The TH Interview: TOMS Shoes (Part Two)



For every pair of TOMS sold, another pair is given away to a child in need. Blake Mycoskie used to think he'd make as much money as possible in life and then give it all away. But now he figures he'll just do business and help the world at the same time. ::TreeHugger Radio

Listen to the podcast of this interview via iTunes, or just click here to listen, right-click to download.

Check out part one of our interview with Blake Mycoskie.

(Full text below)TreeHugger: Blake, is there an environmentally friendly component to the shoes you are making?

Blake Mycoskie: Absolutely. When we first started, we were just trying to learn how to make shoes. We were basically using whatever material we could get our hands on.

But then once we got going and we hired some people who were professionals in the shoe industry, we realized very quickly that our shoes could not only be very environmentally friendly, but also vegan.

There are a lot of vegans out there that want cool, comfortable footwear, but they have trouble finding it because most footwear is made with leather. If you look at 90% of the footwear out there, if it's not a flip-flop, it has some leather component.

So we were able to work along with Whole Foods in developing an eco and vegan shoe that we just released with Whole Foods exclusively about a month ago. They will have the exclusive on it up until the end of the year, and then, in January, we will start selling it on our website and in some of our other select retailers.

In terms of our canvas, it is a blend between our organic canvas and then also some post consumer recycled plastics. It makes for a really strong canvas, which is great because it lasts long, and it's also much more environmentally friendly. So yeah, it is really a win-win for us.


TH: Who is making TOMS and where?

BM: When we first started making them, it was me! We started in Argentina, and we still have a little factory in Argentina where we make about 30% of the shoes.

As we have grown, we have had to source all over the world because we are selling all over the world. That has been a really awesome experience because I've gotten the opportunity to visit all these factories.

We now have factories in Ethiopia, which I am very excited about and which are really growing for us. We have factories in Asia. We also have factories in Brazil. So really where we make the shoes depends on the exact TOMS shoe and the material and also where it is being sold.

The great thing is, I think, as our company gets more and more global—we are now selling in eight different countries—everyone wants to have a connection to not only the shoes that are being given away, but also where the shoes are being made.

We are in the process right now of launching our TOMS 2.0 website, and on there we are going to really connect people, maybe even in real time, to all of our different factories and our factory workers.

One of the cool things about visiting the factories is, when I do visit the factories, I always show our 35 minute documentary film that premiered at the Tribeca Film Festival.

The great thing is that even if they don't speak the language, they understand through the images what we do. They understand, "Oh, those are the shoes that I am making and they are helping someone."

There is nothing better you can do to build your relationships with your factories then showing them that this is not just a business, this is really a cause and something that is really important to a lot of people. Often times the workers know people who don't have shoes as well, and that makes them really excited.

TH: Are there standards that dictate the conditions of these various factories?

BM: Absolutely. There are standards. One of the things I think we are going to see a lot of in the next five to ten years is better international and global standards for production.

There are not a lot of really specific standards, like if you do this, this, and this, you get this stamp. I think it will be great when we get to that point. So a lot of it is internal monitoring and understanding what is generally perceived as fair trade and fair labor practices.

So what we use is a consulting group, an agency, to help us monitor and to audit both announced and unannounced in all of our factories. It is very important to us. TOMS' whole mission is about helping people.

So we want to make sure that we are not only helping the people who we are giving the shoes to, but that we are providing an environment where people are valued and not taken advantage of from a labor perspective. I feel very confident, having visited all of our factories, that we are doing that very well.


TH: I have heard this model of "buy one, give one away" called one-for-one. Is this a movement? Do you see this spreading into other industries and other products?

BM: I think it's somewhat difficult for it to spread to a lot of different industries because of the general cost of goods, the cost of giving, and the needs that people have around the world.

I do say that part of my vision for TOMS is that we won't always be a shoe company; that we will expand into some additional products where it makes sense. A lot of that will come based on the needs that we encounter when we are traveling around the world and giving out the shoes.

So I think it is safe to say that there will be, in the years to come, additional TOMS products. But I do think it is difficult for this one-for-one model to be applied to a lot of different businesses.

Let's face it, most business people and entrepreneurs are starting businesses to make money. It definitely does not help your bottom line. It might help you to get launched and to exist. But it is very hard to apply this to most industries.

So unless there are new products and new businesses being developed, I think it is not something that a company can just say, "Oh, we are going to add that on to our model," because you really have to build the model based on that.

So I think it will be a catalyst for people to think, though, about incorporating giving into their business in a more transparent way than just as a percentage.

TH: Has the one-for-one thing improved TOMS' bottom line? Do you think TOMS would have been a success were it not for the one-for-one model?

BM: No, I do not. I think that the one-for-one model is the reason that we're here today and the reason why you're interviewing me. I do think that the one-for-one model has allowed us to enter the market, and I think that the fact that the shoes have become fashionable, and they're comfortable, and they're inexpensive, has taken it to the next level.

I think that if the style had not been right and right for the times and right for the economy, I don't think the one-for-one model would work with just any old shoe. So I think it's about a 50-50 push, but I do think that the one-for-one model ultimately will be good for the long-term success of TOMS.

It's very hard in the first few years because you have so much overhead and startup cost already, and then you throw in giving away 200,000 pairs of shoes. It's very tough on us financially, and it's a sacrifice that we make with a smile, though, because it's why we're here. So, I don't think TOMS will ever be a super, super profitable company.

I think it can be profitable, and I think it can do a lot of good, and that's all we really want anyways. So, I think as a profit strategy, it might not make sense, but as a life strategy for me, it definitely makes sense.

So, I think as a profit strategy, it might not make sense, but as a life strategy for me, it definitely makes sense.

TH: Are you guys turning a profit now?

BM: We are not yet. We are very close, but every time we get close to turning a profit, we find out that we need to hire three or four more people, and then we go back into the negative. We're very stable, from a cash flow standpoint, but we're definitely not profitable yet.

TH: What are you going to do if people decide that, next season, they're not interested in the Argentine slipper thing? What then?

BM: Well, actually, we anticipate, at some level, that has to happen. We definitely don't feel like we're setting fashion, but we're a component of it. I'm hoping that we can build this shoe into an iconic silhouette, like a Vans or a Converse that, year after year, people want, but I also am kind of mitigating the risk by developing some new styles.

So there's another shoe that will come out about a year from today, in the fall, that is also based on an Argentine shoe, but it's a little bit more; good for the fall and winter time, so you can wear it year-round, where our shoe is more of a spring/summer shoe, unless you live in southern California or Florida or Texas.

And then also we just launched our first new product and it's called the wrap boot. And it's actually inspired by the polo ponies and the bandages that they use in Argentina. It's only for women, it's very sexy. People have been like, "man, that's pretty sexy and racy for TOMS."

But you know, our background is Argentina, and Argentina is a very sexy, beautiful, magical place, especially in the polo culture, and the polo players, they come from the farms, so we want to preserve that.

Our background is Argentina, and Argentina is a very sexy, beautiful, magical place...

So we created this boot. It's been incredible. I think in the first week we already sold out of red. We have four other colors that are still in stock available, but we anticipate by the end of the month we'll be completely sold out, and then we won't be able to get new ones in until probably to November, December, for the holidays.

But that's been really exciting for me, to introduce something that's a total departure, on some level, from the traditional alpargata, even though it's based on the alpargata, and have it sell so well and so quickly. And all the boots that we sell, we will be matching another special boot to the people in Ethiopia to prevent this disease, podoconiosis.

So they're still one-for-one, but it's a little bit different focus of where the one is being given away. Instead of another TOMS shoe, it's a special boot. So, I'm very excited about that, and I think that's what's going to allow us to sustain our growth and to sustain our commitment to give.


TH: What if Nike or Reebok came along and they said, "Blake, we want to buy TOMS. We're willing to keep the one-for-one model going." Is this something you'd ever consider?

BM: I don't think so. I probably can say absolutely not, and the reason why is I'm an entrepreneur, and all my life, I always said to people, I'm going to spend the first half or three quarters of my life making as much money as I possibly can, and I'm going to spend the last quarter of my life giving it all away.

And there's many quotes from me in the press from years and years ago of me saying that, before I ever had any businesses that had a philanthropy or charitable cause. So it's something that has been part of my DNA forever, and I thought that's how you had to do it.

But now, with TOMS, I'm realizing I can build a business, I can be creative, and I can be helping people at the same time. And to me, that is the perfect blend. That is, to me, life.

And so, if I sold to Nike for $10 million, what would I do for the next 30, 40, or 50 years? I would spend my time giving that money away. So it makes no sense to sell to another company.

And I think, also, part of the real beauty of TOMS, no matter how big we get, is preserving this culture and this community that we're building. And I think that's a little bit harder to do with the bigger corporations.

But now, with TOMS, I'm realizing I can build a business, I can be creative, and I can be helping people at the same time. And to me, that is the perfect blend. That is, to me, life.

TH: Within your consumers, how much do you think people care about one-for-one, and how much do people care about just the notion of putting on a slick pair of shoes?

BM: I think it kind of goes back to what I said about how we got launched and our success. I think, basically, if I had to draw a line in the sand, I'd bet it's 50/50. I meet a lot of people who, when I say thank you so much for buying TOMS, they're like, oh, yeah, the cause is cool, but I have six pairs of these and I love them, they're so comfortable, or, they really look good with skinny jeans, and it's hard to find a shoe that doesn't look too clunky.

It's really interesting. I mean, I meet a lot of people and I'm just blown away that they're obsessed with the fashion of it, and they kind of politely say, oh, it's really cool what you guys do, but...

But then I meet a lot of other people that are just obsessed with the cause and the giving, and they think the shoe is ugly but they wear it everyday anyways. So I think it's really a split, and I think that's the healthiest place for us to be as a business, as well.

TH: What does the whole idea of sustainable business mean to you? How does that resonate?

BM: Sustainable, to me, means that we are able to sell shoes and have enough profit built in to give a pair away and hire the best people to help grow the message and the mission. So that's what sustainable is in terms of our business.

Now, sustainable, in a lot of businesses, is more focused on the environment and using materials that are environmentally friendly, and that's definitely a component of our business, as I've explained, but the most important sustainability to us is based on the question: can we continue to give those kids shoes year after year?

TH: When you look out there into the world, what do you see that's inspiring to you personally?

BM: Entrepreneurs. I'm always inspired by entrepreneurs, be they young, old, men, women, what country, doesn't matter. I love people who take risk, have ideas, and put it all on the line to make them come to life. And that really inspires me.

I think I get really inspired by just being around creative types, people who are maybe not entrepreneurs, or maybe not doing anything socially good, but artists and writers and musicians. Being around that is really great because it allows me to stop thinking so much about: 'we have to get this done, or this deal has to get inked ' And it allows me to get back into what I love the most, and that's just being creative.

Tags: Argentina | California | Corporate Responsibility | Cotton | Developing Nations | Diseases | Poverty | Shoes | TH Interview

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