The Cost of Cheap

Some may have heard the news that a recent building collapse in Bangladesh killed over 1,100 people. Most have not. Disasters happen all over the world, all the time. What makes this different? It was a garment factory for some of the worlds biggest (cheap) brands with deplorable conditions. Ann Zimmerman and Neil Shah wrote a great piece in the Wall Street Journal this weekend entitled American Taste for Cheap Clothes Fed Bangladesh Boom. It is a must read.

Building Collapse

Photo Credit: Andrew Biraj, Reuters

My wife and I walked through the mall this weekend past an H&M store where they advertised a bikini for $4.95 (modeled by Beyonce). $4.95. Let that sink in. If you’ve ever dug into the economics of products like clothing, it means the cost of goods on that bikini is somewhere between $0.50 and $1.50, depending on a number of factors, that include the fabric and the labor itself. That does not include paying Beyonce. People have quickly become familiar with China making just about everything (and typically of rather poor quality), but what people are less familiar with is that even China is becoming “too expensive” in terms of labor. Companies are shifting their manufacturing from China to even lower cost manufacturing countries like Bangladesh, with devastating consequences. There aren’t even basic safeguards for people working in these countries. Over 1,100 people died in this building collapse. In buildings like this and others that have experienced deadly accidents in Bangladesh, clothes are made for H&M, Zara, J.C. Penney, United Colors of Benetton, Wal-Mart, and other major companies. H&M and Zara have made a name for themselves with “fast fashion”, taking inspiration from couture fashion, cutting down the production to shelf time, using dirt cheap labor, and bargain basement pricing. The consequences of these business practices are great profits for these companies along with significant human suffering.  It is absolutely true that offshore production can give people in developing countries a chance at a brighter future with jobs, if done responsibly. This is anything but responsible.

The only way things will change is if people in America and Europe (primarily) start to vote with their dollars and demand change. United Colors of Benetton champions itself as a company of social responsibility. It denied having any connection to the factory that collapsed, until pictures emerged of its clothing amidst the rubble.

Things have to change. I believe we’re doing our part at Mizzen+Main with our commitment to American manufacturing. While people don’t typically make the choice between item A and item B based on where it is made, seeing American made products, or responsibly made products from overseas, helps encourage people to keep in mind the consequences of their purchases.

John Mackey, the CEO of Whole Foods, is probably the best example of what he champions: conscious capitalism. At Inc’s 2013 GrowCo conference, he said America is in “disintegration mode,” and unless businesses, government, and the media behave more ethically and more cooperatively, high unemployment levels and economic decline will continue. Perhaps most importantly, he said “the virtues that made us a great nation are beginning to disappear. Capitalism needs to renew itself, and we need new ethcial foundation for business.”

There is a cost to cheap. A very, very high cost. I encourage you to vote with your dollars and effect positive change. Pay attention to who you buy from and do business with. You’ll be surprised.

Start Something.

Start Something. I think this is an amazingly simple challenge that can have profound implications for our economy and society at a macro level and our overall wellbeing and outlook on so many things at a micro level.

Start something, anything really, as long as it something in which you can make money. You don’t have to go start the next multibillion dollar business empire, next Facebook, or even the next hot gaming app. Why? There are a few main reasons.

Start Something

  • Experience. The experience of accomplishment (or failure) that is yours. Working for others, for companies, will mean that your successes and failures are always on on other’s shoulders – your boss, your coworkers, your direct reports, and the company’s shareholders. When things go well, or poorly, generally, the accolades or blame get spread around, even if it was virtually all because of you or in spite of you. Even if it was your idea, your execution, and even your job on the line, with almost virtual certainty you relied in some way on company resources, capital, prior experience, connections, reputation, and personnel.
    It’s an indescribable feeling when you can look at something you made or a service you provided and know that someone paid their hard earned money for it.
  • Ownership. If I were to say “lemonade stand”, most of you would likely think of young kids selling lemonade in their front lawn. It’s a fantastic experience as a kid, mostly because it’s all profit for you, but to make something yourself, then watch as people give you money for your time, effort, and product.
    What I’m speaking of isn’t vastly different – maybe you have some artistic or crafty talent, you’re really good with computers, or perhaps could be a freelance personal trainer to help friends or family get in shape. Whatever your talents, use them, even if it’s selling hand made candles out of your house or apartment. The feeling of ownership is one our society is lacking on a growing level. Knowing that you can build something or offer your skills or talent is a powerful feeling, and one that you will never fully realize working for someone else.
    This doesn’t mean you have to quit your job and be a starving soap maker. I’m merely saying start something that is yours, even as an occasional activity at night or on the weekends, to really get that amazing feeling of ownership.
  • Opportunity. Do you notice how those that are successful just seem to have the right opportunities fall into their laps? I promise you, that isn’t true. They are out there working their tails off every day, whether it’s building a business as an employee, as a partner, as an owner, investing in others with their time and resources, or networking and proving their worth as a person with whom others would like to do business or just simply be around.
    You’ll be surprised at the opportunities that begin to present themselves when you begin to put yourself out there.
  • Understanding. There’s a great deal of hostility towards business owners these days. Walk a mile in their shoes, even in your own small way, and begin to understand things in a new light.
    Certainly negligent or malicious business owners deserve the scorn they receive, but the large majority of business owners are men and women who wanted to build something of their own, hire a few employees, and make their own way in the world.
    Daymond John recently said “Being a boss is this: Your employees don’t like you. Your family doesn’t think you’re doing enough at home. You share the success with everyone, and the failure is yours alone.” It’s no cakewalk, despite the widespread perception.
    Business owners are also the ones who create jobs – no one else.
  • Economy. That is a perfect segue. New businesses, new products, new services. These drive us forward. The beautiful thing about starting something is it’s not a zero sum game. Think about GoPro – they created an entire industry around high quality video cameras on the go out of virtually nothing and destroyed no other businesses in the process. This results in more jobs and new opportunities others had never imagined.
    We need people who are willing to take risks and grow this economy. Status quo is unacceptable.

Start something. Anything. Do it for the experience and fun at first, then grow. Get to a point where you are ready to start something great. Something that will have a real impact on the world. Don’t worry about changing the world with your first go – doing it at all is more than 99% of people. As you gain experience, aim higher than a flash in the pan or a quick buck. It will be so much more rewarding than all your past experiences combined.

Please don’t misconstrue this challenge. It is vitally important that people start and continue efforts to help those around them, their community, and those that deserve our assistance. Another disclaimer that must be said: anyone who starts something is likely going to rely on the help of partners, employees, investors, or family and friends at some point. That does not diminish the points made above, and if you are fortunate enough to start something and receive help from those around you, be sure to recognize it.

Do something that matters.

Brent Beshore recently shared an article titled “The Hypocrisy in Silicon Valley’s Big Talk on Innovation” which challenges many out there talking about their hugely important projects and super sexy startups to remember that the newest timewasting app (or, let’s be honest, the 10,000th productivity app) may not be all that innovative, or all that important.

It’s an interesting article, particularly in the light of the current reality of many of the “hottest startups” in recent memory. Andrew Mason of Groupon was forced out of the company he started last month. Living Social is in dire straits (some may disagree, but their financials speak volumes). Remember when group couponing was going to revolutionize commerce? The insane valuations of investors crazy to pour money into a “sure thing” that was “innovative” beyond any doubts seems almost comical, in retrospect. One thing Groupon and Living Social have accomplished is a strong contribution to the race to the bottom on prices and quality many companies are locked into these days, destroying company and product value and consumer perspectives on what something is actually worth. Looking at Zynga, another innovative next big thing, tells a somewhat similar tale. Things aren’t going well, in terms of management (Founder forced renegotiations on equity promises when things were going well), stock price, or future. Even Zynga itself got caught up in other’s hype when it paid $180 million for Draw Something, an app that became hugely popular in a relatively short period of time. It’s taking a $100 million write down on that purchase. These are just a few examples. Certainly we’re seeing great things in innovation and tech these days (from Twitter and Square to Tesla and Shopify), but there is a continued fascination and obsession with a multitude of companies that seem highly talented at raising money and making noise rather than building real companies of true value. Why?

Real Work

For what little my opinion matters on the subject, I think it comes down to three things.

  1. Short sightedness. This is on behalf of both the investors and the entrepreneurs. The few stories we hear today of founders and investors cashing out for hundreds of millions after 3 years has poisoned people’s thought processes. Building something of real value takes a long time, great sacrifice, and more than most could ever imagine. If you’ve cashed out early for hundreds of millions, it was almost certainly a fluke. Since tech companies seem to be all the focus, let’s look at the ones we rely on the most: Google, Apple, Microsoft, Samsung. These companies took years, even decades, to build and massive investments. There is no get rich quick. There is no build value quick. There is only hard work. Time will tell on Facebook’s real valuation (read: value). Right now, in pursuit of calming investors, they are making just about every single one of their users incredibly frustrated at every turn. Look at LinkedIn: once the ugly duckling of social media, they are the darling of the investor world today because they are creating real value and something people actually want and need. Twitter remains a toss up in my opinion – it is fundamentally the most transformative communication tool since the cell phone, but let’s see how they handle things moving forward.
  2. Tech. Tech isn’t a dirty word, but it is distorting perspectives on what is worthwhile and valuable. The ability to scale an app company quickly, reach millions, and quickly flip it for $180 million (see Draw Something) or $1 billion (see Instagram) has changed the way people pursue innovation, has changed the way investors look at risk and reward, and has changed the public’s perspective altogether. Look at Elon Musk with SpaceX and Tesla Motors. One man (supported by investors and an all star cast of employees, of course) is responsible for carrying the greatest nation on earth’s dream of space travel forward through his private sector efforts WHILE ALSO building the first real attempt at a viable electric car company. Most of the country laughs at him and says he’ll never make it. While many probably laughed at Steve Jobs and Bill Gates, monumental gains in demonstrating what is possible (computers, cell phones, satellites, the internet) should have us cheering for Elon and others like him rather than worshipping a photo filter app… For some reason, most aren’t.
  3. Distractions and Ease. The first two aren’t really the general population’s fault. They’re really more reserved for investors, entrepreneurs, and the media (particularly the startup media). We aren’t getting off that easy though. As Gary Vaynerchuk said, “Stop watching F-ing LOST” (I’m paraphrasing here and in full disclosure I absolutely loved LOST). Many people say how busy they are and how little time they have to a) do something that matters or b) do something they really want to do. I don’t need to quote any articles to point out how much time is spent wasted on Angry Birds, Social Media, or picking your latest filter. Sure, there’s a time and place for fun and social media is an amazing tool for business, communication, and maintaining friendships… but they’re also fantastic time wasters. Many people have lost sight of the big picture because they are focused on the very small screen right in front of them with flying birds that knock down pigs. People can get quite frustrated when their phone freezes or they lose service on a phone call. While this is indeed a frustrating experience, many forget the hundreds of billions of dollars and too many hours to count that went into creating computers, processors, cell phones, satellites, infrastructure, new forms of programming so on and so forth. The ease with which we live our lives, and the very entertaining distractions, have made most of us lose sight of what really matters and how hard it is to really build something of value.

I’m not trying to suggest that Mizzen+Main is a cure for cancer, or that we shouldn’t be excited and engage with fantastic tech developments. Not at all. I am all the more convinced, however, that we are on the right path to building something of real value, something that matters, and something that can have a very positive impact on our communities and our country. For a great perspective on our journey so far, please check out my brilliant cofounder’s thoughts on How to (Really) Found a Startup. It feels good to be getting our hands “dirty” (don’t worry we wash them before handling the fabric!), it truly is a labor of love. We’re building real products and aim to build something of true value.

In response to Brent, I said that companies need to aim for more than the next “hot app” while investors need to aim for more than a quick flip. Brent summed it up nicely: “Do stuff that matters”.

Please let me know what you think on Twitter @KevinSMU.

Get it done. Period.

Of all the things that have been most surprising in starting a business, I think the lack of interest in earning new business or retaining existing business I’ve experienced from a number of vendors has to take the top spot. It also makes me appreciate vendors, or companies I am a general customer of, who don’t just do the bare minimum, but go above and beyond. In a world of low-touch interactions and poor customer service, any business has an easy shot at standing out from all the rest. I came across this quote recently and was struck how many different ways it applies to being successful in business. It also reminded me of how much I love companies that I work with that I know will just get “it” done. Whatever it is. I know I can trust them to get it done.

Be A Good One

“Whatever you are, be a good one.” Abraham Lincoln

  • If you are starting out as an assistant, be the best assistant there is. You won’t be an assistant for long.
  • If you are in charge of new business, don’t let anything or anyone slip through the cracks or feel like they don’t matter. Trust me, you’ll be at the top of their mind anytime they have to make a decision related to your industry. If they can’t choose you for whatever reason, be it price, timing, etc., they will recommend you to their contacts or network. You won’t be in charge of new business for long, because everyone around you will see how much potential you have to get things done and get them done right. You’ll be in charge of all business, operations, or the company.
  • If you are a customer service representative, each customer should feel like once they call you, you will take care of their problems on your side of the fence. People are way too busy, all the time right now. If a customer calls you and says “I have a problem.” When they hang up, they should feel like 1) it’s resolved or 2) you will personally see to it that it is resolved.
  • If you are a sales representative, don’t make your clients or customers work to give you business. This should go without saying. If you make them work for you, you won’t be a sales representative long – you won’t have a job or, if you are the only representative, your business may fail. If you work your tail off for them, you won’t be a sales representative long – you’ll be in charges of sales, or the company, soon.

See a pattern?

I strongly encourage you read this article called the $4 Million Complaint Call. In a nutshell, one customer named Bob required an enormous amount of help with a software package, including basic training on how to use the computer itself. While some at the company encouraged the CEO to give up (“We can’t AFFORD to help him – just refund his money and move on”), he didn’t. Six months later, a call came in out of the blue with a new company requesting to standardize their systems on this company’s platform. How did they know they should select this company? Bob was brought on to their team a few months earlier – he said there was no one better to go with.

One final thought: things go wrong. All the time. If something can go wrong, it will. Maybe not now, but sometime soon. Don’t lose yourself. Don’t start cutting down people around you. Just get it done. Be the person that people want to have on their team, as a partner, as an employee, as a boss, or as a friend. People should know that if you’re involved, you are so good, whatever needs to get done, will.

Whatever you are, be a good one. Get things done. Period.

Everything else will fall into place.

Simple, but Significant

When I started this blog it was intended to be a forum for updates on business and life – and business and life have most certainly be going on at full speed. I also didn’t want to be another blog that compulsively updated without something meaningful to say. I see many people/blogs that feel compelled to push content, without necessity or quality. I think this poster below sums it up best, when it comes to this blog and what I am trying to build:

Make it simple, but significant.

In that vein, here is a simple, but significant update:

  • Mizzen+Main has made tremendous progress. After going back to the drawing board to make our moisture wicking, wrinkle free dress shirts that much better, we’ve done just that. We have substantially improved the cuffs and collars and made a number of design improvements to the shirts themselves.
  • We’ve taken our redesigned and improved shirts and released them in a beautiful Cornflower Blue and are releasing this weekend an Atlantic Blue Pinstripe and Pink Houndstooth. It’s an amazing feeling to see months of hard work result in such a tangible result.
  • Our first video will be debuted this weekend. The team at Slice Media did an unbelievable job of capturing what we are building – the next great American clothing company.
  • I received a thank you note from President George W. Bush. That was an incredibly significant moment in this journey.

GWBLetter

  • I come to understand more and more every day the blessing that it is to work with my two co-founders in building Mizzen+Main, Web Smith and Steven DeWitt. Their talents are overwhelming, and they are two fantastic gentlemen.
  • I have learned more in the last year, particularly the last six months, than I have in 4 years of college and 4 years of working.
  • I heard a quote when I started out on this journey – “Entrepreneurs are the only people who trade a steady paycheck and a 40 hour week for no money and an 80+hour week.” No sugarcoating, add to that investing your spouse, your savings, your emotions, your family, asking for stress 24/7, and asking others to participate on a roller coaster that could have seriously negative consequences for them, and you are beginning to see the picture. So am I.
  • The most significant lesson I have learned in terms of a daily impact on my actions and decisions (and something to keep in mind if you take this plunge yourself) – it’s nearly impossible to get things done on the timeframe, quality level, and price bracket you agree to with a vendor. There are exceptions (cherish those), but this is the rule. Should be done in 2 weeks? Allot 4. Sign off on a sample? Expect something to go wrong. Enter in thinking amount $ABC? Add $DE and perhaps $F into your budget for last minute changes, expedited shipping, and all the extras that will be necessary to complete your effort. A key element of this – people will take advantage of you, lie to you, or just steal from you. It’s reality.
  • Getting to spend the holidays with my family nearly six months into this journey was the most wonderful gift I could have asked for. I won the parent lottery, the sibling lottery, and my sibling’s choice of partner lottery.

IMG_1254

  • Of all the lotteries I won though, I know ultimately I won the wife lottery. To have someone as graceful, strong, understanding, and let’s be honest, beautiful, as Jen… I am one very, very lucky man.

JenAndKevin

 

 

 

My First TEDx Talk

What an absolute honor.

I had the privilege of speaking at TEDxSMU Hilltop in September. The theme of this year’s TEDxSMU is reThink.  I’ve dreamed for many years about speaking at a TED event, of any kind, and I finally feel like I have something worth sharing on such an amazing stage.

The idea I shared was simple: above money, power, connections, or even luck, what turns an idea into a reality is an unwillingness to accept no as an answer, from others, and perhaps more importantly, from yourself. I highlighted examples of amazing accomplishments in the face of a stream of naysayers and doubt, like Peter Thum’s Ethos Water and Fonderie 47 and Harvey Lacey’s Ubuntu Blox. I also talked about men who have pulled themselves out of incredibly difficult life circumstances and turned into titans of industry, such as Daymond John and Robert Herjavec. While I called these examples out to demonstrate known success stories, I also discussed the never ending hurdles I’ve faced in launching my own company, Mizzen+Main.

It has been nearly a year’s worth of work to bring Mizzen+Main to life, and we’re really only just starting. I have heard hundreds and hundreds of “no’s” – but it was never a question whether I would keep going. Please check out the talk below and let me know what you think by connecting with me on Twitter @KevinSMU.

Choosing What Defines Us

Jonathan Wentz passed away this weekend due to complications from cerebral palsy, and this world lost a truly inspirational figure who chose to define his life in his own terms.

I met Jonathan at TEDxSMU Hilltop, where he and I both were honored to speak to the SMU community about our experiences.  Jonathan had just come back from the 2012 Paralympics in London where he narrowly missed a medal in the equestrian events.  He said it was the most amazing experience – and not just the Olympics itself but the entire journey – one for which he was incredibly grateful.  The fact that Jonathan was able to call himself an Olympian (which I remember him proudly saying despite not winning a medal, “once an Olympian, always an Olympian”) is actually not the most amazing thing I saw in him. We got to chat for a few hours after the event in which he described to me his journey through life, not just to the Olympics.  The most amazing thing Jonathan told me about himself was that he should not even be able to stand up, let alone walk around and control a thousand pound animal in equestrian events on the world’s greatest stage for athletics.  The most amazing thing I saw about Jonathan from the outside was that while some may see his life defined by his significant disability, something he did not get to choose, he chose to become an athlete at the highest level, a scholar (with a triple major), an advocate, a teacher, and an inspiration.

Jonathan described to me just how amazing horses are to those with disabilities. Riding a horse allows those who cannot walk to “learn” how to walk with the rest of their body by mimicking the gait of walking normally and teaching the body’s others muscles to walk.  Jonathan’s experiences as a child actually helped push forward the use of horses to help those with disabilities. He told me how tests on his muscles show that he should not be able to stand up at all – but his years of effort and hard work have him standing, walking, and competing in the Paralympics.  There’s a lot more about Jonathan’s story on his website.

Here is Jonathan’s TEDxSMU Hilltop talk:

Jonathan was not dealt a “fair” hand and didn’t get to choose his life circumstances – but he chose not to let that define him or what he was capable of.  He was a triple major at SMU and wanted to go into politics. He was an Olympian (and always will be). He was a staunch advocate – petitioning Congress to support American Olympic athletes (the United States is basically the only country in the world that expects its athletes to win gold and honor but tells its athletes they are on their own, effectively sentencing its athletes to never ending fund raising and having to work full time side jobs to afford living and training). He helped others with disabilities to ride and change their lives. He worked with horses and was a teacher. Most of all, he was an inspiration.  He is an inspiration.

Jonathan achieved greatness in his far too short life. Some may see Jonathan as disabled. I only knew him a short time and immediately saw that Jonathan was defined by so many other amazing things – things that he chose to define him.

If you would like to make a donation in Jonathan’s honor, details are below:

USPEA
Jonathan Wentz Scholarship Fund
3940 Verde Vista Drive
Thousand Oaks, CA 91360
*The USPEA is a 501(c)(3) and all donations are tax-deductible.

You may also donate through the USPEA website atwww.USPEA.org by clicking the red “Donate Now” button at the bottom of the page. Please specify that the donation is for the Jonathan Wentz Scholarship Fund. Any questions about donating can be e-mailed to donate@uspea.org