Many companies outsource their philanthropic activities to external partners, so that they can fulfill their social-impact commitments while staying focused on what they are good at, says Bombas CEO David Heath. But that’s not what Heath had in mind when he founded the apparel brand with a tagline, “one purchased=one donated.”
"To tell the authentic brand story, I wanted to stay close to our end customers on the giving side,” Heath told Dean Bill Boulding of Duke University’s Fuqua School of Business as a guest in the school’s Distinguished Speakers Series.
For Bombas, the end customers are the 600,000 homeless people living in the U.S., he said.
Heath said he didn’t start Bombas because he wanted to create a sock business. The idea grew on him after he heard that homeless people perceived socks as a luxury item, he said.
“I started carrying around socks in my backpack,” Heath said. “Once I started having human interactions with people experiencing homelessness, and giving them a pair of socks, I saw how transformative that small item was.”
He thought he could help solve a specific problem of people in need through business, Heath said. The idea of “one purchase=one donation” was already built into the first pre-sale of socks in 2013, he said, and continues to be Bomba’s core mission.
“We wouldn’t exist without it,” Heath said.
A premium mass-market to target
Once it was clear what kind of business Heath wanted to build, the next step was to learn everything there was to know about socks —he didn’t have any previous apparel expertise—and find out how to make better ones, he said.
“Some socks may feel scratchy. Others have that annoying ridge. And other ones–you are constantly pulling them up throughout the day,” Heath said.
He soon started focusing on a specific segment—specialty socks for athletic activities—where “a tremendous amount of innovation” is embedded to provide arch support, comfortable foot beds, and fabrics that wick moisture, he said. He wondered whether, besides athletes, other categories of customers were also in need of specialized socks.
“Nurses, firefighters, doctors, real estate agents, even parents chasing their kids around—we’re all moving throughout the day,” Health said. “I thought, maybe I can take some of this technology and innovation and bring it to the mass market.”
Growing while staying true to the mission
One year after its launch, the company appeared on the 2014 edition of Shark Tank and got a deal, eventually becoming the show’s number one all-time best selling product for retail sales. In the ten years since its launch in 2013, Bombas has sold more than $1.3 billion of product, and donated more than $100 million worth of clothing to more than 3,500 giving partners, who distribute the apparel to their network of homeless shelters.
The brand also expanded its product categories to underwear and t-shirts.
Bombas is now a certified benefit corporation and plans to grow further by convincing customers to switch “from the low-cost commodity brands to a premium, mass-market product… similar to what Starbucks or Nike did for coffee and sneakers” Heath said.
The company keeps investing in its homeless community brand in the same way as it does for its paying customers, he said.
Heath said the company added specific features for their homeless products, such as reinforcing the seams, so the socks last longer, and using darker colors to minimize stains and visible wear. The organization also added an antimicrobial treatment that prevents fungi and helps with odor, he said.
“We want to be a truly authentic brand that delivers the mission,” he said.
Advice for students, future entrepreneurs, business leaders
“Being an entrepreneur is akin to saying you want to become an actor, or a musician: just because you want it badly, doesn’t mean you will succeed,” Heath said.
He said entrepreneurs need to practice and train their entrepreneurial mindset every day, and talk out ideas with people to see if they experience the same pain points about a product. Also, entrepreneurs should always write down their business plan to see if it holds up financially “before you put a cent into it,” he said.
“The first idea I had upon graduating, I didn't go through that process. I was like, ‘I went to school for entrepreneurship, I know everything there is to know about entrepreneurship,’ and I started a business,” Heath said. “And not surprisingly, it was a pretty epic failure and I lost a lot of my savings.”
He also recommended that students pursue career choices as a continuation of learning, as opposed to “making a bunch of money,” he said.
“Don’t go to the job that pays the most, but rather to the job that treats you like an investment in yourself,” Heath said. “Pick a company where you can learn and develop skills that you think would end up making you a better entrepreneur.”