on page after page after page but this is one sentence I double underline because it's essentially what he's searching for I was still wondering why
I was really in business in the crazy unexpected surprising way he finds in case he finds the answer to like his why he actually decides to involve the rest of the people in his company he decides okay we need to write down this is very common uh you probably already done this
in in your work in your business as well but like you write down like you need like written written the written word on what your philosophies like what are important to you and what are like the the cornerstones of The Bu of your business building philosophy right so
you could share with other people in the company so that is a very like un unon likee thing to do and yet he got such great value out of out of it because I think some people here that like oh it's like really skeptical like how helpful could that be and so what he does they
start writing it down he's like okay well that's not good enough like we're going to write it down that's like the first step that's least we can do but then we're going to teach and we're going to teach and we're going to teach and we're going to teach philosophy
classes company Philosophy classes to everybody else in the company now why is that important because in teaching his employees his company Philosophy he learned it himself and of course it's in his own unique way I began to lead weeklong employee seminars in these
newly written philosophies I realized now that I was trying to do was to instill in my company at a critical time lessons that I had already learned as an individual as a climber and a surfer and a kayaker and a fisherman I had always tried to live my life fairly simple
simply but remember he just talked about our our freaking organizational structure looks like a Sunday crosswork puzzle like how do we let this happen doing wrist Sports had taught me another important lesson never exceed your limits you push the envelope and you
live for those moments when you're right on the edge but you do not go over you have to be true to yourself the same is true for business the sooner a company tries to be what it is not the sooner it tries to have it all the sooner it will die I it was it was time to apply a bit
of Zen philosophy to our business and so at these company meetings this is something I never even would think to do he says I did know that we had become unsustainable and then we had to look to the iroy so the iroy Native Americans and their seven generational plan seven
generation planning and so again his whole thing is like he looks for the long term and he wants his company to last so at these meetings uh he says we're going to look to the iroy and there seven generational planning and not to Corporate America as models of
stewardship and sustainability as part of their decision process the iroy had a person who represented the Seventh Generation in the future if Patagonia could survive this crisis we had to begin to make all of our decisions as though we would be in business for a hundred years teaching the classes also
gave me the real answer to Dr Kam's question I knew after 35 years why I was in business true I wanted to give money to environmental causes but even more I wanted to create in Patagonia a model other businesses could look to in their own searches for environmental
stewardship and sustainability just as our pons and Ice axes were models for other equipment manufacturers I'm going to interrupt this paragraph because when I got there and made me think of something I heard Jeff Bezos say one time that I think is absolutely fantastic I talked about AO
Marita which is the the founder of Sony I think it's episode 102 both Jeff Bezos and Steve Jobs among a bunch of other entrepreneurs but both Jeff and Steve are on record about learning from AIO and actually setting his career and using those ideas in building their
company right which is the entire thesis of what you and I are doing every week on Founders je so this is Jeff basos on what he learned from AO Marita and how it influenced the building of Amazon this is what Jeff said right after World War II Akia Marita the guy who founded
Sony made the mission for Sony that they were going to make Japan known for quality and you have to remember that this at this time uh this was a time when Japan was known for cheap copycat products and Marita uh didn't say that he was going to make Sony known for
Quality he said we're going to make Japan known for Quality he chose a mission for Sony that was bigger than Sony is that not and now I'm interrupting an interruption to tie this back to what he just said he's like he just picked a mission bigger than Patagonia let's go back to what Jeff is
saying uh he chose a mission for Sony that was bigger than Sony and when we talk about the Earth's most customer cented company we have a similar idea in mind we want other companies to look at Amazon and see us as a standard Bearer for obsessive focus on the customer as
OB as opposed to obsessive focus on the competitor back to where we are in the book I remembered again how I become a businessman in the first place that I had come home from the mountains with ideas spinning in my head on how to improve each piece of clothing and
equipment I used teaching the classes I realized how much Patagonia as a business was driven by its high quality standards and classic design principles having our philosophies in writing as well as the shared cultural experience of the classes played a critical role in
our turnaround and so during this crisis I think this is the last like serious crisis the company had I don't think they've had like another serious crisis like this in the next like 25 years but what he realized it's like oh we have to like this was the the lessons and the
learnings and the Improvement of our capabilities that came out of this crisis were so important like we have to maintain this like we need to in if there's no stress we're going to create stress we're going to induce stress he has this concept I've never heard of
before which is excellent It's called yarak I'm going to read it to you before I read to you I'm going to tell you like I'm going to quote ion later on the book and he talks about he says this at the beginning of the book he says this towards the end the lesson to be learned
is that Evolution what he calls change right does not happen change does not happen without stress and it can happen quickly just as doing risk Sports will create stresses that lead to a bettering of oneself which is why he climbs Mountain does all the crazy stuff he
doesn't begin with right so should a company constantly stret itself in order to grow and so that he talks about it's the leader the founder and the leader role to create stress even if there isn't so your company's constantly evolving and changing and growing he took this concept because when he was
like a young boy he was like 12 years old 13 years old in California he he was obsessed with falconry I didn't even know falconry was a thing before I read this book to be honest with you and so he then takes this idea just like he took an idea from the iry the Native
Americans and apply it to his business he like oh I have a lesson from falconry that we can apply to the company and so I just wrote I love this concept yarak it is y a a k and so it says for the most part the big problems have been solved and there were no crisis except
those that were invented by management to keep the company in yerak for the most part the big problems have been solved and there were no crisis after what we just went through except what was invented by the management to keep the company in yerak what is jerak jerak
is a falconry term meaning when your Falcon is super alert hungry but not weak and ready to hunt so Ivon is telling us keep your company super alert hungry but not weak and ready to hunt that is one of my favorite ideas in this entire book and it was something I
missed I missed the importance of that the first time reading the book and in a few weeks for episode 300 I'm going to reread James Dyson's autobiography still the number one book recommendation the first autobiography he wrote when he was a younger man uh when he was like 45 not
the one he wrote when he was like 75 or 70 but the what's fascinating to me is that uh the organization of Avon's book is very similar to James where he'll like line out and some of these sections are specifically titled like hey this is my production philosophy this is my
marketing philosophy this is my distribution philosophy this is my financial philosophy this is why it's so important to not just listen to you know this podcast about it but actually read the book and buy the book and use it as a reference and so this goes back to
where I just have to repeat a bunch of things that are really really important to me um they've stuck out to me for years something I want to keep in my mind EX goes back to Quality is number one quality Simplicity long-term thinking uh being a misfit uh you know
being a pirate these are very important lessons from the book that I think can be applied uh in like in infinite situations and forever make the best product is a Cornerstone of our business philosophy striving to make the best quality product is the reason we got into business in the first place we are
a product driven company we are not satisfied making second best clothing make the best is a difficult goal does not mean among the best or best at the particular price point it means make the best best period I actually have a reminder of that saved on my phone it's
actually a gift of Jay-Z doing this interview probably 10 years ago and he says what am I here for to be second best I don't think so and then aanas has fantastic on liners this is one of my favorite lines one of the best lines in the book The more you know the less you
need talks about the importance of keeping your product line simple few of us have the time patience or knowledge to order from a 12-page Chinese restaurant menu or to choose among 50 pairs of seemingly identical skis in a ski shop people have too many choices these days they are tired of constantly
having to make decisions particularly when it takes major effort to make Intelligent Decisions too much Choice brings unhappiness and really what he's saying is part of the value that you're providing is making the decision for the customer you have the time and the
knowledge and the specific knowledge to make Intelligent Decisions they do not they're busy with other things they're busy with their own work they're busy with raising their kids they're busy with their own life part of the value that you provide is making the decision
for your customer and I know I've already said this one time but it is really important to repeat it I wrote when I read this the second time I feel this in my soul difference and retention of total control that is a quote from James Dyson I feel this in my soul is a
quote from me when I die and go to hell the devil's going to make me marketing director for a Cola Company I'll be in charge of trying to sell a product that no one needs is identical to its competition it can't be sold on its merits I'll be competing headon in the
Cola Wars on price distribution advertising and promotion which would indeed be hell for me remember I'm the kid who couldn't play competitive games I'd much rather design and sell products so good and so unique that they have no competition and so even though Ivon
definitely marches to the beat of his own drummer and is dancing to music most of us can't even hear he still one thing he shares with oh I would say everybody that you and I study on this podcast is like when you listen to the podcast you read the books it's like these people
are going to hold you to unbelievably high standards and so he is not with any kind of excuses reading this book like when I'm on this page and I'm thinking about this and I'm actually like making underlining and I'm taking the notes and I'm like not skipping to the next page
and trying to get through the book as as quick as possible I'm thinking it's like do I do any of this are there parts of my life whether it's professional personal otherwise it's like where I am listening to excuses where I would be better served having ivonne's
uh perspective on this than my own and this is an example he just talks about some common examples and excuses that he or hears from other companies like this is not good enough your quality level is too low it is not acceptable uh so it says or you hear something like I wish I
could help you with that but you know I wish we could do it but our insurance policy just won't allow it and so he's going to say he's going to give you the example what you'd hear and then he's going to say what he would say uh so I wish we could do that but our insurance
policy won't allow it why not just do it anyways or get another insurance policy or don't even have insurance get out of the kitchen if you cannot stand the heat here's another example we can't get any more Fabric or aluminum or whatever so substitute another material try another
Mill or 50 or 100 other Mills try Mills in other countries call a competitor and find out where they get their fabric another example I've called and called and called and I can't get through how many times have you really called three or four times call 20 times try an email
or a registered letter or catch them at home with a 5:00 a.m. wakeup call here's another example of an excuse I didn't have the time or I've been too busy to answer your letter or to return your call or to write a weekly report or to clean my desk whatever these are
dishonest excuses what the person really means is that the job didn't get done because it had the lowest priority and in fact he may never return your call because he really doesn't want to people do what they want to do and lastly impossible this is the lamest of the
lame excuses difficult maybe or impractical or too expensive but rarely is anything impossible and then another reason I recommend this book so highly is because he just conveys these ideas and it doesn't take a long time he's not if if he can convey the idea in a sentence or
a paragraph he's going to be able to convey that idea in a sentence or a paragraph and not take an entire chapter and so this jumped out of me this is something I missed the first time where he's like oh highquality people who he's targeting with his his products right
he's like high quality people want specialization this is going to Echo what uh Johnny IV learned about Steve Jobs when Steve Jobs came back to Apple uh in the late 1990s he says by carrying a little bit of this and a little bit of that these stores meaning his competitors have evolved into non
specialty stores that would be okay if your average outdoor store customer had average chaste and an average mentality but are talking about smart people with money and not much free time in most cases the the consumer has far outgrown the capabilities of average outdoor
stores to service them and you can summarize that entire idea with high quality people want specialization this is a quote from the biography of Johnny IV that I read back on Founders one uh episode 178 jobs didn't want to compete in the broader market for personal
computers Ivon does not want to compete in the broader market for outdoor wear or outdoor activities he is specialized right uh these companies competed on price not features or ease of use jobs figured theirs Was a Race to the bottom instead Steve argued there was no reason
that well-designed well-made computers just like Ivon is arguing here that well-designed well-made clothing couldn't command the same market share and margins as a luxury automobile a BMW might get you to where you're going in the same way as Chevy that costs half
the price does but there will always be those who will pay for a better ride and a sexier car why not make only first class products with high margins so that Apple could continue to develop even better first class products and then he talks about is marketing philosophy and I actually
realized like there's ideas spread over probably 50 different pages that all kind of relate to each other so I'm going to get into non-fiction Marketing in a minute and really I think a like a important part of the non-fiction marketing is that teaching like if you
teach the sales if you focus on teaching uh your customers sales will take care of themselves uh I mentioned this exact exctly what Trader Joe's did earlier with the Fearless flyer they took ideas in fact in that they talked about they took ideas from David ogy like 20 years
earlier and just used his ideas in that like the more you teach the more you sell or the more you tell the more you sell I think is the the the ogave quote so he talk he's talking about the male order catalog but he says the male order catalog has always been our soap boox
and enables us to transmit information about patagonia's philosophies and products directly my first principle argues that selling ourselves and our philosophy is equally important to sell selling the product so he's his form of selling there is education and so
they're doing that not only on their own properties on their website on their catalogs in their stores but then they go and spend money like uh enabling other people to teach their customers Patagonia catalogs have printed field reports these are brief essays about
experiences in the Wild by writers and friends and these are like some famous writers and outdoorsmen there's like six listed here and in addition to that we have commissioned and printed environmental essays and and documentaries and he list another six or seven other people as well he's just
like okay okay that is a form of Education you could ALS also argue it's a form of you know advertising in public relations but the education and the teaching comes first and if you do the education teaching first then the sales will come naturally later on this is all
spread over many many pages I did not understand this the first time I read the book but you see that pop up and I'm glad I I left notes on all these different pages and reread them last night before I sat down to talk to you today and I was like oh there's a
pattern I missed our approach to public relations is aggressive advertising as I mentioned rates dead last as credible source of information his whole point is just don't advertise say hey this is what I have buy it from me his point is if you teach inform and Inspire and you
do so relentlessly the sales will follow teach inform and Inspire do so relentlessly and the sales will follow that's an excellent idea and it ties back to how he opens the marketing philosophy as uh portion of the book on this is an idea I did not miss the first
time and I love it it's called non-fiction marketing and I I bet everything on this that people crave authenticity we hate this fake that companies do our branding efforts are simple tell people who we are we don't have to create some fictional character like the maral man or a fake responsible
caring campaign like chevron's we agree advertising campaign writing F this is so good writing fixure so writing fiction is so much more difficult than non-fiction fiction requires creativity and Imagination non-fiction deals with simple truths patagonia's image arises
directly from our values and passions of its Founders and employees it's not you cannot make it into a formula in fact because so much of the image relies on authenticity a formula would destroy it amen without a formula the only way to sustain an image is to live up to it our
image is a direct relation of who we are and what we believe and I would also argue this authenticity right is a form of resourcefulness when they started doing this they would take like pictures like you you know he's producing clothing for God's sake so you take
pictures or you get models you hire people or in a case where you didn't have any money to be friends and they would just snap a picture and he's like yeah but that's like it's a stage photo this is doesn't make any sense and so there's the form of resourcefulness is
the fact that that that humans crave authenticity they respond to it and then they're not necessarily just identifying with the company but they're like oh like they're cre your customers if you have like if you you actually an authentic brand and Company your customers want to help you and so the
form of resourcefulness how this all ties together is the fact that like he ion had an idea one day he just popped into his head he's like well we're spending all this money we're we're hiring models and we're taking photos and everything and this doesn't really
look good it's not really authentic what if we just put a line they put a line in their catalog and says uh we're going to collect photos from our customers of real people doing real things we put a notice in our catalog for our customers to capture a
Patagonia uh I guess it's a line for the people that really love pag Patagonia the brand and we were inated with photo submissions from our customers and photographers photos of real people doing real things that they gave you for free so that's what I mean about the
resourcefulness I he might have 2,000 and he only needs four or five so they're you know they're going to be high quality because he gets so much inbound from that it's free and it's your customers want to do that because they're responding to your authenticity
and your non-fiction marketing so then ion takes his love of Simplicity and applies it to his financial Philosophy for running the business and he says our mission statement says and this is also going to remind me of something that Steve Jobs said as well our mission statement said
nothing about making a profit in fact our family considers our bottom line to be the the amount of good that the business has accomplished over the year still family business I think he just gave it uh ownership to like a trust I'm not sure if that takes Place uh if it
already taken place or if it happens when he dies but he says however company needs to be profitable in order to stay in business and to accomplish all its other goals and we do consider profit to be a vote of confidence that our customers are proove of what we are
doing we have to be profitable because the profit keeps the company in business right and he has a funny line here it's okay to be Ecentric and he knows his his ideas on business are Ecentric so he says it's okay it's okay to be Ecentric as long as you're rich otherwise you're
just crazy at Patagonia making a profit is not the goal but as the Zen master would say profits happen when you do everything else right this's this fantastic book called in the company of giants I think it's episode 208 of Founders it's printed in 1987 it's like an interview with like 16
technology company Founders and Steve Jobs said in that book I was taught by some wise people that if you manage the top line of your company that your customers your products your strategy the bottom line will follow but if you manage the bottom line of the company
meaning Finance first and forget about the rest you'll eventually hit the wall because you take your eyes off the prize and so then ties in the fact that if you have a high quality product and you control your cost then you can't help but make a profit our profits are
directly tied to the quality of our work and our product a company that doesn't take quality seriously will attempt to maximize profits by cost cutting increasing sales by creating artificial demand for goods and hammering the rank and file to work harder quality not
price has the highest correlation with business success that's so important let's repeat it twice quality not price has the highest correlation with business success companies with high products and services High product and service quality reputations excuse me have an average return on investment
rates 12 times higher than their lower quality and low price competitors whenever we are faced with a serious business decision this is the most important sentence in this entire section in my opinion whenever we are faced with a serious business decision
the answer almost always is to increase quality and to prove the point that repetition is the mother of all learning he says it again we never wanted to be a big company we want to be the best company and it is easier to try to be the best small company than the best big
company we have to practice self-control our goal is to have no debt which we have achieved a company with little debt or with cash in the kitty can take advantage of opportunities as they come up or invest in startups without having to go further in debt or found or find
Outside investors that reminded me of what Charlie said uh when I had Charlie merer said when uh I had dinner with him said that him and Warren and birkshire in general had made a ton of money because they always had cash and they could act fast and then just to wrap up
this section this importance of quality I actually underline this and I text my friend Rob Moore who's the co-founder of the human Lab podcast because I'm always thinking about who are the smartest players on the board and in terms of quality and and execution not only the
the quality of their product but also how they think about their business those they're in they're leading in this in this profession and this is I've talked to them enough that it's like oh like this is clearly how I'm trying to think and this is how they already think
I can imagine any company that wants to make the best product of its kind being staffed by people who do not care passionately about the product amen at the top of this page is one of my all-time favorite quotes in general uh this you know could be if you had to choose a North star a quote as a North
star this is a fantastic one to get the most out of life a master in The Art of Living draws no sharp distinction between his work and his play his labor and his leisure his mind and his body his education and his Recreation he hardly knows which is which he simply
pursues his vision of Excellence through whatever he's doing and leaves others to determine whether he is working or playing to himself he always appears to being doing both that's how I feel about Ivon I think Ivonne nailed that and then we go back to this idea which I
absolutely love is the fact that he gets all these lessons on how to run his business from reading books and they're not even books about business so he's reading this book called The the beak of the finch by his SK named J Jonathan Weiner and it has this idea where was
like a theme throughout the book where he feels change as opportunity and that if your company isn't going undergoing uh stress you actually need to induce it because that's how you grow uh so he says in his book Jonathan weiner talks about an insect that was found preserved
in Amber this specimen is millions of years old and is identical in appearance to that specimen or that species living today with one big difference the present day insect has developed the ability to shed its legs and regenerate new ones after touching plants covered
with pesticides the lesson to be learned is that Evolution and he puts in parenthesis change the lesson to be learned is that change does not happen without stress and it can happen quickly you should not see change as a threat rather as an opportunity to grow and
evolve to a higher level a company needs to constantly stress itself in order to grow our company's always done its best work whenever we had a crisis when there is no crisis the wise leader or CEO will invent one not by crying wolf but by challenging the employees with a change
if you don't move now then you might not be able to move when a real crisis happens Teddy Roosevelt said in in Pleasant peace and security how quickly the soul and a man begins to die and then he reiterates that they're doing so to make the highest quality product to
make a business that lasts over 100 years and to use the resources to fight this uh Global ecological crisis that is that he goes into much detail in the book and then there's just this excellent quote that I've never heard before and wait to get to the last line
if you want to die the richest man then just stay sharp keep investing don't spend anything don't eat any Capital don't have a good time don't get to know yourself don't give anything away keep it all die as rich as you can but you know what I heard an expression that
puts it well there's no pocket on that last shirt and then Ivon leaves us with some parting advice adapt or die when I look at my business today I realize one of the biggest challenges I have is combating complacency I always say we're running Patagonia as if it's going to be
here 100 years from now but that doesn't mean we have 100 years to get there our success and Longevity lie in our ability to change quickly continuous change and innovation requires maintaining a sense of urgency this is a tall order especially in Patagonia is seeming
laid-back corporate culture in fact one of the biggest mandates I have for managers as the company is at the company is to instigate change it is the only way we're going to survive in the long run it's the same in nature nature is constantly evolving and the ecosystems support species that adapt
either through catastrophic events or through natural selection a healthy environment operates with the same need for diversity and variety evident in successful businesses and that diversity evolves out of a commitment to constant change our current landscape is filled
with complacency be it in the corporate world or in the environmental front only on the fringes of fringes of an ecosystem those outer rings do Evolution and adaptation occur at a furious Pace the inner center of the system is where the entrenched nonadapting species die
off same for startups and older businesses older unchanging businesses doomed to failure by maintaining the status quot businesses grow through the same Cycles conventional corporations are at the center of the ring and eventually they will die off through either their own misdeeds or
catastrophic events such as dismal economic climates or unforeseen competition only those businesses operating with a sense of urgency Dancing On The Fringe constantly evolving open to diversity and new ways of doing things are going to be here 100 years from now adapt or
die and that is where I'll leave it for the full story highly recommend buying the book people always ask me to make like a top 10 list which is so hard to do because I love all the books in general but all the books that I cover I would I'd have to imagine if I did ever
have uh have like a permanent top 10 I think this book would be in it that's how much I um I recommend there's just a ton of interesting ideas and like prompts for your own thinking in the book so if you buy the book using the link that's in the show notes uh on your
podcast play it's also available at Founders podcast.com you'll be supporting the podcast at the same time if you want to join my free email newsletter I'll email you the top 10 highlights from every book that I read that link is down below and finally
another way you can support the podcast is by joining Founders premium where I make episodes on questions that I receive from subscribers that link is down below and available at Founders podcast.com along with everything else that is 297 books down 1,000 too and I'll talk to you again soon