THE CONCEPT WAS BRILLIANT, truly. Blake Mycoskie, who was mostly recognized for his participation in the reality TV show The Amazing Race back in 2002, was eager to embark on a new venture. Despite having already established several businesses, ranging from laundry services to billboards, nothing had truly sparked his passion. Mycoskie aimed to make a difference. To contribute to society. He was young, driven, brimming with entrepreneurial zeal… but lacking a solid idea. He had funds at his disposal, but was unsure where to invest them. Finally, his inspiration struck unexpectedly in Argentina.
In January of 2006, Mycoskie had traveled to Argentina to learn the sport of polo—Argentina is renowned for its exceptional polo facilities. However, in the rural areas, he witnessed poverty-stricken children without shoes, alongside locals donning basic yet remarkably comfortable farming shoes. It was while he was seated on that Argentinean polo farm one day that “the light bulb went off,” he recalls. Stylish shoes… a style not yet seen in the United States… revamp them, bring them up north, and for every pair sold, donate a pair to one of those shoeless children.
TOMS Shoes—along with the high-profile concept of “philanthropic capitalism”—was born. Mycoskie developed an entire business model that served as an inspiration. “Ultimately, I aim to create something that will outlast my time here,” he states.
The business flourished. With the fashion industry and consumers embracing the diverse TOMS Shoes collection, the company organized “shoe drops” in Argentina, Ethiopia, and South Africa, distributing 140,000 pairs of shoes to underprivileged children. Priced between $44 to $70 (and $98 for women’s boots), the shoes offer a feel-good shopping experience. The charitable approach attracted renowned business partners as well (including limited-edition shoes featuring the Dave Matthews Band).
Despite the success, Mycoskie leads a somewhat surreal dual existence. Half his time is dedicated to running the business, collaborating with trendsetters and fashion influencers, designing fresh styles, and spreading the word through personal appearances and endeavors like his widespread AT&T commercial. The other half is spent in remote countries, providing shoes to joyful children— the previously mentioned “shoe drops.” In 2009, the company aims to distribute 300,000 pairs of shoes.
Of particular significance to Mycoskie are the drops in Ethiopia. “There are numerous individuals affected by a debilitating foot condition known as podoconiosis, or ‘podo,'” he elaborates. “A long time ago, Ethiopia experienced volcanic activity, resulting in a silicate deposit in the soil that penetrates the skin of the feet, leading to damage in the lymphatic system. This causes severe foot swelling, resembling elephantiasis, which not only debilitates individuals physically, but also mentally, as they are shunned from society, regarded as outcasts.”
TOMS Shoes plays a vital role in maintaining these children’s foot health, enabling them to attend school. Education paves the way for a brighter future— all sparked by a simple pair of shoes. Another positive outcome: Mycoskie has engaged in numerous soccer matches with children across different continents, at times using rolled-up plastic bags as makeshift balls. “I’ll indicate that I want to play, and before I know it, I’m either on the shirt or skin team, playing soccer with some of the most enthusiastic players worldwide. Soccer serves as our universal language with the children.”
TOMS’ philanthropic business model has shown resilience amidst economic downturns: While most companies are cutting back on resources and personnel, TOMS is expanding. Mycoskie attributes this to two key factors: “Firstly, consumers are more mindful of where they invest their money. A product like TOMS, which gives back, is more appealing than ever. Additionally, as a company grows, be it a footwear company or any other corporation, profit margins diminish due to extensive overheads. Businesses operate by the small margins. However, we are certain that every pair of shoes we sell equates to giving away a pair, and that’s non-negotiable. If the business can’t sustain that principle, then the business won’t succeed. Thus, there is never a temptation to compromise on this.”
Herein lies the significant hurdle preventing numerous companies from engaging in more charitable activities, especially amidst harsh economic climates: Giving is not integrated into their operational costs. “Our philanthropy was ingrained in our business model from the outset, hence the cost per shoe is fixed,” he explains. “If a company suddenly decides, ‘Now we’ll donate 50% of our earnings!’ it may not be equipped to handle such a shift.” He smiles. “Their shareholders definitely wouldn’t be on board.”
Nonetheless, this shouldn’t absolve companies from pursuing more philanthropic endeavors and fostering relationships with their communities. Mycoskie emphasizes the need for businesses to adopt a more inventive approach. “The ideal starting point for any business is to ask basic questions: What are our core strengths? How can these strengths benefit those in need? For instance, an accounting firm can assist a nonprofit in establishing their accounting system. It’s all about identifying a requirement and doing everything possible to meet it, regardless of the scale of your resources.”
The one-for-one business model stands out due to its sustainability, unlike traditional charities. This was Mycoskie’s intent from the outset. “I launched TOMS with approximately half a million dollars of personal capital,” he reveals. “Had I simply invested that amount in purchasing shoes for children, I would have been able to provide shoes once. It wouldn’t have had the extensive and enduring impact that TOMS Shoes has today. Opting for a for-profit enterprise that channels a significant portion of its earnings back into philanthropy, as opposed to a straight charity, can benefit a far larger demographic.”
TOMS also reaps intangible rewards from its business model. Employee morale remains consistently high—how could it not, knowing that every action contributes to children’s happiness? The unique company culture at TOMS attracts a higher calibre of talent compared to conventional shoe companies. “Our company ethos is distinctive,” Mycoskie notes. “I’ve been fortunate to draw in passionate, committed individuals who will go above and beyond to make a difference in the world. They seek more than just a typical 9-to-5 job.”
Another successful TOMS business strategy (which has evolved into a key advantage): Enable your product to provide consumers with a narrative. “Hey, those are some cool shoes. Thanks! They’re TOMS Shoes. For every pair we sell, we donate one to a child in need…” Buyers feel a profound sense of satisfaction with their purchase, motivating them to share the story with others. Few businesses can evoke the kind of enthusiastic, word-of-mouth, how-cool-is-this buzz that TOMS does.
Mycoskie’s current challenge lies in keeping pace. As a footwear company, constant innovation and new designs are essential. Mycoskie, still only 33, media-savvy, and ambitious, finds his double life—much of it spent in transit—exhausting. Nonetheless, he has finally discovered his source of inspiration: an iconic product and a business model that fosters enduring giving to those in dire need. “My aspiration is to motivate other companies to incorporate the one-for-one model, or philanthropy, into all their operations.”
