TOMS Shoes founder Blake Mycoskie created his Santa Monica, California-based company as a vehicle for giving away shoes to needy children, but should the Texas entrepreneur be looking ahead to selling the company and using the money to pursue other philanthropic goals?
TOMS, an abbreviation of “Tomorrow’s Shoes,” is based on a simple concept: for each pair of shoes sold, a pair is donated. Mycoskie, 33, conceived his “One-for-One” business model on a trip to Argentina, when as a volunteer on a shoe drive, he witnessed how a simple pair of shoes could change a child’s life (read original story here).
“Many of the kids’ feet I saw were really badly cut up and infected and just really gross, for lack of a better word,” said Mycoskie, who also noticed how much trouble the non-profit organization he was helping had in getting the right size shoes for the kids, as they were completely reliant on donations. “It dawned on me that instead of looking at this as a charity thing, which is what they were doing, why not look at it from a business perspective and create a business where you sell a pair of shoes and give a pair.”
In the first year Mycoskie sold 10,000 pairs of his South American-inspired canvas espadrilles, which retail for $45. Conversely that meant he was able to give away the same amount to kids in Argentina. Mycoskie refused to give specific revenue figures, but said it’s easy to extrapolate his overall minimum revenues since his 2006 launch – based on 400,000 giveaways at an average cost of $45 – as roughly $18 million.
To date, TOMS has been entirely bootstrapped by Mycoskie, who would prefer to keep it that way. He said the orders are still essentially processed as they come in, allowing him to carry little in the way of inventory.