Power Point: Be the changeOctober 11, 2008: 1:48 AM ET
"Be the change you want to see in the world."
Blake Mycoskie, founder and Chief Shoe Giver of TOMS Shoes, says that this Mahatma Ghandi quote is his favorite--and he even sells shoes that display those words. I met Mycoskie last evening at Arianna Huffington's house in Los Angeles, and he so impressed me that I visited him this afternoon at TOMS headquarters in Santa Monica. Fascinating business: For every pair of shoes TOMS sells, it gives a pair to a needy child. TOMS are simple $48 canvas shoes that you can find in 400 U.S. outlets, including Nordstrom (JWN), Urban Outfitters (URBN), and Whole Foods (WFMI)--TOMS' biggest customer. So we're talking lots of shoes for the needy.
Mycoskie, 32, launched TOMS in May 2006 after visiting Argentina and seeing kids without shoes--and wanting to do something to help them. In just two and a half years, TOMS has given away more than 70,000 shoes in Argentina, South Africa and Ethiopia. Measured by revenues, the company is small--$8 million projected this year. But Mycoskie says it will be profitable this year. He seems to have found a sustainable model. Rather than spend on marketing--which he says eats up 20% of a typical shoe company's gross margin--he spends on "shoe drops." These shoe drops earn him good will and positive word of mouth.
This afternoon, I saw scores of boxes stacked at the entrance to TOMS' warehouse offices. These were 12,500 shoes headed to storm-ravaged Haiti next week. The following week, Mycoskie and TOMS' 46 employees will do their first shoe drop in the U.S.: in Gulfport, Mississippi, still suffering from Katrina. Mycoskie is a scruffy, charming SMU dropout who lives on a boat in Venice and rides his bike to work. He's only 32 and already on his fifth startup. (His fourth, an online drivers' education business called Drivers Ed Direct, earned him the money to fund TOMS with no outside investors.)
He's one to watch. He just got Ralph Lauren (RL) to design a TOMS shoe. His mission? To build a diversified, socially responsible brand a la Richard Branson, he says. Last night at Arianna's, we were discussing whether the Wall Street meltdown will cause more young people to turn off traditional business and want to work at companies that aim high to do good. I think it will. And TOMS is in a sweet spot for these hard times.