Next time you “go outdoors,” you might just do it by using a brand or product that got a boost thanks to REI’s Path Ahead Ventures. The Seattle-based outdoor retailer has embarked on a year-long program to provide more opportunities for founders of color and those from traditionally underrepresented groups.
REI says that in the $460 billion outdoor industry, only about 1% of retail brands are owned or run by people of color. Path Ahead Ventures aims to fill this gap with a $30 million fund to guide startups and entrepreneurs through mentorship, production and distribution needs, networking, cash flow assistance and more.
“We learn a lot, very humbly, about how each person’s journey is truly unique.”
—Dan Kihanya
The initiative includes two accelerator-like programs, called Embark and Navigate, depending on whether a founder needs help with an initial idea or an existing business.
The first cohort of six startups participating in the Navigate Accelerator was chosen this summer, and they will be showcased on October 29 at a showcase event at REI’s flagship store in Seattle.
A team of retail, tech and investment professionals spearheading the effort includes Mina Yoo, the founder of the Heroclip gear-holding gadget, which was acquired earlier this year. Yoo is an entrepreneur in residence.
Path Ahead Ventures is led by Dan Kihanya, a tech veteran with years of startup experience. GeekWire caught up with Kihanya to discuss the initiative, how it works, and more. Our Q&A has been edited for length and clarity.
GeekWire: What was REI looking to do with Path Ahead Ventures?
Dan Kihanya: “While there is a lot of work to be done on many fronts that REI is pursuing around our employees, our customers and the industry as a whole, we have taken a close look at the supply chain and the position of brands. [in representation.] Currently, it is estimated that only around 1% of brands in the outdoor industry are owned or founded and led by people of color. As part of our racial equity work, we said, “How can we make a difference in the industry? That was really the overall impetus for Path Ahead Ventures.
GW: How does REI use the $30 million?
Kihanya“We actually have two programs. One is kind of a pre-accelerator or our startup school called Embark and for participants in that program – we had a cohort so far, which was 27 people – each gets a grant of $10,000, which is non-equity, non-dilutive. And then for the Navigate Accelerator Program, they each get a $25,000 grant. And depending on the stage and needs of these companies as they grow, there are also distinct investment opportunities in them.
GW: What do you see in outer space in general? Is there more need to take off? Is there more need to enter established retailers like REI? What are some of the most important needs for these brands?
Kihanya“We spent a lot of time last year before we launched Path Ahead Ventures really digging into discovery with hundreds of discussions and secondary research on challenges, not just for any founder, but specifically for founders from underrepresented backgrounds What we heard falls largely into five themes:
- Mentoring. They feel like there’s a lot of “they don’t know what they don’t know”. The people who can help guide that connection on the choices, the paths they should consider to grow their business.
- Manufacturing and distribution. Everything from how you manage the supply chain to distribution channels, whether wholesale and retail or direct to consumer.
- Cash flow. Initial capital and help them find solutions to manage their cash flow needs as they grow.
- Networks. Founders from underrepresented backgrounds and founders of color come from networks that don’t necessarily overlap where their peers connect to potential partners, suppliers, or other investors.
- Credibility. REI has established quite a credible reputation in the outer space and so many founders are looking for ways in which participation, engagement with us, as an entity, can help them gain credibility in the marketplace then that they develop awareness and demand.
GW: Is there an intention, or is it on a case-by-case basis, for these brands to end up on your store shelves?
Kihana: “Distribution is obviously an area where we excel and we pride ourselves on how we connect with our 21 million members. So we’re offering that and that’s our intention for brands that come forward, depending on where they are in their journey and how prepared they are for that. We do not require it for any of the programs or investments. We are very aware of the fact that in some categories some brands may choose another vertical to start with, but they want to go outside maybe later. Our goal, ultimately, not just for Path Ahead Ventures, but REI, is to create more diversity around the brands that are carried at REI.
GW: Is the overall goal here, beyond helping these brands, to perhaps foster greater representation or participation of underrepresented groups in the outdoors?
Kihana: “The Outdoor Industry Association has noted that up to 30% of people who recreate outdoors identify themselves as people of color. And so if you think about that number versus our estimate of 1% for people who are on the producer/innovator side, it’s really more of a demand-driven opportunity to serve underserved groups or underrepresented who are already starting to be on the outside and are looking for more potential solutions that could represent specific things for their communities.
GW: Are you excited about what you’re seeing so far? Is the next Yeti or North Face already among you?
Kihana: “It’s a bit early to tell. But we were very excited about the response we got from the programming side. We had over 400 applications between the two programs. We’re really impressed with the perspectives people bring, the new ways of thinking about the industry and making it more welcoming and inclusive. When it comes to the founders themselves, we learn a lot, very humbly, that everyone’s journey is truly unique. »
