On a crisp Saturday in October, a group of startup founders set up shop outside of REI’s flagship store in Seattle. Around tables and inside tents filled with camping gear, hiking apparel, and more, a half-dozen companies, represented by eager entrepreneurs, discussed their products with potential buyers. The outdoor bazaar marked their successful completion of REI’s new Path Ahead Ventures program.
Dan Kihanya, Director of Path Ahead Ventures, a $30 million initiative started by REI in 2021, said the event exceeded his expectations — from founders selling out of their products, to consumers finally finding outdoor wear made for them.
Raquel Vélez, founder of Alpine Parrot, makes technical hiking pants for women size 14 and up. And at the event in late October, she met a number of customers, one of whom found particular interest in her product.
“A woman came by and was really excited to see what [Vélez] was doing. She tried on the pants, and came out of our little dressing tent, looked at the mirror and started crying. And she said, ‘I’ve never had pants that fit this well and that were built for me,’” said Kihanya.
And for Kihanya’s team, those sorts of connections are part of the desired effect of Path Ahead, which recruits two cohorts of diverse founders in the outdoor space. One cohort, Embark, focuses on early-stage entrepreneurs still developing products, and the other, Navigate, focuses on entrepreneurs who have already created products and identified customers, but need help scaling. The Embark program kicks off again in January.
How the Initiative Began
Kihanya said REI decided to launch the program to address disparities in the outdoor industry.
By some estimates, around one percent of the founders in the industry identify as people of color.
“Today, the outdoor sector has very few diverse-owned product, gear, and apparel companies. By some estimates, around one percent of the founders in the industry identify as people of color. And it doesn’t really track with participation since… nearly 30 percent of the people who are recreating outside are identifying as people of color,” he explained.
The initiative, with $30 million in dedicated funding to make investments, serves as part of a larger REI goal to improve diversity, equity, and inclusion in the outdoor industry as a whole.
By 2030, Kihanya said, Path Ahead hopes to partner with and invest in at least 300 founders of color, which REI defines as people from Black, Indigenous, Latina/o/x, Asian American and Pacific Islander communities. And, with two 2022 cohorts in the books, the company has begun that journey. The recent Embark cohort included 27 founders, and the Navigate cohort had seven founders.
To Embark or to Navigate?
Kihanya said the design of the two programs was purposeful. REI wanted to maximize the impact it could deliver for founders.
“We’ve taken cues, and benchmarked against other industries that are more mature, in terms of the entrepreneurial ecosystems. One of the things that we’re looking at is, where can we be helpful to companies? How can we meet them at the places where we can have an impact?” Kihanya said.
And as they built out the program, Kihanya and the Path Ahead team felt they wanted to customize two different programs for different stages of companies. So they created two arms of Path Ahead Ventures: the Embark program and the Navigate program.
The Embark participants go through a 12-week virtual coaching and mentoring program, and receive $10,000 grants to advance their ideas. That program began in January 2022.
Navigate focuses more on helping its later-stage founders who already have a product get access to suppliers, sustainability expertise, and distribution. Navigate participants get access to a 16-week hybrid program and receive $25,000 grants, with the potential to have REI make a follow-on investment at the end of the cohort.
“When you come into the [Navigate] program, we have decided to offer an investment to you of $100,000. What we have determined, in order to be the most founder friendly, is that it’s not required. And so it’s up to the founder if they want to take on investment,” Kihanya said.
Navigate founders can also work to get their products onto REI’s shelves, he said — and one company, from this year’s cohort, Outdoor Element, is already there. He said the program will look to make a decision on carrying the rest of the founders’ products within two years of program completion.
Lessons Learned from 2022
According to Kihanya, REI is committed to running both programs again in 2023. But his team has learned from the first cohorts of founders, and will use that learning to make the programs stronger. Eventually, he said, he’d like to see Path Ahead build a pipeline between its Embark and Navigate programs, or create new programs to serve founders at different stages of evolution.
“We hope over time that we can find more programs that could be upstream from Embark, or between Embark and Navigate, or certainly beyond Navigate,” he said.
Kihanya said the programs ask their founders to evaluate each activity or exercise they complete together, to ensure they’re getting value.
Path Ahead will welcome 20 new founders to its Embark cohort in January. But this group of founders has less variability, in terms of startup stage, than the 2022 cohort, Kihanya said.
“We tightened up a little bit… It’s helpful to have people who are not exactly at the same spot; they can help each other and [share] different perspectives. But if there’s too broad a range, from the most far along, to the least far along… the learning is going to be different,” he explained.
The startups joining the Embark cohort in 2023 need to have more than an idea; some customer discovery work and early designs are a prerequisite, Kihanya said.
For entrepreneurs who entered Embark with only a concept, “it was a struggle for them, just because they weren’t at the same level everybody else was,” he said. “So we felt like, if the program can’t serve them, we need to think about other ways to support companies that are or founders that are at that stage.”
And 2023 participants in the Navigate program will get a more tailored experience — and some additional breathing room in between the learning units.
“Because it is such a personalized program, we feel like we probably need to build in more time for founders to absorb and apply the themes that we present. We go through times in the program where this week, it’s finances, and [the next] week, it’s marketing, and then it’s direct to consumer selling. I think it’s all appreciated, [but] the founders can be at different levels of sophistication and understanding about those things to start,” Kihanya said. “Building in more time to say, ‘Okay, how does this apply to your business?’ [or doing] a one-on-one with a mentor to say, ‘How do I synthesize that with my business?’ [could help],” he said.