When Bombas co-founders David Heath and Randy Goldberg first worked together, at another startup, they got a lesson in how not to run a company. As employees, they always felt there was a lack of transparency. Policies, procedures, and organizational structure were not explained to them. The financials were a mystery. The health care plan was so unhealthy that Heath had to use vacation time to have surgery after he broke his leg.
When they decided to start a business together, "Randy and I said, 'We will never make people feel that way,' " says Heath. "We will make people feel welcomed, included, supported--loved--as part of whatever it is we do." Today, their company, a maker of high-end socks, has grown to 80 employees. Last year, revenue passed $100 million. Bombas is a mission-driven company that gives away a pair of socks to someone in need for every pair it sells. Last year, it donated 10 million pairs of socks. It has extended the giveaway to a T-shirt line. Bombas has been profitable since its third year.
Even more telling: Since its founding, only three people have left the company, an extremely low rate. And none to a competitor, or to any startup. The co-founders have made leaving difficult from the beginning, offering unlimited vacation, unlimited remote work, and unlimited sick time--feel free to break your leg.
They've also gotten creative, devising a "situational fund" to help employees meet additional or unexpected needs. Heath knows, for example, that some of his staff are supporting other family members. If one of those staffers got a week off, the last thing that person would do is spend a few thousand dollars on a vacation. So Bombas would give them the money to go away for a week.
Another example: emergencies. In December 2017, after an apartment fire ruined many of designer Katie Peaslee's belongings, Bombas gave her enough money to get back on her feet. "I was overwhelmed with how supportive a gesture it really was," says Peaslee. "At a time like that, you really feel the support Bombas provides." Another employee, new to the customer service team, had recently joined Bombas after "battling some personal issues," says Heath. The employee hadn't saved much money when a beloved aunt died. When word reached Heath that the employee couldn't afford a last-minute plane ticket to attend the funeral, Bombas paid. "There is no reason that person should miss a funeral because of $700," says Heath.
These expenses are not a huge outlay for the company--$10,000 to $20,000 a year--but this generosity is meaningful, and Heath's view is that his firm and his investors can afford it. "For a company with millions a year in revenue, you're never going to miss those dollars, but to the employee, it means a tremendous amount," he says.
Beyond these gestures is a robust benefits package: a generous 401(k) match and fully paid health insurance. Better yet, every employee gets equity. Bombas uses benchmarks to set salaries at the 65th to 85th percentile over what people are paid for similar work. And although the offices are airy, open, and welcoming, the company's new space will have modern amenities, such as showers, a meditation room, and a mothers' room.
It helps that Bombas has raised relatively little outside capital: It had a $1 million seed round in 2014 and then a $3 million Series A from angel investors. None had enough equity to claim a board seat. A private equity round didn't come until 2018. Heath says the company "consistently beats expectations, even our own. So you get a lot of leeway. The investors are like, keep doing whatever you're doing."
That includes offering a perk Heath says every company should implement: an all-staff nonworking retreat. Twice a year, Bombas basically takes everyone on vacation--most recently, to a dude ranch in Arizona. The intent is to break down silos by bringing people to a fun environment. "You have people from product interacting with people from customer service and from accounting, because they all like to ride horses," Heath says.
That five-day retreat cost $300,000. Heath has heard the argument that he should use the retreat money to give everyone bonuses instead. He couldn't disagree more--and the company does award bonuses. "It's about the laughs, the bonds, and the relationships that form," he says. "Of everything we do, the retreat has by far the best ROI."