You may be familiar with the story of Blake Mycoskie, founder and Chief Shoe Giver of TOMS, one of the fastest growing shoe companies in the world. The Texas-born entrepreneur who came within minutes of winning the Amazing Race in season two found his calling on a vacation to Argentina in 2006.
Mycoskie wasn’t looking to start a shoe company, but was struck by the number of poor children who went shoeless. He felt compelled to help. Rather than follow the conventional model of starting a charitable organization to raise money to provide shoes to children in need he decided to create a stylish shoe based on the Argentinianalpargata, adapt it for a North American audience and pledge that for every shoe sold he would give a pair to a child in need.
Mycoskie wasn’t looking to start a shoe company, but was struck by the number of poor children who went shoeless. He felt compelled to help.
As Mycoskie explains in his book Start Something that Matters he did think about starting a charity but was concerned it would not guarantee a constant and reliable flow of shoes because it would be dependent on donations. So he looked for solutions from the world he knew: entrepreneurship.
“I had spent the previous 10 years launching businesses that solved problems creatively, from delivering laundry to college students to starting an all-reality cable-TV channel to teaching teenage driver education online,” he said.
“An idea hit me: Why not create a for-profit business to help provide shoes for these children? Why not come up with a solution that guaranteed a constant flow of shoes, rather than being dependent on kind people making donations? In other words, maybe the solution was in entrepreneurship, not charity.”
It is a simple concept. Sell a pair of shoes today, give a pair of shoes tomorrow. “Shoes for a Better Tomorrow” quickly became “Tomorrow’s Shoes” which then settled into TOMS, with a simple and powerful promise — a better tomorrow.
After considerable success, TOMS announced Wednesday it was selling a 50% stake in the company to venture capital giant Bain Capital Inc. Clearly there’s strong value in the company and the idea upon which it was built. In a statement Wednesday, Mycoskie said he sees the partnership as a way to amplify his vision.
When I spoke with Mycoskie, I was struck by his honest admission that the “buy one give one” language was not intentional. In fact, he didn’t use that language to sell the shoes for the entire first year of operations. Then in conversations someone used “one for one”to describe the business model and he quickly trademarked it. The simplicity of its appeal was undeniable. No percentages, no formulas, simply one for one.
The growth and success of TOMS profitable good model in the past eight years is undeniable. Millions in profits thanks to footwear, glasses and coffee products combined with great social metrics: 10 million shoes given, 200,000 people with restored eyesight and now the start of clean water.
But its success can also be measured in the number of “buy one give one” (or BOGO as they are now affectionately called) companies and offers that have proliferated. This is not a passing fad, but rather, proof that a social impact imperative combined with a great story can be a key driver to business success.
While the true BOGO model continues to proliferate there are its detractors. Many articles have been written about the lack of meaningful social impact, arguing that such models don’t get at the underlying structural changes necessary to combat social ills such as poverty.
The criticism seems unwarranted when you consider that BOGO companies are being held to a higher standard than regular businesses. And so long as the desired social impact articulated in the company’s business model is both transparent and meaningful, why would someone have a problem with marrying purpose with selling product?
The three key ingredients to the long-term success of one for one companies (encapsulated in TOMS) are as follows:
- A great product. It doesn’t matter how compelling your social impact, if the product isn’t great and can’t compete with other products on the market consumers won’t engage.
- A great mission. The mission must be authentic because it is the underpinning for why the company exists. And if it isn’t authentic consumers will see right through it.
- A great story. With a great story comes lots of sharing. Customers will become your evangelists and wear their conscious consumerism (particularly the Millennials) with pride.
A recent Stanford Social Innovation Review article by Christopher Marquis and Andrew Park supports these key ingredients to success and argues that even though this model is becoming more commonplace, it will continue to dominate the cause marketing space for years to come.
This must be music to the ears of Mycoskie, who made it clear as we finished our interview that he hopes the model he pioneered will be his legacy.
This article was originally published in the National Post
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Phillip Haid is co-founder and chief executive of PUBLIC, a cause marketing agency and innovation lab designed to create large-scale social impact through the merger of profit and purpose. You can follow Phillip on twitter by clicking here @philhaid