How Bombas Socks Survived the ‘Shark Tank’
Shark Tank Appearance: Sept. 26, 2014
Investor: Daymond John
Deal: $200,000 for a 17.5 percent stake
Results: Total sales increased from $450,000 in the company’s first nine months to $12 million
As you’re reading this, David Heath, co-founder of Bombas Socks, is probably checking out tattoo parlors in Manhattan. That’s because in August 2013, when he and Randy Goldberg launched an Indiegogo campaign to crowdfund their high-performance athletic socks company, Heath pledged to donate a pair of socks for each pair sold. If they ever gave away a million pairs of socks, he’d tattoo the Bombas logo—a bee in flight—on his body (something he now describes as “a rash promise”). Now Bombas has closed in on that milestone; staying true to his word, Heath has decided the tattoo will go on his right biceps.
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No one will be more surprised to see the tat than Kevin O’Leary, Robert Herjavec, Mark Cuban and Lori Greiner, four of the investors on Shark Tank. When Heath and Goldberg appeared on ABC’s Emmy-winning business reality show in September 2014, seeking $200,000 for a 5 percent stake in their company, the quartet turned down the deal with unusual vehemence. O’Leary, for example, dubbed the entrepreneurs “sock cockroaches,” while Cuban exclaimed that “there’s not enough margin” in a $12 pair of socks to sustain a business.
That left Daymond John. With his history as the founder of the trendsetting sportswear company FUBU, John was the investor Heath and Goldberg had hoped to lure. They got him, albeit for more than three times the stake in the company they originally offered.
John has proved well worth it, keeping Heath and Goldberg on a steady course. “One of the first things we got immediately excited about was [going into wholesale],” Heath says. John cautioned them to apply the brakes. “You’re killing it online,” he told them. “You’ve got so much room to grow in that area.”
Likewise, Heath and Goldberg were eager to expand the brand to underwear, undershirts and hats. Again, John cautioned that expansion was premature.
“There might be attractive opportunities that put some immediate cash into the company’s pockets or on the surface,” John says. “But you need to make sure these are in the best interest of the company in the long run. I often tell them stories about some mistakes I made while FUBU was scaling. One of my jobs as an investor and mentor to the Bombas team is to talk about those mistakes, so hopefully they don’t have to learn the lesson the hard way like I did.”
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Heath and Goldberg spent two years developing their sock technology before they quit their comfortable six-figure jobs (Goldberg with Urban Daddy, a lifestyle media company, in late 2012 and Heath with a private equity firm in early 2013). They continue to make sure they resist what they call “sock complacency.” Instead, Bombas, which takes its name from bombus, Latin for bumblebee, has stayed focused on innovation. In fact, the only thing the co-founders like talking about more than Bombas’s blister tab and honeycomb support system is the good their socks are doing.
Goldberg and Heath met in 2007 when they were working at Urban Daddy. “We had a shared history in startups,” Goldberg says, “and we knew pretty early on that we wanted to start a business together.” They hadn’t had a particular passion for socks until Heath came across a news release that said socks were the No. 1 most requested clothing item at homeless shelters. “I shared it with Randy,” Heath says. “We couldn’t shake it.”
By early 2011 the two began to think that maybe there was a solution to the sock problem in the buy-one-donate-one model developed by social enterprise businesses such as TOMS and Warby Parker. To test their concept, they bought a bunch of socks and handed them out to homeless people on the streets of their New York neighborhoods. “It really surprised us,” says Heath. “People we knew who we’d regularly give a sandwich, a granola bar or a couple of bucks to got really excited about the socks.”
Today every new employee is given 10 pairs of socks on their first day to pass out to those in need. “It’s a really moving experience, a small moment that connects people to our mission,” Goldberg says. “We all carry socks and try to give away at least a pair every day.”
Early on, Heath remembers walking up Manhattan’s Madison Avenue when he saw a homeless veteran outside a park with a sign that read, “I’ll take anything.” Heath reached into his bag. “I don’t know if this will help,” he said, “but I have a pair of socks.”
The veteran responded like a kid getting a PlayStation on Christmas. “This is exactly what I need,” he said, immediately bending down to take off his combat boots. “He’d wrapped a plastic bag around one foot,” Heath recalls, “and he’d taken the bandana off his head and wrapped that around the other foot. It was an eye-opening experience for me, that something we take completely for granted—waking up in the morning and putting on our socks and shoes—could be a luxury for somebody else.”
At least one day a month, Goldberg, Heath and their staff, which has grown to 15, spend a few hours volunteering at a shelter, soup kitchen or with one of their 260 giving partners. Heath says, “It reminds our employees and ourselves that what we do here every day is about more than just building sales and revenues.”
The tattoo will be another reminder.
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This article originally appeared in the October 2016 issue of SUCCESS magazine.
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