Sometimes, being a social entrepreneur isn't enough.
When Blake Mycoskie launched TOMS in 2006, he inspired a new wave of social entrepreneurs with his company's buy one, give one model. Initially, TOMS would donate one pair of shoes for each pair his business sold.
And while TOMS has given away more than 10 million shoes to children in need and widened its one-for-one model to include eyewear, the company has come under fire for providing aid but not helping to alleviate poverty.
Well, Mycoskie says, he’s now taking action.
During the Clinton Global Initiative’s annual meeting this week, where leaders of businesses, nonprofits and governments have convened to address social challenges, Mycoskie, 37, announced plans to build a new shoe-manufacturing plant in Haiti, where locals will be trained to begin production in January.
“I want everyone to hear me clearly: This is not just additional aid to Haiti,” Mycoskie said in a session where both former President Bill Clinton and activist-actor Sean Penn spoke about development progress in Haiti. “This marks a major investment and will have one of the most important investment returns possible -- and that is improving people’s lives.”
Mycoskie sat down with Entrepreneur.com to discuss how he’s listened to his critics and what young entrepreneurs should keep in mind as they try to grow beyond startup phase. Here's an edited version of that conversation:
Q: You’ve given away more than 10 million shoes and expanded the program to include eyewear. What do you attribute this success to?
A: The success of the shoes comes from the simplicity of the one-for-one model. A 9-year-old, and my 90-year-old grandmother, could both understand it and be excited about it.
When we recognized the one-for-one model had that power not only to be a great marketing tool but to help people then we said how can the model work in other areas? Eyewear was the first of many to come. Next year, when we launch our next one-for-one product, it’ll most likely not be in the fashion and lifestyle space -- and that will be the next big challenge for TOMS.
Q: Some have argued TOMS has failed to alleviate poverty, in part, because shoemakers aren’t getting the wages they deserve. Is this initiative in Haiti addressing that criticism?
A: I think that statement -- people making the shoes and not getting the wages they deserve -- is just false, and it’s just people assuming that you’re making a product in Asia and people are not being properly paid. That is, in my opinion, an ignorant understanding of production. Yeah, maybe it was true in the 1980s and maybe early 1990s. But if you go to China now the facilities are better than the facilities in Africa or South America.
But the criticism -- whether it’s true or not -- is a fair one, and if you’re building a brand you have to listen to the critics, and we have. So, yes, this is addressing not that specific comment but more the comment of “aid is not enough.” That criticism is a very fair one, because if you build a company to the size of TOMS that’s able to do real good and create jobs then why not do it?
Q: Like many startups, TOMS could have failed early on. What have you done that’s helped the business grow?
A: There’s an inflection point that you hit where if you only remain focused on your core business you might be out of business in a few years. This is a rapidly changing business environment. Entrepreneurs need to think about trying to understand when it's the right time to reinvent yourself, and we’re going through that right now.
Two years ago we were just a shoe company. Then we became a shoe and eyewear company. But we were only focused on aid. Now we’re focused on job creation. We are evolving through some major paradigm shifts.
Everyone focuses on the startup phase and the advice -- focus, focus, focus -- which is important. But what’s not talked about a lot is the very thing that gets you success can be your falling point, too, if you don’t evolve and change. That involves risk, and something we’re going through right now. In the true sense of the word it allows me to be an entrepreneur again -- and not just company founder and owner.
Q: You started a business at 18 and then launched TOMS at age 29. What advantage can youth provide?
A: People, especially other business people, are excited about young entrepreneurs. They kind of see themselves in you, so it’s a great opportunity to get mentorship. It’s also a great idea to get your foot in the door.
They see you as a young, driven entrepreneur and so they give you a chance. That’s why I dropped out of college and started as an entrepreneur very young. I was trying to get my foot in the door today people would just see me as another entrepreneur or business guy.
Q: What's the downside of youth?
A: Particularly when you're trying to convince big companies to do business with you, it can be difficult. In the tech industry it’s almost expected that you’ll be young, but if you’re more in big media, supply chains or something like that, they want you to pay your dues.
Q: How does TOMS keep its culture intact as it grows?
A: We’ve been able to preserve a lot of the early employees from TOMS, and the torch is really carried by them and me. The other thing is leading top-down in a place that is rewarding and risk-taking and not getting stuck in our ways.
Neil Parmar's work has been published in The Wall Street Journal, SmartMoney Magazine, The Huffington Post and Psychology Today, and he's been interviewed on CNN, ABC News, Fox News and radio shows in the U.S. and U.A.E. In 2012, former President Bill Clinton announced that Neil was among one of three winning teams, out of 4,000 applicants, who won the Hult Global Case Challenge and $1 million to help SolarAid, Habitat for Humanity and One Laptop per Child. Most recently, Neil was an assistant business editor and writer for The National, a newspaper based in the Middle East.