It's not often that you get to witness our society changing before your eyes. Last week I had the extraordinary opportunity to do just that. The place I saw this change was, oddly enough, not in our country, but in Argentina. And odder still, it was on a trip with a private company in the prosaic and dare I say "pedestrian" business of selling shoes. The company is called TOMS Shoes and this trip to the rural Misiones region of Argentina was another in a long series of the company's "shoe drops," in which they give away shoes to people in need. This trip was particularly special because during the course of this trip, TOMS gave away its millionth pair of shoes. (In the interest of full disclosure, I should note that TOMS paid for my trip and expenses.)
So what is a for profit company doing giving away a million shoes, you might ask? TOMS business model is simple: for every pair of shoes you buy, they give one pair away. TOMS calls their model -- appropriately -- One for One. And the name TOMS is taken from the word "tomorrow," as part of the idea that if you buy a pair of TOMS shoes today, a pair is given away tomorrow. TOMS is a new kind of business that fits into the much-hyped "social entrepreneurship" model. This term, and others variants on this theme, have become catchphrases in the business community and on college campuses, where courses and even majors with these names have sprouted from the Ivies to community colleges. in the past few years.
But in addition to doing social good and making an impact in the world, TOMS also makes really good shoes that people want to buy and wear. Their shoes have been featured on just about every hot list you can name and even in particularly fashionable places like Vogue. TOMS shoes are wildly popular because they are great shoes and because the consumers who buy them are simultaneously helping the world. This double function has earned TOMS a particularly special place in the hearts and on the feet of college students.
TOM's 34 year-old CEO and Founder, Blake Mycoskie, who prefers to go by his official title, Chief Shoe Giver, has been an entrepreneur since his childhood days. With TOMS, he wanted to build a sustainable company that could be a force for good in the world. But TOMS is a for profit company (although the company briefly experimented with a not-for-profit that has since disbanded). The company has a first class design team, a customer service team, a marketing department, and every other function any other company in the fashion industry would have.
While TOMS is a private company and doesn't disclose its financials, they have been growing rapidly. Now four years after they launched, with only a big idea and a small band of loyal staff members, TOMS employs over 100 people and has outgrown their offices several times, and, of course, they've sold over 1 million pairs of shoes. This growth is what could be most exciting about TOMS. In the much buzzed about social business space, very few companies have demonstrated both measures of having achieved real, measurable social impact and enjoyed substantial financial success. TOMS may be one of the best models for social and business success, which makes them a particularly interesting and important company to watch.
Business is changing before our very eyes; that's what I saw in Argentina as volunteers on behalf of TOMS put the shoes on the feet of children who had never had a pair of shoes in their lives. This didn't feel like something a for profit business was organizing. It felt more like an experience with an NGO or the Peace Corps, yet this whole trip was made possible by a private shoe company. What's more, TOMS doesn't show up once with a splashy event and never follow-up. Part of their work is to build real continuity and sustainability into their program. They routinely go back to many of the same villages and towns to provide new shoes to replace the worn-out ones. (I'll be following up shortly with a more detailed account of a shoe drops so you can get a real sense of the experience.)
This is what I call 21st Century Capitalism. It's what more and more businesses will look like in the years to come. Businesses that do good and do well. People in my generation -- the millennial generation -- are creating these kinds of business and the same generation is creating demand for these kinds of companies. We're saying that it's no longer enough for companies to maximize their profit without a concern for the world, and we're also saying it's time to up the ante on how much social good a company can do and should be expected to do -- beyond the usual, well-accepted, and always needed charity and philanthropy work.
Is TOMS too good to be true? After all, many believe business can never be a force for true social change, because ultimately, the desire to increase profit will take precedence over most other factors. And TOMS itself still has many tests of time ahead of it. But it is clearly on a very important and positive track.
Millennials want to wear "awareness," dressed in their Project (RED) t-shirt that supports aid to Africa, with their FEED bag across their shoulder that supports ending world hunger, and their TOMS shoes on their feet. We aren't naïve enough to believe that simply wearing causey clothing will change the world, but it's a way of becoming the change we'd like to make in the world. These are the kinds of companies we will support, and the kind we will start. It won't change the world overnight, but in the next few decades, the world of 21st century capitalism that TOMS epitomizes is likely to change the nature of business, and even more importantly, the realities of our world.