Blake Mycoskie wants to help people, but he is not blind to their foibles. “Do you know what was the most poorly performing of all of the products created by Red [the charity raising funds for AIDS programmes in Africa]?” he asks. “It was its credit card, because nobody really gets to see what credit card you use. Your giving isn’t visible enough. What can you say? People are people.”
This notion was brought home to Mycoskie some 10 years ago. The then fledgling entrepreneur, who had launched a laundry service for students while at college, was getting his new business off the ground. Called TOMS, it sold a brand of espadrilles with a philanthropic twist — for every pair that a customer bought, TOMS would donate a pair to a shoeless child somewhere in the less affluent world.
People will buy your product once for the cause, but they won’t do it twice unless it’s good
This one-for-one model would work, Mycoskie thought, because, as he puts it, “shoes are something you wear, they’re part of your identity. So that means when you wear TOMS, for example, it’s noticeable that you’ve done some good. That’s human nature and you have to embrace it.” He also believed the idea would quickly make an impact. “There are some very philanthropic people behind fashion brands, but the idea of fashion itself remains very materialistic and me-focused,” he concedes. “It’s true that fashion consumerism and a good cause are completely at odds, but that’s why we would be able to stand out.”
An old hand in the footwear business then caught him short. “I remember this guy taking one look at the shoes and telling me that we had to make them last better, fit better and be more comfortable or we wouldn’t have a business,” Mycoskie recalls. “He said that people will buy your product once for the cause, but they won’t do it twice unless it’s good.”
So Mycoskie made it good, itself a bold move given that espadrilles have long been regarded as essentially cheap and disposable. Since being inspired to establish TOMS after encountering shoeless kids in Argentina in 2005, Mycoskie has seen the company give away some 35 million pairs of shoes to children in need. He has also expanded his causes, launching an eyewear range to support restorative eye surgery and a bag line, fronted by the model Christy Turlington, linked to better pregnancy care and birthing procedures in the Third World. More recently, Mycoskie has also branched out into making coffee, dealing directly with growers, with profits going to clean water initiatives in developing countries.
His charitable goals, which include a benevolent fund to nurture socially minded businesses, now require collaborating with more than 100 NGOs and other non-profit “giving partners” in more than 70 countries. He’s also now pondering whether he can find a philanthropic model in micro-finance and even the hospitality industry. “It’s an interesting space and industry because there’s such a contrast between people who have the opportunity to stay in safe, beautiful places and people who simply can’t afford shelter,” he points out. “It’s one of many examples of how I believe a profitable business can build a model to help people and create a relationship between those who have access to these types of resources and those who may not.”
The notion of a business — let alone a profitable business — setting out to do some good is a relatively recent one. The corporate world has come to terms with the need to at least wear the face of what has been called corporate social responsibility and to daub its activities with some greenwash. “So many brands today have begun to retro-fit a ‘giving’ story or mission to their brand identity and communications, because they see how hungry people are for more purposeful products and services,” observes Mycoskie. “This does often appear to be a marketing ploy instead of a sincere desire to transform the world through business. I’m seeing this more and more every day and sometimes it does just seem like all talk. We know that the more successful the business is, the more positive impact it can have. But businesses that seek to begin a social enterprise with profit as the primary goal often do not succeed.”
Businesses that seek to begin a social enterprise with profit as the primary goal often do not succeed
What he calls his “social entrepreneurialism” has arguably made TOMS a hero brand for a new movement of businesses founded on the principle of making money while giving back. It has also made Mycoskie the epitome of a new breed of CEO — sockless, shaggy-haired and wearing beads and a big hat, while the official title on his business card is “Chief Shoe-Giver”.
Yet he concedes that the “buy one, give one” policy is not necessarily the best for all social entrepreneurs. “It’s just one interesting model and allows us to leverage the relationship of a consumer and a recipient,” he says.
“We felt the simplicity of this message helped with the success of TOMS and the ease of sharing the idea, but there are many new social models that can be equally effective and interesting.”
Mycoskie cites such “thought leaders” as Richard Branson and the social entrepreneur, banker and economist Muhammad Yunus as inspirations. Like them, he has written a new-age business book, Start Something That Matters. “Our overarching goal,” Mycoskie says, “is simply to expand our impact and help inspire the social entrepreneurial community to really adopt a spirit of giving, no matter what the exact model looks like.”
That goal has not come without criticism. For example, following complaints that TOMS’ shoe-giving helped individuals rather than communities and encouraged dependence instead of self-sufficiency, the company has to date moved 40 per cent of its production to more local facilities in a bid to help job creation in the regions where it gives.
Other critics have suggested that, by encouraging business to re-configure itself along more socially progressive lines, TOMS’ stance is letting governments avoid their responsibilities. As might be expected, Mycoskie, who recently met with many world leaders at the UN’s Global Goals for Sustainable Development conference in New York, offers a pragmatic riposte: “It’s easy to point fingers at who is to take the responsibility and who will be accountable. In my experience, the most success and greatest impact comes from alignment and collaboration across all sectors, such as governments working with NGOs in step with business and the private sector. I don’t avoid politics, but I do avoid talking about politics too broadly. I try to find bridges that unite a conversation with a friend or the public, versus getting caught up in areas that might divide us.”
Yet TOMS’ goal seems to be chiming with our more austerity-bound times. Last year, the Australian philosopher Peter Singer challenged the conventions of giving through the idea of “effective altruism”. He argued that, to do the most good, 10 per cent of one’s income should be donated through targeted, evidence-based giving, although that may mean giving to unfashionable, more prosaic causes.
“His thinking definitely rings true to me,” says Mycoskie, who has just turned 40. “My wife and I are committed to re-investing in purpose-driven entrepreneurs with innovative ideas, and will continue to be so. It’s important to know where your money is going, so we are thoughtful about it and review closely. But we’re also really finding great reward in knowing that even just a small amount can make a big difference in a new project and allow it to soar.”
More importantly, Mycoskie’s approach seems to be chiming with a generation of consumers who, while they want a decent product for their money, increasingly also want that money to go to a company that is greater than its products. If you’re older than 40, he reckons, it’s tough to accept the idea that profit and social good can go hand in hand. Those in their thirties are more likely to waver on the issue, he believes, while those in their twenties are relaxed with the notion.
The social aspect has to be a business strategy not just a trend. It has to change the way your business is done
“Younger consumers have seen the damage that a policy of just making money has brought in some cases, but they also accept that everyone, businesses included, have to make money to live,” Mycoskie argues. “They have higher expectations of social responsibility, which is driving business to be more oriented towards doing good. Businesses have to keep shareholders happy, so that’s one way of driving business. But the social aspect has to be a business strategy, not just a trend. It has to change the way your business is done.”
Ultimately, Mycoskie believes, it’s the consumer that will make such changes happen. “TOMS really began with a small group of people who stood for an idea and wanted to take that idea to the world. It was an ambitious goal and, looking back, probably a little naïve,” he says. “But I’ve seen how our business model has disrupted commerce and has influenced how people think about their purchases. As consumers, our choices dictate and define how companies grow and react. That’s inevitable. And that’s not a bad thing.”