The Curious Beginnings of TOMS
How a serial entrepreneur built an iconic brand that donates shoes to children around the world for every pair sold.
About TOMS
In 2006, Blake Mycoskie took some time off to immerse himself in Argentinian culture. It was during this trip that he learned about the devastating impact of poverty, particularly how the inability to afford shoes can prevent children from attending schools and safely accessing water. Blake also learned that existing solutions were inefficient. Organizations were unable to collect enough shoes in the correct sizes. As a result, unused shoes went to waste while many children returned to their homes empty-handed.
Blake realized that charity wasn’t going to solve this issue alone, so he decided to take a different approach. He created a for-profit shoe company that would give a pair of new shoes to a child in need for every pair that they sold. In other words, the company would offer “ shoes for a better tomorrow “ or TOMS for short.
Blake’s innovative approach became known as the One for One® business model and would eventually inspire popular brands like Warby Parker and State Bags to follow in his footsteps.
As of this writing, TOMS has positively impacted 100 million lives. The company received the Secretary of State’s Award of Corporate Excellence (ACE) and the ISPA Humanitarian Award. Blake has personally received the Next Generation Award from Harvard’s School of Public Health and he has been recognized as one of USA Today’s Five Best Communicators in the World, Fortune’s 40 under 40, and ABC News Person of the Week.
The Build-up
The success of TOMS can be attributed to Blake’s perseverance and ingenuity in solving problems, which were key characteristics that enabled him to start five businesses before founding TOMS.
In college, Blake taught private tennis lessons for $25 an hour. After a tennis injury prevented him from coaching and playing, he started a laundry service called EZ Laundry for college students in 1996. His laundry business was the first time that he discovered the power of marketing. Blake borrowed a tactic used by Benjamin Franklin and delivered and picked up fake loads of laundry to create the perception that he was running a popular and reputable service. It worked. EZ Laundry went from serving 10–15 customers to servicing three universities, eventually generating around a $1 million in sales and employing 40 people.
Initially, Blake was depressed by the failure of his media business, especially after having to let 25 employees go. This didn’t stop him from jumping on another opportunity, however. During a final barbecue to honor the end of their TV network, a colleague’s son described his boredom with driver’s education classes. A light bulb flashed. Blake realized that these classes are mostly taught by teachers who didn’t have much in common with the students. Most classes were also taught in-person.
Starting a Mission-driven Company
In January 2006, Blake closed DriversEd Direct, as he did each year so that he and his employees could vacation for a month. That year, he decided to travel to Argentina. He fell in love with the country during The Amazing Race but hadn’t visited since the competition. His intention was to relax and immerse himself in a new culture, but he was also deeply affected by the level poverty that he witnessed. After volunteering to help deliver shoes for children in need, he was determined to find a way to help. Instead of charity, Blake would start a business that would generate enough profit to give away a new pair of shoes for every pair that the company sold.
The story behind TOMS was placed prominently next to the shoes and happened to catch the eye of the leading fashion writer at the LA Times. TOMS made the front page and the company sold 2,200 pairs of shoes through their website before noon that same day, in addition to catching the attention of a Nordstrom rep. The problem was that Blake only had around 100 pairs of shoes left at his apartment. To fulfill the orders, Blake immediately flew back to Argentina to line up a manufacturer that could produce around 1,000 pairs a week.
The Power of Storytelling
The story behind TOMS is heart-warming and inspiring but the company would not have succeed based on this story alone. There are plenty of organizations that positively impact society, but we don’t necessarily hear about them because their mission is complicated and people forget to credit them for their work.
Blake stood out from the crowd by closely integrating the product with the story behind the company. If you listen to him talk about starting the company, you can immediately see that he is a talented communicator. He includes funny anecdotes and authentically conveys his passion for positively impacting the lives of others.
Another important aspect about the brand is that the business model can be easily explained in under a minute: TOMS donates a pair of shoes to children in need for each pair that’s sold. Each time the company reports the number of lives that they’ve positively affected, buyers can feel proud of supporting the brand.
TOMS Today
In 2014, Blake stepped down as the CEO of TOMS, reportedly earning $300 million when Bain Capital took a 50% stake in the company. The company was valued at $625 million at that time. Although Blake is no longer at the helm of the company, he remains the Chief Shoe Giver.
The investment from Bain was partly to revamp the company. NYU Professor Russ Winer suggested that part of the reason why TOMS lost its edge was because they focused on wholesale for too long and missed out on the advantages of selling directly to customers. DTC is advantageous because it gives a company more control over their marketing, inventory, and prices. TOMS also relied on the alpargata shoe for too long. Other companies copied the shoes and undercut TOMS’s prices. By focusing the majority of the company’s efforts on social responsibility, TOMS lost sight of their product and lost their advantages over competitors.
Despite some of the company’s financial struggles in recent years, TOMS remains a globally recognized brand and has positively impacted over 100 million lives. The company has also moved beyond just donating alpargatas. Starting in 2011, TOMS expanded into eyewear and eyecare. In the years following, TOMS began contributing to clean drinking water programs, improving medical care for pregnant mothers, and the company donated $5 million to US organizations that were working to end gun violence. To this date, TOMS has donated 95 million shoes, 780,000 pieces of eye wear, and 722,000 weeks of clean drinking water.
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Originally published at https://curiositysphere.com on December 9, 2021.
