Call it a revolution, call it a movement. Call it good business. Millennials are reinventing capitalism to achieve loftier goals than profit, and Blake Mycoskie, founder of civic-minded shoemaker TOMS, visited MTV to get us thinking about how the network can help.
MTV President Stephen Friedman, host of MTV’s ongoing Pioneers speaker series, called the visit a particular honor because the channel’s aspires to do well by doing good.
“Every day we entertain. But we also try to figure out how to do good in the process,” Friedman said.
Mycoskie, whose official title is Founder + Chief Shoe Giver of TOMS, sat down with Noopur Agarwal of MTV Public Affairs in front of an audience of MTV employees to discuss TOMS’s strategy. The conversation uncovered how Mycoskie turned the venture from a “side project” into a global business operation, and how he’s sustained a profitable business while giving away products for free.
Mycoskie spoke on the power of channeling a story, the importance of consumer engagement and the challenges behind him (production) and ahead (keeping his mission top of mind as the shoes become popular as a fashion statement).
The idea for TOMS grew out of a trip Mycoskie took to Argentina to recharge from his then-successful software business. The basic need for footwear he saw in rural communities there gave way to a shoe company that pairs children in need based on a one-for-one principle of buying and giving: buy a pair today, one will be given tomorrow.
(Interesting aside: Mycoskie couldn’t fit TOMORROW on the label at the back of the shoe, so he shortened it to TOMS).
But Mycoskie feels that the success he’s attained with TOMS wouldn’t have been possible during his parents’ generation.
It seems basic, but without the Internet, a story can’t spread as fast — not just in terms of being seen, but being talked about. And story is key, Mycoskie said. TOMS had no ad budget, but it had a powerful story that enabled it to spread.
Trailers like the one below have become social media phenomenons unto themselves:
“[Social media] is easy, free, and it’s easy for [consumers] to share their experiences and what they care about,” Mycoskie said.
From encouraging customers to post videos on what they do with TOMS to a design-your-own TOMS contest in Teen Vogue – for which readers designed a pair and voted for a winner to go into production – they’re a part of the process.
Central to the success of the company is consumer engagement – involving the customers in all aspects of development, Mycoskie said.
TOMS wedges? Those grew out of women complaining that they wanted to buy a pair, but would never wear flats.
TOMS maximizes social media resources, from recruiting interns on Craigslist (Mycoskie found his original eight interns from there) and hiring through Linkedn to posting YouTube videos. By all means, TOMS is a model for how you can build a company or an NGO in our hyper-connected world.
And not surprisingly, they’ve had great success with a youth audience. Mycoskie figures that his average customer now is a teenage female.
The challenge, moving forward, is to address the fashion focus that’s come with their increased popularity.
TOMS has answered this challenge by taking a heightened responsibility for its messaging. To keep the mission top of mind, it’s continued to engage customers. Mycoskie said he’s approached girls in the airport, asking them why they bought the TOMS on their feet, because he wants people to buy them for reasons greater than the fact that “their best friend got the gold glitters and they want them too.”
Right now, TOMS is in the process of selecting eight winners to take a trip to Guatemala together for a shoe drop.
“The greatest way to talk about what we’re doing is to let our customers talk about it,” he said.
From a business standpoint, keeping the mission top of mind makes sense too, if it’s the power of the story that’s really gotten the product to catch on.
“The secret sauce of our model is that most companies spend 10 to 12 percent of their gross margin on ad budgets,” Mycoskie said. “We put that money toward shoes.”
TOMS maximizes the cost-effectiveness of social media and consumer engagement, letting the power of the story and the mission take hold more organically.
With greater scale, though, comes greater expense, Mycoskie said of TOMS, which functions as a business, not a nonprofit. (With a nonprofit framework, Mycoskie would have had to ask for money, which he didn’t want to do.)
“The model is feasible,” he said. “As we’ve gotten bigger, it’s gotten more expensive than just making another pair of shoes, though.”
It becomes a question of how to give responsibly, hiring universities to do studies to figure out the impact, CSR reports, and so on.
Mycoskie encouraged us to take part in his annual awareness day, One Day Without Shoes, on April 10, for which you pledge to take off your shoes.
“It’s a day or a moment to be thankful for what we have and think about what we can do to help,” he said.
They rallied 1 million last year – from traders on Wall Street to kindergarteners in Korea.
“Wear your socks to the cafeteria. Or if you’re feeling really aggressive, go out there,” he said, pointing out the window into Times Square.
And load up your content, he instructed.