Selling Socks And Saving 'Soles'

In this heartwarming and compelling exclusive Social Capital Q&A with David Heath, the eloquent and kind CEO of Bombas explains the nuts and bolts of how he’s leading the next generation of companies created to solve important human problems. And he’s not only helping to improve the lives of the homeless but helping millions of customers to find a deeper purpose in their own lives.

In November we honored David Heath as one of our Top 10 Social Capital CEOs for creating a capitalist solution to solving one of the most heartbreaking realities in America - hundreds of thousands of homeless cannot afford or find socks. He leveraged his entrepreneurial desire and spirit into fixing this problem over the long haul by creating a superior sock that sold like hotcakes. Along the way he found he wasn’t just helping to heal the homeless but to open the hearts of customers who found meaning and purpose in helping others. Now he’s ready to take that commitment to the next level.

Like with all our CEO Q and As, this is just the beginning of a series of ongoing articles and interactions with Heath who we hope will be sharing many more of his insights on how to do business right in today’s complicated and challenging environment where Social Capital is becoming more and more important.

Chris: Lauren and I are very excited to chat with you. We are really looking to reach out to CEOs and thought leaders who understand the value and the ability of capitalism to really make a difference by remembering the value of people. And really at the end of the day, it's about CEOs and thought leaders who see people as people, whether it be customers or employees or people in the community. We're realizing that the point and purpose of business and capitalism in general is to take care of people and, you know, to serve people. And we're in this weird space right now in time when I think a lot of people have come to this strange conclusion that capitalism is bad and can't work. And that it's all about greed and that anybody that runs a company is greedy. We don't believe it's true, but really the only way to show that is to recognize people in the space who are making a difference and really doing some important things, like you.So in November we had our article called the politics of empowerment. It coincided obviously with the election, but the whole idea of it was companies that are really making an extra special effort to empower everyday people. And you guys really stood out to us for two reasons. One, you're obviously trying to empower the homeless and help them, but you're also empowering everyday people to be able to make a difference in their economic choices and how they use those economic choices to do good. And that's going to obviously put them in a better space. So hats off to you for what you're doing. And we're, we're very excited about talking to you about it. So the first thing I wanted to just say is thank you because that is something that is important and we really appreciate it.

David: Awesome.

Chris: So what first brought the need for socks for the homeless to your attention?

David: So my journey originally started with this kind of burning desire to be an entrepreneur. My dad's an entrepreneur. I went to school for entrepreneurship. I was the kid in the neighborhood who had lemonade stands, walked dogs, cleaned gutters, whatever I could do for a buck. So when I graduated college, I think I walked through the world with my eyes open and my ear to the ground, always looking for opportunity, mostly driven from a business perspective. And, I had started a company early in my twenties and then sold it and then went to work for a bunch of startups and always kind of again, keeping my eyes out for my next big idea. I was scrolling on Facebook one day, and I came across this post from the Salvation Army that said most people don't know it, but socks are oftentimes the number one most requested clothing item in homeless shelters. And I sat there, and I was like, wow, that's pretty sad. Here's an item of clothing that I've never spent more than a few seconds a day thinking about that could be perceived as a luxury item for over 600,000 people living right here in the us.

I didn't do much with it other than shared it with some friends and one of my now co-founders, who was a coworker of mine at the time. And I was like, "Hey, did you know that socks are the most requested clothing item?" At first it seems surprising, and you'd think coats or jeans or whatever would be more important, but the more you start to think about it, you're like, yeah it’s a wear through item and members of the homeless community don't get to take their shoes off for fear that there'll be stolen or walking as their main mode of transportation. And you realize that if they constantly are wearing old worn through socks that they'll develop foot problems like blisters or fungus or sores, which will then prevent them or their ability to walk around. So this idea kind of just stuck with me for a little bit. This was in early 2011, and this up-and-coming shoe company called Toms was on the rise and had really pioneered this idea of a one-for-one business model, and this brand new company had just launched called Warby-Parker and, they were donating eyewear for every eyewear sold. I obviously followed entrepreneurship and the startup world and I saw what these two companies were doing. And that's kind of when I had my aha moment. I was like, I wonder if maybe we could solve this need in the homeless community by, you know, creating a company where we donate a pair of socks for every pair of socks that are sold. And that was really kind of the catalyst for my journey.

Chris: So basically you came from the space of wanting to have a company and the Toms model made you think that rather than a non-profit essentially you could solve a social problem with an economic solution? Did you do some more research on that in general? How did that evolve?

David: Yeah, so again, I think I was initially driven by a desire to start my own company. When I came across this quote on Facebook, my first reaction was that's sad, how do I do something about this? Then there was kind of this aha moment of saying like, oh, wow, I can marry the two things, my desire to start a company with the desire to solve the problem in the homeless community. I realized I could bring them together as I've seen in this great example of this fast growing shoe company that people are really resonating with this concept of a buy one, give one model. So from there I went out and validated the market as it were. I started carrying socks around with me in my bag to and from work, and I lived in New York City where you can have interactions with the homeless community on a daily and sometimes multiple times a day. So I started handing out socks to people that I saw on the streets, and I would always say, "Hey, I'm sorry I don't have any money, but how would you like a nice pair of socks?" And to see their reaction time and time again was, "How did you know that's what I needed?" And to see them take their shoes off and either not have socks on at all, or have holes in their shoes. Then this one guy specifically, I remember he had wrapped plastic bags around his feet because he didn't want them to rub in the boots that he had on. It was living those experiences where I was like, wow, I'm experiencing firsthand the real need and how premium of a product this is for this community. Then of course I was calling different homeless shelters, both in New York and across the country to say, "Hey, 'm thinking about starting a company. If I had some donation socks, can you accept them? How do I get them to you? How many can you take?" Overwhelmingly all the calls were, "Oh my God, we'll take whatever you can get us, you know, we're happy to have anything." So that was the next step in my journey. It validated the need in the homeless community.

And then I said, okay, well, if I'm going to donate a lot of socks, I'm going to need to sell a lot of socks. And if I need to sell a lot of socks, then going back to the business side of things, I've got to create a really good product, right? I've got to create a brand that resonates with people in a story and features and benefits that differentiate themselves from everything else in the market. So I spent a year and a half, and I didn't come from the manufacturing or retail or apparel side of the world. It was real grassroots, customer driven, customer centric driven mindset where me as the customer, let me go out into the world and see what products exist and how can I improve upon these products to address some of the needs I was looking for as a customer, so softer fabrics, arch support, comfort foot beds, getting rid of that annoying toe seam across the heel, developing a sock that wouldn't fall down a bunch of times throughout the day. A running sock that had a blister tab, and I took a lot of innovations and features and benefits that I've seen in really high-end, very niche focused, athletic socks, so socks for marathon runners or hikers or basketball players, and so on and so forth. I took those features and benefits and then basically put them into a much more consumer approachable mass market type of product.

Chris: So you need to think on these two tracks at the same time. What does the homeless person need? What does the consumer want that's going to distinguish this and make this different, because I've got to sell more? Did you learn something about the distinction of the product in the beginning that was an aha moment at all that really made this take off. Obviously you have taken off in a big way, and why you're doing it probably has a lot to do with it, but it's clear that people probably like the socks too. So, was there something that you hit on in particular that really made your socks special?

David: I think it was the idea of the sum of the parts being greater than the whole. I improved upon all of these individual features that again were really only found in either high performance athletic socks at a much more premium price point that was being marketed to a very niche endemic category, and I was taking them and figuring, hey, I think a mom who's on her feet chasing her kids around all day, or the firefighter who's on his feet all day, or the doctor on his feet all day or whatever, you pick anything, right. We're all on our feet all day. So it was trying to think about why does comfort and support and performance have to be reserved for a marathon runner? Everybody is on their feet in pursuit of their own passion. And everybody wants comfort and everybody wants support. So you know I was kind of originally just designing the product for what I was looking for. Then I shared it and put it out into the world. And it seemed like there were a lot of other people that resonated with that as well. And then obviously that tied into the mission component, right. I always say that a big part of the reason that we're successful is that we gave people a reason to talk about their socks. In any other situation, if somebody came over for a dinner party and said, "Hey, I'd like to tell you about my new socks." You'd think that person is slightly odd or weird. But if somebody came over and said, "Hey, did you know, socks are the most requested clothing in our homeless shelters? I discovered this company, that's giving a pair of socks to the homeless for every pair that they sell. And oh, by the way, they happen to be the best pair of socks I've ever put on my feet." That is a much more compelling story than, "Hey, can I tell you about my new comfortable pair of socks?" So it's the marriage of the two, and we've seen that play out over the history of the brand.

Where we've surveyed our customers, and we've said, why did you buy this, and the number one, and number two reasons are always product quality and, and mission, and they interchange depending on time of year and the types of marketing campaigns that we're running. So if we're running a really mission forward marketing campaign, call it our million pair or 10 million pair or 50 million pair campaign, a lot of people will say, oh, the reason I bought the product is because of the mission, and I also love the product quality. But if we're introducing our new performance running sock or a compression sock, we'll say, Here's all the features and benefits, and by the way, we donate a pair for every pair that we sell, people will say they came in because of the product quality and comfort and features and benefits, and their second reason to support the purchase was because of the mission. So they always had this weird duality to the way that they play with each other. That's given us an incredible amount of freedom. But I think also differentiation in the way that our tool set as it were to talk to our customers is much broader than most companies.

So I think about when COVID first hit, this was probably one of the best examples of this. If you remember early in March, when nobody really had a sense of what was going on, and if you looked at your inbox, you'd read something like, "New Spring Florals," and you'd be like, what? I don't know where I'm getting toilet paper, why is Lululemon emailing me about the new yoga pants they've just released? Or why am I getting something from J. Crew about Spring styles. You're like this is the last thing on my mind. We kind of sensed that. So all of our emails that we basically lined up months in advance around product releases and everything else, we pivoted away from all that garbage and committed for at least the month to only delivering mission-based, email copy, which was more about, hey, this is what's going on in the homeless community. You know, let us advocate for the homeless community and use our microphone to speak to our customers about the ways in which we are responding to the COVID crisis, not by asking our customers to purchase more product from us, but to say, we just delivered 40,000 pairs of compression socks to frontline medical workers in the homeless community. Often those with the least suffer the most in times of crises. So here's active, homeless organizations that are still actively going out and getting food and supplies and PPE to the people who are living on the streets. And we saw some of the highest open rates that we've ever had in our emails, up to 65, 70% open rates. While most of the world is sending an email about what new product to buy, we're talking about what we're doing out in the community. That's having that ability in our arsenal to basically talk to our customers about something different than buying product. I think it was a real brand moment and differentiator for us.

Chris: That's awesome. You answered two or three of my questions at the same time, but I love what you just said because we did an article all about meaning over marketing , and it was all about a lot of these people that were sending out these emails that may have even claimed you know, we support you in the fight against COVID, but by the way, here's our new product. What is that about? So I was unaware of your marketing messaging and what you've done, but I'm glad to hear that. It actually brings up another question, which is how people in general responded to your mission, not just in the sales, but do you get a lot of feedback from people from customers because of the mission and what did they say?

David: Yeah, I think a tremendous amount. You can just go on our Instagram or Twitter, and anything that is mission-related, you'll see has super, super high engagement, you know, people saying, thank you for doing what you're doing. This is one of the reasons I buy Bombas. I didn't know this about X, Y, Z organization. And I think that we're still very much in the early days of what we can do with that type of content and personalization, and then ultimately activation. So as a company, we donated over 10,000 hours of volunteer time. For us, it's really important to not only talk the talk, but walk the walk. And back when we were in a physical world, we had between 15 and 20 giving events that employees could sign up for every month. And the second sign-up sheet would go within an hour. It was fully booked, which really speaks to the commitment that our employees have to wanting to be involved in something that is bigger than them, or has greater meaning to them.

But I have these aspirations as we continue to get larger about ways in which we can get our customers involved in those types of things where once we have more resources and more of a foundation built, we can dedicate more of our team's time, our giving teams time to identifying specific partner organizations and major hubs of cities where we feel we've got a large densely customer base, or we could say maybe we can bring 10 customers out every month to volunteer at a soup kitchen where we donate product, or do a midnight run with this type of organization.

And one of the steps that we've made towards that is we've created what's called our giving directory, which is basically like a store locator, but for homeless shelters that we participate in, so you can enter your zip code and it'll show the closest giving partners that we have, if you want to do a more proactive outreach and get involved. What I'm hoping to do is eventually link that to the kind of post-purchase email flow, such that, when somebody purchases a product, it takes their zip code, puts it into the giving directory, and then a custom email comes back to them that says, by the way Josie's corner is 50 miles from you and is one of Bombas' giving partners. This is what they do in the community to close the loop for the customer to say, wow, my purchase that I just made actually has a direct impact in a community, and that it's actually not far away from me. Maybe that'll inspire you to go get more involved in giving back to your local community.

So I think we're really just scratching the surface of things that we can do. Again, to go back to the COVID example, because we have over the last seven years built a network of 3,500 giving partners, and we had companies coming to us that had cleaning products or bed sheets, or extra clothes and said, hey, we want to be able to do our part, we want to be able to help out, we've got all this extra product, we don't even know where to begin to get it to local communities.And they reached out to us because they knew that we obviously distributed socks across the country. And then we were able to connect I think like 30 or so different partners with different organizations to help get other products to those in need, which is kind of a unique thing, right? This wasn't something that we'd ever built with the intent of using it as a supply chain or a broker of sorts to get other products to other organizations from other organizations. And here we were seen as an expert. So again, I think we can build upon that, as we continue to grow the company.

Chris: David, I love the fact that you keep answering my questions before I ask them. That's a journalist's dream. That whole concept of where do you go next with this and what are your plans for the future was what I was going to address. And those are some amazing ideas and thoughts. I had one more question about that giving network: Do you do follow ups in any way, shape or form with people that actually do look up giving network partners?

David: We don't have a way of tracking that today. But we hope to as we get bigger and have more capital to invest in technology, An interesting part about running a social good company is that you're also running a company, right? It's not a nonprofit where all of your energy and priorities and resources can be dedicated just to helping those in need. It's this circular machine that you need to make sure that this side continues to grow and as the infrastructure in order to feed the other side. So it's a unique balance that we deal with. So when we look at road mapping technology resources for the next three years, we say, okay, well obviously we need to build technology for our website and for our warehouse and for our shipping and for our customer service and for all of these other core business functions, but then to say, let's also make sure that we dedicate resources to the giving side of our business to help encourage that flywheel.

Chris: How difficult is that for you balancing those two? Like you said, this is kind of a new concept, right? These companies like Toms and yours have only been around for 10 or 20 years. So that to try to juggle these two completely different cycles must be tough, or it is more coincident than one might think? Has it become easy for you now, or is it still kind of a challenge?

David: I think at this size and scale, it kind of naturally happens. It's so ingrained in what we do it's not an afterthought for us. It's just part of the business. So when we sit down and plan, we plan the department and the department's needs and resources like any other department and we get the inputs and we look at the goals and objectives that we want to accomplish over the next few years. And we start to just build that into the three-year roadmap. So I think it happens naturally, I think certainly when we talk about budgeting, we always have to say there's this component of our business that is a cost center, and it doesn't have trackable ROI, but we know how important it is and key it is to the brand. So the harder part is deciding how much to invest and dedicate resources to that team when you can't quantify the output. I mean, obviously you can quantify the giving output and the impact that we have in the community. But when you're running a business, you always want to tie that back to, OK, is every dollar that I'm spending an effective use of that dollar?

Chris: Yeah, and so have you come up with methods or ideas to gauge that , or is it just kind of a feel-it-as-you-go kind of thing as far as how much effort to give that side or how much to put on that?

David: I think we feel it as we go. I mean, we're so close to it that it feels intuitive. I think we're always sitting here saying we'd love to do more. Like it's an exciting part of the business where, you know it also feels good. And I think everybody internally and externally gets really motivated when we do kind of big things around our mission, but it is a balance that we know as capital stewards that we need to make sure that we work through.

Chris: David, I would love to wrap up by saying you are an incredible communicator, and you occupy a very important space, not just for Social Capital and what we're doing, but for the economy in general, and for this concept of for-profit solutions. So we really look forward to sharing many more of your thoughts with our readers in the future.

David: Thank you guys. I appreciate you.