The founder of Toms is thinking outside the shoebox--though he's learned the hard way that some things can't be disrupted.
--As told to Scott Gerber
Your company is an icon of conscious capitalism. What's been the key to its success?
Our "One for One" model--we donate a pair of shoes for every pair we sell--is easy for customers to understand. It's empowering, and customers share it with the people they know, which leads to more customers. We launched in 2006, just as Facebook and YouTube were really taking off, and that helped us too.
What have you learned about disruption?
When I started Toms, I wanted to eliminate shoeboxes, which create a lot of waste. So we started selling our shoes in recyclable canvas bags. But retailers' stockrooms are set up for boxes. The canvas bags created so many problems that clerks would tell customers that the Toms shoes were sold out, and sell them something else, because they didn't want to deal with the tangled mess created by drawstring bags. We almost went out of business. So now we do boxes. It was a very humbling experience.
You've expanded from shoes to eyeglasses to coffee. What does it take to make such leaps?
People connect with us because buying Toms is like a badge that says, "I did something for someone." If we can give customers the feeling of giving back, we can extend into Toms Hotels or Toms Banking or other ideas we haven't come up with yet, because the One for One model can be relevant to many things consumers do.
Will your for-profit form of philanthropy displace nonprofits?
Many causes make sense for nonprofits. Take human trafficking: I don't see an antitrafficking organization having a product to sell or any reason to be a for-profit. But as a for-profit, I can make smart bets on marketing and talent that will allow us to do a lot of good over time, because I am not scrutinized about how I spend money in the same way that nonprofits are. There is a need for both.