Blake Mycoskie, Founder, TOMS Shoes
Blake Mycoskie had a number of hits and misses as a young entrepreneur, but it was a trip to Argentina that inspired the idea that would become his mission—and end up having a huge impact on the business world.
Mycoskie wanted to find a way to help the children he encountered who didn’t have proper footwear, but he wanted to do it in a for-profit, self-sustaining way. That’s how TOMS came to life.
From there, Mycoskie blazed a trail in the way companies think about social good, by popularizing the one-for-one giving model and building the beloved brand that still exists today. TOMS generates hundreds of millions in sales and still stays true to its mission of giving back to communities around the world.
Check out this episode to learn more about Mycoskie’s advice for those who want to pursue social entrepreneurship, the business model that led to his success, and the expansion of TOMS into other types of products.
- Why the idea of a “job” was foreign to Mycoskie growing up
- How Mycoskie’s entrepreneurial spirit led to him founding everything from a laundry service to a reality cable television channel
- The trip to Latin America that inspired the idea for TOMS Shoes
- How Mycoskie changed the social entrepreneurship game with his one-for-one model
- Why social good isn’t necessarily the right path for every business
- Mycoskie’s personal reasons for selling half of TOMS to Bain Capital
- How TOMS was able to grow completely organically through social media when it launched in 2006
- The journey to achieving millions in revenue and donations
- The reasons behind TOMS’ expansion into eyewear, coffee shops, and more
- How Mycoskie continues to innovate despite a lack of background in apparel design
- Mycoskie’s best advice on choosing the right partners and building a sustainable business
Full Transcript of Podcast with Blake Mycoskie
Nathan: The first question I ask everyone that comes on is, how did you get your job?
Blake: How did I get my job? I don’t know if I have a job. It’s funny, when I was a kid I played tennis really competitively, and because I played tennis every summer in tournaments around the country I never had time to have a summer job like my other friends did, and my parents, my dad used to give me a hard time about, that I was afraid of the J-O-B. And then I ended up becoming an entrepreneur and dropping out of college, so I never have ever actually had a job for anyone but myself, so that word is kind of foreign to me.
Nathan: There you go, J-O-B. So how did you find yourself doing the work you’re doing today? How’d it all start?
Blake: Sure. Yeah. I mean, I started, my first company when I was 19 years old, it was a laundry service, and it was just out of necessity because I broke my leg and couldn’t do my own laundry, and so I was trying to find someone to pick up and deliver it and that was not available. And so, they say, I think, entrepreneurship, a lot of what is created by an entrepreneur is out of necessity.
But what I really created was a realisation that all those years of playing tennis, and being competitive and having self-discipline, those are a great training ground to being an entrepreneur, and I really loved the idea of starting something and kind of building an idea into something that customers wanted to buy and employees wanted to work for.
And so I spent first 9, 10 years of my life doing a couple of different startups, and then I got to a point where I enjoyed being an entrepreneur but I wanted more significance, I wanted more purpose, and that’s when I had the idea for Tom’s. I was travelling in South America and doing some volunteer work, and met some children that did not have proper footwear, and I wanted to help them but I didn’t want to create a charity. So I decided to create a for-profit business that would give a pair of shoes every time we sold it instead, and that’s what became Tom’s.
Nathan: Yeah, wow. It’s incredible. So you guys have been around for quite some time, I bought a pair of Tom’s very, very long time ago. When did you guys start?
Blake: Thirteen years ago.
Nathan: Thirteen years ago, wow. And incredible growth, you got, you’ve really pioneered this one-for-one, or this give model. Were you one of the first to do something like this, where it’s a for-profit but it’s, it has a really strong element of social good linked to it?
Blake: As far as I know, we were the first to do the one-for-one model in a commercial way. As we started we just really wanted a very simple and easy way to keep track of what we were doing from a giving perspective, and so one-for-one was just the idea that we came up with, and I had no idea that it would be powerful and so easy for people to understand and then share and that it would have, impact a lot of other businesses as well. But yeah, when we first started it definitely was not in trend do so.
Nathan: Yeah, I see. And you said that you wanted to start a business with a little bit more purpose. Can you tell us about your previous companies? I know you had the laundry business.
Blake: Sure, I … Yeah, laundry, I started an outdoor advertising company, I started a reality cable television channel, and then also an online driver’s education company.
Nathan: Yeah, I see. And what happened with each of those companies? Did you build them up and then sell them, or did they not work out?
Blake: I wish, yeah. No, some were … Let’s see. The laundry business I sold, the outdoor advertising company I sold, the reality cable channel went belly-up, and the driver’s education company I ended up selling to my partners. I had some partners in that business, and I was able to sell it to them and they continue to run it today.
Nathan: Yeah, I see. So I’m curious, how did you … When it came to the one-for-one model, you said that you didn’t think it would do as well as it has done and it’s just been incredible for the growth of Tom’s. And you said that you just came up with it because it was easy to track things.
Nathan: I’m curious, with the margins and things like that, that’s something that a lot of people, especially in the physical product space, it’s just tough with margins and with rising ad costs and media acquisition, and all these kinds of things, it’s difficult to make good margin. What would you say to founders that are in a position … Do you believe that every founder should have an element of social good in the, in their … or using social entrepreneurship in their model, or … I’d just love to hear your thoughts there.
Blake: Yeah. No, I don’t think it’s for every business. I mean, you need a business that has high margins, footwear has high margins historically, but most importantly you really just need to know what is the purpose of why you exist. I wanted to help kids get shoes, and so that’s why we created Tom’s in the first place, was to create a sustainable way to keep giving kids shoes.
But I think for every entrepreneur you have to ask yourself what are you, why do you exist on the planet? And if part of the reason you exist is to accomplish this social goal, well then I think it’s a great thing to incorporate it into your business, but I don’t think it’s the type of thing you want to tack onto another business idea. If it’s not integral to why you exist, then I would not actually incorporate a social cause. But if the reason you exist is to fulfil a social cause, then it’s a natural thing to be integrated into your business.
Nathan: Mm, I see. So I’d love to delve a little bit deeper with Tom’s. I know you, four, five years ago you sold half of the company to Bain Capital.
Nathan: What … Why did you decide to do that?
Blake: Well, I never had any investors. So most companies that got to the size that we get to typically have investors and a board of directors and even partners, and I didn’t have any of that, and so frankly I was kind of lonely. I built this company to over $400 million in sales a year, and had given away tens of millions of shoes, and had hundreds of employees.
And at the end of the day I was running it like a mom and pop, it was all my capital and I was the main, the only owner, and that can kind of be a lonely plight. And also I recognised at that point, I had just gotten married and my wife was pregnant with our first child, and I just realised that there was a lot more to life than just working all the time.
And so as much as I enjoy my work, I also enjoy many other things, and I knew that if I sold part of the business and brought in other partners that had real financial interest, then I would not be, have all the pressure on me. And so, that’s why I didn’t want to sell all of it because I really wanted to stay connected to Tom’s and wanted to help continue to see it grow and thrive, but selling half of it was, seemed like the right thing to do.
Nathan: Okay, that makes sense. And I suppose you have to choose the right partner as well, because you want to still be able to lead the vision and also, I guess, yeah, it has to, the, they have to be bought in with your values as well.
Blake: Yeah, absolutely. And Bain has been an incredible partner, they definitely bought into the values and they’ve supported the values ever since we partnered, and I couldn’t be happier.
Nathan: Amazing. So, tell us about the early days of Tom’s. Was it easy? How’d you get your first customers? Or did it just take off? Or because you’ve had a bit of experience beforehand, building and growing, selling some startups?
Blake: It was definitely not easy. I mean, no … starting any business is easy, I don’t think. If anyone tells you that, I don’t know. I haven’t met that person yet.
But no, I, it was hard as in all starting businesses are, but there was definitely more of a gravitational pull with this than other businesses. Of anyone that I told the idea to, there was a potential customer.
Our partner was excited about it and interested, and thought it was interesting idea and were giving so much play, and so at that point I think … And because it was such a radical idea back then, I mean, there were no other companies doing what we were doing, I think that also helped create a lot of demand and interest, and it really was a competitive advantage because it was so different than what every, anyone else was doing back then.
Nathan: Mm, I see. So did you guys, when you launched, were you selling originally always online, or you went to retailers? Or how did that side of the business run?
Blake: Yeah. No, we sold online. Yeah, we sold online first, and then we were having so much success online that the retailers started contacting us, and then we were very excited to expand to retailers as well. And so we were really early on and able to build a business of both a good sizeable business, both online and with retailers.
Nathan: I see. And what was the, in the early days, what was the best marketing channel besides having this really strong purpose, really, yeah, really strong values behind the business?
Blake: Well, the interesting thing is I started Tom’s in 2006, and I think Facebook opened up to the public, it was originally just on college campuses in 2007 maybe, and …. or, maybe right, or maybe the year before, and then you also had YouTube launched in 2007. And so social media as a channel really was birthed at the exact same time as starting Tom’s, so all of our marketing was done organically on social. We didn’t pay for any social back then, it was all done organically, and so that’s, I think, part of the reason we were able to hold a healthy enough margin to build a business with the giving around.
Nathan: Mm, I see. And as time has gone on, you guys have also expanded your product line. At what point … How many different products do you guys sell right now besides the shoes, and when did you introduce each?
Blake: We, right now we only do shoes and eyewear, and then we have a few coffee shops. We started eyewear in 2010, and we started the coffee in, I think, 2014.
Nathan: Yes, I see. And why did you decide to introduce other product lines?
Blake: Well, it really is just all, there’s more ways that we could use our one-for-one model to give back, and so we wanted to do that.
Nathan: I see. And do you plan to add other product lines in the future?
Blake: It’s hard to say. I mean, since Bain got involved and we got more focused, I think, we recognised that there… little just in the footwear business. And so that’s what we know best, and so as of right now we’re mainly just focused on the footwear.
Nathan: Yep. I see. And when it came up with the early days of designing the shoes, I know … did you have a background in designing shoes? Because they were cool man, I … Yeah, how did that come about?
Blake: I … No, that, that’s, it was just based on the original alpargata which is a shoe that was very popular in Argentina. So, no, I didn’t have any background in designing shoes, that was really just a shoe that I found in Argentina that I kind of improved upon in redesign.
Nathan: Yeah, I see. Because yeah, that’s the crazy thing, right? If you step outside of it, if you think of your favourite pairs of shoes, like you, people really like Yeezys and all these other things. You’re, you guys are designing shoes and, yeah, that is something that people are very, very particular about and you guys have been able to do … Well, you’ve been able to come in and say, “Okay, here’s these incredible shoes, which look great, and here’s this incredible cause and mission and purpose behind them.” So I was interested to know if you had a background or anything around that. Do you have designers now, or do you have any, much of a focus on that piece?
Blake: Yeah, yeah, we have a whole … I mean, now that we’ve grown and we have all different types of shoes we sell now, and a whole product team and designers, developers, and all of that. So yeah, so that’s very much a part of our structure now is a lot of investment in designers and creativity.
Nathan: Yeah, I see. So what’s your biggest challenge right now with Tom’s?
Blake: I think it ties into that. It’s just staying relevant from a design standpoint, that’s not easy to do. So I would say that’s probably the biggest challenge.
Nathan: Yeah, I see. And when it comes to the glasses, how does that exactly work? Because that … Is that easy to … I guess because shoes, you said you found the design from, in Argentina. With the glasses, how does that work on the, I guess, on the fulfilment and design standpoint and … Yeah, how many SKUs?
Blake: We have quite a few. I mean, we have a whole team that are professional eyewear designers and they design them, and it’s not that much different than the shoes. The only difference is instead of giving you a pair of shoes we give sight, so we either do prescription glasses donations, or eye treatments, or cataracts surgery. So yeah, it’s different in the giving, but the process and making the glasses isn’t that different than making the shoes.
Nathan: I see. And when it comes to, I guess, the facilitation of the one-for-one model on the other side of the table, so helping, I guess, the less fortunate, do you guys actually facilitate that, or … and do you have people on the ground in certain countries facilitating that, or do you find partners to help facilitate that?
Blake: We have partners, really great nonprofits all over the world that we work with, and so they’re the ones that are actually doing the distribution, and I’m, and we’re just kind of choosing our partners.
Nathan: I see. So how do you, yeah, how do you know what is, a good partner? What do you look for when it comes to, yeah, choosing these partners to work with? And I assume you’d have many partners, for example with Tom’s, you would have…
Blake: Yeah, we have a … Yeah. We have 70 partners all over the world, and they’re, we look for nonprofits that have been working in these community spaces for a long time, and are best in class and have good reputations, and have good warehousing capabilities and distribution capabilities, because they’re really our eyes and ears on the ground. And so we put a lot of energy into picking the right partners, and then, too, staying, monitoring them and quality controlling them, and all of those things.
Nathan: Yeah, I see. And now that you … You said you, you’ve sold half of the company to Bain and you’ve been able to bring in, I guess, some management help. Do you guys have the CEO in place now, and you you’re just kind of a …
Blake: That’s correct.
Nathan: Yep, I see. And when it comes to kind of your day to day, what does that look like? You, you’re spending a lot of your time on strategy and vision, or …?
Blake: It’s … I mean I’m, I definitely am involved on the strategy and vision, but I still think that that’s an important role for the CEO. My role more is kind of sharing the Tom’s story, doing media interviews like we’re doing right now, and then really making sure that the staff feels inspired, but I don’t really have much day to day. I mean, I spend a lot of time with my family, we actually live in Wyoming and Tom’s is based in California, so I don’t, I’m not in the office that much anymore. And so I’ll fly in every other month for a couple of days and kind of connect with everyone, and then most of what I do is on the phone or via Skype.
Nathan: Yeah, I see. And how does that feel, to build a company of this amount of significance and value, and then, yeah, basically kind of have yourself, almost for the most part, fully replaced? And by choice of course, but … Yeah.
Blake: Yeah. No, I did… I mean, it’s a nice … I think we have … Life is a beautiful thing, and that we get to do many different things and many different journeys. And I spent almost 20 years being a hardcore entrepreneur and 10 years building Tom’s and I’m very proud of it, but I also recognise that there’s much more to life than just running a company or being an entrepreneur. And I have lots of hobbies, I have a wonderful family, I have many different nonprofit organisations and groups that I care about. And so it’s this source of pride to know that Tom’s can go on and thrive and help people without being dependent on me.
Nathan: Yeah, amazing, and I find it interesting. So … And I respect that. So I assume you have a young family, so you want to spend more time with your kids and watch them grow. Because as founders, it has to be an obsession, like to build something of, I believe, of true worth and significance, it has to be an obsession. Which it probably was for you for a long time, and you’ve kind of taken a little bit of a step back to focus-
Blake: Yeah, for 10 years.
Nathan: Yeah. So-
Blake: Yeah, yeah. No, 10 years, it was my entire life, and so when I realised that I, that was, that I wanted to do more then I want to make sure that I had the right people in place, and I think we have great people to do, to carry it on.
Nathan: Yeah, amazing. We have to work towards wrapping up, and I’m mindful of your time. Few last questions. One around, I guess, what would you like to share with anyone that’s in the early stages of their journey? Majority of our audience have actually already started the business and they’re listening to incredibly experienced founders like yourself that have achieved success in all different levels in like early stages, first round of customers, looking to grow it. I guess you would say that a lot of them would be doing work that they’re really passionate about or purposeful, but not all. Some might just be kind of building a business out of necessity or trying to solve a problem, but they might not be insanely passionate about that problem.
Nathan: So, yeah, that was the first question, and then the last question was with the best place people can find out more about yourself and your work?
Blake: Yeah. I mean, you know, most … I mean, I’m on Instagram and Twitter, those are the main social media that I engage in, and then obviously toms.com. And … But I think that as you were talking about how most founders are at the early stages, I think my advice to them is really, to really focus on the one thing that your company can do better than everyone else. I think that there’s a lot of founders that get in trouble because they have, like me, a lot of ideas and a lot of excitement, a lot of passion, and so they end up building businesses that are good at lots of things but not great at one thing. And so I think doing one thing really great is the best way to build not only a successful business, but one that’s defendable and sustainable.
Nathan: Amazing, I love it. And how did you maintain focus?
Blake: Really listening to that advice. I mean, I got that advice early on from different other entrepreneur founders, and I really stayed focused on the shoes. I mean, obviously we added eyewear and some other things, but really stayed focused on our one-for-one model and staying true to that.