Cotopaxi works with the IRC to help refugees get job skills and adjust to life in Salt Lake City.
Davis Smith is no rookie to entrepreneurship. Founder and CEO of Cotopaxi, a Salt Lake City-based outdoor retail brand, Smith has raised over $40 million in venture capital for his previous startups. But this time, he doesn’t just want to sell just any product, he wants to use his business as a vehicle for “doing good.”
As a child, he lived in Central America, often seeing the harsh divide between the have and the have-nots, he says. But later in life, when it came time to devising a business plan that did more than gain profit, he knew he had to think beyond the one-for-one model. “The one-for-one model just didn’t work. It didn’t actually solve the problem. You need business to help support those who are tackling the root of the problem.”
Cotopaxi Teca windbreaker is made from waste fabrics.
That’s why his latest company, Cotopaxi has a host of initiatives focused on different aspects of poverty: water and sanitation, livelihoods, education, and refugee communities. While selling jackets made from repurposed materials, sweaters made of Bolivian llama fibers by local weavers, and one-of-a-kind backpacks made from scrap materials, Smith is keen on putting the profits into non-profits that are tackling social issues, abroad and locally within Salt Lake City. Hence, the startup funnels 2 percent of the company’s revenues into these various initiatives.
Founder and CEO of Cotopaxi Davis Smith (left).
A student at BYU in Utah, Smith recalls that he had a hunger for "entrepreneurship with a purpose" from the beginning. It started with admiration for Steve Gibson, a serial entrepreneur, who has invested in companies such as Ancestry.com, 1-800-Contacts, and co-founded the Utah Angels, the first angel investment network in Utah.
But it wasn’t Gibson’s financial success that lured Smith. “I remember reading an article,” he recalls, ”in which it explained that he had sold one of his companies for a hefty sum, and then decided to move to the Philippines to educate others on entrepreneurship, giving them room and board, and helping them set up their own businesses.”
Smith cut out the article and popped it into the front of his binder — a visual reminder for the next three years in college of his aspirations. “I was just amazed that he chose to go educate other people, and empower them. He could have retired anywhere. He could have bought a nice big house in Hawaii. But he chose to spend his time helping others.”
Three years later, fortuitously, Smith saw Gibson on-campus for an event. He forced himself into an elevator with Gibson. Later, he tried to convince Gibson to hire him. But Gibson encouraged him to be an entrepreneur, his own boss.
After a few failed attempts at building a mission-driven business, Smith has, perhaps, stumbled onto the right concept with Cotopaxi. With the aim to make people self-sufficient, Smith has incorporated marginalized communities, namely refugees, into his business plan.
Salt Lake City has welcomed refugees from the Democratic Republic of Congo, South Sudan, Bhutan, and even Syria. It’s estimated that 60,000 refugees reside in Salt Lake City county.
Smith decided to employ a few of them to write thank you notes to customers. Since starting the business, Smith would personally write the thank you notes that accompanied orders. As the business grew, he and his team couldn’t handle the workload. So they employed local refugees– a suitable way for them to practice their English and get their first job in their new home, he says.
Fiston and Jolly, two Congolese refugees, who participated in Cotopaxi’s card writing program.
Through the program, he met a dynamic brother-sister duo, Fiston and Jolly Mwesige from the Congo. They had fled their home during the Ituri conflict in the Congo, after their parents were killed. With their four siblings, they walked to the Ugandan border where they lived as refugees in a camp for five years. Recently, they were given refugee status and welcomed to Salt Lake City.
When they arrived at Cotopaxi to write thank you letters, Smith was blown away by their tenacity and spirit. “What we sometimes fail to remember is that they’re brothers, sisters, dads, moms, grandchildren with goals and dreams and ambitions just like us,” he says.
Jolly has now graduated high school with a full scholarship to the University of Utah. Smith hopes that his company can support more young men and women like them through small interventions. The card-writing program is a permanent feature at the company; now, it’s done in partnership with the International Refugee Committee in Salt Lake City, meaning the participants not only earn wages from their work at Cotopaxi, but also get access to training and courses on how to improve their interviewing skills, write a resume, and even code.
As more people filter through the program, Cotopaxi is helping these individuals find employment in local companies, such as Adobe, Smith says. In addition, more prominent fundraising campaigns bring awareness and clarity on refugees and their struggles.
Last year, on Giving Tuesday, Cotopaxi ran a campaign called #JustLikeUs, addressing the movement of Syrian refugees into their hometown. “It was risky,” Smith admits, “given that it became such a politicized issue, and we were a young brand. But we felt like it was necessary.”
The campaign raised $30,000 in $20 donations for the IRC. “It’s not a massive amount of money, but it came in such small donations, and got so many people talking, recognizing a whole community of people,” he says.
Cotopaxi today employs three refugees full-time in their warehouse, has worked with 95 card writers, and trained 45 refugees in coding in their first batch. With the company growing between 2 and 4 times annually since launch, Smith says, that their commitment to the community locally and the refugee programs will continue in the coming years.
When the company launched in 2014, Neil Blumenthal, co-founder of Warby Parker and Smith’s classmate in business school, told Smith, no one is going to buy the product because you’re going to do good. At the time, Cotopaxi was selling just 5 backpacks and the messaging was all about doing good. So, is it possible that all this talk of "business for good" could actually turn away customers?
“Now we’ve realized that you do have to the find the balance between a great product and a brand that speaks about bigger issues," Smith says. "It’s not one or the other, but finding the balance between the two."
However, for him, it’s very clear that business can be the vehicle to push money, opportunity, and new skill sets to communities that lack it the most, such as the refugees in Utah.