Blake Mycoskie: “We see ourselves as a movement”
Make it last chats to TOMS founder Blake Mycoskie about the debated one for one model – and his thoughts on entering the hotel industry.
Blake Mycoskie is an American entrepreneur, the founder of TOMS and the person behind the idea of One for One, a business model that helps a person in need with every product purchased. Make it last chats with him about the ups of TOMS business model, challenges in the supply chain and TOMS latest coffee bean project.
Given that TOMS have four product areas (shoes, eyewear, bags, coffee), in which industry do you place yourself and what does the market look like in terms of competitors?
– I don’t really see TOMS like an industry, not as a charity or a shoe business either. We have our eyewear business, and bag business now. So I think we’re in a kind of unique position where we cross many different industries. But if we really look at our primary competitors it would be shoe brands, like Vans or Converse. These are brands we typically sit next to in department stores, and that’s a core of our business. Our eyewear business is growing quite a bit, and there we have competitors like Ray Ban. But in terms of a specific industry, I think what’s fun about TOMS is we’re really are in so many different industries. We don’t even call ourselves a industry, we call ourselves a movement, because our idea can make a difference to our business and to people’s purchases.
You state that TOMS One for One model can be applied to any product area. Do you think it could be applied in any industry as well?
– I think it could be applied to a lot of areas. What is most important is to clearly identify a need, and to fulfill that need through the sell of a product. So, for instance, our eyewear business works very well. Because when we sell a pair of sunglasses we either give a pair of prescription glasses to someone who can’t afford them or offer surgery and help someone get the service they need.
– One industry that we haven’t entered into, that I think would work for us, is the hotel business. There are a lot of homeless people in the world and there are a lot of people in need of somewhere to sleep. So the principle would be that when you stay in a hotel room one night, the hotel pays to help a homeless person off the streets. There are some areas that might not make sense, I mean I don’t think we need more t-shirts in the world, so a One for One t-shirt model will not be the next thing. But there are a lot of areas to grow into still.
Do you have any planned projects in new areas?
– No, no new projects or products. Right now we focus on our four products and they all kind of fit together in our cafes and retail places. But I do think our model will be developed in the future.
You sell a lot of shoes. Do you have a sustainability approach when it comes to the actual production?
– We have a couple of different things. We have very stringent guidelines that all of our factory groups have to sign. If we find any infraction of those rules then we give them one warning and if they don’t improve we move to a different factory. The nice thing about our business having grown so big is that we have a lot more leverage than newer and smaller brands trying to do sustainable manufacturing.
With every product purchased at TOMS a person in need will be helped, most often in the areas of shoes, water, sight, safe birth and bullying prevention. What, if any, are some of the major challenges that your “one for one” business model faces?
– One challenge is that it’s very expensive to do the giving that we do. We don’t have a lot of room to make any mistakes because the margin is quite small. An other challenge is that when we started the business we didn’t really come from a shoe making background. We had to learn a lot about making shoes and as we expanded our production we tried to focus on putting production facilities in the countries where we are giving the shoes. We have factories in for example Haiti, Ethiopia and Kenya. We also make a lot of shoes in India. It’s hard to manage all these different factories, and many of these developing countries struggle with things like independent electricity. And things you wouldn’t even anticipate. So there are a lot of challenges around the production.
In TOMS latest coffee bean project, water is donated to people in need when someone buys coffee at TOMS. Given the fact that coffee production requires a lot of water, how do you reason around this?
– That’s exactly why we give water. I was in Rwanda and visited some coffee farmers about four years ago. I was amazed to see how much water was being used to process the coffee beans and yet there were children in a village very close by that did not have access to clean water. That led to the idea of selling coffee to raise money to invest in clean water projects, because people are going to continue making and drinking coffee. If we can use some of the profits of that coffee to help the local communities have better sources of clean water then we feel it’s a very powerful way to do it. I’m very passionate about the coffee business for that very reason.
Do you think the water production cost equals the amount you donate?
– The production water is recycled water, it’s not a wasted resource. They can use it to process the beans and then filter it, clean it and use it again. I actually think the water systems we put in contribute more to clean and safe drinking water. That is at least what we aim to do.
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