TOMS -Material for class use-Part III:Can TOMS break into the coffee business? ...and more (unedited version)

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Can TOMS break into the coffee business?


March 11, 2014

After making his name in shoes, Blake Mycoskie is taking TOMS into the coffee game -- but the move is just the first part of a much more ambitious plan. Fortune has the exclusive full story on the company's new direction announced at South by Southwest Tuesday.

By Daniel Roberts, writer-reporter

Blake Mycoskie






FORTUNE -- Howard Schultz, be warned. Blake Mycoskie has already gone from a reality TV contestant to the world's most benevolent shoemaker and a trendsetting social entrepreneur. And yet by any measure, he's about to make his boldest move to date -- by getting into the coffee business.

When he takes the stage at South by Southwest Tuesday, the founder and CEO of TOMS -- which made beachy canvas slip-ons a fashion sensation and pioneered the "one for one" model, donating a pair of shoes to children in need for every pair sold -- will announce that TOMS is bringing that model to the coffee business. And it isn't just opening a pop-up café or two. TOMS Roasting Co. aims to be an ambitious new brand with a chain of coffee bars, a wholesale roasting business, and a subscription coffee club online.

Like the shoes that made TOMS famous, the coffee comes with a built-in plan for doing social good. In this case, the "give," as TOMS employees call it, is water: For every bag of TOMS beans sold, a person in Rwanda, Malawai, Guatemala, Honduras, or Peru -- the areas where TOMS is sourcing beans -- will get clean water for a week; for every cup, someone gets water for a day. As with the shoes, an outside partner will handle the giving -- Water for People, an international charity based in Denver, which is also where TOMS Roasting Co. will be roasting its beans. The coffee company's simple tagline: "Coffee for you, water for all."

TOMS says it's not targeting Starbucks (SBUX) so much as "third wave" artisanal roasters like Blue Bottle, Intelligentsia, and Stumptown, cult coffee brands that keep cropping up in places like San Francisco and Portland. But TOMS Roasting Co. will have one major distribution channel most of those niche brands don't: Outside of its own cafés and website, the beans will only be available in Whole Foods (WFM). Not too shabby for a brand-new entry to a hyper-competitive market.

Today's announcement represents almost a year of tedious planning, trips to Rwanda, barista-hiring, and secret-keeping. (The initiative's internal code name was "project burlap.") But it also represents something bigger -- an ambitious plan you might call TOMS 2.0. Beginning with coffee, Mycoskie plans to enter a new product category under the TOMS name every year, always with a "one-for-one" model. If succeeding in coffee isn't enough of a tall (grande?) order, consider the other markets Mycoskie says he has his eye on: hospitality, banking, transportation, education, and more. Picture, for example, a TOMS hotel where for every room booked the company gives a homeless person shelter for a night; a TOMS publishing imprint that donates a book to an underserved school for every book sold; a TOMS credit card that helps sign up the unbanked with every charge; you get the idea. "When we think about product, we don't think, 'What can we make and sell,'" COO Joe Scirocco recalls Mycoskie telling him when they first met. "We think, 'What does the world need, and how can we address it with a commercial endeavor?'"

TOMS has departed from shoes before; it launched a line of sunglasses in 2011 (for each purchase, TOMS performs a cataract surgery or donates prescription glasses in developing countries). It also sells other branded apparel like tank tops and hats, plus leather-bound journals clearly inspired by the one Mycoskie carries with him everywhere.

But these initiatives pale in comparison to TOMS' new venture, which represents not just a major departure for the company but the return of Mycoskie to the business after stepping out of the day to day in 2011. In exclusive interviews with Fortune at TOMS Los Angeles headquarters and in New York City, Mycoskie and other executives spoke about the process of building a new coffee brand from scratch and about the company's ambitious next chapter -- and his own.

The new venture is all the more significant considering that two years ago, Blake Mycoskie left the company he created. The 37-year-old from Arlington, Texas, who made Fortune's 40 under 40 list in 2011, had decided things were going well enough that he could, and should, take a break from the business. In May 2011, TOMS installed former Burton CEO Laurent Potdevin (now CEO of Lululemon) as president; Mycoskie soon moved to Austin, married his fiancée Heather Lang, a former TOMS employee, and planned to stay. He remained involved -- he still owned 100% of the company -- but from afar. Sitting in an Italian restaurant in New York, reflecting over a glass of red wine, he now says the sabbatical was a mistake. "Society tells us, 'Sell your company, hire a CEO.' And I bought into all that," he says. "After working and bootstrapping and grinding away for six years, I bought into this idea that if I don't have to work, I shouldn't be working. That was the beginning in a series of wrong decisions."

For the first handful of months in Austin, Mycoskie and Lang were in heaven. He hit the golf course; she spent time with local friends. Together they mapped out plans for a beautiful new house. Mycoskie says he spent so much time designing it that he felt as if he took an architecture class.

It wasn't to be. He eventually realized that for months he hadn't been feeling right. "I had lost my purpose," he says. "I didn't feel like the business was mine anymore, even though it was still mine." He says he became depressed -- "nothing clinical ... but I was probably drinking more than I should be. I felt like I wasn't contributing to the world anymore." Finally, one day last fall, only a week before they were set to break ground on the house, he woke up so unhappy he couldn't get out of bed. It was his wife who pulled him out of it and told him that they needed to go back to L.A. All told, his hiatus was almost two years. "I think what kept me in Austin, forging ahead with building this house, was my pride," Mycoskie says now. "I didn't want to turn back and say, 'Man, I fucked up.'" But the idea to take TOMS into a new chapter was also a reason to come back -- he'd had the idea for branching into coffee in April 2013, and had starting thinking even bigger than that. "During my quiet time, I began to see a bigger vision for TOMS," he says.

While the founder was away, Potdevin, with his years of global retail experience, effectively took the business to another level. Under his leadership the company upgraded its technology platform to SAP (SAP), consolidated many distribution centers into a single logistics operation in nearby Mira Loma, and aggressively expanded into international markets. Potdevin (employees called him "LP") hired most of the leadership team still in place today, including seasoned executives from Starbucks (SBUX), Pfizer (PFE), and Tommy Hilfiger. Things were cranking.

In November, Mycoskie moved back to L.A. to rejoin the company full-time. The transition was difficult for him and for employees. When he first came back, he took on the role of CMO, but that meant letting go of CMO Nils Peyron. ("That was hard for me because I really liked him," Mycoskie says.) Potdevin stayed a month and then left for Lululemon, clearing the way for Mycoskie to become CEO again. "We're all kind of still settling in from the departure of Laurent," says HR head Amy Thompson.

Mycoskie concedes that, "Over time, I think probably my being back caused a lot of disruption." But TOMS execs say Mycoskie brings something different than Potdevin did. "His job is to inspire and lead in a very unique way, as only he can do," says COO Joe Scirocco, former CFO of Tommy Hilfiger.

Indeed, while Mycoskie has had to roll up his sleeves and has gotten more involved with the day-to-day operations of the business, conceiving and driving the overall vision for TOMS and cultivating the company's culture is where he shines.

That comes through clearly on the last day of February, a rainy Friday at TOMS Marina Del Ray headquarters. Like on any morning, employees line up for coffee from the counter where a barista serves it up for free. 320 of the company's nearly 400 employees work here. The large, open space is surrounded by conference rooms named for important places in TOMS history: South Africa, Ethiopia, and "The Barn," a reference to the hut in Argentina where Mycoskie first worked on his idea. Two giant blue plastic tubes inside headquarters spiral from the second floor to the first; employees slide down them to avoid the stairs.

Mycoskie has called the staff together to reveal "project burlap" to them for the first time. Once everyone's seated -- many in the back in stadium-style bleachers -- Mycoskie bounds onto the stage. His dog, Gypsy -- one of two Goldendoodles Mycoskie and his wife have, along with a Golden Retriever -- barks with excitement at the back of the room. Even for this internal gathering, a series of inspirational PowerPoint slides pop up on a screen. Mycoskie declares, "What Richard Branson did with Virgin, that's what we want to do with giving." People cheer. Mycoskie eventually passes the mic to Elan Lieber, a coffee nut from Ohio whom TOMS plucked out of public health grad school to work on the coffee launch. Lieber runs through the most minute details of each of the six TOMS roasts, from flavor profile down to their individual logos. (It wouldn't have been that hard to predict coffee as the next TOMS product. TOMS was already serving coffee in its only brand store, on posh Abbot Kinney Boulevard in Venice. It will use the store as a model for the cafés, the first of which opens March 12 in Austin, followed by New York, Portland, and San Francisco.)

Even devoted fans of TOMS will be skeptical that the maker of those colorful slip-ons can be trusted to provide their morning cup of Joe. Mycoskie designed the look of the coffee bean bags to call out that very doubt. Each says on one side: "TOMS makes coffee?" and responds: "When we started as a shoe company, we knew nothing about footwear. But starting from scratch only made us work that much harder."

The TOMS coffee bag




No matter how hard it works, TOMS may find the $30 billion U.S. coffee industry a crowded sandbox. Mycoskie says he isn't looking to take on Starbucks, but if the cafés take off, don't expect TOMS to hold back on expanding. The TOMS Roasting Co. sweet spot is high-quality beans (single-origin, free-trade) at a lower price ($12.99 per 12-oz. bag compared with $16 to $18 for cult coffee brands). Rachel Halliburton, the TOMS marketer who led "project burlap," says the hope is to play somewhere between Starbucks and Stumptown. "I'm intimidated to walk into Intelligentsia," she says. "We want you to feel okay about walking in and saying, 'I just want a cup of coffee, and yes, I'm going to put sugar in it.'"

Mycoskie points out that the artisanal makers represent only a small portion of the coffee market. "The big part of the market is all the people drinking from these mass chains," he says. The TOMS brand, he reasons, is mass enough that those customers will instantly know it. "If we can use our brand to get them to taste this premium coffee for the first time, we have a really big opportunity." In trendy areas like the West Village store in New York City, Mycoskie expects celebrities to patronize the cafés. Ever the marketer, during his speech to employees he holds up the pale blue TOMS cup and says that when famous folks are seen holding it in a photo in People, it will help propel recognition. (Mycoskie is extremely press-savvy. The launch of TOMS Roasting Co. is a highly calibrated exercise in public relations maneuvering, complete with television blitzes, a media offensive and the onstage performance at South by Southwest, for which he hired the consulting firm Duarte to help him prepare.)

That sure sounds like pie-in-the-sky, big-coffee-chain thinking. But anyone who knows Mycoskie is used to it. HR head Amy Thompson, who spent six years at Starbucks, says that out of all the CEOs she's worked with, as a leader, "Blake most resembles Howard [Schultz]. Their passion for using business to improve people's lives around the world, their leadership traits, their focus on the customer."

So, what if TOMS coffee gets burned? As it launches more businesses, it risks biting off more than it can chew. Mycoskie's idol Richard Branson, for one, doubts a failure would damage the brand. "People love people who try things," Branson tells Fortune. "In fact, if you're too smarty-pants, and every single thing you do is successful, in some ways the public isn't as endeared to you as if you sometimes fall flat on your face."

If TOMS truly does try a new business every year, there almost surely will be a few duds. Mycoskie says TOMS spent very little on the coffee launch. It was "capital-light," will end up requiring less than 30 new hires (three at headquarters, plus five or six baristas at each café), and getting Whole Foods wasn't too hard since the juggernaut already sells TOMS shoes. He thinks the key is to fail fast, and to launch new businesses frequently, rather than taking more time: "If you're doing one a year, then the company brand gets known not as any one product."

And TOMS is a brand well-versed in social media thanks to its hardscrabble early days. Back in 2006 when the company operated out of Mycoskie's apartment, "We had no money for marketing, but we had a great story, we had a ton of interns, and all they did all day was post on social media," he says. TOMS has 2.2 million followers each on Twitter and Facebook. Though TOMS is private and won't share revenue, it says it will have donated 20 million pairs by the end of 2014. (That's at least 20 million pairs sold.) Estimates in the press of annual revenue have ranged from $100 to $350 million, but a TOMS spokesperson says, "Our sales are higher than what's been reported."

Launching a new venture now is far different from when Mycoskie was a little-known founder with a slip-on shoe (the "alpargata") and an idea. As TOMS has grown and evolved, so too have Blake's persona and reputation on the broader public stage. He's a bestselling author. Through charitable partnerships, he's become close with Charlize Theron and Ben Affleck. The housewares designer Jonathan Adler recently feted Mycoskie at his home, where he gave a speech from a tiny balcony in Adler's bedroom that overlooks the living room. He counts both Branson and Whole Foods CEO John Mackey as close personal friends and mentors. He's the youngest member of Branson's "B Team," a high-profile club for corporate good that includes big names like Arianna Huffington, Ratan Tata, and Unilever CEO Paul Polman.

His perch among these titans of business might be what sparked Mycoskie's big idea for taking the giving model even further. Sitting in his office -- a large loft-like space on the ground floor of headquarters adorned with salvaged-wood counters, a kitchen nook, a walk-in closet, and a framed photograph of Mycoskie and Branson -- he starts talking about Haiti, where he's become active lately. TOMS recently opened a shoe factory there, and he's become close with Haitian prime minister Laurent Lamothe. Mycoskie mentions that Haiti's new tagline is "open for business," and says it's a motto that fits TOMS, too. He believes the next evolution of TOMS will involve partnering with corporate giants -- say, Bank of America (BAC), P&G (PG), and the like -- to develop custom giving-oriented, TOMS-branded products. "We can create the TOMS credit card, or TOMS soaps, whatever it is," he says. "We say to the big business world: We can be the engine that you need to incorporate giving into your business."

Welcome to TOMS 2.0, and perhaps Blake Mycoskie 3.0. Both are open for business -- to coffee swillers, corporate titans, and do-gooders all.





























































































How TOMS Shoes founder Blake Mycoskie got started

TOMS // The TOMS Story

de Giant Ant Plus

TOMS charged us with telling their origin story. And tell we did!

We used TOMS' word-of-mouth marketing strategy as inspiration for a story told by many voices. The script was read by TOMS employees that had been there from the beginning including, of course, Blake Mycoskie.

TOMS didn't start with an idea for a shoe. In fact, it was the absence of the shoe that started it all...

Client: TOMS
Agency: Giant Ant
Directed by Giant Ant
Producer: Brant Cheetham
Script: Jay Grandin, Leah Nelson
Creative Direction: Jay Grandin, Leah Nelson
Art Direction & Design: Lucas Brooking, Jay Grandin
2D Animation Team: Jorge Canedo Estrada, Henrique Barone, Matt James, Shawn Hight, Nicholas Ferreira, Jay Grandin
3D Animation Team: Jorge Canedo Estrada, Nicholas Ferreira
Music & Sound FX: Ryland Haggis

TOMS // The TOMS Story from Giant Ant on Vimeo.

TOMS Founder Blake Mycoskie Promises Big Investment, Not Just Free Shoes



Posted: 06/24/2013


TOMS founder and chief shoe-giver Blake Mycoskie is making a lofty promise to both customers and critics: By the end of 2015, TOMS will produce one-third of all the shoes it donates in the countries that are the the focus of its giveaway programs.
Critics have blasted the shoe company, dismissing its one-for-one business model as one big marketing ploy that does nothing to bolster local economies.
“Some of the criticism we’ve had is that we’re not using our company to create jobs,” Mycoskie said in an interview Monday. “And I think that it’s a fair criticism.”
For every pair of shoes it sells, TOMS gives away a second pair to a person in need, a model that has conjured a public image of altruism -- and a $250 million business, according to Fast Company.
Creating jobs in developing countries requires significant commitment and investment in the local economy, far more than the shoe "giving trips" that made TOMS famous. And the endeavor will be more complicated than simply opening a factory and letting locals make some shoes. Over the next two years, TOMS will have to find reliable factories, build infrastructure and maintain human rights standards, Mycoskie said.
“To go into these countries -- Haiti, Ethiopia, Kenya -- there’s a lot of good that can be done by creating some jobs,” said Mycoskie. “But you have to be even more cautious with human rights and even more thoughtful in how you make your agreements with factories.”
Mycoskie started TOMS in 2006 with no experience in the apparel and footwear industry. He described his time building an international supply chain as a massive “learning experience” in which he was burned many times. Currently, TOMS makes its shoes in China, Argentina and Kenya. The company plans to start producing in India “for sure,” Mycoskie said, and wants to enter Brazil and Haiti, too.
Then there’s Ethiopia, where Mycoskie has previously tried to produce his wares. This will be his third attempt to manufacturing in the East African nation, after the first two attempts failed.
Mycoskie said the first factory he worked with in Ethiopia charged TOMS for one product but gave it another. The second factory was overly ambitious and couldn’t handle the quantity of orders TOMS demanded, he said. The company was forced to sever both relationships.
He said he also ran into some trouble with faulty electricity grids. Sometimes, the power would just shut off, forcing factories to remain stagnant for days or weeks on end.
“We can’t have our most business-critical supply chains attached to these factories,” said Mycoskie. He stressed that diversifying manufacturing is wholly important to the success of a global apparel business. “That way, if [some factories] fall behind, it doesn’t sink the ship," he said.
It’s harder to manage production in countries without a heavily established apparel industry because they don’t have the same infrastructure as, for instance, China, which has networks of reliable roads, ports, power, and other systems that have been built up over the past decade.
“We can only go to places that have some form of an apparel industry already,” said Mycoskie. “You’ve got to have some basic manufacturing processes in place.”
Ethiopia's apparel and footwear industry is still in the early stages of growth, but the country has drawn the attention of international companies. Retail mammoths like H&M, Tesco and Primark have garments made in the country, attracted by a major government-driven expansion program. Chinese shoemaker Huajian is investing $2 billion in a “shoe city” manufacturing zone, hoping to make the nation a global hub for the shoe industry.
Mycoskie plans to bring in machinery from abroad, and expertise for training locals will come from experts in China, Vietnam and other places with a history of shoe manufacturing. His team is also trying to make TOMS' supply chain “iron tight” in Africa by signing on auditing firms with experience in apparel hubs like China.
“You have to have people who represent your company in the factories every day to make sure the product are the right quality, how they’re treating workers -- everything,” he said.






The Way I Work: Blake Mycoskie of Toms Shoes


AS TOLD TO TAMARA SCHWEITZER


Blake Mycoskie, founder of Toms Shoes, built a lifestyle business based on social entrepreneurship.



Blake Mycoskie doesn't like to sit still. A serial entrepreneur, Mycoskie got the idea for his latest company, Toms Shoes, while on vacation in Argentina. After spending time in several villages in which children didn't own shoes, he created a company -- originally dubbed Shoes for Tomorrow -- in which helping those kids, and others like them, is part of the business plan. For every pair of shoes Toms sells, it donates a new pair to a child in a developing country. In the four years since its founding, the Los Angeles-based company, which has 72 employees, has given away 600,000 pairs of shoes. The company's canvas slip-on shoes -- the same type it often donates -- now sell for $45 to $85 a pair in upscale retailers such as Nordstrom and Bergdorf Goodman.

The more Toms grows, the less time Mycoskie seems to spend in the office. He delegates the day-to-day operation of the company to his management team. That frees him up to spend much of his time traveling -- spreading the Toms gospel, delivering shoes to children in Africa and South America, and taking fairly lengthy vacations. When he is not on the road, Mycoskie, 33, reconnects with employees in quick, focused meetings and in relaxed afternoons on his sailboat.
My schedule varies depending on what city I wake up in. These days, I'm home in L.A. about five or six days a month, and the rest of the time I'm on the road.

I live on a boat in Marina del Rey. When I wake up on the boat, it's very relaxed. I usually get up at 8:30, have a Clif Bar for breakfast, and spend a few hours thinking and writing before going in to the office. Almost every morning I write in my journal. I've been keeping it for a long time -- I've filled more than 50 books. I write about what's going on in my personal and spiritual life or what's going on at work. It helps me keep things in perspective, especially when things get crazy or I get stressed or we have obstacles. When I go back a month later and read what I was feeling, I realize that it wasn't that big of a deal -- we got through it. And that helps me prepare for the next time that I deal with difficult stuff.

Lately, my wake-up call has been around 4:45 a.m., so that I can catch early flights. Often, I'm traveling around the country to speak at companies and universities about our business model. I love teaching people about what we do. My goal is to inspire the next generation of entrepreneurs and company leaders to think differently about how they incorporate giving into their business models. Plus, many of the people who hear me speak eventually purchase a pair of Toms, share the story with others, or support our campaigns like One Day Without Shoes, which has people go barefoot for one day a year to raise awareness about the children we serve. I also travel to meet with organizations like CARE and the World Health Organization. Then I'll go to Ethiopia for three weeks to give away 3,000 pairs of shoes to kids.
I don't get jet lagged that much. I'm so used to traveling and being in different places every day that I can sleep anywhere. I read quite a bit when I'm on the road. I've read a lot of business biographies. I dropped out of college when I was a sophomore, so those were my education in business. I've probably read 40 to 50 of them -- on Michael Eisner, David Geffen, Howard Schultz. Ted Turner's autobiography is really interesting, and so is Sam Walton's. I read that one very early in my career. The great thing about biographies is the subjects have already been successful, so they're not insecure about their failures. Howard Schultz doesn't mind talking about all the dumb things he did when he started Starbucks. Reading about those mistakes taught me a lot.

I also use plane rides to catch up on e-mail. I go through these periods when I won't respond to e-mail for three or four days, and then I'll get on a plane and write 300 e-mails. People who work with me have gotten used to it. And they know when I've landed, because suddenly they'll get a bunch of e-mails from me on a Friday at 10 p.m. My staff members call it the "Toms bomb."

When I'm traveling, I usually send one e-mail a week to the whole staff. I try to stay connected to everyone through letters. Some people call them little manifestoes. I'm a very open person, so I really tell the staff what I'm struggling with and what I'm happy about. I tell them what I think the future of Toms is. I want them to understand what I'm thinking. It's like I'm writing to a best friend.

Anything that really inspires me and that I think is relevant to our overall mission, I try to share with them. Sometimes, I'll tell them about an amazing article I read in a magazine -- about an issue we should challenge ourselves to think about.

When I was gone a few months ago, I was reading a lot of Emerson, so I started sending the staff a lot of my favorite Emerson quotes and poems. When I got back, I printed all of the Emerson e-mails and put them in a binder, so everyone could read it throughout the year.

Several times a year, I lead shoe drops in different parts of the world. I'll go with a group of 10 to 15 people -- Toms staff members and volunteers -- to hand out shoes. After an employee is with us for a year, he or she gets to go on a shoe drop. We're giving away shoes in 28 countries now. The shoes not only help kids go to school, but they prevent life-threatening diseases. We're helping to prevent hookworm in Guatemala. In Ethiopia, we're preventing podoconiosis, a disease that can cause the feet and legs to swell to dangerous proportions. Kids get it from walking barefoot on volcanic soil. We're getting more involved in getting the best doctors and clinics there, so we can take it to the next level of prevention.
When I go on shoe drops, I meet with our partners: nonprofits and other organizations involved in public health. They help us give away shoes all year long. We partner with organizations that are already in the community, because they really know what the kids need. They tell me what's working, what they need more help with.
When we're in these countries, we are in the field at least once a day hand-placing shoes on kids' feet. It's really important for us to go back and do that. It's a renewable energy source for me. Seeing the smiles on those kids' faces makes me excited to continue on.

When I'm traveling, I check in with the office occasionally, but I'm not the day-to-day manager. The reason I can travel so much is that I've put together a strong team of about 10 people who pretty much lead the company while I am gone. Candice Wolfswinkel is my chief of staff and the keeper of the culture. Candice has been with me from the beginning, and she tells me what the vibe is like in the office. That's really important to me, because when I'm gone, I can write a letter, but I don't get the feeling of the office.

I'm on the phone a lot with my assistant Megan Memmott, who handles my schedule and requests for meetings. She will even respond to my e-mails for me if something's a high priority. I have an amazing CFO, Jeff Watts, and I'll check in with him twice a week. I talk to my sales managers on a weekly basis. I also call my younger brother Tyler a lot -- he's head of corporate sales. We're eight years apart, so we weren't that close growing up. But when he came out to L.A. in 2006, he started interning at Toms, and since then, we've grown a lot closer. Since I'm gone so much, it's nice having family in the office. I can just call Tyler up and say, "OK, what's the real deal?" and he'll tell me.

When I return to the office, I make sure to hold an all-staff meeting. We all gather on one side of our warehouse. It's a chance for me to tell everyone what I've been doing, where I've been, and usually I have something pretty exciting to share. It's nice to come home and reconnect with my Toms family that way.

When I am in the office, there's a certain energy. Maybe because I'm such an anomaly now. There's all this excitement, and everyone wants to grab me. I have very focused meetings and sign off on things. I like making decisions, but I'm not big on sitting around and talking about ideas. I get bored really quickly in brainstorming meetings. I like it when the creative team has already thought of 10 ideas, and then we can just pick one. I prefer to be involved in the first meeting -- to put my thumbprint on, say, a big marketing initiative or a new design -- and the last meeting.

June and July are slow travel months for me, so I'm in L.A. working in the office four or five days a week. It's a very open office environment. I sit next to the customer service people in a cubicle, just like everyone else. I like to stand up, walk over to people, and find out what they're working on. I bounce around from department to department. Sometimes it's disruptive, I think, but it's just the way I build things.

I usually work until 7 or 8 p.m. In the summertime, I leave early and go sailing almost every day. A lot of times, I'll invite employees to go with me, or I'll bring friends. It's my way of staying connected with my social group in L.A. I'm out there sailing and entertaining people and having a good time.
I'm a pretty social person, so almost every night when I'm in town, I also have some type of dinner or event scheduled. A lot of times, I'll have dinner with one of my employees. For instance, if I haven't had the chance to catch up with my CFO that day, we'll go to dinner. I'm not a late-night person. After 10 p.m., I'm falling asleep. If I'm out at that time, I'll be the one falling asleep at dinner.


For two or three months of the year, I kind of do my own thing. That's one of my dirty little secrets: I take a lot of time off. I went surfing for a month in Costa Rica last November. I went to Uruguay and spent some time there. I'm going to Colorado for three weeks to go fly-fishing. Getting away from work helps me sustain my passion. And I do my best thinking when I'm on vacation. I'm not just sitting on the beach drinking piña coladas. I'm exploring and meeting new people. I'm getting inspired.


Traveling as much as I do, I get lonely sometimes. I have friends now in cities all over the world, so I get to be social, but it's hard to have the deep meaningful relationships, especially an intimate one. With my guy friends, I can show up once a month and go to dinner with them and they're happy. But that doesn't work so well with a girlfriend. Right now, that's a sacrifice I'm making. I do want to have a family -- I'm from a big family. In a year, I think I'll make some different life choices, but I'm just not ready yet.

JUN 1, 2010





















































Blake Mycoskie, founder of TOMS Shoes, in Ethiopia



Interview by Jessica Shambora, reporter

March 16, 2010





(Fortune Magazine) -- My first venture was a door-to-door laundry business for students that I started while on a partial tennis scholarship at Southern Methodist University in Dallas. I wanted to do something that didn't depend on my hands to create value.

My father is a doctor, so when he's playing golf, he's losing money. When I came out of a business class and saw my trucks picking up laundry, I thought, I'm in class and making money at the same time.

TOMS shoe


After we expanded EZ Laundry to four colleges, I sold my share. I moved to Nashville to start an outdoor-media company that Clear Channel scooped up three years later.

In 2002 my sister and I teamed up to compete on the CBS reality show The Amazing Race. We didn't win, but my travels during the show led me back to Argentina in 2006. On my visit I saw lots of kids with no shoes who were suffering from injuries to their feet.

I decided a business would be the most sustainable way to help, so I founded TOMS [in Santa Monica], which is short for a "better tomorrow." For each pair of shoes sold -- TOMS are based on the classic alpargata style worn in Argentina -- we donate a pair to a child in need.

AT&T (T, Fortune 500) found the story so compelling that it decided to feature us in a television campaign last year. Today TOMS can be found online and in stores like Whole Foods (WFMI, Fortune 500) and Nordstrom (JWN, Fortune 500), and on the feet of more than 400,000 kids in countries like Argentina and Ethiopia.





Secrets of my success



Personalize it


Storytelling is the new marketing. I think that's why AT&T called me to appear in its commercial, because stories get shared and spread much more than a message or a product.

Beware experts bearing gifts

As entrepreneurs we often get pressured into hiring an industry executive. While it's good to hire people with experience, it can also be a stumbling block because they think about the business the same way everyone else does.

No clock punchers

Walk away from anyone who is unduly focused on vacation and compensation. It's a sign of potential trouble. No matter how talented you are, if you don't really want to work at TOMS, you'll never work out here.

Spend!


Instead of squirreling away your earnings early in your career, spend on experiences that will enrich your life -- like diving with great white sharks. It can expose you to influential people who could open doors for you.














Profitable do-good biz Fashion TOMS Hits 10 Million Mark on Donated Shoes The hip, charitable company has reached a milestone in giving By Claire Groden June 26, 2013

A boy is fitted with a pair of donated TOMS shoes. TOMS, the trendy and philanthropic retailer, announced that it has reached a landmark achievement. Since the company’s creation seven years ago, it has given over 10 million pairs of shoes to needy children around the world.The company giving model called “One for One” is easy to follow: for each pair of TOMS shoes sold, it will also give a pair to a needy child. TOMS has taken flight since its early days of selling simple, cloth slippers inspired by traditional Argentine alpargata shoes. While it continues to carry the original style, TOMS has branched out to include bandage-like boots, retro sunglasses, and even nuptial footwear. With its expansion beyond simple shoes, the company expanded its philanthropic mission, donating eye care, via prescription glasses or medical treatment, for one person per pair of glasses sold. So far, the eyesight of over 150,000 people has been restored through the initiative, according to a company press release. As TOMS continues to mature, it says it will invest further in philanthropy. While the shoes are currently manufactured in Ethipoia, Kenya, Argentina, and China, TOMS is looking to open plants in other regions where it donates, including parts of Africa, India and Haiti. As a part of that initiative, it’s employing a handful of Haitian artists to design a limited edition line of hand-painted shoes. Judging by the trend in hand-painting shoes already, the Haiti Artist Collective’s line is bound to be a hit among fashion-forward shoppers. TOMS isn’t the only company to dip its toe in tit-for-tat philanthropy, though it may be the most famous. Sketchers attracted some attention in 2010 when it debuted BOBS: simple, cloth shoes with thick rubber soles. Look familiar? The business model is, too—for each pair sold, Sketchers gives a pair to children in need. So far, BOBS is lagging behind TOMS, having donated about 4 million so far. Warby Parker, an eyeglass retailer, follows in the same vein. It gives funding or a pair of glasses to a non-profit partner for each pair purchased. Warby Parker goes a step further than just donating the goods: its non-profit partners work in developing countries to train entrepreneurs, who then sell the glasses to their communities at affordable prices. Despite its achievement, the company has no plans to rest on this week’s milestone: TOMS says it plans to give another 10 million pairs of shoes to needy children in the next two years, doubling its current total in just a fraction of the time it took to reach its first 10 million. Fast Company Toms Sets Out To Sell A Lifestyle, Not Just Shoes Founder Blake Mycoskie has set out to save the world with his "one-for-one" tagline. His critics say that giving alone doesn’t solve a thing. By Jeff Chu Carpe diem. It's a bit surprising to see that Blake Mycoskie repeatedly invokes such a hoary old self-help slogan. But there it is, in foot-high, wooden letters on an upstairs landing at the Los Angeles headquarters of his shoe and accessories company, Toms. There it is again, in a painting on the wall of his office/man cave. And you'll find him repeating it several times in his book, Start Something That Matters. If there's anyone who can make a case for seizing the day, it's Mycoskie. He has done it repeatedly and successfully over the past seven years, orchestrating Toms's rise into the top flight of fashion and establishing it as a new kind of business. More than any other brand, Toms has integrated old-fashioned, for-profit entrepreneurship with new-wave, bleeding-heart philanthropy, bonding moneymaking and giving in an unprecedented manner. The company has become so closely identified with giving away a pair of shoes to a poor child for every pair sold--Toms has trademarked the tagline "one for one"--that it's often mistaken for a charity. And it has spawned buy-one-give-one copycats offering everything from dog treats to cups of coffee. “With his deep tan, untamed mess of curly brown hair, and sometimes-questionable hygiene, Mycoskie appears almost feral.” This spring, Toms gave away its 10 millionth pair of shoes. "Within the next 18 to 24 months," Mycoskie says, "we expect we'll have given away 10 million more." It now also sells sunglasses--more than 150,000 pairs in the past two years--and in turn has helped deliver eye care to more than 150,000 people. Toms currently donates shoes in 59 countries and eye care in 13. The figures add up to remarkable growth for a remarkable company, one that has put shoes on the feet of many poor children, made its owner a very rich man, and pioneered a much-admired business model. "I had no idea it would ever get this big," says Mycoskie, a 36-year-old Texan whose laid-back, surfer-dude vibe masks the ambition of an entrepreneur who prefers to talk less about the company he has built than of the movement he is building. "Now that we've grown, it's all about: How do you use these resources to do even more?" Related: The Broken “Buy-One, Give-One” Model: 3 Ways To Save Toms Shoes Mycoskie says the one-for-one model could involve much more than your feet and your eyes--he envisions a Toms empire that encompasses all sorts of everyday products. But what many of his critics would like him to talk about instead--and what, during two long interviews with Fast Company, he discussed publicly at length for the first time--are Toms's failings on the giving side and its plans to change its ways. You could sum that up with a different Latin phrase: Mea culpa. There's an old Dutch proverb that says "Shoemaker, stick to thy last"--an admonition to go with what you know. But what if you never knew much about anything, including how to make shoes? Mycoskie has never been conventional. The son of an orthopedic surgeon and a cookbook author, he confesses that he never graduated from high school (he didn't fulfill his Spanish requirement) but managed to attend Southern Methodist University anyway; he then dropped out after two years as a philosophy and business major. He started a laundry company, a billboard company, and an online driver-training company before he hit upon Toms, and says that he has never known anything about any of the businesses he has gotten into. "When you don't know the rules, you break them all," he tells me when I meet him in his L.A. office in early April. "It's hard to take big risks when you know the history of an industry and what has worked and what didn't."

For several years he lived on a boat, until he got married last summer and his wife, Heather, forced the issue. And while he loves to read business books--John Mackey's Conscious Capitalism is a recent favorite--he also revels in talking about Plato, Socrates, and Kierkegaard and in reflecting on the existential questions of his purpose in life. "Anytime I see a book like that," he says, "I buy it." The reading can only have helped. Mycoskie is a brilliant storyteller and a charismatic, masterful marketer--one of his staff says that Toms's secret "is Blake's gut"--and in some ways, the Toms genesis story has been the company's most lucrative product. Mycoskie was traveling in Argentina in 2006, playing polo and drinking wine, when he met a woman who was collecting shoes for the poor. Startled that in the 21st century so many kids still needed shoes, he decided to start a shoe company that would give a pair away for every one it sold. His first product: a variation of the traditional Argentine shoe that he brought home from his trip, the rope-soled, canvas-topped alpargata. With $5,000 saved from his earlier ventures, Mycoskie set up shop in his Venice apartment. It was chaos. Liza Doppelt, the second person Toms hired, recalls that when she arrived for her interview, "I had to physically move dirty laundry from the armchair I was told to sit on." When Garett Awad showed up for his internship interview a couple of months later, he found boxes and shoes everywhere. "It was totally insane," he says, "and I thought, Yes, this is exactly what I want." (Doppelt is now VP of marketing for eyewear, while Awad heads retail marketing.) Despite the mess behind the scenes, the combination of a slightly exotic yet still approachable shoe and a do-gooder story proved alchemical, establishing the brand's popularity with tastemakers in fashion, lifestyle, and entertainment. Booth Moore, the Los Angeles Times's fashion critic, was the first to write about Toms, in May 2006. Then the editors at Vogue featured Toms in its October 2006 issue, naming legendary designer Karl Lagerfeld as an early-adopting fan. The shoes themselves did not always work as well as the story. The first pairs of Toms--the name stands for tomorrow's shoes--were made in Argentina, but Mycoskie quickly realized that producing in China would be more cost-effective. As a supply-chain novice, he didn't send anyone to supervise production there. "If you don't show that you care, they assume you don't care," says Jonathan Jung, Toms's first hire. "Every single pair was defective in some way--glue stains, mismatched shoes, insoles that were too big for that shoe." Mycoskie, Jung, and a crew hired via Craigslist worked crazy-long hours to salvage what they could, cleaning stains, matching pairs, pulling out insoles and recutting them to fit. (Jung is now director of supply-chain planning for Toms.) Another early Mycoskie mistake nearly cost the company its account with Nordstrom, which today is Toms's biggest retailer. "I was adamant I didn't want the environmental waste of cardboard boxes," he says. "I wanted organic linen bags with drawstrings. It meant less money spent on shipping. It was eco-friendly." It was also salesperson-unfriendly. Finding the right sizes amid the messy piles of linen bags took too long, and the drawstrings were forever entangling. Sales tanked. Toms went back to conventional boxes. For someone who has quickly built a formidable fashion-and-lifestyle brand, Mycoskie has never been much of a fashion guy. His look could be described as sentimental neo-hippie. He always wears a thatch of bracelets and a tangle of necklaces, accessorized by stories; one faded, pinkish woven-fabric strip around his wrist was a gift from a young boy on the first shoe drop in Argentina, while his string of brown prayer beads comes from an Indian ashram he and Heather visited during their honeymoon. When we went to lunch one day, he wore a blousy, shiftlike top he had picked up in Nepal, shorts in a Native American print that he thought were Polo Ralph Lauren, and a pair of camouflage-print Toms. With his deep tan, untamed mess of curly brown hair, and sometimes-questionable hygiene, he appears almost feral. (By all accounts, he has been significantly cleaner since he married. Heather told me that her wedding vows included a pledge to "love him regardless of how many times he showers or whether he brushes his teeth on a daily basis.") That don't-care-too-much sensibility fits well with what Toms sells. It's not so much shilling tangible, sartorial accessories (shoes, sunglasses) as offering ineffable, emotional ones--an aura of goodwill, a sense that one is doing something positive with that consumer dollar. "We're about empowering people, inspiring people, helping them to see the life they could live differently," says Awad, the retail marketing head. "We've changed the way people think about consumption." If that sounds a tad grandiose and self-righteous--the rhetorical opposite of the humble alpargata--it's also completely consonant with the way we live and market today. Toms has identified like-minded, high-profile influencers, partnering with Charlize Theron and Ben Affleck, who collaborate on limited-edition lines and appear at Toms events to promote the brand and their own causes. And it has heavily courted young, trendsetting actors and musicians, such as Olivia Wilde and Passion Pit, hoping that they'll be photographed in and tweet about their Toms. (The company says these unofficial brand ambassadors occasionally receive free products but are never paid.) The Toms story has also been magnetic to big corporations, which have integrated the brand into major ad campaigns and saved Toms the expense of advertising. After an ad exec saw an item about Toms on a video screen in the back of a New York taxicab, Mycoskie and Toms were featured in TV commercials for AT&T. Microsoft, American Greetings, and AOL have promoted Toms in digital campaigns. All this publicity has helped Toms become more than a small business very quickly. The company, which is wholly owned by Mycoskie, does not release revenue or profit figures. But Mycoskie did tell me that the average retail price for a pair of Toms is $55, and that about 30% of its revenues come from direct-to-consumer sales via Toms.com. Its giveaway projections--a trailing indicator of sales, since Toms aims to distribute its "giving" pairs within six months of a consumer's purchase--indicate that it expects to sell at least 7 million pairs of shoes this year. A little back-of-the-envelope math gives a conservative revenue estimate of nearly $250 million in 2013, but an inside source suggests that the figure will surpass $300 million (including sunglasses). The hard part? "Giving, man," Mycoskie says with a shake of his head. "Giving is hard." Toms's powerful marketing, its good intentions, and the potential of its model to do enormous good inspire widespread praise. Lane Wood, a not-for-profit consultant who has worked with Charity: water, the well-digging NGO that is one of Toms's partners, credits Toms with helping companies mature beyond basic corporate social responsibility. "People have seen the success of Toms and said, 'How do I get a piece of that?'" he says. "While you've seen some really disingenuous campaigns, what I'm excited about is that this will become ubiquitous. Companies have to understand the effect they have on the world." Yale professor Dean Karlan, who has done groundbreaking research on poverty alleviation, seems cautiously optimistic about what Toms has achieved--and what it could yet accomplish. "Toms has a tremendous vehicle for figuring out how to do this right," he says. "It's a neat idea. I love the passion. But show us the impact, because it takes more than passion to do good." Here is where the critics chime in. Laura Seay, a professor at Morehouse College, argues that by giving away millions of pairs of shoes, Toms is "just treating one symptom of a much deeper problem, and treating symptoms is not a cure." She adds that Toms's model is built on what's known in trade as dumping. "It undermines the local economy," she says. "The shoe seller goes out of business. He can't send his kids to school." Tom's Brain Trust

Mycoskie's rule-breaking philosophy pervades Toms--not least in the hiring of an eclectic staff you wouldn't expect to find in top jobs at a shoe company. From left: Liza Doppelt, a former tech publicist, became employee No. 2 in 2006 and now heads marketing for Toms eyewear. Social media director Caitlin Coble was an intern at Nylon magazine when Mycoskie hired her to lead social media in 2008. Creative director Anya Farquhar worked as a designer at TBWA and BMW Designworks. Chief people officer Amy Thompson has had one of the more conventional careers, previously working in HR at Starbucks, Ticketmaster, and Citysearch. Others say Toms addresses the wrong issue. Scott Gilmore, CEO of the not-for-profit Building Markets, which works to boost local economies in post-conflict countries, says the problem of persistent poverty is "not a lack of shoes, but a lack of opportunity and a lack of jobs." While he concedes that Toms has helped to build awareness of poverty, he argues that its success really shows the power of monetizing white guilt. "How can we make ourselves feel better?" he asks. "This is the power of self-congratulatory smugness, of saying, 'I'm better than you because I'm helping somebody.' But the people who lose out are ironically the ones they say they're trying to help." Such criticisms aren't new. They've been growing in number and vehemence--especially on the Internet--in lockstep with the popularity of Toms shoes. But Toms has declined for years to address its critics publicly, giving the impression that it is ignoring them. Mycoskie explains that he has chosen not to engage, in large part because most of the grievances have been broadcast online: "It's a debate you can't win in that medium." He expresses doubt that many of Toms's detractors genuinely want dialogue, and fears "that they'll just take that one sentence out of context." Privately, Mycoskie claims, he has been seeking out constructive criticism for several years. "I've asked people, 'What could Toms do better?'" he says. "I've learned that the keys to poverty alleviation are education and jobs. And we now have the resources to put investment behind this. Maybe five years from now, we'll be able to say it's really good for business. But the motivator now is, How can we have more impact? At the end of the day, if we can create jobs and do one-for-one, that's the holy grail." Toward that end, the company has sought to improve the effectiveness of its work throughout the supply chain. All of Toms's consumer shoes today are made in China, as are the vast majority of its giveaway shoes (a small number of which are distributed there). "Toms would not be what it is today without China," says Toms president Laurent Potdevin. "We wouldn't have the resources we have now. It has been the easiest, most cost-effective place to make shoes." Three years ago, Toms began to make giveaway shoes in Ethiopia, which has a small but burgeoning shoemaking sector. Within the next couple of years, it expects to add shoemaking in India, Kenya, and Haiti, where an artist collective is already customizing Chinese-made Toms for a limited-edition line. Potdevin emphasizes the challenges of such ventures: "Getting a factory up and running, retention, training, finding local management--every aspect is more difficult in a place like Haiti." But separately, Jung, the supply chain chief, notes that it's not all altruism and sacrifice. "Let's not lie to each other," he says. "If you're creating product for the local market, you're spending less to distribute it. No sea freight. No duties." Staying local is especially important in Africa; Ethiopia and Kenya both belong to a free-trade zone that includes nearly every African country where Toms shoes are given away. Head of giving Sebastian Fries adds that Toms is upgrading the quality of its manufacturing jobs. He rattles off a list of improvements: higher wages; tutoring for workers' children; company-provided take-home meals for working moms; financial education; an on-site preschool at a Kenyan factory where Toms hopes to begin production later this year. "The jobs we help create," he says, "should be in line with what Toms stands for." At the other end of the business, Toms has lately decided that it ought to learn whether its giveaways work. In August, researchers from the University of San Francisco are expected to release results of a two-year study, funded by a $225,000 Toms grant, of giveaways in El Salvador. Fries, who in 2011 was hired away from Pfizer, where he had been devising products for consumers in low-income markets, says that more such research is planned. Most of the data the company has gathered so far is anecdotal. Fries has pushed his team to act on the findings anyway. Toms is working with giving partners to integrate shoe drops into health and education programs; in Malawi, for instance, the respected NGO Partners in Health uses shoes to coax parents to bring children to clinics for checkups. It's targeting areas of clearer need; with Save the Children, Toms will give 100,000 pairs of shoes this year to displaced Syrians at the massive Zaatari refugee camp in Jordan. And in response to a common critique that the giveaway shoes don't always meet children's needs, this fall, Toms will begin distributing a winter boot in Afghanistan, India, Kyrgyzstan, Nepal, Pakistan, and Tajikistan. But as usual, Toms's impromptu ways might have hurt the effort a little; when it came time to test prototypes, winter was already over. "We found someone in Los Angeles to make artificial snow and ice," Fries explains. "People walked in it for about four hours to make sure they would hold up. But we should have tested it in the winter months." The question is whether the quality of Toms's giving is as high a priority as the quantity. When the company advertised last summer for a new director of impact assessment, the job's main responsibility was described as "the building of a body of evidence that illuminates and supports the positive and compelling role of all aspects of Toms's giving strategy." What happens, though, if the evidence is not entirely positive or particularly compelling? In those exhilarating six months after Mycoskie returned from Argentina with his story and his samples, Toms sold 10,000 pairs of shoes, and in the fall of 2006, he went back to the country for the first round of giveaways, which took place mostly in Misiones, a northeastern province near the Brazilian border. The company has returned multiple times since then to give away more shoes. Without Toms's knowledge, Fast Company recently went to several Misiones communities to see what, if any, lasting effects those giveaways have had. “I've learned that the keys to poverty alleviation are education and jobs. And we now have the resources to put behind this.” The economy in Andresito revolves largely around the yerba tree, whose leaves are dried to make yerba mate, the strong tea that Argentines drink constantly. The sprawling municipality, hacked from virgin jungle just 40 years ago, is dotted with pockets of poverty. From the sleepy town center--there's just one restaurant and one guesthouse, catering mostly to passing truckers--you have to bump along red dirt roads for 40 hilly kilometers, past orchards and pastures and fields of mandioca, to reach School No. 436, one of the first that the Toms team visited in 2006. That visit, says school director Sergio Dario Gonzalez, "was a gift from heaven." Typically, the only foreigners who come through Misiones are en route to Iguazu Falls, one of the seven wonders of the natural world, on the Argentine-Brazilian border. "They pass by in cars and buses, some take photos of the school, and then leave," Gonzalez says. "But this was real interaction." After distributing the shoes, some volunteers played basketball and soccer with the kids, while others sang, danced, and played other games. The fleet of motorcycles parked outside indicates the region's improving fortunes--five years ago, most students came to school either on horseback or on foot, but today, many of the landowners' kids arrive by "moto." One of the most important, if unexpected, functions of the shoe drops tugs in the opposite direction of that richer-kid fleet: the erasure of a visible sign of income inequality. "It was really great to have these students next to each other with the same shoes--as equals," Gonzalez says. "The kid of the tobacco farmer had the same shoes as a kid whose mom can't always feed her kids. That was powerful. It was really a special moment for the kids, especially for their self-esteem." Adds Fabiana Ramos, a sixth-grade teacher: "At the time, it was really the only shoe that many of these kids had." Though most pairs lasted no more than three months, some of the students, she recalls, "washed and dried them until they broke." Those shoes lasted six or eight months. About a four-and-a-half-hour drive south of Andresito, in the even poorer municipality of San Pedro, Toms has given away more than 20,000 pairs of shoes since 2006. In a destitute San Pedro village called Alacrin, where the population is entirely indigenous Guarani, residents have become dependent on donations--not just shoes but also clothes and school supplies. Toms's gifts were very welcome. Alacrin's rudimentary one-room schoolhouse, cobbled together from wood and scrap metal, bursts with chatty, smiling kids of all ages, many of whom go barefoot even in winter. "Mothers in need ask for two basic things for their kids: milk and shoes," says Mirta Allgayer, a San Pedro civil servant who helped coordinate visits by Toms in 2006, 2008, and 2010. "These are the basics. Especially in families with seven, eight, nine children." Toms's legacy in Misiones is measurable in smiles, tears, and memories. Celia Romero, the head of School No. 341, which got a shoe drop in 2006, was moved as she recalled the Toms visit. "It was more than a gift," she says. "There are kids here who come to school with their toes sticking out of their shoes. The families came to watch and be part of it. It was very exciting. Everyone was happy." Allgayer, who still gets choked up at her memories of the shoe drops, says, "It was amazing to see the faces of these kids when they see someone giving them a gift one time in their life. The kids said, 'Someone is going to give me something?'" But Toms's giveaways haven't been as transformative as the company might have liked. Though much of Misiones has grown rapidly in recent years, the improvement is mainly an outcome of the generous, vote-stoking subsidies of Argentine president Cristina Fernandez de Kirchner's populist government. Many of the shoes Toms distributed at the seven Misiones schools that Fast Company visited went to children who would not be considered poor; according to Clara Alicira Hirschfeld, director of the 370-student School No. 144 in San Pedro, all of her kids have always had shoes. ("But it was so much fun," she says, "like a party.") And in Misiones's poorest villages, like Alacrin, a shoe drop once every two years can't keep kids shod for long. The region's soil--rocky, red-stained, and prone to glooping into sole-sucking mud during winter rains--is devastating to the alpargatas' already limited life expectancy. Of the dozens of people interviewed throughout Misiones, only two said they still had hand-me-down pairs of Toms in use, rare survivors from the 2010 shoe drop. (The company now prefers to call the distributions "giving trips.") Yet the giveaways don't appear to have damaged local businesses as much as the critics said they would, either. An hour's drive south of San Pedro, the El Gato alpargata factory makes shoes for all of Misiones Province. Owner Graciela Mabel Katz claims never to have heard of Toms, but thinks the shoe drops haven't hurt sales. El Gato produces 800 pairs of alpargatas daily--a child-size pair goes for about $3 retail--and sells out every two weeks. "They're seen as something accessible for people with little money," she says. Gladys Pitsch, who runs a shoe shop in Andresito, also has seen little harm from the giveaways. "Alpargatas aren't really shoes," she says. "It might have been different if Toms had given out waterproof shoes or long-lasting ones." A few weeks after visiting Toms headquarters, I flew to Austin, where Blake and Heather Mycoskie moved last year. He still typically spends a couple of days a week in L.A., but living in Texas has given him the space to think bigger and more strategically. He invited me to join him for a walk around Town Lake, the waterway that bisects central Austin, and he was in a more philosophical mood than when I'd seen him in California. Even his speech seemed a little slower. To Mycoskie, Toms will be a failure if we keep appending the word shoes to the company name, because he's thinking much bigger and for the long term. Even now, if you type tomsshoes.com into your browser, you'll be redirected to toms.com. One of Mycoskie's business heroes is Richard Branson, and he sees a model in the British mogul's unprecedented propagation of the Virgin brand. "Nobody has done that like he has," Mycoskie says. "Here's my hypothesis: In the 1960s and 1970s, when Richard was starting, he tapped into an energy and attitude that was countercultural and irreverent and disruptive. He started with music, which was perfect, and once the customer knew what the Virgin brand stood for and trusted it, he was able to take that same attitude into all different industries, and today, kids who listened to music from Virgin Megastores are flying his business class." Toms-wearing teens and twentysomethings are, in Mycoskie's vision, today's equivalent of the Virgin kids of the 1970s and 1980s. "They're buying clothing that's organic. They're giving up their birthdays to raise money for Charity: water. They're shopping at farmers' markets. And they wear Toms," he says. "We started with shoes. Now we're doing eyewear. We're taking them along this path where they can integrate giving." Mycoskie is mulling three or four categories for Toms's expansion, and the next could launch as early as the fourth quarter of 2013. "I want to show people that one-for-one is not just for the lifestyle-fashion space," he says. "It can even be everyday products." Though he won't say what industries or categories he is eyeing, a search of the 200-plus domain names that Mycoskie LLC, Toms's parent company, has registered over the past few years suggests that he is considering everything from wine (tomswine.com) to event ticketing (tomsticket.com, tickettogive.com) to financial services (tomscreditcard.com, tomsinvesting.com, tomsmortgage.com, tomsstudentloans.com). In March, a lawyer acting on Mycoskie's behalf also filed a trademark application for the tagline "You drink, we dig," which may indicate that the company could expand its partnership with Charity: water, the not-for-profit founded by Mycoskie's good friend Scott Harrison. The lawyer also sought an expansion of Toms's existing trademark "One for One," to cover "beers; mineral and aerated waters and other nonalcoholic beverages; fruit beverages and fruit juices; syrups and other preparations for making beverages." There's a scene in Aleksandr Solzhenitsyn's novel Cancer Ward in which the patients stumble across "What Men Live By," a short story by Leo Tolstoy, another author Mycoskie has read and admired. The story is about a poor shoemaker who takes a naked beggar into his home. The beggar, who becomes the shoemaker's assistant, is eventually revealed to be a fallen angel. Before the angel can regain his wings, he must learn lessons about mankind, including the answer to the question, What do men live by? When one of the Cancer Ward characters poses this question, his friends offer divergent answers: air, water, and food; "their rations"; "by their ideological principles"; "professional skill." In the Tolstoy short story, the right answer was "love"--which some of the novel's men find foreign, unsatisfying, even unacceptable. "No," one says dismissively, "that's nothing to do with our sort of morality." If you ask, what does Toms live by?, the reactions will be similarly divergent. The model that Mycoskie pioneered, the mistakes he has made in execution, the profits he has reaped, the good he has done--all these will be read and received in different ways by different people. At times, Mycoskie seems at once emboldened and bewildered by his success--and by people's reactions to it. "I had no experience in fashion," he says as we walk around the lake. "I had no experience in shoes. I had no experience being a public figure. I had no experience in giving. I had no experience in development. I never even read a book by Jeff Sachs!" He does appreciate some of the criticism. "Toms will never be a perfect company. Sometimes as entrepreneurs, we think of things and we sell them to ourselves. But I've learned so much along the way, and we want to think in a more holistic way about our impact." I ask if the burden--of being Mr. Toms, of trying to do something unprecedented--sometimes feels like too much, and he reflects for a moment before answering. "The responsibility can at times feel exhausting, and some days I don't want it. There are definitely times I say, 'Is it even worth it?'" He smiles and then quickly adds: "But I'm not asking anyone to feel sorry for me." I feel the pace quicken just a bit. "I'm going to say this as humbly as I can: I believe what we're doing is affecting the way businesses will be built for hundreds of years to come," he says. "You stay true to what you believe, and what your message is, and then you let the chips fall where they fall." Do Good, Look Good Like Toms, makers of everything from scrubs to doggie treats are seeking to burnish their image by giving away their wares.

1. Figs Scrubs ■For every set of scrubs sold, donates a set to a health care professional in need. ■1,500 sets donated in Kenya, Haiti, Ecuador, Honduras, Botswana, and South Sudan. 2. Two Degrees ■ For every natural vegan health bar sold, donates one to a hungry child. ■ More than 820,000 meals donated in partnership with AOL, HP, and Cisco. 3. Dog for Dog ■ For every dog treat sold, donates a Dogsbar to a shelter in the country of sale. ■ 54,000 dogs gratified. 4. One World Futbol ■For every soccer ball sold, donates one to organizations working with disadvantaged communities. ■325,000 soccer balls distributed in 160 countries; pledge from sponsor Chevrolet to donate 1.5 million balls by 2015. 5. Bobs by Skechers ■Donates a pair of shoes for every pair sold. ■More than 4 million pairs donated in over 25 countries. 6. The Company Store ■For every comforter sold, donates one to a child in need. ■16,735 comforters donated last year in 33 states. 7. Warby Parker ■For every pair of glasses sold, gives a pair (or funding)to not-for-profit Vision Spring, which sells them at subsidized prices and trains low-income entrepreneurs to provide vision care. ■ 250,000 pairs given. Reporting from Argentina by Jessica Weiss Photos by Mike Piscitelli; Justin Fantl (shoes) A version of this article appeared in the July/August 2013 issue of Fast Company magazine. Jeff Chu writes on international affairs, social issues, and design for Fast Company. His first book, Does Jesus Really Love Me?: A Gay Christian's Pilgrimage in Search of God in America, was published by HarperCollins in April 2013. 2013 DSIC Awards - Blake Mycoskie Blake Mycoskie on Becoming an Entrepreneur Published on Apr 20, 2012 From laundry to billboards to reality TV to shoes. "Responsible Capitalism and the Future of Business" -Tij Innova Published on Oct 20, 2012 by MgCrOl: Keynote by Blake Mycoskie -Entrepreneur philanthropist, owner of Tom shoes, popular around the world and one of the most interesting conferences of the day. "Capitalismo consciente y el futuro de los negocios". Tijuana Innovadora 2012 Conscious Capitalism and the Future of Business In this visionary talk, Blake Mycoskie shows you how to succeed in a new era of relentless competition and heightened social awareness. Why is philanthropy your best competitive advantage? How do you make money and do good simultaneously? How are the two acts intertwined? At TOMS—a self-sustaining, for-profit company—the act of giving is the cornerstone of its business model, integral to its financial success. In a behind-the-scenes look at how it all works, Mycoskie shares counterintuitive ideas (“In tough times, give more!”) that you can apply to your own business. His bold, winning strategies are proven, and have been talked about by Bill Clinton, the Obama administration, and the hundreds of thousands of customers that have joined the TOMS Movement by buying a pair of shoes. Inspired, inspiring and most of all practical, Mycoskie presents a new direction for business, offering TOMS as his prime case study. After hearing him speak, you too will know why giving just makes sense. The New Social Entrepreneurism How do you turn ideas into great businesses? And how do you create businesses that people love, and love to talk about? In this keynote, serial entrepreneur Blake Mycoskie shares his secrets for starting, growing, and sustaining new businesses. Before TOMS, Mycoskie ran a successful national campus laundry service, sold a media company to Clear Channel, and ran an online driving school featuring hybrid cars. Where did each idea come from, and what is the common thread connecting their success? With infectious enthusiasm, hard-won lessons, and a generous sense of encouragement, Mycoskie lets you in on the proven tactics he’s used to become one of the new faces of American entrepreneurism. Sources: www.theguildagency.com/CNN Money/Fortune/www.youtube.com/TIME Magazine/Fast Company