Bombas: From Shark Tank to over a BILLION in sales (with founders David Heath & Randy Goldberg)

1. 0:00 – 2:17

   When Bombas appeared on Shark Tank

   1. DHDavid Heath0:00

      Every step along the way, including the day that you are filming in front of the sharks, they are like, "Just because you are here filming in front of the sharks, and just because you get a deal, does not necessarily mean that you are gonna air."

   2. SPSpeaker0:13

      That's David Heath on getting picked for the hit TV show, Shark Tank, with his then nascent sock company, Bombas. And here's his business partner, Randy Goldberg.

   3. DHDavid Heath0:22

      They give you no guarantees. If, if we call you, and you do all the work, you may not film. If you film, you may not air. So, like, you cannot bank at any moment until they call you and say, "Two weeks out, your episode is gonna air-

   4. SPSpeaker0:39

      Wow

   5. DHDavid Heath0:40

      ... you have to act like business as usual."

   6. SPSpeaker0:42

      They did get the call though, and they held a watch party for their episode.

   7. DHDavid Heath0:47

      So the moment comes, we're elated. We have friends and family around. We have a team in place. We think we're ready. The, the episode begins, and then we're watching it. By the way, watching yourself on TV, you know, when they're trying to make it look dramatic and you're sweating, it, it's not the most comfortable-

   8. SPSpeaker1:06

      Yeah

   9. DHDavid Heath1:06

      ... ex- you know. And then you start to get the calls, and the calls say, "The site is down."

   10. SPSpeaker1:11

       Oh.

   11. DHDavid Heath1:11

       It's the last thing you wanna hear in the biggest moment in the history of your company-

   12. SPSpeaker1:15

       Right

   13. DHDavid Heath1:15

       ... that you've spent all... You're pouring everything into this process to get this thing on the air to, like, be on national TV, and then the site is down, and you feel, you just feel like you blew it.

   14. SPSpeaker1:28

       Despite that rocky takeoff, Shark Tank helped launch Bombas into hyper-speed. The mission-driven company donates a pair of socks for every pair sold. That's led to more than 140 million donations so far.

   15. DHDavid Heath1:43

       This is Masters of Scale.

   16. SPSpeaker1:46

       I'm your host, Jeff Berman. David Heath and Randy Goldberg are two of the co-founders of Bombas. Their story is full of lessons about how to design a product that stands out and scale not just your profits, but your community impact. Uh, David and Randy, welcome to Masters of Scale.

   17. DHDavid Heath2:04

       Thank you for having us. Thank you.

   18. SPSpeaker2:05

       Um-

   19. DHDavid Heath2:05

       Excited to be here

   20. SPSpeaker2:06

       ... I'm, I'm thrilled to have you. A longtime wearer, first-time conversation. Um-

   21. DHDavid Heath2:11

       And this is longtime listener, first-time conversation, so.

   22. SPSpeaker2:14

       Yeah, there we go.

   23. DHDavid Heath2:15

       Yeah.

   24. SPSpeaker2:15

       Uh, so, um,

2. 2:17 – 4:46

   The inspiration behind Bombas

   1. SPSpeaker2:17

      why socks?

   2. DHDavid Heath2:18

      Uh, Randy and I were working together at a media company, and I was scrolling on Facebook, as one does back in 2011, and I came across a post from the Salvation Army that said socks are the number one most requested clothing item at homeless shelters. And it kinda stopped me in my tracks where I was like, "Wow, here's an item of clothing that I don't spend more than a few seconds a day thinking about, and yet this is being perceived as, like, a luxury item for 600,000 people living here in the U.S. and even more globally." And I remember kind of thinking like, "That's pretty sad." And I walked over to Randy's desk and I was like, "Did you know this fact?" And obviously he hadn't, and I watched a similar reaction. And- The reason socks are such an issue is because most organizations and shelters don't accept used sock or underwear donations. Mm. And if you're sleeping on the street- For hygiene reasons, obviously.

   3. SPSpeaker3:09

      Even for socks?

   4. DHDavid Heath3:10

      For socks, yeah. Yeah.

   5. SPSpeaker3:10

      Huh.

   6. DHDavid Heath3:11

      I mean, foot hygiene is a big issue-

   7. SPSpeaker3:12

      Yeah

   8. DHDavid Heath3:12

      ... if you're sleeping on the street. A fresh pair of socks means a lot. Potentially you're walking more or you don't wanna take your shoes off at night. Uh, uh, you're afraid they're gonna get stolen. Like, all sorts of foot issues come up, and this is what we heard, and then we would, we talked to organizations and they said, "We have to buy socks- Mm ... and our budgets are strapped as it is." We kinda draw the, drew the connection to Tom's Shoes and, like, the mass... I mean, at that time, I think they're in their fifth year of business, doing a couple hundred million of revenue, uh, really pioneered that buy one, give one model, um, in December of 2010. So at the time we were like, "Well, why don't we see if we can, you know, create a fun little sock company," didn't really think it would be much, "that could give, you know, a pair of socks to the homeless community for every pair that we sold?" Um, and that was kind of the, you know, the spark of the idea.

   9. SPSpeaker4:01

      But th- this was before it was relatively easy to start an apparel company where, you know, a lot of the sort of logistics problems are solved, uh, you know, manufacturing, et cetera. I mean-

   10. DHDavid Heath4:12

       E-commerce.

   11. SPSpeaker4:12

       E- e-commerce, right. I mean-

   12. DHDavid Heath4:14

       And the technology was prohibitively expensive at the time. But what's interesting is if you could afford e-commerce at that moment, and you could afford to build a site, the marketing was basically free. Now that's totally flipped, right? The marketing-

   13. SPSpeaker4:28

       Bec- because, because the social landscape was less crowded because-

   14. DHDavid Heath4:31

       It was. The algorithm-

   15. SPSpeaker4:32

       ... they weren't charging-

   16. DHDavid Heath4:32

       Right

   17. SPSpeaker4:32

       ... for like, you know, I don't think Facebook-

   18. DHDavid Heath4:34

       Whatever you posted, all your followers would see it. Right.

   19. SPSpeaker4:37

       Right.

   20. DHDavid Heath4:37

       I, I mean- Facebook ad platform barely existed at the time.

   21. SPSpeaker4:40

       Before we get to marketing and how you solve that, you have to have a product to sell.

   22. DHDavid Heath4:44

       Yes. Yes.

   23. SPSpeaker4:44

       So-

   24. DHDavid Heath4:45

       Important

   25. SPSpeaker4:45

       ...

3. 4:46 – 7:35

   Discovering the value of high-quality socks

   1. SPSpeaker4:46

      uh, you become obsessed with socks. Great. Cool. Like, you know, the internet exists. You can do some research. But h- how do you, how do you even figure out how to start manufacturing socks? How, like, how do you figure that out?

   2. DHDavid Heath4:56

      We knew that we wanted to donate a lot, right? And given the model, we then realized, okay, in order to donate a lot, we had to sell a lot. In order to sell a lot, what product, like, white space were we gonna fill that was differentiated from what we were seeing out in the marketplace? And I think when we looked at the marketplace, we realized very quickly 85% of all sock sales were dominated by the low-cost, low-quality commodity-type brands. Think of 12 pairs of white socks in a plastic bag you're gonna get at Costco, Target, Walmart, TJ Maxx, whatever. And then the other 15% was this hyper-niche athletic performance-focused categories by brands that were super small but focused on running, cycling, basketball, skiing, you know, you name it, right? Hyper-focused. We, we went down to the local sporting goods store here in New York City, Paragon, and we looked at the wall of socks, and we were like, "What differentiates an $18 pair of socks from the sub $1 a pair that you're gonna get in this plastic bag?" And the more and more we started to test the product and wear it, we were like, "Whoa, there's actually a tremendous amount." As you might imagine, right, if someone's running a marathon, right?

   3. DHDavid Heath6:07

      They can't have blisters. They've gotta regulate their temperature. Like, it's gotta be super cushiony, have the support in all the right places. And that's where, like, the second, like, aha moment came, where we're like, "Why do athletes, you know, why should they be the only ones who are feeling comfortable and supported?" And having zero experience in the apparel manufacturing retail world outside of, you know, a three-month stint I had at The Gap when I was 14, um-

   4. DHDavid Heath6:35

      That's a great sales job

   5. DHDavid Heath6:35

      ... doesn't qualify me.

   6. DHDavid Heath6:37

      You, you learned how to fold a T-shirt.

   7. DHDavid Heath6:38

      Yeah, [laughs] I did.

   8. DHDavid Heath6:39

      Yeah.

   9. DHDavid Heath6:39

      A lot of T-shirts-

   10. DHDavid Heath6:40

       Yeah

   11. DHDavid Heath6:40

       ... which is ultimately why I quit. Um, you know, I remember telling my dad over dinner one night, I was like, "I have this idea for this sock company." And he was like, "Funny enough, your godfather was in the sock business." Turns out he was the president and CEO of a company called Gold Toe. Like-

   12. DHDavid Heath6:57

       Sure.

   13. DHDavid Heath6:57

       Yeah.

   14. DHDavid Heath6:57

       Yeah.

   15. DHDavid Heath6:57

       I mean, most people know it's the one with the little gold toe over the sock. Um, he was that in the late '80s, early '90s, and then started a private label sock manufacturing company, which he grew to, like, you know, a couple hundred million in revenue, and he had brands like Tommy Hilfiger, Calvin Klein. He was doing all the socks for the big, um, you know, department store brands that, you know, they weren't... They just licensed that product out. So we sat, we, we met with him and he was like, "Tell me what you wanna make and I will help connect you to the best factories in the world." And so that was a... certainly one of those, like, luck moments, right? Where-

4. 7:35 – 9:36

   Overcoming skepticism from industry experts

   1. DHDavid Heath7:35

      Well, let's also be honest. He-

   2. SPSpeaker7:36

      Yeah

   3. DHDavid Heath7:36

      ... he said, "Don't do it." [laughs]

   4. DHDavid Heath7:39

      Yeah.

   5. SPSpeaker7:39

      Why?

   6. DHDavid Heath7:40

      He said, "You know, you're looking to do something... Nobody wants good socks. They want cheap socks. They're sold by the dozen, pennies per dozen. Like, you're talking about all these high-end features and bringing these niche ideas into a mass product." He's like, "Eh..." You know, he was jaded by years of experience and, you know, he s- he, he's the first of many people, let's be honest, who told us, "Don't do it." But we said, "All right. Make the introduction. Like, we hear you, Steve, but, [laughs] you know, respectfully, we're excited about this."

   7. SPSpeaker8:13

      Well, what, what kept you going in the face of someone so experienced saying, "This is a terrible idea"?

   8. DHDavid Heath8:19

      I mean, I, I think it's just the entrepreneurial drive, right? Like, I... We, we were, I think, more motivated by creating something, and we had this mission underlying, too, which I think was, you know, a big fac- We were like, "This is... If we get this right, this could actually help a lot of people."

   9. DHDavid Heath8:37

      And we didn't have much to lose at the time either, you know?

   10. SPSpeaker8:39

       Yeah. It was a, it was a trust your gut, we feel this, we're gonna keep going.

   11. DHDavid Heath8:42

       Yeah, this, this wasn't something that we were like, "Oh my God, we need to quit our jobs tomorrow and raise $50 million to go..." Like, we, we were like, "We can go at this at a snail's pace and, you know, if it turns into something, it turns into something. And if it's not, then it's a fun project that, you know, I get to work on with one of my best friends and, you know, see where it goes."

   12. SPSpeaker9:01

       So what was the inflection point from the, the godfather saying, "Don't do it. You're gonna regret it," to, to getting to the starting line to actually having a product in market?

   13. DHDavid Heath9:11

       It, it took two years-

   14. SPSpeaker9:13

       Yeah

   15. DHDavid Heath9:13

       ... because we were obsessed. And tests, for example, 137 different tension levels on a calf sock so it would stay up and not fall down but wouldn't leave a mark on your leg. We just got really into the details, and we knew at that point that putting on a good pair of socks could change the way you felt for the day.

   16. SPSpeaker9:30

       Mm-hmm. You'd bootstrap this. You're spending your own money. You-

   17. DHDavid Heath9:34

       Ba- yeah, barely any.

   18. SPSpeaker9:35

       Yeah.

   19. DHDavid Heath9:35

       I mean,

5. 9:36 – 12:36

   Testing the market through crowdfunding

   1. DHDavid Heath9:36

      you know.

   2. SPSpeaker9:36

      And so when you get that sock where the tension level is right-

   3. DHDavid Heath9:40

      Yeah

   4. SPSpeaker9:40

      ... and the padding is right and the feel is right, and you're like, "Okay. We've, we've, we've got this good enough. We're ready to go," what, what happens then? How, how do you actually get the product in market?

   5. DHDavid Heath9:52

      So we knew that we wanted to be a digital brand.

   6. SPSpeaker9:55

      Mm-hmm.

   7. DHDavid Heath9:55

      Um, and we knew that we wanted to try to do it, you know, get some validation in market in the most capital efficient type of way. And 10 years ago, um, maybe a little bit longer, 12 years ago, um, it was kind of at, like, the high point of, of crowdfunding.

   8. SPSpeaker10:13

      Mm-hmm.

   9. DHDavid Heath10:14

      Right? Like, everyone's, "Oh, wow, there's this new model. You can go on Kickstarter or Indiegogo. You can put up a three-minute video, and people may or may not buy your product sight unseen, but there's no commitment to making it unless you hit a certain milestone." And we were like, "We're good storytellers." We knew that. Um, and so we were like, "Why don't we put this out into the world, see if we can tell our story, and see if people will care within a pretty low risk?" I think it cost us, like, $4,000 to produce a video-

   10. DHDavid Heath10:46

       Yeah

   11. DHDavid Heath10:46

       ... um, at the time.

   12. DHDavid Heath10:47

       Low risk, yep.

   13. DHDavid Heath10:47

       We hired a couple NYU film students. Um, and, uh, yeah, we launched this Indiegogo campaign, and I think we had a goal of $15,000, um-

   14. DHDavid Heath10:57

       In 30 days

   15. DHDavid Heath10:58

       ... 30 days. Uh, we did over $20,000 in our first day.

   16. SPSpeaker11:01

       Amazing.

   17. DHDavid Heath11:02

       Uh, $150,000 in our first 30 days, and I think at that moment we were like, "Okay," like, "Way, way, way more, you know, people seem to be interested in this than, than we thought." Um-

   18. SPSpeaker11:16

       Was that terrifying on some level? Or was that-

   19. DHDavid Heath11:18

       No

   20. SPSpeaker11:19

       ... fully-

   21. DHDavid Heath11:19

       No, it was exciting

   22. SPSpeaker11:19

       ... that was fuel?

   23. DHDavid Heath11:20

       I mean, we'd been working on this for a long time.

   24. SPSpeaker11:21

       Yeah.

   25. DHDavid Heath11:22

       It was valid. Uh, what would've been terrifying is if we had actually just, just hit our goal and we had to manufacture for $15,000 worth of socks, and it didn't feel like a win, and we w- You know, this felt like a very big vote of confidence.

   26. DHDavid Heath11:36

       I think another part of our, like, product validation story that I think gave us a lot of confidence in the product that we were actually producing, you know, Randy and I, we would, like, go to our local gym and, you know, we'd be that weird, like, sock guy at the gym that would like-

   27. DHDavid Heath11:51

       Very weird

   28. DHDavid Heath11:52

       ... interrupt people's workouts. We'd be like, "Hey, take your headphones out. I saw you wearing these Nike socks. Can I give you a pair of these? Tell me what you think." And they're like, "All right, bro." But then the next day they'd come back up to you and they're like, "Yo, those things are amazing. Where can I get more?"

   29. SPSpeaker12:06

       Hmm.

   30. DHDavid Heath12:06

       And you're like, "That's a validating proof point that the product..." This, this guy doesn't owe me anything. He doesn't know me, but he wants more of this product now that I've given it to him. So I think-
6. 12:36 – 16:06

   Preparing for Shark Tank

   1. SPSpeaker12:36

      at some point, Shark Tank comes into the picture. Why Shark Tank?

   2. DHDavid Heath12:40

      We got an email from Shark Tank, um, that said, "Hey, do you wanna try out for Shark Tank?" And-

   3. SPSpeaker12:45

      They discovered you through Indiegogo.

   4. DHDavid Heath12:47

      They saw-

   5. SPSpeaker12:47

      Yeah. Yeah.

   6. DHDavid Heath12:47

      They actually-

   7. SPSpeaker12:48

      Sorry

   8. DHDavid Heath12:48

      ... send you an email fr- it was like a producer who had a Gmail unrelated to the show. We thought it was a prank-

   9. SPSpeaker12:54

      Sure

   10. DHDavid Heath12:54

       ... at first.

   11. SPSpeaker12:55

       Yeah.

   12. DHDavid Heath12:55

       And, you know-

   13. SPSpeaker12:56

       It's like sharktankcasting13-

   14. DHDavid Heath12:58

       [laughs]

   15. SPSpeaker12:58

       ... 278@gmail.com.

   16. DHDavid Heath13:00

       [laughs] We're like, "Okay."

   17. SPSpeaker13:01

       You're like, "I'm waiting for this person to ask me for my banking information."

   18. DHDavid Heath13:04

       Right. Right. Right. Right. Right. Nigeria's calling.

   19. SPSpeaker13:05

       Nigeria and France.

   20. DHDavid Heath13:06

       Yeah.

   21. SPSpeaker13:06

       Yeah.

   22. DHDavid Heath13:07

       Yeah.

   23. SPSpeaker13:07

       Right. So, so you get the email, you validate that it's actually Shark Tank, you come out to LA, and you get on set, and what happens?

   24. DHDavid Heath13:16

       It, it's a pretty wild process. I mean, the legal alone is daunting. But for us, once we decided that we wanted to do it and that we thought that it would be good for us and good for our brand, um, we treated it like a full-time job. And it's a v- actually a pretty good process for a young business to go through because they don't tell you what they're gonna ask you. They can ask you any question about your business on national television, and you have to have an, a good answer prepared. So we knew we had to sit down and answer every question that we were maybe avoiding answering at that time about our business, and then we just did all the research. We looked at every single episode. We compiled a list of questions. I mean, we treated it like w- we were gonna win Shark Tank.

   25. SPSpeaker13:59

       Yeah.

   26. DHDavid Heath13:59

       Like it was a game show.

   27. SPSpeaker14:00

       Yeah.

   28. DHDavid Heath14:00

       And, like, the, the prize was not embarrassing yourself on national TV.

   29. SPSpeaker14:04

       Did you think you would actually raise money, or did you think of it more as a, "This is incredible marketing exposure for us, and if we raise money, fine"?

   30. DHDavid Heath14:10

       I think we were looking for both.
7. 16:06 – 16:58

   Managing sales and inventory post-Shark Tank

   1. DHDavid Heath16:06

      had.

   2. SPSpeaker16:06

      So how did you end up solving the inventory problem? I mean, this is incredible demand, but it's not, it's not linear. It's not consistent, so-

   3. DHDavid Heath16:12

      You know, at the time-

   4. SPSpeaker16:13

      Yeah

   5. DHDavid Heath16:13

      ... you think these things are gonna sink you. Your site crashes in the mo- biggest moment for your company, and you think, "We blew it."

   6. SPSpeaker16:20

      Yeah.

   7. DHDavid Heath16:20

      You know? You run out of inventory, you think, "We blew it." But you work your way through everything, like, like every other problem. And we had to get smarter about inventory planning. Raising money was a part of that, you know, having funding to be able to buy more product. Also, having a strategy of our product early on where everything was sort of core-

   8. SPSpeaker16:38

      Mm-hmm

   9. DHDavid Heath16:38

      ... and we weren't yet designing seasonal product-

   10. SPSpeaker16:40

       Yeah

   11. DHDavid Heath16:41

       ... allowed us to buy more inventory. If we could afford it, we could buy it, and we knew we could sell it. If one color sold out, we were pretty good at selling the next color. It's kind of a low-risk product in socks. So there was a lot working in our favor that we didn't know when we entered the category-

   12. SPSpeaker16:55

       Yeah

   13. DHDavid Heath16:55

       ... but it really helped us with that piece of it.

8. 16:58 – 20:53

   Building a nationwide network of giving partners

   1. SPSpeaker16:58

      You all had to figure out distribution two times because you're distributing to your customer who's purchasing the product, but you're also distributing to customers to whom you're donating the product. So can you talk about h- how, how you all developed those systems and, and made that work?

   2. DHDavid Heath17:13

      Yeah. I mean, uh, listen, when we first started, the i- we had the idea and we said, "Okay, we've gotta make the best socks in the history of feet so that we can donate as many products as we possibly can," and we set a goal to donate a million pairs of socks in 10 years, and we're over 140 million items donated. But in the beginning, we didn't even know... We, the way, we didn't know how to make a sock. We didn't know how to donate a sock either.

   3. SPSpeaker17:38

      Mm-hmm.

   4. DHDavid Heath17:39

      The making part we figured out, and it took us a couple years. The donating part, I mean, listen, we just Googled it. [laughs] Uh, uh, that was our strategy. Like, this was the beginning of w- who's donating socks? We found a organization in Ohio called Hannah Socks, still one of our giving partners. It was started by a girl, I think she was seven at the time-

   5. SPSpeaker17:59

      Mm

   6. DHDavid Heath17:59

      ... and she was serving dinner at Thanksgiving at a homeless shelter, and she saw somebody who was wearing tinfoil around his feet.

   7. SPSpeaker18:05

      Mm.

   8. DHDavid Heath18:05

      And she asked her mother, "What, why is that man wearing that?" I mean, she's seven, right? So she started, uh, an organization where she's donating socks to shelters in her local area. We called this organization- And in the same way that we kind of thought, you know, Shark Tank was a prank, they were like, "Wait, you just wanna give us-

   9. SPSpeaker18:26

      Right

   10. DHDavid Heath18:26

       ... all the socks?"

   11. SPSpeaker18:28

       Right.

   12. DHDavid Heath18:28

       And we were like, "Yes. Can you take them, please?"

   13. SPSpeaker18:30

       Yeah.

   14. DHDavid Heath18:30

       And that was our first giving partner, and we would send them socks when we, when we made sales. We would... We created a schedule. We'd send them product. And eventually we started talking about the needs of the community and how we could change the product to, I don't know, make them more-

   15. SPSpeaker18:50

       Technical

   16. DHDavid Heath18:50

       ... technical and specific-

   17. SPSpeaker18:52

       Mm-hmm

   18. DHDavid Heath18:52

       ... to serve the needs of people facing homelessness.

   19. SPSpeaker18:54

       What, what are the different needs?

   20. DHDavid Heath18:55

       So we add an antimicrobial treatment-

   21. SPSpeaker18:58

       Mm-hmm

   22. DHDavid Heath18:58

       ... to prevent the growth of fungus.

   23. SPSpeaker19:00

       Mm-hmm.

   24. DHDavid Heath19:00

       We use darker colors to show less visible wear, and we reinforce the seam. So on our core socks for our s- for our paying customers, we tend to use a seamless toe, um, which is really light, but less durable over time than reinforcing the seam. So things like that. The same base yarns. We're just-- We're trying to make really smart products for our non-paying customers and do research, market research, having conversations with that, with that customer the same way we do with our paying customers. So we adjusted and adapted those products over time based on the conversations we're having with this organization, and then we started to add more organizations. And eventually we said, "Our customers are in all 50 states. We need to be donating in all 50 states." So we went on, you know, we started to add giving partners everywhere across the country, and then we started to let people apply to be a giving partner. And organically, over the years, we've built up an infrastructure of giving, and we have a pretty advanced network of 4,000 partners across all 50 states, and our same fulfillment partner that we send to our customers is sending product to our giving partners in the shelters all over the country. And we have this logistical expertise that we've built up for donating product as just a natural extension of how we've run the business.

   25. SPSpeaker20:23

       Wow. And how many socks donated to date?

   26. DHDavid Heath20:26

       140 million items. So that includes socks, underwear, slippers, and T-shirts-

   27. SPSpeaker20:30

       Right

   28. DHDavid Heath20:30

       ... and footwear.

   29. SPSpeaker20:30

       Socks is the bulk of it, but yeah. The last three years we've introduced other products.

   30. DHDavid Heath20:35

       Yeah.
9. 20:53 – 23:31

   Prioritizing core values as you scale

   1. SPSpeaker20:53

      the challenges that we talk about a lot is especially in the, um, um, kind of the gravel road phase. You start out at dirt road and hopefully you get to, to a paved road-

   2. DHDavid Heath21:02

      Love the analogy

   3. SPSpeaker21:02

      ... but in that grav- gravel road phase is, you know, companies literally create, you call them departments, but they call them divisions in a lot of companies. It's kind of a terrible word for it, right? Like-

   4. DHDavid Heath21:10

      Yeah, it's a great point

   5. SPSpeaker21:11

      ... right. So and, and, and managing like culture consistency, keeping those values front of mind is really hard in that phase. You all seem to have done an incredible job of that with your values deeply infused in your company. As you've scaled, how, how have you kept that front and center for your team?

   6. DHDavid Heath21:26

      Well, I think we t- we talk about it and prioritize it, and by forcing ourselves to stand up and check in on it, it's been... You know, we don't always get it right either. We survey the company every year and ask how we're doing on these things. We work on the areas where we need to improve. We have to shift and be honest about that we're not 15 people in, sitting around one table anymore, and you have to adapt things, but you have to kind of have to decide what those core values are, like Dave was talking about, right? What are the things that you're just unwilling to compromise on? How do those shift over time, and what makes sense for a company at your scale? What can you actually do? How do you serve the good of the company and make people... You know, it's the balance of having people come to you a little bit with the things that you believe in and also listening to where people are and what the world looks like and how people want a company to serve them in their careers and finding that balance and being open with people and listening. It's not rocket science, right? It's just making sure that it's an important thing that you talk about. And we sit around at our executive meetings and we talk about these things.

   7. SPSpeaker22:29

      I'll also say from day one, our core values have been a lar- It's 75% of our interview process.

   8. DHDavid Heath22:37

      Mm-hmm.

   9. SPSpeaker22:37

      Like every person who's interviewed is given a core value to test the person against.

   10. DHDavid Heath22:41

       Mm-hmm.

   11. SPSpeaker22:41

       And so it becomes this filter of people.

   12. DHDavid Heath22:45

       Mm.

   13. SPSpeaker22:45

       Um, I think naturally our brand and what we stand for attracts a certain type of person.

   14. DHDavid Heath22:51

       Yeah.

   15. SPSpeaker22:51

       But then this becomes the, you know, the filter by which we say, are, is, are these people legitimately here because they wanna be a part? Everybody shows up saying, "Oh, I wanna give back." But the people that we have working for us, like they, they all participate in volunteer activities every single month and, and part of the work that they're doing, they see the value, you know, end to end of how their work contributes to actually helping people, you know. So, so this has become this kind of filtering mechanism that has in- inevitably built this very like-minded community of people who, similar to the four co-founders, share the same values and the types of places that they wanna

10. 23:31 – 27:30

    Expanding beyond socks cautiously

    1. SPSpeaker23:31

       work.

    2. DHDavid Heath23:31

       You did expand beyond socks. Um, uh, not always easy for companies that are in a single product line, maybe multiple SKUs, but single product line to expand. Um, how did you make that decision?

    3. SPSpeaker23:45

       I think it was a series of a number of bad decisions leading up to that decision. I think-

    4. DHDavid Heath23:50

       Our heart was in the right place.

    5. SPSpeaker23:51

       Yeah. I think, you know, in year three we had done $5 million in sales and I remember, you know, talking to one of our, our mentors and we were like, "We're on top of the... We're unstoppable." We went from like a million to two million to five million and we're like, "Oh my God, this is unstoppable."

    6. DHDavid Heath24:07

       [laughs]

    7. SPSpeaker24:08

       "We're gonna start producing underwear and sweatpants and sweatshirts." And they were like, "Look at the best, most of the best brands stuck with one product." The Nike started with s- running sneakers, Under Armour started with base layers, Lulu with yoga pants. Most of these brands became hundred plus million dollar brands before they ever expanded into other product category. And they're like, "If you're-

    8. DHDavid Heath24:32

       Core product is growing at like three hundred percent year over year. Why are you gonna add complexity to your business? Stay focused.

    9. SPSpeaker24:39

       Yeah.

    10. DHDavid Heath24:39

        Just you've so much demand there. Wait till you start to see that demand dwindle before you would add anything additional. That was great advice. So fast-forward year five, hundred million of revenue. We're like, "Oh my God, we're even more unstoppable than we thought," and we started very rapidly, you know, making other product, underwear, T-shirts, sweatpants, sweatshirts. Um, and we had made the product 'cause we were like, "Well, of course, people love our brand. They love what we do. We kind of... If we make it, they'll buy it," type of thing. And so we went through this process and, you know, we produced sweatpants, sweatshirts ear- you know, first. Um, we were... Underwear development takes a lot longer. It's much more complicated of a product. Uh, we end up launching this product, and we hadn't thought through things like, well, what are we gonna donate, and how are we gonna talk about... You know, s- sweatpants and sweatshirts aren't even, like, number ten on the most requested items, so we're like, "How do we talk..." We were like, we just ran so fast-

    11. SPSpeaker25:45

        Yeah

    12. DHDavid Heath25:45

        ... uh, to just make something. We were like, this is adding complexity to the warehouse and all this other stuff. And so we made the hard decision. We're like, "Look, we've already made it. We'll sell it, and then we're gonna pull it, and we're just gonna go back to focusing on socks." We had one season-

    13. SPSpeaker26:00

        Wow

    14. DHDavid Heath26:01

        ... where we sold un- uh, sweatpants and sweatshirts, uh, and then we didn't end up launching underwear until year eight.

    15. SPSpeaker26:07

        Wow.

    16. DHDavid Heath26:08

        Um, so you know, and I think by that point we were two hundred and seventy-five million of top line in socks. Uh, and we were like, "Okay, we now feel comfortable to start planting the seeds and intentionally keeping those businesses small to begin with and not trying to make them twenty percent of the business on day one." We were like, "It's gonna be two percent of the business."

    17. SPSpeaker26:32

        Yeah.

    18. DHDavid Heath26:32

        We're gonna learn, and we're gonna take the same amount of time that we took to perfect the sock with a much larger customer base now to get the feedback and just go slow. And having this amazing core business that was incredibly profitable, still growing like crazy, gave us confidence and the leeway to be able to say, "We're gonna go really slow at this other thing." Um, and so, you know, we've developed these other products and, um, you know, today, socks is still like eighty percent of the business. Um, funny enough, our, our footwear business is our second largest category despite launching a little bit after our underwear. Uh, it's like fifteen percent of the business, and we're just trying to follow where the customer is telling us, you know, they wanna go.

    19. SPSpeaker27:20

        Yeah.

    20. DHDavid Heath27:20

        We're still producing underwear and tees-

    21. SPSpeaker27:22

        They want socks. Yeah

    22. DHDavid Heath27:22

        ... but now we're... We've very quickly validated through the consumer that that's actually what they want from us, so we're going further down into that direction.

    23. SPSpeaker27:29

        Yeah.

11. 27:30 – 32:06

    Understanding and addressing homelessness

    1. SPSpeaker27:30

       On, on, on homelessness, which is obviously, you know, a, a, a, it's a, it's a human rights issue, it's a public health issue, it's a public safety issue. I mean, um, and, and we have a lot of work to do in this country to, to abate homelessness. What, what, what have you learned and where are the opportunities to do more beyond what you guys do? 'Cause y- you all do a lot, but w- where can we make real change on that front in this country?

    2. DHDavid Heath27:56

       Listen, I, I think that a lot of that starts with getting a little bit smarter on an individual basis and trying to find some compassion. A lot of the people who are experiencing homelessness in this country are experiencing it for less than a year. Ninety percent of people, it's transitional. You know, you don't have the support network, something unexpected happens, maybe you're couch surfing, maybe you spend a couple nights in a shelter. I don't wanna, you know, blanket over everybody's experience. Each experience is very personal. But we meet a lot of people when we volunteer. We have a lot of giving partners who share a lot of information, and we talk and interview a lot of people who have lived experience with homelessness. And they all say the same thing, "Let's start with a little bit of compassion, a little bit of, like, understanding that I'm a human and that I'm in a situation that I don't wanna be in." Of course, we are all confronted with v- ideas of what homelessness looks like to us, and I think a lot of those are misleading. And, you know, in the same way that you don't want one example of something to color the entire, like, an entire issue, like, I would say the same. This is, this is about people and people in this country, and it's really a lot of other issues showing up in this one word, right? This is about, like you said, mental health. This is about the healthcare system. This is about wage increasing. This is about the housing market. There are so many related and complicated things. It's a very nuanced, very tough topic. We all have some sort of experience with it. These are people who live close to us in all of our communities, and I think there is some responsibility to try and have a perspective and be a little bit smarter on it because it's a representation of a lot of the things that we all care about. So the thing that I've learned the most in talking to people is human connections matter. People understanding that there's somebody who is thinking about them or cares about them more than what's expected matters. The organizations that are working this every day are doing incredible work. They're strapped. They don't make a lot of money. They're out there just trying to help people, and just a little bit of extra care and a little bit of shifting perspective potentially in a conversation that you're having because you've learned a little bit more or because you've had an interaction, a personal interaction with somebody, if, if that happens millions of times over, it can make a difference. In the same way that us donating a product seems like a small thing. If I give somebody a pair of socks, you're like, "Eh, you're not giving them a home." We hear, we hear people say things like that to us all the time, right?

    3. SPSpeaker30:32

       Yeah.

    4. DHDavid Heath30:32

       Like, how about, uh, homes are the most requested thing in homeless shelters? Okay, like, we understand, but we've had tons of conversations with somebody where it's a opportunity to start a connection, an opportunity to establish trust. That's what our giving partners love. They're giving somebody something free of charge. There's no bureaucracy. There's no strings attached, and they're using that as an opportunity to say, "I care about you. I'm here to help you." And it's an amazing thing, and you can talk to any of the organizations that we work with, and they'll say this. And I think there's a personal version of that where you're just trying to have a little bit more understanding about something that we all have to think through and try and help solve. I don't have all the answers. We're not pretending to be a political organization where we're influencing things on that level. We're just trying to continue to make new products for people who don't often get new things or don't have a lot of choice and show them that there's a company out here that's thinking about a small part of something that seems and that they're telling us is important.

    5. SPSpeaker31:29

       Fantastic. Thanks, guys.

    6. DHDavid Heath31:31

       Thank you so much. Thanks for having us.

    7. SPSpeaker31:33

       With more than one hundred and forty million socks, underwear, and shirts donated, it's undeniable that Bombas has scaled on bold needs business, but its impact on communities in need. For some leaders, there might be a temptation to cut corners on core values for the sake of blitzscaling. But for the Bombas founders, their commitment to the company's social mission has helped accelerate their growth. A reminder for all of us that when you set your foundation properly, you can do good and do well at the same time and at extraordinary scale. I'm Jeff Berman. Thank you for listening.

Episode duration: 32:16