Patagonia's History: a "dirtbag" business The Beginnings of a Businessman A world-class mountaineer known for several impressive ascents, Chouinard described himself not as a businessman, but a "dirtbag," his term for someone who wandered through "temp jobs and long summers," pursuing a life of climbing in Yosemite and surfing in Baja. 10 Spurred by the desire to make stronger, better climbing equipment for himself and his friends, Chouinard started a business making pitons (pegs used in mountain climbing) in 1957. As demand for his gear grew, the back-of-the-car operation eventually transformed into Chouinard Equipment. In 1966, Chouinard set up shop in Ventura, California, for its proximity to surf breaks, and began a partnership with his peer climbers, Tom and Doreen Frost. 11 Chouinard Equipment became the largest supplier of climbing hardware in the United States by 1970, but as Chouinard recalled, "None of us saw the business as an end in itself. It was just a way to pay the bills so we could go off on climbing trips."12 Tom and Doreen would work while Chouinard took six months surfing down the west coast of the Americas, skiing in Chile, and climbing in Argentina. In return, the next year, Chouinard would watch the business while Tom climbed the peaks in the Himalayas. 13 Patagonia's Early Years In 1972, Chouinard Equipment added an apparel line named "Patagonia" after a mountainous region in Chile and Argentina. Soon after, Chouinard's partnership with the Frosts came to an end. Patagonia was established as its own company in 1979, and Kristine McDivitt Tompkins, an avid ski- racer and fellow "dirtbag," was appointed its first CEO. Lost Arrow Corporation was created in 1984 as a parent company for Chouinard's businesses. 14 During the 1980s, while Chouinard Equipment experienced legal trouble and was eventually sold, Patagonia grew its sales from $20 million to $100 million and expanded internationally to Europe and Japan. 15 Although the early 1990s recession triggered a sales crunch and layoffs of 20% of its workforce, sales at Patagonia continued to grow, albeit erratically, throughout the 1990s, at 6.7% compounded annual basis from 1989 to 1999.16 By 2000, the company was grossing about $200 million in net sales. (See Exhibit 1 for Patagonia's financials.) Business Philosophy Chouinard stated that he would "never be happy playing by the normal rules of business."17 He saw business as deserving much of the blame for many of the world's economic, social, and environmental problems. However, he believed that business had the potential to alleviate these problems and inspire positive change. For Chouinard, Patagonia represented an experiment" to "challenge conventional wisdom and present a new style of responsible business."18 Expressing that he wanted to "distance [himself] as much as possible from those pasty-faced corpses in suits," Chouinard asserted, If I had to be a businessman, I had to do it on my own terms."19 He firmly believed in Zen philosophy, which he saw as "perfect" for the business world. He explained, "In Zen archery...you forget about the goal-hitting the bull's-eye-and instead focus on all the individual movements involved in shooting an arrow. . . . If you've perfected all the elements, you can't help but hit the center of the target." Applying this philosophy to Patagonia, he oriented its goal away from profits and toward "doing things right."20 Chouinard also applied to his business important lessons he had learned from climbing the likes of Yosemite's El Capitan. In particular, Patagonia's environmental commitment arose from Chouinard's