MBA Startup: Cotopaxi’s “Gear for Good”
With the motto “Gear for Good”, Cotopaxi, a startup founded by two Wharton School alums, is changing the game for philanthropy in business. In addition to their direct-to-consumer brand of outdoor gear, the company seeks to change lives through direct partnerships with charities, allowing customers to see the true impact of their contribution.
Cotopaxi’s Charitable Core
At its core, Cotopaxi is a direct-to-consumer brand selling outdoor accessories like backpacks, water bottles and outerwear, to name just a few of their products. Purchase of the products helps the company fund the needs of those living in extreme poverty, and is used to create targeted grants for advancing education, health and livelihood initiatives throughout the globe.
Cotopaxi aims to directly connect their products to the cause that their sale will support, to help consumers better understand how their purchase has impacted the world.
“If you buy the Inca backpack, you’re giving one week of tutoring to a child in an orphanage in Bolivia,” said Cotopaxi co-founder, Davis Smith. “If you buy the Sambaya fleece, you’re giving one cancer treatment to a woman in Senegal…Every product has its own unique story. Our goal is to help users of our products to feel a direct connection to a cause, country and individual story.”
Cotopaxi solicits and partners directly with the charities they support. Not only do they partner with the charity financially, but Cotopaxi also provides support to help each nonprofit function as efficiently as possible. The company does not accept proposals from organizations, but actively searches for nonprofits which are led locally and help serve the community.
Just after their launch in 2014, Cotopaxi began hosting Questivals: massive 24-hour races in which thousands of participants take part in both athletic and quirky challenges. The inaguaral event witnessed almost 5,000 participants and generated 30,000 social media posts throughout the day.
Cotopaxi’s Story
Launching in early 2014, Cotopaxi began more than a decade ago, when co-founder Davis Smith and his wife (G11 WG11) travelled from Utah to Peru with a nonprofit organization. While traveling to see Machu Picchu, the young couple encountered Edgar — a young boy with a shoeshine kit — and began to bring him meals. One day Edgar lost his shoeshine kit and thus the means to an income which helped support his family. After witnessing Edgar’s despair, Smith and his wife gave the boy what little money they had. They didn’t truly understand the impact they had had on Edgar’s life until seeing the smile on his face the next day.
Ten years later, and with a decade of entrepreneurial experience behind him, Smith encountered Stephan Jacob (G11 WG11) at a Lauder Institute reunion. Together, the two Wharton graduates would use their entrepreneurial experience to help people around the world feel empowered to make the same sort of change.
Within just a few short weeks of launching, the brand received more than 400 unsolicited job applications. Product return rates are lower than 1 percent, while the likelihood of another purchase after the first order is as high as 20%.
How the MBA Influenced Cotopaxi
“I came to Wharton with some self-doubt, wondering if I could start another business as successful as the last,” said Smith, who was an already experienced entrepreneur at the time he entered Wharton.
“I knew that coming to school would give me two years to reflect on lessons learned from my last business and to come up with the next big idea. I took a class…where we held an innovation tournament and that class concreted the importance of idea generation as part of the entrepreneurial process.”
After graduating from Wharton, Smith and his cousin expanded one of these ideas into the successful Baby.com.br, a baby focused e-commerce company in Brazil. Today, between the direct partnerships with Cotopaxi and local nonprofits as well as the Questival races, Smith is truly living his vision of using entrepreneurship to create positive change in the community and around the world.
In discussing the influence his Wharton education had on the founding of Cotopaxi, Smith says:
“It was really instrumental, I think, in identifying this opportunity, just because you’re surrounded by other brilliant entrepreneurs, people who are taking this risk. And it was a great idea to bounce your ideas off people, and kind of sound check them a little bit.”
About the Author
Alanna Shaffer
Staff Writer, covering MetroMBA's news beat for Atlanta, Houston, and Dallas.
