Building a business on giving stuff away for free? Yes, it can be done — and done profitably, with benefits to the business itself as well as to the greater good. The one-for-one business model has become a proven way for charitably minded entrepreneurs to do more than make money; with this approach, they can also make a difference.
TOMS, founded in 2006, was one of the first to see mainstream success with this approach — indeed, it even branded itself as the “One for One” company after pioneering the business model. The company has since expanded beyond shoes, but it still vows to help a person in need with every product purchased.
Warby Parker, founded in 2010, works with partners around the globe to ensure that for every pair of glasses it sells, a pair is given to one of the 2.5 billion people worldwide who need glasses but don’t have access to them.
Bombas, founded in 2013, has applied that one-for-one approach to socks, which Bombas Co-Founder and CEO David Heath noted are the most-requested and least-donated item at homeless shelters. Heath told PYMNTS how one-for-one can defy traditional business logic and urged entrepreneurs to take a similar approach.
From the Gym to the Mountains
Bombas began by making high-quality gym socks that addressed everything people hated about their old gym socks, adding blister tabs, extra-cushioned foot beds, honeycomb stitching around the arches and moisture-wicking cotton to keep the sweat (and stink) at bay.
The company recently added hiking socks to its repertoire, again emphasizing the details where other socks fell short, with cushioning, vents, moisture-wicking fabric and various foot supports. As fancy as that sounds, customers can buy the socks for a relatively reasonable $18 per pair — and, of course, that amount is really buying two pairs — one for the customer and one for a homeless shelter.
Next, Heath said Bombas plans to venture into t-shirts, following the same one-for-one model. This will be the first product category extension for the brand outside socks. Like their one-for-one model with socks, one t-shirt will be donated to someone in need for every t-shirt purchased.
Going back to their roots, Heath said the brand will launch t-shirts on the crowdfunding platform Indiegogo, the same site where they first launched the brand in 2013.
Defying the Odds
When the startup appeared on “Shark Tank,” most of the investors said the one-for-one model would prove too costly, but Daymond John took a chance on the concept, and it seems to have paid off quite literally. Bombas set out to donate 1 million pairs of socks within 10 years. The $47 million startup surpassed the 7 million mark in February.
As Bombas, TOMS and Warby Parker have proven, the one-to-one model can work in a variety of categories. Heath said there’s still a lot of opportunity out there for others to adopt this business model for the greater good — and not only to provide for people’s physical needs, but to inspire cultural change.
“Bombas gives specially designed socks to those in need because they’re the No. 1 most-requested clothing item in homeless shelters, but the need to give back and help certainly doesn’t end there,” said Heath. “Giving back to those in need is something that can extend across an endless array of industries.”
Heath’s advice for the charitable entrepreneur? Choose an issue about which you’re passionate. Educate and immerse yourself in the issue — it’s not enough just to nominally subscribe to a cause. Work with experts and volunteer to gain firsthand knowledge of the needs and potential impacts of the mission.
Finally, he said, consider the best way you can serve the community you’ve chosen to support — and that may not mean donating physical goods.
“Beyond giving products, there is a real need to spread awareness to issues that often face negative stigmas and stereotypes, like homelessness,” Heath said. “Working to humanize an issue like this is just as valuable for a brand to invest in. Plus, it’s something any company can pursue, regardless of if they sell hard goods or not.”