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Optimal, minimal.
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At this altitude, I can run flat out for a half mile before my hands start shaking.
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Can I ask you a personal question?
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No, we're just sitting here talking at the time.
0:10
What if I did the opposite?
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I'm a cybernetic organism living tissue over metal endoskeleton.
0:23
This episode is brought to you by Ink Tel.
0:26
And I've used them personally.
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Ever since I wrote the 4-Hour Workweek, I've been asked over and over again how I choose to delegate tasks, how I do 80/20 analysis, and so on.
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At the root of many of those decisions is a simple question, actually two questions.
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2:22
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2:46
This episode is brought to you by 99designs.
2:47
I've used 99designs for years for all sorts of graphic design needs.
2:52
Whether you need a logo, website, book cover, or anything else, 99designs was created to make great designs accessible to everyone and to make the process of getting designs much much easier.
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4:34
Hello boys and girls, mademoiselle et monsieur. Oui, oui.
4:38
This is Tim Ferriss recording in Montreal, Quebec.
4:40
The Tim Ferriss Show each and every episode is focused on deconstructing world-class performers from all different fields.
4:49
And this episode features Blake Mycoskie.
4:50
You can say hi to Blake on the socials, Twitter and so on at Blake Mycoskie, m y c o s k i e.
4:59
We've known each other for quite a few years.
5:01
Blake is the founder and chief shoe giver of TOMS.
5:06
And that makes him the person behind the one-for-one business model, which helps a person in need with every product that is purchased.
5:11
But there are many, many stats and some very impressive numbers related to his bio and his business, and we will get to that shortly.
5:17
I'm going to keep this initial intro very, very short.
5:22
In this episode we cover a lot.
5:24
We talk about early entrepreneurial ventures.
5:26
Let's try that again in English.
5:27
Early entrepreneurial I think that's French. English? All right.
5:35
Anyway, early entrepreneurial ventures, the power of journaling, how the stool analogy changed Blake's life, lessons from Ben Franklin, and much, much more.
5:45
This episode comes from my new television show Fearless, 10 episodes, it's a full season where I interview world-class performers on stage in front of a studio audience about how they've overcome doubt, conquered fear, and made their hardest decisions.
5:58
You can watch the entire first episode of this TV show Fearless with illusionist David Blaine, where he actually performs magic on stage with guests from the audience as well.
6:08
You can watch it for free at att. net/fearless. That's att. net/fearless.
6:17
To watch all of the episodes, and a lot of them are physical or involved demos on stage, please visit directtvnow. com.
6:26
Only one t in that, not direct space TV, but direct TV, one word, directtvnow.
6:31
com, or you can go to tim. blog/fearless.
6:35
And we've recorded 3 hours of material for this particular session with Blake, all of it was awesome. We used 1 hour for TV.
6:43
So, this podcast episode is not a duplicate.
6:46
It is almost entirely brand-new content that did not appear on television.
6:50
So, I hope you enjoy this chat as much as I did with Blake Mycoskie. Welcome to Fearless.
7:01
I'm your host Tim Ferriss, and on this stage we'll be deconstructing world-class performers of all different types to uncover the specific tactics and strategies they've used to overcome doubt, tackle their hardest decisions, and ultimately succeed on their own terms.
7:14
By show of hands, how many of you guys own a few pairs of shoes?
7:22
That is everybody in the room.
7:22
How many of you own around 10 pairs of shoes?
7:28
All right, more than half.
7:28
How many of you do not own a single pair of shoes?
7:35
All right, that's a big fat zero.
7:35
My guest tonight has built a company that's given away more than 60 million pairs of shoes to those who need them most.
7:43
During a trip to South America, he recognized a unique opportunity to blend business and philanthropy.
7:46
Since it's founding, TOMS has given away millions of shoes, helped restore eyesight, and provided safe drinking water to those in need across the globe.
7:55
So, ladies and gentlemen, please welcome to the stage the founder of TOMS, Blake Mycoskie.
8:19
How did your mom and dad differ in terms of parenting styles? That's a good question.
8:23
I think my dad was more serious and and more kind of intellectual and the things that he taught us.
8:31
And I think my mom was much more, you know, kind of hands-on, caring.
8:35
I mean, they both were very caring, but but I think that my mom's, you know, kind of was just so over attentive to our And I was a first child, and so I think the first child gets that, no matter what family it is, cuz the parents are so afraid of messing up. I know I am. I have a 2-year-old.
8:54
So, but no, but my dad was always like kind of like the moral, you know, kind of you know, that he was the true north in the family and and he kind of was a disciplinarian when that needed to happen, and he was kind of the you know, the intellectual, I would say.
9:07
But what was interesting in is when my mom became, you know, this best-selling author and every publishing company in the world's flying to Arlington Texas to try to court her, and and then my dad's realizing like, "Wow, this is like totally changing our our family's, you know, kind of the whole financial life."
9:26
The coolest thing I think I learned from my dad was like he like, you know, cut down on his practice 50%, started supporting her, traveling with her, going to the talk shows, infomercials.
9:37
Like he it was a total role reversal.
9:39
And I think that really taught me a lot about relationships because it was like such a beautiful thing to see even though I wasn't like in like I wasn't really understanding all of what I was seeing at that age, but now it was like, you know, he she was there putting him through medical school.
9:52
I mean my parents literally used to sell their blood to go pay their rent.
9:57
They were so poor during medical school.
9:59
I mean they they had all these stories of being in New Orleans at Tulane and like going and on and my mom always says my dad could get more money for his blood because it was more rare than hers and that used to piss her off and and like all I mean all these things that but she was just she was, you know, working, you know, you know, as a waitress and working here and there and everything to put him through medical school.
10:19
So it's all about his career for the longest time.
10:21
But the moment that my mom created something and it was this and it had so much energy, instead of him being threatened by that, which I think a lot of men would have been, he said, "This is amazing. It's your turn now."
10:32
And and I think that's my parents been married for 47 years and so yeah, it's Yeah, they they deserve it.
10:41
So I think, you know, that was that was something seeing that was another part of that whole that whole experience that really had a big impression on me.
10:52
Not only what my mom created, but the support my dad played in that.
10:59
Was the cookie stand your first business experience?
11:01
I think so and that seems like such a cliche, doesn't it? I don't really Yeah.
11:06
Um that was early day cookies.
11:06
Um I was a little older when I was selling them myself.
11:10
Um but I was trained at a young age.
11:12
You know, it is almost like kind of like one of those I mean I feel like there's some great cliches in entrepreneurship and they're cliches cuz they're, you know, they're cliches for a reason.
11:21
Like having your first business be the lemonade stand or the cookie stand. You hear that.
11:27
But yeah, I mean like I at a a older age than that, um my mom made these amazing cookies and I recognized my grandmother lived on a golf course.
11:36
And so on Saturdays and Sundays, you have, you know, hundreds of people who mostly know my grandmother, who was a real character, uh coming through the golf course.
11:45
And so if I sat there right on the eighth hole, I think she was on the green and I was, you know, dressed cute and all that, like I could sell anything, right?
11:53
And uh and the great thing about this business model was is I convinced my mom to make all the cookies but not charge me for making them.
11:59
So I had zero cost to good sold, 100% profit margins.
12:06
Uh and is a terrible cookie supplier. Yeah.
12:08
It was a fantastic uh business while it lasted.
12:10
I did that a couple summers.
12:12
So I built up some clientele and they liked the cookies so much that they wouldn't just buy them for that eating occasion.
12:18
They would buy them and put them in the freezer to have for weeks.
12:21
So I I had a pretty good thing going.
12:23
I think that was about when I was like 9 or 10.
12:26
Um but yeah, it was That was That was the first, I think, entrepreneurial venture.
12:30
The second one was in what very few people uh know cuz it's not I don't think it's really been that public but my dad, when I was say 18, freshman year in college, at this point, I had never had a a real job, as my dad says.
12:45
Like, I mean, I was training to be a professional tennis player.
12:50
So every single day after school, I trained from 3:30 till literally bedtime.
12:55
And I was incredibly obsessed with tennis.
12:57
And uh my parents totally supported that.
13:00
But then when I went to college, I was playing college tennis and and I remember my dad, after the season was over, and he said, "You know, this summer I really think you need a job."
13:09
I had a younger brother and sister.
13:12
My brother and sister had like they were 8 years younger and 4 years younger.
13:16
They had jobs at like the dry cleaners or the, you know, the the clothing store at the mall or the the all these different places.
13:22
And they were much younger than me.
13:23
And and my dad's like, "You know, you got a college scholarship, you're doing your thing, but this summer like you need to have a job." And I was like, "Okay."
13:31
Like, you know, I wasn't really excited about that, but I I I said, "Fine."
13:35
And And it wasn't because I didn't like to work.
13:37
I mean, I worked really hard, but I worked hard on something I cared about, and that was tennis.
13:42
And so, I talked to people and said, "What's the How can you make the most amount of money when you're 18 years old in a part-time job?"
13:48
Cuz I still needed to practice tennis.
13:51
And the answer I got time and time again was to get a job at a restaurant that had high price points, um but that had a but were pretty quick turnover.
14:00
So, not fine dining, but like a you know, but but a a more expensive restaurant um than than kind of fast service.
14:07
And so, there was this asking for advice?
14:11
I I was asking like anyone in college that I had that I thought was older than me that had made some money or that had any any form of um you know, like that had some work experience.
14:22
Um and uh And And friends of mine who were older than me in school had done that and and had Some of them were even putting themselves through school that way.
14:29
And so, there's this restaurant called Pappadeaux in Texas.
14:31
I don't know if you've been there.
14:33
Um so, a couple of people. So, it's like seafood.
14:37
Um Anyways, it's it's pretty expensive, but the tables turn fast.
14:41
And so, I went and uh and even though I had no experience, and some people this is their career.
14:46
I mean, this isn't a part-time job.
14:47
It's that good of a restaurant job.
14:48
But luckily, the hiring manager was a huge tennis fan.
14:53
And so, we talked about tennis, and she played in college at a rival school that I was playing at and all this.
14:58
And so, I was like, "I can do this job."
15:01
Like I mean, I really had to sell her on me doing it. So, I got the job.
15:04
So, I came home, and I was like to my dad, I was like, "I got a job.
15:07
Not like any job, but I got like a job.
15:08
I'm going to make like a lot of money this summer."
15:12
And uh And so, the next part of If you're working in a restaurant is memorizing the menu.
15:15
Well, I hate memorizing things.
15:17
I mean, I just like that is like the worst for me.
15:19
Like studying and cramming for tests is not my thing.
15:22
And so after like two or three days of this I was like I just this is miserable.
15:26
Like I I'm not going to be able to memorize this menu.
15:27
And I found out that you don't even get paid the first two weeks cuz it's training.
15:31
And my summer's only like nine weeks long.
15:36
So I'm like that's like 15% I'm not even getting paid.
15:38
So this is this is sounding less and less appealing every day.
15:42
So this is where the moment came in.
15:44
I think this was truly my first entrepreneurial kind of synapses went off in my brain.
15:50
My in our house next to our house there was a tennis court.
15:55
And I clearly you know learned to become a great tennis player and I knew that there were a lot of kids in our neighborhood that could use tennis lessons and maybe even some other adults who wanted tennis lessons.
16:06
And and we had this tennis court we could use anytime.
16:09
And I knew how much my parents paid for tennis lessons for me growing up.
16:13
I mean it was a huge investment for me.
16:15
And so I just said before I go into work this next week this weekend I made these flyers and I put SMU college tennis player you know training for the next eight weeks kids adults classes da da da the whole thing the same way as you'd see it like a country club.
16:30
And I made 5,000 flyers and I put them in literally took me like two days every single mailbox in the entire neighborhood.
16:37
And and then I at that point I had my own phone line.
16:39
And I put changed my voice mail to like Blake's tennis camp or something.
16:44
And um and I started getting calls.
16:47
And like within a week I had like every hour of the day booked.
16:51
And instead of making like I was charging as I was I think at Pappadeaux's with tips and stuff I had average where I was going to be making like maybe 14 or 15 dollars an hour which would have been really good back then.
17:03
But teaching tennis cuz I had each kid paying you know like 15 dollars an hour and have five kids at a time I was making like 80 bucks an hour.
17:09
And so I had this set up. My dad came home.
17:12
He thought I was supposed to be at work at Pappadeaux's and he sees me teaching like a whole group of kids and my mom delivering cookies and lemonade to their parents and he goes, "What's going on here?"
17:25
And I said, you know, this I said this is a still a job and and I'm making four times money than I was.
17:31
So that was the moment where I really felt like I kind of started my entrepreneurial journey.
17:38
Did your dad want you to get a job to earn money or was it because he wanted you to have the experience of like reporting to someone else and all that?
17:44
it was the latter but I trumped him with earning more.
17:46
He he he he couldn't argue with an 18-year-old making $80 an hour. I mean it was crazy.
17:54
Every time I'm on airplane, the first thing I do if it's not getting a cup of coffee is is start journaling.
17:58
I have I have a massive safe in my office that has hundreds and hundreds of journals.
18:07
We're actually making a documentary film about the whole TOMS experience and a big part of the film is going back and just grabbing random journals and reading these entries and you're like, "I can't believe I was saying this or thinking this."
18:19
Because you tend or at least I tended to be more even though I'd confess all my fears, I tended to kind of use the journal as a way of positively setting the tone for the next day, the next week, the next month, you know, and it's
18:32
something that I I love doing and and it's something I'm really glad I did cuz I think it helps me understand my life which I think is good because understanding your past is how you can really think be more proactive for your future. Totally. Totally.
18:45
I have so this is a shared habit.
18:47
So I have probably about eight bookshelves worth of Oh wow.
18:51
journals and I've I've kept them all since around the same age, 15, 16 but it started with weightlifting. Same thing.
18:57
I wanted to track my progress and to be able to understand what worked and what didn't and so on.
19:01
But it's turned into what I've heard described, I think her name is Julia Cameron.
19:04
She wrote a book called The Artist's Way.
19:06
She described journaling, the first type that you the confessional Yeah.
19:11
as spiritual windshield wipers.
19:14
Meaning You get that down especially in the morning. Uh-huh.
19:18
And the way I look at it is sort of trapping my monkey mind and my anxieties on the page so that I can get on with the day. Yep.
19:23
And the morning journaling habit was actually introduced to me by And by the way, guys, like the the morning journaling specifically isn't something I started until about want to say 3 years ago.
19:37
Uh at the recommendation because I think as a lot of people I been journaling for a long time and then I stopped for a while. Yeah.
19:43
And I would only use it for goal setting. Yeah, interesting.
19:45
But I didn't do that other part of it which I think is so so critical.
19:49
And I was like, ah, that's like the rah-rah positive thinking like I don't want to even get involved The Secret what Like I don't want to deal with it.
19:56
So I then ran into a guy named Brian Koppelman who's a screenwriter along with his writing partner.
20:03
They did The Illusionist, uh Solitary Man, uh Ocean's Thirteen, Billions is a co-creators of that show which is a current huge hit.
20:12
He does it every morning. Yeah.
20:15
And he said, "You have to start morning journaling."
20:16
So since it was coming from him, I started and it was immediate Yeah.
20:21
the difference in not just my performance, but also my well-being.
20:25
And Well, I think and I haven't heard the spiritual windshield wiper which I like that that term because that's what it kind of does for me is it it and anything that is like like controlling my thoughts, like stress related or like you know, or I feel like I have too many things on my mind or my to-do list or everything.
20:43
Once I get on the page, then I can just like singularly focus on the most important things of the day.
20:48
You know, and I know you've spoken about like do the first two most important things right away in your day and by journaling, A, it helps me organize what are those really things cuz when you're writing about it, you kind of it start the you know, whatever's getting the most attention typically is the thing you you don't want to adapt to have to do with it you need to do, Um but it but it really does I think help you clean your day.
21:10
And then at the end of the day, too, I think it also can serve as a way to kind of allow yourself to relax and and get ready for for bed and like get over with the day if you've had some stuff on your mind.
21:21
So, it's interesting by writing it you would think it would make it even more something you'd be thinking about, but I find like once I've written it and I let it go and I close the book, it's like the problems are in the book and they're no longer with me anymore. Totally.
21:33
And if the if it's a positive thing, then I think it is potentially reinforcing that. Mhm. I'll never forget this.
21:40
It's so interesting how going back to these little moments in your life that can really change trajectory and how oftentimes it can be someone that you meet or you hear listen or listen to or a book you read.
21:50
So, there was a guy named Bob Dedman.
21:54
And Bob Dedman has has passed now, but um he was a self-made billionaire um and he gave more money to SMU and University of Texas I think than anyone ever.
22:04
Uh he grew up in a trailer park and he started off as a lawyer and then ultimately um where he made his real fortune was he recognized that um golf clubs uh country clubs um were becoming more and more popular in the '70s and the '80s, but it was very expensive to maintain the golf course and the restaurant and everything and you made money by selling the real estate around it.
22:28
So, what he started doing is creating clubs um with multiple courses, but one crew that could service multiple courses.
22:34
So, now you only need one greenskeeper for three clubs and three times the amount of real estate sales, one kitchen, you know, all these things.
22:41
And it became this thing of ClubCorp.
22:43
And it was when he passed away he was the largest owner of golf golf courses and tennis courts in the world.
22:49
And he's this amazing guy and he lives in Dallas, Texas and he loved tennis.
22:54
So, he'd come out and watch our tennis matches.
22:56
And he was kind of eccentric billionaire guy and watch our tennis matches and uh and for whatever reason uh I forget what it was. I think it was raining.
23:07
We couldn't practice that day and our coach said, you know what you guys have seen Mr.
23:12
Deadman many times watching the matches since it rained today we can't practice.
23:15
We're going to watch a video of a commencement speech that he gave for the MBA program at University of Texas a couple weeks ago and just so you can have some more frame of reference of how wise this guy is.
23:27
And he hit the speech was basically about having a life path and thinking of your life as a stool and every stool has three or four legs and what are they going to be the legs of your life?
23:38
What are going to be your path?
23:39
And then one is your talents, one is your interest, one is you know all these different things.
23:44
I can't remember exactly what it was.
23:45
But I remember leaving that day and I just hurt myself thinking, you know, I don't think my stool is going to be a professional tennis player and I actually think my life is about other things and I started recognizing these kind of pal you know talents was definitely self-discipline and all these different things.
24:00
And so I remember watching that video and having peace at the idea of not continuing down this tennis path.
24:10
Another great Ben Franklin story that I've read that actually had a huge impact on early days of Toms.
24:15
I was reading the biography one of the ones many written and so when he had the Farmers' Almanac, right?
24:22
And that was a lot of people don't recognize that that is that's how he made his first fortune was was through the Almanac.
24:28
And most of the things we know Ben Franklin for actually happened after he retired age 40.
24:34
So he sold the Farmers' Almanac, had money at the time, retired and then all these inventions and then came out of the curiosities afterwards.
24:40
But one of my favorite stories was is there was this person who wouldn't advertise in the Farmers' Almanac and Ben Franklin did not agree with his ethics and his morals and his ideals, but he needed to take advertising money to keep his Almanac going.
24:58
And so what he decided to do was that night he instead sleeping in his bed in his home, he slept in his office on the floor with only a piece of bread to eat.
25:09
And he woke up the next morning and was just as happy as he was the day before.
25:13
And that's when he said that he would never take advertising dollars from someone he didn't believe with.
25:18
And so that was a huge thing with me with earlier the Tom's is like we will we will stay 100% focused on the mission whether we make it or not because we're going to be we're going to be happier doing it the way we feel that was is the right thing to do than cutting corners to make extra money.
25:33
And that when I read that that was a huge thing.
25:36
So That So I was just going to say not only that but that you can live with the worst case scenario. Right?
25:47
was that's that's what he proved.
25:48
So this has gone so we're we're going to keep kind of peeling back the onion here cuz I mentioned stoicism earlier.
25:54
Part of the reason I suspect Ben Franklin did that is he was a huge Seneca fan. Yes.
25:58
And Seneca specifically he has a collection of letters called the moral letters to Lucilius.
26:04
Don't worry this is going to be long.
26:06
And there's letter I think it's 13 called on feasting on festivals and fasting. That's it.
26:16
And I know the name because I've read it so many times and part of it is set aside a few days I'm making up the time period every month where you will go with the the cheapest of dress, the scantiest of fare, sort of the roughest of bed asking yourself all the while is this the condition I so feared. Yes.
26:32
And I have a close buddy Kevin Kelly who's amazing.
26:38
Kevin Kelly is the founding editor of Wired magazine and has done a million just incredible things.
26:43
And what he would say to himself to kind of bring it into contemporary times because he'd spend a lot of time backpacking as a kid and he was like I was always thrilled even as just like a dirtbag college student backpacker, to have sleeping bag and oatmeal.
26:55
He's like, "As long as I have sleeping bag and oatmeal, Yeah. I'm fine.
26:59
I don't have to sell out."
27:01
So, this isn't selling out. This is dropping.
27:04
And and so, but I had started this thing and it was it was kind of working and I had employees and I had this responsibility and that felt much more real than going to class, like, you know, talking about Descartes or whoever whichever philosopher I was talking about at the time.
27:21
Um and so, I I remember calling my dad and I was really nervous because my dad, as we talked about before, you know, is this just really accomplished doctor, you know, did I mean, how many years of school?
27:34
College, medical school, you know, residency.
27:36
I mean, he had like made a life of education and I was going to tell him after 18 months that I was going to drop out of college.
27:42
And um and I was also the oldest grandchild of of all my other cousins and stuff, too.
27:47
So, I was like the one everyone was looking at, you know?
27:51
And uh and I you know, his response to that was was like the most amazing and to this day I still kind of baffled to understand how his response was this way, but he basically said, "You know, you've you've you've taken on this thing.
28:04
Uh you have a responsibility now to a lot of people.
28:06
Um and it seems like you're having a lot of fun.
28:08
And so, I think it's a great idea."
28:11
And I was just like, "This is a joke, like I have all this script left.
28:15
I mean, I've been working like a month on the preparation for this call.
28:17
Like, I was too scared to do it in person.
28:19
Like, I did it I mean, even though my parents only lived an hour away.
28:22
Like, I mean, I did this as a phone call just cuz if any point in time I needed just to hang up and get out of it, I could.
28:27
And and he was totally supportive and and I think, you know, it's a big testimony to my dad and kind of his belief of like giving people the chance to to fail and to to learn.
28:40
Um and uh but it was it was an amazing point because his confidence or his ability for me to kind of be curious and try something and then also him stressing how I had really now that I had employees, I had taken on more responsibility than just doing something for myself.
28:55
It was bigger than just me.
28:57
And that has really stayed with me through all the different businesses and I think that's why we invest so much in our employees at TOMS and in their full well-being, not just in their financial well-being.
29:08
And also the point was my dad and I made then too was I was going to be on my own financially.
29:14
So if I dropped out, like I was being supported by my parents when I was in college as most or a lot of kids are.
29:20
Not every kid has that that fortune, but many of the kids at my school were but it's like, "Okay, if you're dropping out, like your business needs to support you.
29:27
Like you need to to be able to support yourself."
29:29
And so that was a real difficult reality at first too, and which created a lot of fear and a lot of like, "Oh my gosh, now like I have to make this work because my parents aren't supporting me anymore."
29:42
And and but that also is a great motivation.
29:45
I think that was a great move on his part. Mhm.
29:47
Oh yeah, you got to keep your feet to the fire, right? No parental safety net.
29:53
One of the things, a question I get all the time when I speak at universities now is they talk about people choosing to become entrepreneurs.
30:02
And and I think in my opinion, and a lot of people will disagree with me, that that is you cannot choose to be an entrepreneur like you choose to be a lawyer or a doctor or a teacher.
30:11
Like I mean if you go into it saying, "Okay, I'm going to study entrepreneurship and my career path is becoming an entrepreneur."
30:19
That is I think a recipe sometimes for disaster.
30:22
Because then what happens if you've chosen that path and you don't have anything that's bothering you, you don't have any itch you need to scratch, then all of a sudden you're you're looking at the world of like, "How can I make money?
30:34
How can I create something that people want?"
30:35
But it's never really your want.
30:38
It's never really your dying passion, your thing that you're willing to sacrifice everything to solve in the world.
30:43
And so you end up creating a business that is to make money and to do all these things that they taught you in a entrepreneurial textbooks, but it doesn't ever have that that same intensity of the person that just is trying to solve a problem and then ends up creating a business.
30:59
Yeah, and it's I should point out too, this is really this super important.
31:02
This is uh cuz I've spoken to classes as well about entrepreneurship and you there are cases of people say dropping out of college and becoming huge successes, right? Yeah.
31:13
But there are also a lot who do not. Of course. Right?
31:15
So it's not necessarily causation. No.
31:18
And then you also have a lot of people who say go to a Harvard MBA program and they do go in to become an entrepreneur and there are successful examples, but my position has always been exactly what you said.
31:29
If I'm at least scratching my own itch, I know for a fact there is one customer. Yes.
31:35
And it's got to have one.
31:35
I know for a fact there's one customer.
31:36
It's like with the Four-Hour Workweek, you know, my first book?
31:40
I uh I went in to find the book that covered it and I couldn't find it.
31:45
I was like, all right, there's Jack Welch over here, how to build a fortune by having a company, not interested.
31:48
Then there's like money's not important, give away everything.
31:49
I'm like, not sure I'm in that camp either.
31:53
Where's the thing in the middle?
31:53
And uh so it was it just ended up being a collection of those experiments uh for myself.
32:00
Which by the way, I mean, I I since you brought it up, I wanted to make sure at least I was able to say this on the show is like, I mean, I read Four-Hour Workweek right when I started Toms.
32:10
And there's so many things that I took from that book that allowed Toms to have this incredible growth with we never had investors, which is like unheard of when you go from zero to 500 million in seven years.
32:20
And and the reason we were able to build so rapidly is we outsource so many things and I never would have understood how you could operate so lean had I not read that book.
32:32
So I think that I'd sent Tim many pictures of the over the years of me going like this with the number four because and it's usually like when I'm sailing or playing polo or doing something fun cuz I'm like there's a lot of people that we've outsourced a lot of this work to that are working really hard right now, but I'm not and things are continuing to do great.
32:48
And and I know that wasn't the only purpose of the book, but it really made an impact on me and a lot of our early staff all read it because when you're building a company, when you try to do everything yourself, it's really hard to grow as fast as you as you can.
33:02
But the minute you kind of let go of some of that control and you're outsourcing as many different things as you can, yeah, your margin might not be the same initially, but you can prove the model, you can get the top-line sales, and then you can always come back and improve the margin later by bringing that stuff in-house. But anyways, thank you. Well, thank you. That makes my day.
33:23
So, one of the things um I think one of the negatives of starting as an entrepreneur age 18 is you're so focused on your work that you have very uh little time for other stuff in your life.
33:38
And I was seeing that my friends were having these much more kind of fun social lives than me cuz I was working all the time.
33:46
So, the way that I was kind of made a deal with myself was uh and that was my way of still having some form of balance in my life.
33:53
And I think the word balance and that we could have a whole, you know, 2-hour conversation about the concept of balance because I think that, you know, people look at it so many different ways, but for me, the only way I could even have a thought of balance was this 11 months, you know, just like going crazy as an you know, working as an entrepreneur and then that month off in this place.
34:12
So, um my sister and I have been on these amazing countries on The Amazing Race, uh and one of the countries we kind of quickly went through was Brazil and Argentina.
34:22
And uh and I always liked like really um immersing myself in whatever that country was known for.
34:28
So, I got a guidebook, and as you know very well, the first thing that that came up and that Argentina is known for is the tango. The tango.
34:38
And and so, I had not read your book yet.
34:42
And so, I didn't know that it was possible to learn the tango at the level that you did.
34:45
I was a little bit, I guess, more uh Well, I just didn't have the rhythm or the dancing skills.
34:50
And And frankly, I didn't want to spend my month off learning something that I probably thought I would never use again.
34:56
So, I decided not to do tango.
34:59
Instead, I turned to horse polo. Mhm.
35:02
I grew up in Texas, had ridden horses before.
35:03
Argentina is really well known for polo.
35:07
I'd always thought it was a very romantic, cool, like just adrenaline, you know, sport.
35:12
And so, I kind of signed up for polo camp.
35:16
And so, it's a place called La Tarde. And so, I I got there.
35:18
And you know, after you know, after being there for a few days, I loved it.
35:23
I mean, it was I got bucked off the horse a bunch, almost went to the hospital the first week.
35:29
Like it was dangerous, but it was like a good danger.
35:31
Like it was just like every morning I woke up like, I'm going to tackle this horse, and I'm going to hit this ball.
35:36
And And so, I did that for a couple weeks.
35:41
But the other thing that Argentina is really well known for is their Malbec wines.
35:44
You know, and and it and if you like to drink red wine, Malbecs are fantastic.
35:48
And they And so, I decided to spend when I wasn't playing polo time in these different vineyards and and and wine cafes.
35:55
And so, so in the wine cafes is when I ultimately met a few women that were doing some volunteer work, which ultimately led to kind of the idea that there were all these kids that didn't have shoes.
36:10
I'm jumping a little forward in the story.
36:12
Um But I chose Argentina ultimately because it was my way of taking a month off and recharging and learning something new, which was polo.
36:22
So, but let's let's jump right into it.
36:24
So, you mentioned meeting these women. Yeah.
36:26
So, I'm you know, this is like I've I've been in Argentina for about 3 weeks, you know.
36:30
I mean here you have Buenos Aires, uh which is an amazing city and there's some poverty and homeless and all the same things we have problems in our major cities here in the United States, but you go an hour outside or even 2 hours outside the city where we were going a lot for the horses and the fields to play polo.
36:45
Um and as I was seeing this and and kind of cuz I was going to and from the city almost every day for the polo and for getting out to the farms, I think it was it was having an impression on me, but it wasn't something that it was leading to like an action, you know, it was just kind of like gosh, this this is really intense. This is really sad.
37:04
Like I can't believe there's this much poverty just an hour from this great city.
37:08
Now almost everyone was speaking Spanish the whole time I was there and I was trying to learn it, but I was not doing a good job.
37:15
I mean I could kind of get around with the Spanish that I learned in 3 weeks, but it was getting exhausting.
37:19
I mean, you you're much better at learning languages and learn very quickly as we know from reading your books, but for me, I had not been blessed with that ability yet and so I was just like sitting at dinners most nights listening to everyone speak Spanish and it was like Charlie Brown's teachers. Just wow, wow, wow, wow.
37:38
I mean, and so like I'd be like playing mental solitaire in my head until they finally would you know, someone could speak English to ask me a question.
37:46
So when I hear three women speaking English, I'm just like, you know, you know, a bee on honey.
37:49
I'm like, "Whoa, what are you guys doing?"
37:53
And then I and like it's so fun to talk to these these women and and so they had been there for about the same amount of time as me.
37:58
Uh two were from the US, one was from the UK and uh and so they were going around to wealthy families in Buenos Aires collecting these, you know, slightly used shoes and then taking them to these these these towns and these villages outside the city where kids needed shoes.
38:11
And it was amazing cuz I had just been like for 3 weeks seeing kids on the streets not in school clearly and not wearing shoes.
38:17
And uh and I was and I was amazed by the fact that this was like the limiting factor in their education, but I also believed it cuz I'd seen all these all these kids on the streets.
38:29
And so, you know, I'm a very curious person and and I've been playing polo for 3 weeks and I was kind of like looking for something more to round out my month experience.
38:38
And so, I said I said like, "I've never done anything like this, but could I come and help somewhat?
38:42
You know, I mean, if you're going to be distributing all these shoes in the next week, like can you just use another set of hands?"
38:47
And they said, "Absolutely.
38:49
We'd love for you to come."
38:51
And we got there, the kids had been told that they were going to get shoes this day.
38:55
So, there was already this incredible excitement in the air.
38:56
And when we pulled in, I mean, the kids and some of the parents just started like kind of just appearing from all these nooks and crannies in this in this town that was kind of right next to a garbage dump.
39:06
I mean, exactly what you you can picture if you've seen Slumdog Millionaire.
39:10
I mean, that's what it exactly what it felt like.
39:11
Um but there was incredible excitement and enthusiasm cuz they're getting these shoes.
39:17
Um and it was hard because the kids, a lot of them had most of them didn't even know what size they were because all they had was like a pair of flip-flops and they didn't have a proper shoe.
39:24
And so, trying to get them fitted and under you know, that was a challenge, but we worked through it.
39:30
And after we got all the kids had shoes, we played soccer and you know, and and we just had a great day.
39:37
And I was like so he was like he was like, "That's pretty cool."
39:39
I mean, he was he was actually kind of you know, he thought it was he firstly thought it was cool that anyone was doing this for these kids cuz he knew the area.
39:44
But secondly, he thought it was a it was it was a nice gesture.
39:49
Um And so, I was telling him about how awesome it was and how exciting and how much fun and and and he was listening really intently.
39:55
And and at this time, Leho is, you know, young guy, he's 23 years old, a great polo player and he's kind of listening and and I mean, he got so excited.
40:04
I mean, it's actually his enthusiasm the reason I'm pretty much sitting here because he's like, "This is an amazing idea. We have to do this."
40:09
I mean, just just to put in perspective too, so the Argentines, especially the uh the porteños. Yeah.
40:19
The A live in Capital Federal in Buenos Aires.
40:23
They're a mixture of all sorts of immigrant blood.
40:25
So, you've got like a a lot of Italian, which is where they get the like kind of the They get all excited.
40:31
They got a little bit of German, and then uh all sorts of other bits and pieces.
40:35
But, yes, a very enthusiastic bunch. Yes.
40:37
And so, Alejo, you know, professional polo player, 23 years old, doesn't know a thing about shoes, tells me he he and it's not it's at first it's not we.
40:47
It's you have to do this.
40:47
Like like your idea, you do it.
40:49
He's like, "But, I will help you, you know.
40:51
I I will figure this out, you know."
40:53
And so, literally by lunch, um you know, I'm he's you know, he he This is a guy who has two cell phones not because he has a work phone and a personal phone, cuz he has two conversations going on at all times.
41:05
I mean, it's like he's talking to so-and-so's brother and so-and-so's cousin and someone's in the and it's all in Spanish, so I don't understand anything he's saying, but it's it's with enthusiasm.
41:12
Then, he'll yell at me, and it's just like, "This is what's happening."
41:16
And so, by lunch, he had already figured out someone, friend of a friend, who made alpargatas like in their garage, you know, an hour away.
41:24
And and and like before I can even say no, like we're going.
41:28
I mean, it's it's like, you know, I mean, we're in this.
41:30
And I'm supposed to leave in like 4 days.
41:32
And uh and so, you know, in that long car ride there and back, cuz we really kind of talked about it, like my entrepreneur brain started thinking it's like, you know, I think this I think this could work.
41:43
Um because first off, I've been wearing this alpargata. I love it.
41:47
It's like super lightweight, super comfortable.
41:48
If it gets wet, it dries right away.
41:50
And there's nothing like this.
41:52
I mean, the only shoes that are in this kind of canvas slip-on are like Converse or Vans, and they're heavier, and they're clunkier, and and I've worn those all all these years, but this is a different So, I started to really kind of fall in love with the product as well as the idea.
42:06
And and then I I recognized that like this didn't have to It was the first time I had an idea in my life that I didn't think of as a business really.
42:17
Even though I was structuring it as we're going to sell something and give something and it's going to be a business not a charity, I didn't think of like I need to do this to make money.
42:24
Like I had made some money.
42:24
I had the Drivers Ed business was going great.
42:28
Like that is you know is is just is is just sales are just are are just skyrocketing.
42:32
I'm I'm a little bit less interested in like starting a business to make money.
42:40
And but I'm really thinking this could be fun.
42:42
And that's the thing I always try to like make sure that people really understand in terms of the beginning motivation.
42:48
It was and I think we I think this could work and help them.
42:50
And it's going to be a ton of fun.
42:52
Cuz now I was going to get go back to Argentina four times a year.
42:55
I mean this is a great excuse to go to this country that I'd fallen in love with and Alejo was so fun and other people were you know so long story short, we get you know we get to this guy, you know, and he's and we're telling him like no we don't want Alpargatas.
43:10
We want to have like a nice insole and arch support and all these things that are going to make the shoe cost like five times as much money.
43:17
And he's like no one will ever buy this.
43:19
Like like no one will ever buy this. It's too expensive.
43:21
And I'm like no but we got to make it it's got to last long cuz these things wear out in a couple weeks and like all and just things that even though I had no experience in shoes, I just as a customer I would want the shoe to look this way but I'd want it to perform a different way.
43:35
And so it is so you know, after a couple days going back and forth and meanwhile I've now called my partners of the Drivers Ed business and told them it's not going to be a one-month vacation but two months this year.
43:43
And so I'm taking I'm going to take another couple weeks to see if I can figure out this shoe thing.
43:48
And I hadn't told any of my friends what I was thinking of doing or anyone and and and I you know, I just I I just started like calling you know, my sister and girlfriends and and and and friends of mine that I thought you know, would appreciate this shoe and not telling them the story initially.
44:07
That was one of the key points.
44:10
So, selling the product on the product's merit?
44:12
that I knew that the story would get people excited, but I I didn't want to like really go into making this adventure unless I felt the product could stand on its own.
44:21
And so, and plus I also didn't know how much to charge.
44:26
So, I needed to kind of get people's reaction. Like, do you like it? Number one.
44:29
Number two, how much would you pay for it?
44:30
You know, cuz it was such a different shoe than anything else out there.
44:33
Um and so, I spent a week or two really doing that. Okay. question about that?
44:38
So, so you you seem to have a long history of doing market research by asking women. Yeah.
44:46
You got the thing We didn't even cover the Don't they buy most of the stuff?
44:49
Well, you got like the thing We didn't even cover the Theta Sorority. Yeah, yeah.
44:53
Like collaboration with Easy Laundry.
44:56
That's a whole separate episode.
44:58
But, did you ask primarily women about I did.
45:02
Even though I didn't think it was I thought men and women would buy the shoes, but I just felt like I didn't know very much at all about shoes in my life at that point. I knew nothing.
45:10
What I did know is that every woman in my life spent a lot of money and time on shoes.
45:16
Like, I mean, whether it was my mom, my sister, my girlfriend, they were always buying shoes.
45:20
I never really saw my guy friends buying shoes.
45:22
I mean, obviously they had to cuz they wore shoes, but it wasn't like they talked about it.
45:27
So, I figured like, let's go where this this conversation's already happening.
45:31
Let's just enter into the conversation. Right.
45:34
And so, that's why initially my my kind of quick market research was was women.
45:40
But, it was so cool because I remember this time I served all the girls over to the house or the apartment at the time in Venice.
45:45
And they thought they were coming over for like this dinner party that I was going to arrange, but instead I had all these shoes on the table.
45:49
And I And I And they were like, "What's going on?"
45:53
And I was like, "Well, we're going to have dinner, but before I want to show you this to earn your dinner."
45:58
To earn your earn your dinner. There is no free dinner.
46:01
Um is is I want to hear what you think about these shoes because I'm thinking of selling them.
46:07
They come from Argentina.
46:10
And I didn't tell them about the story.
46:12
And as I saw them in my living room trying them on and getting pretty positive feedback of their cute, they're comfortable, I'd wear them with this.
46:17
I mean, they were kind of talking amongst themselves.
46:20
Then I pulled out a bunch of photos from my trip in this village and I told them the story.
46:25
At this point, I've never seen women so excited by a pair of shoes.
46:29
I mean, they bought like three pairs each.
46:31
I mean, they were like telling me like, "Oh, I'm going to call my friend.
46:34
She's got to get a pair."
46:34
I mean, it was like this just like You've never seen a feeding frenzy.
46:40
And it was because of the story.
46:40
It was because of the idea of one for one.
46:41
It's because up until that point they had never been offered an opportunity to buy something for themself that they usually feel guilty about, right?
46:49
Cuz I mean, women buying shoes doesn't always, you know, end in happiness. A lot of it's guilt.
46:57
Uh, cuz they have too many already.
46:57
This time they had no guilt.
46:59
It was like the guilt-free shopping of the century, right?
47:02
So, so they were buying multiple pairs.
47:06
Um, they were telling me other other, you know, girlfriends of theirs that would get to buy them.
47:09
Some of the girls worked in PR and were telling what stores to be in.
47:12
I mean, it was just like immediately I was like, "Wow, this we've stumbled."
47:15
I mean, it was like I hit a nerve.
47:16
Um, and and so that was really encouraging.
47:19
Um, and that's what kind of got the initial kind of um the the initial sales going and helped me figure out how much to charge for them.
47:28
And the interesting thing about the charging, and this is I think is like at some level why in the dictionary under the word karma there should be a picture of TOMS is, you know, we charged we we created a model that was basically to break even, not to make money.
47:42
So, we're like, "Okay, we want Our whole goal is to give as many kids as shoes possible."
47:47
So, we wanted to charge a price that would be the least amount that we could charge a customer and still be able to pay for another pair of shoes and have an organization.
47:53
So, even though we weren't a non-profit, we went into this thinking that we're not really profit is not the motivation. maximizing your margin. Yes.
48:03
So, but the thing is is we were making all the shoes by hand in garages in Argentina, which turns out is very expensive. Right?
48:12
So, so we're making shoes.
48:12
So, when when TOMS started to take off, and all of a sudden we were selling not, you know, 100 pairs here and there, but thousands, tens of thousands, and then millions, Yeah.
48:24
we started large-scale manufacturing, our costs went from here to here.
48:26
And then all of a sudden we had this hugely profitable business.
48:30
And it was like, how did we how did we get here?
48:33
I mean, it was truly I will never forget when Accidental profitable business.
48:38
It was an it really was this crazy moment when I would met with this factory when the first time like we were moving from like garages to factory, and I was like, um, so how much per pair?
48:47
And he gave me a price, and I'm like, is that for per shoe or per pair? Yeah, yeah, yeah.
48:53
Like it was crazy how much less it was.
48:55
And then we realized, okay, we can do the giving, we can do that, and we can have a good business, and we can make money.
49:01
And that was like that was the aha moment of, okay, this is what I'm going to, you know, put all my energy behind.
49:06
So, in the very beginning, what what names did you consider for the company, and how did it end up on TOMS?
49:13
Yeah, that's a great question.
49:13
So, And how many people think your name is TOMS?
49:17
Most people think my name is TOMS.
49:17
I mean, that's the NUMBER ONE QUESTION.
49:25
I MEAN, YOU KNOW, YOU YOU KNOW THAT TIM'S A GREAT interviewer because it's been an hour and 45 minutes until he's asked me that question.
49:34
Nine times out of 10, that's the leading first question, cuz it's so obvious. Um, so the name TOMS.
49:40
So, I wore this shoe today in particular because A is one of my favorite shoes we've ever made, and it's also one of the first shoes we ever made 10 years ago.
49:47
And and and and and so, what happened was is I originally called them Tomorrow Shoes.
49:57
And the reason they were called Tomorrow Shoes is that we thought we could make a better tomorrow by selling a pair today and giving a pair tomorrow.
50:03
So that was our our pitch was if you buy a pair today, we promise you that we will give a pair tomorrow to a child in need. And so thank you.
50:13
And so that was AND SO FOR THE FIRST couple of weeks they were called Tomorrow Shoes.
50:21
We're down in Argentina, we're making them, whatever.
50:24
And then we start looking at all the other kind of casual shoes in the market cuz now we're starting to think about this a little bit more like, okay, we got to you know, we got to figure out like how we're going to brand this thing.
50:34
And and and so we're looking at the shoe and this shoe particular there's not a lot of places to brand it.
50:39
But the most natural place would be on the back.
50:41
And there's no way I could fit the word Tomorrows on the back of the shoe.
50:45
It just wouldn't fit no matter how little the font got.
50:46
So I said, okay, we'll call it TOMS, shoes for a better tomorrow.
50:53
And so TOMS coming from the word tomorrow and and we chose the Argentine flag because that's where they were being made and we got rid of the sun and put the TOMS in there.
51:01
And you know, and that's how it that's how it started.
51:05
Um and that's how the name came.
51:07
But you know, it's funny because I mean literally, I mean still to this day people call me Tom.
51:11
And especially in the beginning, I mean before anyone knew what I looked like and they just assumed that there was this Tom.
51:16
And and and one of my favorite favorite stories is um in order to sell the shoes, you know, it's like anything else an entrepreneur like the story is as important as a product.
51:27
You got to make sure you have a good product, but you know, you've got to convey your enthusiasm.
51:30
And so when I first got into Nordstrom, which was pretty early considering how small a business we were, uh they said, well, we'll we'll sell your shoes in these stores in like Southern California, but you have to commit to going like every Saturday and literally sitting there next to them and like telling the story, cuz the story was what was so interesting. And so I said, "Fine.
51:49
Okay, I'll do I'll do whatever, you know?"
51:52
Like so I would go, and I'll never forget this one manager.
51:56
I got there on Saturday morning, bright early.
51:58
I'm all excited, and I'm like, "Hey, I'm Blake.
52:00
I'm I'm here for the for to sell the TOMS shoes."
52:04
And she looks at me, she goes, "Oh, man, we have a problem."
52:06
And I was like, "What's the problem?"
52:08
She goes, "We've been advertising for like a week that Tom IS COMING."
52:15
AND I WAS LIKE, "I AM TOM."
52:19
SO SO I I I USED TO CARRY MY laptop everyone like quickly have it up.
52:24
Like that's who you think Tom is. Look, that's me.
52:27
Like we're the same person.
52:29
So The times that we live in right now, it's very romanticized to go out and raise hundreds of millions of dollars in venture financing with something very complicated. Yes.
52:42
The businesses that have worked for you that we talked about started off addressing a frustration or a need of your own, simple and low capital requirements, at least in the very beginning.
52:53
No, the only business I ever raised money for was the business that failed, and that was the reality TV channel.
53:00
So, I mean, that was the thing about TOMS is we never raised money, and and because we started small, 250 pairs, then it was 1,000 pairs, then it was 2,000 pairs.
53:09
And as we started growing, we were able to you know, to get you know, bank loans and things like that to finance inventory.
53:16
But um I mean, that's one of the things I think that allowed us to preserve who we are today, 10 years later, and 75 million shoes given, and all these things happened because we didn't have that influence that comes from investors, and then their demands, and how fast you got to grow, and things you got to do.
53:34
So, I always say to entrepreneurs, like there are some businesses that inherently you have to raise money for.
53:39
But the every day, if you have a good idea and you can execute everyday that you wait your idea and your company becomes more valuable and the more leverage you have and the more leverage you have.
53:52
The first time I saw someone wearing Toms was like a really special moment.
53:56
You know, it's kind of like maybe an artist the first time sees their painting hanging in a gallery.
54:00
You know, I mean anyone who's been in the created something any magnitude is proud when they see it.
54:08
Especially they see it on someone that's a stranger that bought it without you like begging them on the floor of Nordstrom, right?
54:14
So about four or five months after we started Toms and this is before we're even in Nordstrom.
54:19
We're only selling them online and mainly the only or the only people I've seen wearing them are my neighbors because all of our neighbors in the neighborhood thought it was cool that we were kind of running the shoe company out of the apartment in Venice.
54:29
So they were buying them.
54:30
My interns and my family of course and and and I was in New York City and I would had actually had a very bad week.
54:40
I'd gone trying to get new customers like retailers like the American Rag and I had just struck out.
54:45
Like I mean New Yorkers wouldn't have nothing to do with the shoe and and so I was going back to LA kind of a little bit with my you know tail between my legs.
54:54
I was I wasn't even wearing Toms.
54:56
I was wearing some you know running shoes or something because I'd gone for a run in the park earlier that morning and then I was like rushing to the airport.
55:02
And I get to the American Airlines check-in counter and I'm doing the kiosk and uh not checking bags just doing it quickly and I looked to the my right and there's this woman and she's wearing a red pair of Toms.
55:16
Mid-30s like wearing a pair of jeans, pair of red Toms and I'm like super excited.
55:21
And but I'm but at the same time I'm like really curious to like where did you get those?
55:26
What do you think about them?
55:27
Like I mean my my marketing head, my focus group head just goes straight to it and so I say excuse me um I couldn't help but to these red shoes you're wearing.
55:36
They're They're really cool. What are they?
55:37
And I'm still doing the check-in cuz I don't want to act like I'm too interested, right? And give it away.
55:42
And and and she looks at me and her eyes kind of widen and she goes, "They're TOMS, TOMS shoes."
55:47
And I'm like, "Oh, that's cool, you know? And that's great."
55:51
And and I'm kind of like just taking it easy, kind of waiting to see what she says.
55:54
And and and and I could tell she's like looking at me like, "No, I have more to tell."
55:57
So, I kind of turned her and and she looks at me like really intently and she goes, "No, I don't think you understand.
56:03
This is the most amazing company in the world.
56:07
When I bought this pair of shoes, they gave a pair to a child in Argentina."
56:11
And I'm like, "Oh, really?"
56:13
He's like and then she continues, she goes, "And there's this guy. He lives in Los Angeles.
56:16
I think he lives on a boat." And he's 8-ft tall.
56:22
And she literally starts telling me my life story word for word, like with more passion than my mom tells it.
56:32
I mean, it was it was incredible.
56:32
And so, she's going on and on about this and that and and and I and I at some point I was like, "Oh my gosh, like I have to tell her who I am now."
56:40
And like and there's other people listening. I mean, she's animated.
56:43
And so, I say to her, I say, uh "Excuse me, actually, sorry to interrupt, but um you know, I'm Blake. I started TOMS."
56:52
And she just pauses and it's like deer in headlights.
56:55
I mean, you could hear a pin drop. And she looks at me. She looks me again.
56:59
She goes, "Why did you CUT YOUR HAIR?"
57:06
BUT THE INTERESTING THING ABOUT THAT question and what I learned a huge business lesson in this question, the reason she knew I cut my hair is she had watched every video on YouTube about our shoe giving. Wow.
57:17
You know, this is right, 2006, right when YouTube, same year YouTube launched.
57:21
And because, you know, there wasn't a lot of content on there, our videos got a lot of views back then cuz there wasn't And and she'd watched it and seen it.
57:28
And so, I realized that she wasn't just a customer.
57:31
I mean, she took the time out of her check-in to tell me the entire story.
57:35
I mean, she was an evangelist for TOMS.
57:37
And and and so like I was so much that like she, you know, kind of didn't recognize me because I had cut my hair short like this and before in the video it was really long and bushy.
57:45
And so it was so funny because on the way home, I realized like we didn't need to focus on marketing and advertising.
57:53
That's not what got this girl to buy her shoes.
57:54
We need to focus on doing our giving and making sure that content was easily shareable with our customers.
58:01
Because if she was this passionate to tell a stranger at the airport, surely she had posted on Facebook about it, tweeted about it, probably bought a pair for her friend for Christmas or whatever.
58:11
And so it was an amazing experience for me and it really has kind of dictated our whole philosophy on marketing for the past 10 years.
58:20
And that is if we do what we say we're going to do, and we create interesting content that allows our customers to share with pride what they've done.
58:28
Because it's really them.
58:30
And we set it up, but unless we sell shoes, we don't give them away.
58:32
So it's what they've done.
58:34
Then the it the momentum can build and I think that's why we had this exponential growth.
58:42
So this is a this is a related one.
58:42
This is actually from the extended family known as the internet. Uh Facebook.
58:50
This is not like the drunk angry uncle though.
58:52
This is a nicer member of that uh Christmas party.
58:54
So Daniel Roddick, I think that's his name.
58:58
And I'm going to shorten this a little bit, but there's a term I've heard used before called WFIO moments.
59:02
It's pronounced wiffio, which stands for we're it's over.
59:09
And you know, essentially it's when your business seems like it's on the brink of death or failure, running out of cash, PR crisis, new bad competitor, etc. etc. etc.
59:15
So the question and it goes on.
59:17
This is a long question, but I was just wondering if you had any particular examples Wiffios. Yeah, from TOMS.
59:24
If there were any sort of existential threats when you're like, "Oh boy."
59:29
There is there is one just I mean as clear as day.
59:31
This is uh in the second year we now have made that transition from making them in garages to the big factory.
59:41
And knowing nothing about how to negotiate with factories and factories can smell naivete like a mile away.
59:48
Uh we totally got screwed over by a factory and we had taken all these big orders.
59:52
We had taken all the cash that we had.
59:55
I mean not just TOMS but like me personally out of my personal checking account to order all these shoes knowing that we were going to sell them for a profit and then we would be able and so it was just a it was a cash flow thing.
1:00:07
And I'll never forget I was with my dad um and it was actually the day I was getting the sailboat that I was going to live on.
1:00:14
I lived on a sailboat for 6 years.
1:00:16
It's a whole 'nother story about essentialism and and not having stuff that you don't need in your life and simplifying your life which I was very intent on doing after spending so much time in Argentina.
1:00:27
Um so I'm going to get the boat with my dad.
1:00:29
Like it's supposed to be a great day in my life um and I get a call and it's Shawn actually, the guy you saw.
1:00:35
And he's like, "We have a problem." And I'm like, "What?"
1:00:37
He's like, "Every single sole on the shoes are falling off."
1:00:43
Like they're not like not good quality like they're falling off.
1:00:45
Like the glue they used at the factory got hot on the way here whatever.
1:00:50
It's like it's disintegrating and like all these people were expecting their shoes and all your money is in this.
1:00:56
And like we don't have money to order more shoes.
1:00:58
I mean it was definitely a wifio moment if there ever was one.
1:01:02
And and you know, it was it was I I really did think it was going to be over cuz I mean it was like it was it was it was just we one we were going to call these people and say we didn't able to deliver and it would take weeks if not months to get them and this is at the point which we now have big customers, you know, like the Urban Outfitters and Nordstroms and they don't just like, take this news lightly.
1:01:23
And the second was is all our cash was in there.
1:01:25
I mean, there was no more cash on our machines.
1:01:26
I mean, ultimately, the way we saved it was we were able to convince another factory that if they would make the shoes without any initial payment, that we would be able to pay them within 90 days, and we would switch all of our business to them, and they did, and they were a great factory for a long time.
1:01:46
But, I didn't even know that was a possibility.
1:01:48
That that came after, like, days of, like, probably heavy drinking and, like, you know, putting myself in a in a hole in which I couldn't come out.
1:01:56
But, yeah, I mean, and I think every business has that, and ultimately, if you get through it, it makes you stronger. Yeah.
1:02:01
But, the truth is is it probably kills a lot of businesses, too.
1:02:03
In retrospect, were there any warning signs or anything that you could have Are there ways you could have avoided that?
1:02:12
In that particular case, I don't think so, because we didn't have the brand reputation or the cash flow to have any leverage over factories, but we needed factories, and at the same time, I just I we didn't have the experience level to know how to protect ourselves from that.
1:02:33
Now, in hindsight, there's lots of things you can do to protect yourself with factories and payment terms and all these things.
1:02:40
Um so, I think it was just a situation where we were unlucky, and and and a factory kind of took advantage of us, and and they probably thought they would never get another order anyways, so they didn't take it too seriously.
1:02:53
And so, if you were advising somebody, um and I know this is going to be a small percentage of the audience, but actually, I mean, a growing percentage.
1:02:59
When you have people now launching businesses on Kickstarter, it's like, okay, good news, bad news, right?
1:03:02
Like, we've never made anything, but we have 5,000 orders. Yeah.
1:03:06
We've sold We've told a really good story. Yeah.
1:03:08
What advice would you give to someone who's looking at manufacturing Mhm. For the first time?
1:03:12
I mean, I would say the best thing to do when you're manufacturing for the first time is have the manufacturing as close to you physically as you can, even if it's a huge difference in margin, difference in price.
1:03:25
Because what you're trying to do in the beginning is prove a model.
1:03:29
You're not trying to necessarily make money.
1:03:31
So, if you can if you if it costs 80% more to do it in your hometown than doing it overseas, I'd say do it in your hometown where you can watch it, be there, touch you know, you then you don't have the surprises.
1:03:43
The thing that kills you with manufacturing and especially from far off place is the surprise when it comes not being what you thought it is and by that time it's too late.
1:03:52
So, the nice thing is is is if you're or you just move to wherever you're manufacturing.
1:03:57
I mean, one of my favorite, you know, entrepreneurs um is Fernando in Santiago who started Reef sandals.
1:04:04
And these are Argentines actually as well that I got to know through the years being in the shoe business.
1:04:09
And and Santiago moved to Brazil and lived like at the factory for those early years of Reef to literally watch every shoe being made and that's why their quality was so good and that's why they built such a great company.
1:04:19
So, sometimes if you can't make it locally, you you go there.
1:04:23
But but manufacturing is where most I would say these businesses never get off the ground or end up imploding is cuz you just do what it's one strike and you're out Yeah.
1:04:34
That That's the case where you really have to have boots on the ground.
1:04:36
Yeah, I was talking to a buddy of mine who's the founder or maybe co-founder of a apparel brand called Sitka.
1:04:42
So, it's kind of like if you want to think of like the Lululemon for hunting and outdoor gear.
1:04:48
Really high quality stuff and he went to China for the same reason.
1:04:54
And this is a guy I've had some some drinks with him.
1:04:57
And the way that he negotiated his terms that he needed because they were like, "Yeah, can't be done.
1:05:00
No, like everything's going to be late."
1:05:01
Similar to So, I'm like, "God, this is an existential crisis."
1:05:04
So, he went to China and he sat there and he needed a translator and they're doing like, "Cheers. Oh, cheers to this. Cheers to the chairman.
1:05:12
to this, and he's like, do they have to drink every time I do a cheers?
1:05:13
And And the translator's like, yes, they they'd be rude not to. Yeah, yeah. And he's like, okay.
1:05:20
And so he just got everybody completely blitzed.
1:05:23
And then the big boss is like, definitely next week, no problem.
1:05:30
Is there a recording of it?
1:05:31
And uh and so he got his gear on time, anyway.
1:05:33
Not my recommended negotiating tactic necessarily.
1:05:36
There are books and so on you could read.
1:05:40
If I lost the material possessions or the wealth or the ability to to do some of the things that my family gets to do, you know, it kind of goes back to what Tim was saying, the guy with the the sleeping bag and the oatmeal.
1:05:52
Like I feel like I've, you know, there's enough people that would help me get that oatmeal and that backpack and that sleeping bag and and me and my family would probably still live a great life.
1:06:03
I mean, the thing that I've learned the most, I think it's the most, from my travels around the world, and I've been to every country and seen almost every hardship that that is imaginable, is sometimes the people who are living the most poverty, the most rural, are also the happiest.
1:06:21
And the reason IS IS THE REASON IS IS BECAUSE their life is so simple that they spend their time in relationships.
1:06:36
Like it's amazing to see, I'm very close with many families in Ethiopia cuz we spend a lot of time there, we do manufacturing there, and when you get to rural Ethiopia, you see the amount of time that they are to spend in laughter and games and playing.
1:06:49
And it's because there's there's not much else to do because they don't have anything else.
1:06:56
Like I mean, you know, I mean, basically their only daily chore is making sure they have water and food, and other than that, it's just all about relationship and and and loving on one another.
1:07:04
And so I think that, you know, um it's a tricky time we live in now because we get caught in the cycle of having to, you know, to support these lifestyles that we create.
1:07:15
And often times we spend so much money trying to do that that we don't end up enjoying the life that we have.
1:07:23
And so, I will say that that's one thing that in my um maturing and and learning and studying over the years, I have gotten uh much better at and put much more premium on.
1:07:36
And I don't work 11 months, you know, lights out and then just for that 1 month off anymore.
1:07:41
I make sure that I am experiencing I mean, yesterday Jim texted me. just going to say that.
1:07:47
He texted me to have a pre-call and I was surfing all day in Santa Barbara. Didn't have my phone on.
1:07:52
Didn't get back to him till 10:00 at night cuz I was like, you know what?
1:07:55
Like, I had a couple really long days before this.
1:07:56
I want to have a lot of fresh energy for this today.
1:08:00
So, I took the whole day and went surfing with one of my best friends.
1:08:02
And, you know, spent time all morning with my son.
1:08:05
And so, those are the things that are important and it those and and I didn't always realize that.
1:08:11
So, so I think that, you know, you really you can't lose everything when what you care about are the people and the memories you have.
1:08:27
Ladies and gentlemen, Blake Mycoskie. Oh, thanks.
1:08:33
Hey guys, this is Tim again.
1:08:33
Just a few more things before you take off.
1:08:34
Number one, this is Five Bullet Friday.
1:08:37
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And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week.
1:08:55
That could include favorite new albums that I've discovered.
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It could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short.
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It's just a little tiny bite of goodness before you head off for the weekend.
1:09:18
So, if you want to receive that, check it out, just go to 4hourworkweek. com. That's 4hourworkweek.
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com all spelled out and just drop in your email and you get the very next one.
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This episode is brought to you by 99designs.
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