A Founder’s Perspective on the Building Blocks of Diversity
Davis Smith is the founder and CEO of Cotopaxi, an innovative outdoor gear brand with a social mission at its core. Prior to that he founded Baby.com.br, Brazil’s leading e-commerce retailer of baby products. Baby.com.br was named Brazil’s “Startup of the Year” in 2012 and raised $40M+ in venture capital.
Davis was recently appointed to the United Nations Foundation’s Global Entrepreneurs Council (GEC). The GEC is a group of eight global entrepreneurs focused on using innovation to solve some of the world’s most pressing problems. Over the next two years, the GEC is specifically focused on developing an entrepreneurial mentoring platform and program to assist entrepreneurs in the developing world. They are also working towards raising awareness and providing aid for refugees through providing immediate aid and assisting in refugee resettlement.
This is an edited transcript of a recorded interview. Davis is also featured in our forthcoming book The Internet of Women:
With Baby.com.br you built a company with a large female consumer-base and also women as part of your executive team, how did this come about?
Firstly, the reality is that nearly one hundred percent of economic growth is coming from small and medium sized business around the world. I think it’s really important to include them in the conversation and to make sure that they’re thinking about gender issues as well and not limit the conversation to large corporations. With baby.com.br, we felt like we had an opportunity to do something different. I remember when we were first talking to one of our early investors Kevin Efrusy, who made the first institutional investment in Facebook, from Accel partners. He brought up that we really needed to identify a mission. He said with Facebook, it was about moving fast and breaking things. It was basically, don’t worry if it’s perfect — just do it really quickly and if it breaks, that’s fine. You can go back and fix it, but learn to do things fast, and test them.
I had a couple young kids and most start-ups were working until 10 or 11 at night and on weekends. Some of my friends who had startups would brag about how their team worked the whole weekend or late into the night. I had no interest in creating a culture like that in my company. I wanted to go back and see my two daughters and do the bedtime routine, read them books, and have dinner with them. We were leaving the office at 6 pm, which for Brazil was really early, especially for a startup.
We saw that our culture attracted a certain type of employee, including a lot of women that were coming to us because they saw that it was a place that supported mothers. We doubled down on it and made sure that this was something that was really built into the company culture. I remember one of our most senior hires was someone who had worked at a major multinational for years overseeing all of their operations and logistics. The reason she left that company and joined us was because she wanted to try starting a family and struggled to do so for years. Six months after she joined us, she pulled me into her office and told me that she and her husband had done in vitro and found out they were expecting twins.
She cried and I cried with her, it was a very emotional, special moment. For me, it was validation that we were building a company culture that mattered. We ended up having close to 65% of our employees that were female, and many were moms. I became a big believer in supporting women and in putting women in senior leadership positions. I just saw the value that they added to our organization.
If you could go in some more detail in terms of the value that you felt they added in your organization, in particular?
Our senior leadership team was half female, and something like 80–90% of all the people buying on our website were women. They were either buying for their own families or as gifts for friends that were having babies. Ensuring we had women at the highest levels of the company was critical. We needed and valued their perspective. I don’t even have to explain why that would make more sense than just having a bunch of men sitting in a room trying to decide how women are going to shop or what they’re going to shop for. Women lead our merchandising, purchasing, planning, customer experience, and logistics teams.
What is your background?
I moved to the Dominican Republic when I was four. I lived in there for a number of years and then moved to Puerto Rico and Ecuador. My family moved back to the US when I was a teenager, but I then went back to Latin America for two years as a Mormon missionary in Bolivia. Once I was married, my wife and I moved to Peru, followed by the Cayman Islands, and then a number of years later we moved to Brazil.
My childhood living abroad had shaped me, and I loved living in different countries, and learning to understand various cultures and languages. I had actually never been to Brazil until I started the baby business. I looked at Brazil as a place that was really interesting with 200 million people, plus everyone was getting online in a large merchant middle class. I felt like it was a great business opportunity, especially as a dad.
I knew the founder of diapers.com from a number of years before. I had kept in contact with him and understood the model and it just clicked. I knew that model would work in Brazil. When you’re in the merchant middle class, you either don’t quite have a car yet or if you have a car in the family you probably have one car and often times that meant that a husband was going to work with the car and a new mom was staying at home. In a city of 20 million people, getting to the nearest Walmart to go buy baby products using public transportation in a city like Sao Paulo can be a three or four hour ordeal.
Giving moms access to products they needed for their families on the Internet where orders would be delivered in 48 hours, was a pain that needed to be solved. We started working on the business in May of 2010 and then I went to Brazil for the first time in August of that year. We started building the team and finally launched in 2011. In December 2013, I decided to come back to the United States to found Cotoxpaxi.
You speak about Cotoxpaxi giving you the opportunity to implement a social aspect in a business at the early stages, could you explain?
Having grown up in Latin America, I always had this huge passion for helping people and looked for ways that I could have an impact on people’s lives. I wanted to find a way to use business to do good and have an impact. With the baby business in Brazil, there’s no way I could’ve said, “hey, by the way I want to start using 10% of all of our profits to give away” or “2% of all of our revenue is to now go to people in need.”
If the social mission isn’t built into the business from day one, it makes it very difficult to make that commitment as the business scales. It’s much easier to do when it’s built into the fabric of the business from the very beginning. The day I came back to the US from Brazil, I incorporated the business, and I flew straight to Silicon Valley to start fundraising.
How did you decide to base your business in Salt Lake City?
I moved back to Salt Lake City because I felt like this was the perfect place for us to build this business. It’s a community that really cares about giving back. A huge percentage of the population has lived all around the world and speaks different languages, because much of the population have been Mormon missionaries. We’re right in the middle of the mountains and our office is literally one minute from trails to mountain bike, hike, or rock climb. I just thought that an outdoor brand focused on giving back was the perfect business to open in Utah. I wanted to use this million-person city to test the model and see if it works, and if it did I could go scale it.
Cotopaxi is named after a volcano in Ecuador where I lived growing up. I actually used to go backpacking with my dad all around Cotopaxi. It was a place where I really learned to love people and service. My parents were good at getting us involved and giving back. I remember we often filled baskets full of food and supplies and we’d drive around looking for families that we could help. I was a Boy Scout there, so I did my Eagle service project at an orphanage in Ecuador.
It was one of those places that really impacted my life and the mountain Cotopaxi was always overlooking the city. It’s an almost 20,000 foot high snow-covered stratovolcano and is just an amazing feature in that city. Even the school that I went to, the international school in Quito, was called Cotopaxi. I always loved the name and decided it would be the perfect for a business that was rooted in adventure, the outdoors, and service.
Our vision is to build the next big outdoor brand, all built around Millennials. A lot of the outdoor brands people know such as North Face, Patagonia, and Columbia have been around for 50, 60, or 70 years. You talk to young Millennials and they’ll say, “Oh yeah, that’s the brand my parents wear and my grandparents wear.” I really felt there was an opportunity to build this young outdoor brand that was built around humanity, and I believed young Millennials would resonate with it.
We make backpacks, jackets, tents, and sleeping bags, but every single aspect of the business is built around the social mission of giving back. Our slogan is “Gear for Good.” Everything from the way we manufacture our products to the delivery, if you get a package delivered in the mail from us when you order on our website, you’ll get a handwritten thank you card that’s written by a refugee here in Salt Lake City that we work with. It’s been a really unique and fun model to explore and build.
What has it been like working with refugees?
The refugees we work with are from all over the world including South Sudan, the DRC, Iraq, and Thailand. There are 60,000 refugees that have been resettled in Salt Lake City, so it’s a fairly large community. We started by writing thank you cards to people ourselves. Pretty soon, we were selling so much that it just wasn’t possible to keep up with the card writing. I got our team involved in a couple events where there were refugees, and someone on our team just had the idea of getting the refugees involved in card writing. We recruited refugee teenagers and put together a program where we told them, “We want to help you guys get your first job.” We got about 40 of them together and would do card writing session where everyone wrote thank you cards and it was a great time.
A couple weeks later, we came back to do another session and some of the teenagers told us, “You know, we’re going to quit, because you didn’t pay us last time.” We’re like, “No, we did pay you. We gave you checks at the end of the meeting.” They were like, “Yeah, but no one would even take those. We went to the store and we tried to pay for things and no one would even accept them.”
That’s when we realized, “Oh my, gosh, there’s so much opportunity here to help this community.” We began spending an hour ahead of each card writing session to teach them about bank accounts, leadership, budgeting, job interviewing, or resume writing. It’s just been such a cool experience to work with these kids and get to know them. When we first started working with them, they were so shy. They didn’t even want to make eye contact. I’ve seen an amazing transformation in their confidence and self-belief that they didn’t have originally.
Could you talk more about maybe what you learned from baby.com.br and what you’ve carried over into your new company?
One thing that I found out in baby.com.br with moms on our team was that they are as efficient and productive as any other team I knew in Brazil. One thing that really surprised me is that even though we ended the work day at 6:00 pm, when most teams in Brazil ended their workday later, is that everyone got their jobs done so efficiently. That was a huge takeaway as I started Cotopaxi. We’re an outdoor gear brand so I really felt it was important to make sure that my team had time to go spend time in the outdoors to test the gear.
We incorporated something that we call 10% in the wild time. It gives people four hours a week, so 10 percent of their work week, to spend either trail running, mountain biking, skiing, or doing service in the community. They can spend that time outside the office. Just as the women on our team at Baby.com.br were more efficient with their time, our team at Cotopaxi is more efficient with our time because we know the importance of getting outdoors to live the brand values.
If you could also speak about the UN commission that you’re on and the gender dynamic it has?
At the end of 2015, I was appointed to the United Nations Foundation’s Global Entrepreneurs Council. The Global Entrepreneurs Council, or the GEC, is a council of eight members who come from all over the world and have a background in leading and driving organizations, typically as entrepreneurs, and who have a history of philanthropy and of giving back.
The group is very global and includes individuals from India, Puerto Rico, Sweden, the United Arab Emirates, Kenya and Uganda. It’s a diverse group and of the eight members, five are women and three are men. This is the first time the council has had such a higher percentage of women and it’s also the most international the group has ever been.
We have two focal points for the next two years. The first is to help create ecosystems for entrepreneurs and a platform where entrepreneurs in the developing world can mentor and be mentored. Within that, we’re primarily focusing our efforts on youth and women. We know that these groups have the highest impact since women have been shown to spend their incomes on their children, where men are more likely to spend it on themselves.
The second area that we’re focusing on is on refugees. The chairman of this council is actually a former refugee himself from Rwanda. He has a really unique story, and it’s an area that a lot of us on the council are extremely passionate about. We’re focusing on building more awareness around the growing global refugee crisis and assisting refugees at every stage — from immediate aid as they flee their home countries to resettlement assistance.
As someone that raised money, what are you feelings on women having access to investment?
I’m the father of two girls, and I would love nothing more than to see them become entrepreneurs. It troubles me to see how badly venture capital investing is skewed towards men. I don’t know all the solutions to that, but I know one way I can help is by ensuring women hold leadership roles in my startups. We know that a lot of startup founders come from startups themselves. They go build experience working at a startup, and then leave and do it themselves with the right networks in place. As a startup founder I’m responsible for making sure my team is building the next generation of entrepreneurs and that we include minorities and women in that growth.
This takes real effort because the reality is that without even realizing it, humans have biases. We tend to hire people that have experiences like us, that maybe look like us, without even thinking about it. From the early stages of a business, we have to be thinking about these things. You can’t just think, “Oh, as we grow or as we scale we’ll be able to get more diverse or we’ll think about those issues later.” I think it’s something that you have to do from the very earliest stages of a startup.
Our board at Cotopaxi is half male, half female. Our biggest investments were led by female partners in VC funds. It’s something that I’m pretty passionate about, and that we think about constantly.
Are there further recommendations you have?
As I mentioned earlier, I have two daughters and would say I’ve become a feminist because of them. I talk about entrepreneurship with them constantly and try to expose them to other female entrepreneurs. I want to make sure that women have the exact opportunities that men have. I think it’s also important to recognize and admit that we aren’t perfect in this area, and that we have a lot of work to do still.
