The Cotopaxi co-founder’s leap of faith: Why Davis Smith stepped down as CEO and moved to Brazil 

“I’d love to come,” Smith told me earnestly, “but I’m moving overseas this summer.”

Given that Cotopaxi seemed to be on an upward trajectory—Smith had just been interviewed about his company’s growth on stage—I was surprised to hear that its then-CEO was planning to move abroad. But maybe he was temporarily relocating to one of Cotopaxi’s overseas hubs, focusing his attention on its growth outside the United States? I asked Smith where he was going, and his response was even more stunning: “I don’t know,” he said.

Smith proceeded to tell me that he and his wife were members of the Church of Jesus Christ of Latter-day Saints, or LDS. Several weeks earlier, they had agreed to take on a three-year-long service assignment as “mission presidents,” meaning they would be based abroad and tasked with overseeing several hundred young missionaries—and meaning he would soon be stepping down from his position as CEO. What’s more, they had been asked to commit to this religious role before being told where they would be stationed. This shocked me, for so many reasons, including the simple fact that of all the founders I’ve interviewed, not one had ever even brought up their faith, let alone cited religion as a factor in any kind of decision-making. Or the fact that committing to relocate abroad without knowing where you’re moving is highly unusual, to say the least. But as I came to find out over the next few months, Smith’s willingness to drop everything and take on a volunteer role for his church, however foreign to me and to the broader business world, wasn’t just on brand for Smith. It was core to who he is.

“I made a decision early in my life that I’m always going to be willing to serve and I would never say no if I was asked to give back,” Smith, 45, told me later, during one of several subsequent interviews. “I guess I’ve been preparing to do this my entire life, since I was a child.”

This desire to give back also helped shape the trajectory of Cotopaxi. Along with a cofounder he met in business school, Smith launched the maker of whimsically colored outdoorsy apparel and backpacks as a Certified B Corp back in 2013, instituting a “corporate giving” program before there was much to give. He also set up a system of accountability to make sure that the company stayed true to its stated mission of “Gear for Good” in the future: To keep its status as a B Corp, Cotopaxi must prove a net positive impact on workers, suppliers, and the environment by undergoing a recertification process each year, which is overseen by a non-profit called B Lab. 

To that end, the company gives away 1% to 3% of its revenue to nonprofits that work to alleviate poverty globally, and it aims to improve the living conditions of Cotopaxi’s factory workers via its own internal programs. Some examples of this: Planting a community garden so that employees at a manufacturing facility can bring fruits and vegetables back home to their families, or funding computer classes for workers’ kids. (Cotopaxi currently manufactures its products in China, Vietnam, the Philippines, and other countries in Asia, and has used facilities in Colombia and Bolivia in the past.)

By all accounts, the ethos of giving back has helped Cotopaxi grow into a smaller but legitimate competitor in a field crowded by several incumbents—there’s the 800-pound gorilla, Patagonia, of course, but also The North Face, Columbia Sportswear, REI, and a growing list of other smaller players. 

“If someone had pitched me some outdoor gear company, even with a great product, I don’t know that that would have gotten me over the line,” says Kirsten Green, founder and managing partner of Forerunner Ventures, and the first venture capitalist to invest in Cotopaxi, back in 2014. “But Davis had such a perfect vision of what he wanted to bring to life. It wasn’t about selling a jacket, it was about creating a movement.” 

That movement is accelerating: Cotopaxi, which has been profitable for the past four years, is expected to pull in more than $160 million in revenue in 2023, up from $55 million two years ago. The startup has 12 stores in the United States and three in Japan, and plans to open seven more domestically this year—with a stated plan to operate 50 total over the next few years, and of course to keep growing its ecommerce business. What’s more, Cotopaxi now employs about 350 people worldwide, and Smith says each new open job listing gets several thousand applicants, which he believes is at least partially due to Cotopaxi’s underlying mission to help people, both in and out of the company. 

But what happens to Cotopaxi’s momentum now that its founder is leaving? Plenty of other startups go through this difficult transition, when the baton gets passed from a founding CEO to a more seasoned leader with big company knowhow, for example. But Smith isn’t leaving because he’s no longer able to lead Cotopaxi effectively—on the contrary, he seems to be hitting the brakes just as both he and the company are picking up speed, on the road to rapid but manageable growth.  

“He has nothing to gain from this financially,” says Stephan Jacob, Cotopaxi’s other founder, who serves as its chief operating officer. “He is giving up three years of prime earning potential.” 

Indeed, over these next few years Smith will have limited interaction with his team at Cotopaxi, and not much time to devote to anything related to the startup world, which has been the focus of his career for more than two decades. His volunteer role for the LDS church is unpaid and full-time. And on July 1, when he officially stepped down to embark on this new phase of his life, the company he has led for 10 years also embarked on a new era, reinventing its identity without its founder at the helm. Over these next few years, both Smith and Cotopaxi will have to figure out the answers to some tough questions: What is Cotopaxi without Smith? And what is Smith without Cotopaxi? And even more complicated: What happens when his overseas mission is complete?

“My expectation is to move into an executive chairman role at Cotopaxi and continue my work in showing that capitalism can be a force for good in the world,” Smith says when asked about his life post-mission. “I expect I’ll have an even deeper drive to find a way to use the business to eradicate poverty upon our return.”

As for the question that first piqued my interest in Smith’s story: Several weeks after the event in Atlanta, he let me know that he and his family found out where they will be relocating. Their new home? Recife, Brazil, a coastal South American city that’s more than 5,000 miles away from the heart of the LDS church in Utah—and from Cotopaxi’s headquarters. 

Traveling the world for the church

Several months after meeting Smith, I flew out to Salt Lake City. It was March, and the snow in Utah seemed endless, coating the surrounding Wasatch mountains but also piled up so high on the sides of streets that it had swallowed up some of the road signs.

I had asked Smith to show me a few places that were particularly meaningful to him in his home state. We started at the Cotopaxi office in downtown Salt Lake City, and then got a tour of the LDS Church Conference Center, where congregants gather to hear their faith’s leaders give sermons twice a year. Naturally, Smith also wanted to show me another integral side of himself and of Utah: The great outdoors. 

Snowshoeing, it turns out, is particularly well suited for conducting an interview. You’re not going very far, or very fast. Questions therefore elicit thoughtful answers, and the slow pace leaves plenty of time for follow ups. Smith and I parked at Spruces Campground in Big Cottonwood Canyon, about 12 miles southeast of Salt Lake City, strapped on our snowshoes, and hit the trail. (An aside: Smith’s snow-tire-equipped Tesla handled the icy roads surprisingly well). 

As we walked, I asked Smith about his upbringing, including his religious roots and desire to give back, his love of the great outdoors, and where his entrepreneurial inclinations came from. As I soon found out, all of these aspects of his personality are inextricably linked. 

Smith was born in Utah and spent some of his formative years in the Beehive State. But when he was just four years old, his family moved to the Dominican Republic because of his dad’s job, helping to oversee construction projects for the LDS church. The family would eventually also relocate to Puerto Rico, Peru, Brazil, and Ecuador, where Smith would get the inspiration for his future startup’s name: Cotopaxi is a mountain located about a two-hour drive from the capital city of Quito. Smith spent time spear fishing and rafting down the Amazon River with his dad and siblings. He developed a love and appreciation for nature turned into a quest for adventure as an adult: Later in life, Smith would kayak from Cuba to Florida, and attempt to climb Cotopaxi—an active volcano (he didn’t summit because it was on the verge of erupting). 

But living abroad in countries that were rich in natural beauty but otherwise poor also helped sow the seeds of Smith’s ultimate underlying mission for the gear maker. “He had an opportunity to see poverty early on,” says Jeremy Andrus, another early investor in Cotopaxi, and a long-time friend of Smith’s. “He had an opportunity to see the challenges of growing up without clean water and basic necessities.”           

Smith says that experience abroad made him hyperaware of what he had, and of what others didn’t. 

“I didn’t come from a wealthy family,” says Smith. “But we felt we had so much relative to where we lived. And I know that from the time I was a child, that’s what I wanted to do with my life: To find a way to help others and to build a brand that was focusing on using its voice and its profit to go fight poverty.” 

Smith’s roots in Utah and in the LDS church also played a pivotal role in paving the path to his entrepreneurial endeavors. His ancestors, Catherine and William Brighton, arrived in Utah back in the 1850s. They were LDS converts from Scotland who had journeyed to Utah to be closer to the religion and for economic opportunity. The Brightons, Smith’s great-great-grandparents, built a hotel not far from where Smith and I went snowshoeing. (The nearby Brighton Ski Resort, which overlooks Big Cottonwood Canyon, still bears their name.)

“Pioneers came to this canyon from all over the place,” Smith tells me during our snowshoeing outing. “There was a culture of entrepreneurship, and a culture of frugality.”

Smith himself showed a scrappy streak early on. He started saving money at age 8, which he would eventually use to help pay for his first mission, to Cochabamba, Bolivia. In college, he and his cousin tried (and failed) to launch several small businesses, including a rose-delivery service. Then, in 2004, after graduating from Brigham Young University in Provo, Utah, he ventured into his next project, his first real startup, which would prove more successful than flowers but was far from the purpose-driven company he longed to launch. It was called Pooltables.com and sold—you guessed it—pool tables online. 

“I had social impact in my head,” says Smith. “I just didn’t know how to tie social impact into a business.”

A B-school relationship blossoms

The idea for Cotopaxi came several years—and a couple of startups—later. Smith and his wife, Asialene, whom he met at BYU, had moved around a bit. At one point, they’d actually lived in Brazil with their first two kids, where Smith ran a baby clothing company. They’d also spent time in Philadelphia, where Smith had gotten his M.B.A. at the University of Pennsylvania’s Wharton School, and where he’d met a fellow student who would be his eventual cofounder at Cotopaxi, Stephan Jacob. 

The two had worked on their master’s thesis together, traveling to the Philippines to conduct research on how microentrepreneurial training could be used as a lever for getting people out of poverty. After business school, Smith and Jacob had gone their separate ways, the former going the startup route and the latter joining a consulting firm. But they’d kept in touch, sometimes getting together for various outdoor expeditions—a former mountain infantry battalion corporal in the German army, Jacob too had a love of challenging adventures. 

“Doing hard things together creates a very special bond,” says Jacob, who had joined Smith for his kayak trip across the Florida Straits several years before the two got together to start a company.

One night in 2013, while Smith was laying in bed pondering his next venture, the idea for Cotopaxi came to him. He had sold pool tables and onesies and even scuba gear throughout his entrepreneurial career, but was now in his 30s and eager to finally connect the dots between the startup world and his desire to give back. The idea was so simple, and so perfectly aligned with everything Smith believed in: An outdoor brand that would use its profits to work toward alleviating poverty. And he knew just who he wanted to build it with: Jacob. Lucky for Smith, his former business school classmate didn’t hesitate, quitting his consulting job to join Smith soon after.

Erik Meadows for Fortune

The $54 billion outdoor gear market was already full of entrenched players—some of them beloved brands that have loyal followings, partly because of their commitment to sustainable practices. But Smith saw an opening for something different. The environment, in his view, was table stakes, no longer a competitive advantage. But a focus on humanitarian work, that was new. 

Smith and Jacob set up shop in Salt Lake City, assembled a small team and got to work. One of their first hires was a chief impact officer. If charitable giving was core to their business, they had to get it right.

“I wanted to do it better with Cotopaxi,” says Smith. “I wanted to have really a deeply rooted value set that we built our culture around. So we identified those values before we sold even a single product.” 

Smith also wanted to create a brand that was more playful, more approachable, than the competition. He didn’t want to focus on the “top of the mountain,” as he calls it, referring to hardcore mountaineers, but rather to welcome more people into the outdoors, regardless of their skill level. The result? Cotopaxi products, which first hit the market in 2014, were colorful, and “kind of funky,” as Smith describes the design—functional, yes, but not necessarily made for free soloing to the top of El Capitan. The duo chose a llama as their mascot and logo, partly because, as Smith tells it, “Llamas make you happy.” 

There were other underlying reasons for Cotopaxi’s spirited and original designs: First, Smith pushed for greater sustainability by using remnants from other products in his jackets and backpacks. This paved the path for the slightly patchwork look of Cotopaxi’s products, which utilize leftover thread, fabric, and zippers from factories. Early on, Smith also had the idea to give Cotopaxi’s sewers the ability to design some of the items they made. There was a cohesive look to the company’s products, for sure, but if two products in the same SKU didn’t look exactly alike, that wasn’t just fine with Smith—he embraced it. 

Today, Cotopaxi’s best-selling product is its Allpa travel pack, first introduced in 2016, the same year the company’s first store opened. The Allpa bag, much like Cotopaxi’s other products, is recognizable for its eye-catching colors, including several hues of vivid orange and rust and equally brilliant blues. The company has branched into coolers and shoes and the ultimate Gen Z accessory, fanny packs, all emblazoned with Cotopaxi’s signature llama silhouette. To help make this expansion possible, Cotopaxi has raised a collective $75 million in venture capital dollars to date, and Smith says it has a “large” line of credit that allows the company to finance even more working capital, putting it toward increasing inventory and new store openings. 

But starting an outdoor gear company wasn’t easy for Smith and Jacob, and getting to a path of growth took time. Smith says he pitched about 100 different VCs before eventually getting Kirsten Green, his first investor, and a handful of others to sign on. 

Jacob says the duo’s North Star—the company’s underlying mission—guided them through that early phase, and through subsequent tough decisions and moments. 

“The cofounder relationship can be really tricky,” says Jacob. “But over the last ten years, Davis and I have not had a single argument. It’s not because we always have the same point of view, it’s because we both always put the business first.” 

Lessons learned from missionary work

Smith had another tool to fall back on when times were tougher at Cotopaxi. His pioneering Mormon ancestors had helped sow the early seeds of entrepreneurship in him, but it’s another element of his religious upbringing that helped nurture him on that path—even in the face of rejection. 

At age 19, Smith had embarked on his Mormon mission to Cochabamba, Bolivia. The South American city of nearly 1.5 million people, where he was stationed for two years, is located in a valley in the Andes mountain range. Along with about 250 other missionaries, Smith spent his days in Cochabamba teaching English classes, making adobe bricks used for building homes, and working in corn fields and orphanages. “Missionary work involves more than just proselytizing,” says Smith. 

Of course, spreading the word of the LDS church was also a priority. This was grueling, often fruitless work, knocking on doors—and having many of them shut in your face. But the tenacity and optimism that proselytizing called for would come in handy later on.

“As an entrepreneur, you talk to 100 people, and most of them are not going to be interested in what you’re doing,” says Smith. “But you just need one true believer.”

When I ask Smith how many people he converted during his mission, he demurs, refusing to give a number. But as he tells me that not a week goes by that he doesn’t talk to someone he met during that period, even all these years later, he is beaming. He holds a genuine belief that those people he and the LDS church managed to connect with back then in Bolivia—and everywhere else in the world where Mormon missionaries are sent—are truly better off, whether they convert or not. 

To be sure, the LDS church isn’t without its controversies and critics. The once-commonplace practice of polygamy, which was officially renounced in 1890, has garnered plenty of criticism. And so has its much more recent support for California’s Proposition 8, an effort to ban gay marriages back in 2008, which didn’t ultimately succeed. (The church subsequently changed its position and eventually backed a 2022 federal law protecting same-sex marriages.) Some also take issue with the proselytizing that is so core to its missionary work—the LDS church has even been known to “baptize” the deceased to ensure their place in the afterlife. 

But to many believers like Smith, missionary work is not just about religious conversions, it’s about helping to elevate people out of poverty, providing a religious path for some but also the material means to a better life—basics like housing, working toilets, and more sustainable food systems in areas that lack these resources.

This is what connects Smith’s religious roots to the culture he created at Cotopaxi. It’s the underlying mission of his startup: Underneath the colorful fabrics, Cotopaxi’s purpose is Gear for Good.  

“I live the same life I do on Sunday, as I do on Monday and Tuesday and Wednesday and all other days,” says Smith. “The very values that made this brand so special are the values that I learned in my faith, of looking out for others and of service to others and kindness. I can’t separate them and I won’t separate them.”

A CEO says goodbye—and lines up successors 

Several months after my slow and steady snowshoeing excursion with Smith, about 170 of Cotopaxi’s employees gathered in the same location, Big Cottonwood Canyon, for some fun in the sun. It was mid-June, and the snow had finally melted, just in time for the company’s annual “Summer Camp.”

The three-day-long retreat is one of several traditions Smith and Jacob started in the early days of Cotopaxi. Each year since the startup’s inception, they’ve brought together employees for hiking, rock climbing, and sharing stories around the campfire. This year, though, was a little bit different. 

“There were lots of hugs, tears, and emotions,” Smith shared with me over email, a few days after Summer Camp had wrapped. 

In the months leading up to his departure, Smith had gradually stepped away from his CEO responsibilities, shedding one layer after another, and prepping his employees for his impending exit. But during my visit to Utah in March, and throughout subsequent interviews with Cotopaxi executives, investors, and board members, it was clear he was still very much the heart and soul of the company.  

“It’s hard to separate Davis from Cotopaxi,” says Andrus, one of its early investors, who is also on the company’s board. Another board member, Wendy Yang, concurs: “No one can fill Davis’s shoes,” the former president of shoemaker Hoka tells me during a recent phone call. 

The decision to step down from the CEO role is one that Smith says was inevitable at some point. But bringing in more seasoned executives was clearly a goal for Cotopaxi in recent years, as the company grew. Thanks to a more flexible post-pandemic policy, the startup was able to recruit from afar, hiring Grace Zuncic, the former head of human resources at yogurt-maker Chobani, as its chief people and impact officer last summer, and other top execs from other purpose-driven brands. 

Zuncic, who worked for Chobani’s founding CEO, Hamdi Ulukaya, for 10 years, cold-called Smith, who created a job for her. “There is something about founder-led leadership,” she says.

Also last year, Smith made another key hire, bringing on Damien Huang, the former CEO of Eddie Bauer, as the company’s president. The search for a president had started in December 2021, as a result of Cotopaxi’s rapid growth. Smith himself had overseen the process, reading and vetting more than 1,000 applications. He ultimately chose Huang not just because of his relevant experience, but because of his other life choices—a history of incorporating service work into his career, as demonstrated by Huang spending his summers volunteering in the Dominican Republic. (It probably didn’t hurt that Huang, who is based in Seattle, had lived in Ecuador for a study abroad program during college.) 

“I hired him knowing that I would eventually be giving him the CEO reins,” says Smith. “But it happened sooner than I expected.”

Huang joined the company in May 2022, and he officially became Cotopaxi’s CEO on July 1 of this year. He says he was clear-eyed about what he was stepping into, well before knowing that Smith was officially stepping away. “While interviewing me, he asked what concerns me most about this job,” says Huang. “I said the founder, of course.”

Courtesy of Cotopaxi

Joining a startup with a founder-led culture in such a key leadership role isn’t usually easy. But in this case, both men, and those around them, say that the hardest part of the transition has already happened. “Davis showed me a tremendous amount of trust from day one,” says Huang. 

Trust and transparency were key to Smith handing the baton to Huang. But so, likely, was the fact that Smith is stepping down to take on what he believes to be a continuation of his purpose in life, not just another startup. “He is authentically passionate about this work, about giving back and making sacrifices,” says Huang. “It’s what drove the founding of Cotopaxi, and it’s what’s driving his decision now.”

That doesn’t mean that it’s been easy for Smith. 

When the LDS church initially approached Smith and his wife in the fall of last year, Smith had already been volunteering his time as a “stake president,” or lay leader of LDS believers, in a geographic area in Salt Lake City for the past five years. That meant spending upwards of 20 hours a week overseeing the activities of his local bishops and ward leaders—a big commitment, for sure, but nothing like what was to come. 

There are currently about 400 mission presidents around the world, overseeing about 70,000 young missionaries. These laypeople come from a wide range of professions, and socio-economic levels. Some, like Smith, are successful business leaders. Case in point: David Checketts, the former CEO of Madison Square Garden, and his wife were recent LDS mission leaders based in London. But the three-year commitment is a financial sacrifice for all who take it on. 

When the call came last fall, Smith and his wife, who now have four children, knew it was going to be something big. 

“We first met with a member of what we call the ‘Quorum of the Twelve Apostles,’” Smith says, referring to one of the highest governing bodies in the LDS church hierarchy. “Now I’ve been a member of the church my entire life, and it is extremely rare to have one-on-one time with one of these leaders.” 

Several meetings later, they received the official invitation: To become mission presidents, location TBD. The uncertainty about the destination didn’t make their answer any less certain. But Smith had his qualms about how to tell his team. 

“I was so nervous,” says the entrepreneur. “I decided to call everyone one by one and talk to them about this. I didn’t want to do it in a group. I wanted it to feel personal.”

Smith spent a weekend calling 15 people, his entire executive team and his board. Only two of them were fellow members of his church.

“In a lot of ways it was easy with those two, because they understood what it means to be a mission president,” says Smith.

For everyone else? Smith had to explain what the role was, and why he was taking it on. He had to reiterate that this pivot would be all-in, that he would be away, fully, for three years. Ultimately, says Smith, everyone he called expressed their support. Two board members told him they got chills as he spoke about his new undertaking. 

“These are people who are not members of my faith, but they could feel why it was so important to me,” says Smith. “I had another member of my team that said, ‘Davis, honestly I’m a little jealous that you have something that you feel so committed to that you’d be willing to drop everything for it.’”

Still, everyone Smith called realized they were losing Cotopaxi’s founding CEO, the one whose life story inspired Cotopaxi’s mission, the man who was the public face of the company since its inception. Having Huang already on board, and already well into the role of Cotopaxi’s president, helped them digest the news. So did the solid footing Cotopaxi was on. 

“It’s a good thing this didn’t happen five years ago,” says Green, Cotopaxi’s first VC investor. “But I’m not worried about Cotopaxi.” 

In lieu of concerns, though, there were plenty of questions, including from Cotopaxi’s new CEO.

“He is our biggest influencer,” says Huang. “As an executive team, we are figuring out how to replace Davis.” 

Jacob, Cotopaxi’s cofounder and COO, is faced with plenty of similar soul-searching. “The biggest question is what does this do to our culture?” he says. “How is it going to feel 12 months from now to work at Cotopaxi?”

In their last few weeks in Salt Lake City, Smith and his wife sold off their house and cars, shedding ties and obligations in advance of their move. As mission leaders, they are expected to be 100% devoted to the LDS church over the next three years. That means they can’t leave Brazil for even a few days. It means no vacations, no visits back home. Smith will not be at Summer Camp next year. Those aren’t easy sacrifices to make. But the founder remains steadfast in his commitment to his new role. 

Nearly a month after relocating, Smith sent me an email from Brazil. 

“It’s hard to articulate how much our lives have changed,” he says. “I admit that I miss my daily work at Cotopaxi. That said, I’ve never questioned whether this was the right decision. It may not make sense financially or professionally, but it was the right thing. I feel incredibly fortunate to have traded one very purpose-driven role for another.” 

Smith says his days in Recife are long—starting early in the morning and ending around midnight each night. It’s hard work, but the former CEO says it’s also the type of work that “fills the soul.” 

“Every minute, the work is about someone else, never about us, and that’s a pretty amazing feeling,” he says.

Ironically, the very thing that pushed Smith to build such a purpose-driven culture at Cotopaxi is what is now pulling him away from his startup: His unequivocal devotion to his values. And while the former CEO doesn’t question the decision to uproot his family and take on a new calling in Brazil, the drastic move away from the company he built is sure to bring up all sorts of other questions about his future. Even the most devout of founders don’t have all the answers.