All For One and None for All?
There’s been a lot of debate of late in the #socent (that’s social entrepreneur in twitter hashtag-speak) community about the value of the One-for-One Model, as best initially exemplified by Toms Shoes. I write about the potential and pitfalls of this model in my upcoming book, The Business of Good.
Last week the NY Times profiled Bombas, a luxury sock retailer that gives away a pair of socks to the homeless for each pair it sells. To date, they’ve donated 922,929 pairs of socks (as they proudly display on their home page).
Bombas socks are impressive. They come with honeycomb arch support, stay-up technology and they’ve even found a way to stop that irritating bump you can feel at the tip of a sock by your toes. They aren’t cheap though, with a men’s pair starting at $11.00.
I didn’t like the tone of Times article. I thought the reporter was a tad too cynical. “That may be a worthwhile venture, but at some point, the connection between profit and benevolence becomes strained,” the reporter noted.
Of course that’s true in general when it comes to the One-for-One Model. But take a closer look at Bombas and you’ll see that socks is a major need for homeless people. In fact, when you ask homeless people what they most need, socks almost always comes up as the first requested item.
The problem is that not all One-for-One Models are created equal. There are many different social enterprises that have used this model not just to give out free “stuff” but to help create jobs and grow the economies in local communities. Warby Parker does a fine job of this. Too often they all get meshed together with the first well known user of the model — Tom’s Shoes. The way this article is written one could assume Bombas wants to be the Toms Shoes of socks. But they don’t. Even Toms Shoes is no longer the Toms Shoes of shoes!
It’s been about 7 years since the One-for-One Model and Toms first gained mainstream attention— and for that we can thank an AT&T commercial.
It was May 5, 2009. Season 8 of American Idol was well underway and over 23 million tuned in that night. During a commercial break AT&T aired the 60 second version and, as they say, the rest is history. TOMS Shoes saw an instant spike in business going from 9,000 visitors a day on their website to 90,000.
Here’s what the ad says:
[EX]My name is Blake and I’m the chief shoe giver at TOMS shoes. I operate my entire business from my phone. I need a network with great coverage because for every pair of shoes we sell we give away to a child in need. It would be impossible to do this without a network that works around the world.
The visual, audio and emotion crescendo comes on the words “…because for every pair of shoes we sell, we give away to a child in need.” It’s a touching ad and made all the more significant because it is true.
Soon after the ad ran, sales (and donations) skyrocketed. A few years later the company was worth well over $500 million. Millions and millions of shoes were donated in the developing world. What could be wrong with that? Well, almost everything.
“Haiti doesn’t really have a shortage of shoes. There are piles and piles and piles for sale (new and used) on practically every street and side street around here,” noted international aide authority, Saundra Schimmelpfennig.
“At worst, it promotes a view of the world’s poor as helpless, ineffective people passively waiting for trinkets from shoe-buying Americans,” Vox declared. “While the shoes themselves probably won’t lead to any kind of disaster, that worldview can lead to bad policies and real, serious harm.”
And forget local shoe markets. How can you make a living creating or selling shoes if free ones magically arrive from America every few weeks? The model was incomplete. And Toms Shoes knew it.
In the fall of 2013, Toms CEO, Blake Mycoskie decided to change course. “If you are really serious about poverty alleviation, our critics said, then you need to create jobs,” he wrote. “At first I took that personally, but then I realized that they were right.”
Mycoskie decided to take aim at the underlying issue behind why people would need donated shoes in the first place: poverty. The way he saw that, the best way to alleviate poverty would be through education and jobs.
TOMS built shoe-manufacturing facilities in places like Haiti, Ethiopia and Kenya. Over 700 jobs have been created to date. They’ve teamed up with giving partners and launched programs beyond their traditional one for one model. The company has moved to tackle clean water, vision, safe birthing and bullying. Staying true to their for-profit social entrepreneurial roots, for each expanded social benefit there is a new product to offer to consumers.
This more expanded social benefit work is far more complicated to explain. It’s hard to imagine AT&T doing a 30 second commercial on Toms more holistic approach. This may explain why most still associate Toms with its initial model as opposed to its evolved model.
Be it socks to the homeless or shoes to the undeserved, there are many ways that social entrepreneurs can make a difference. Sometimes the direct One-for-One Model can be effective. Other times the model treats a symptom while the disease continues unabated. At their best, social entrepreneurs are eradicating the disease — they are changing the conditions in which is breeds. This is hard work. But it must be done. And there are lots of ways to go about it.
