Monthly Archives: November 2008

Milton Friedman vs Jim Sinegal

“So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not”
-Milton Friedman

I came across this quote during my MBA studies and rejected it instantly.  Several years prior, while reading Double Dip, I realized the potential for business to create positive change and decided I wanted to leverage that power to make my impact.  My personal commitment to that idea is Atayne, the company I launched to inspire positive environmental and social change through the power of sports and active lifestyles.

Recent events (and no, not just the financial crisis) made me think about this quote again, specifically in regards to organizations where the primary purpose appears to be to maximize shareholder wealth in the short-term.

Last week I took a business trip to Seattle.  I booked with an airline I am not very fond of to save $50 versus traveling with my favorite, Southwest. ($50 makes a difference to an entrepreneur!)  I will not mention the other airline by name, as my intention is not to malign them.  However, examples of poor customer service prevailed throughout my trip.

On the flight to Seattle, I learned that Airline X no longer offered complimentary beverages.  No big deal. I typically bring my own water.  But $2 for a can of soda or bottle of water?  I understand times are tough, especially for airlines (and banks!), but $2 for a beverage that probably cost them no more than $0.30 is outrageous.

By the time I landed in Phoenix for a 4-hour layover heading home on a Saturday afternoon, my feelings toward Airline X were less than charitable.  Eager to get home, I approached Customer Service to see if I could fly standby on a flight leaving 3 hours earlier.  I was told that to go standby, it would cost me a $150 fee plus the difference in fares, even though the flight was half-empty.  Did it cost them $150 to change the flight?  The agent responded, “Yes it will cost you $150.”  I replied, “But will it cost Airline X $150 to print me a new boarding pass?” I got a blank stare and walked away, vowing that I would never fly Airline X again. (A side note: I had “elite” status on Airline X for the past 2 years.  You would think that might mean something.)

As I sat in the airport – still fuming — I began to read November’s Fast Company, which includes an interview with Costco CEO Jim Sinegal. The interview opened with this statement, “Wall Street grumbles that Costco cares more about its customers and employees than its shareholders; it…covers 90% of health-insurance costs for both full-timers and part-timers.  Yet revenues have grown by 70% in the past five years, and its stock has doubled.”  Mr. Sinegal further remarked, “You have to recognize…that people in the business (Wall Street) are trying to make money between now and next Thursday.  We’re trying to build a company that’s going to be here 50 and 60 years from now.”

Google Finance)

Stock Chart (Source: Google Finance)

Here is Costco, a company that puts its customers and employees first and shareholders second; their stock price has gone up 21% in the past 3 years.  Then you have Airline X, which in my opinion puts their shareholders first, with customers and employees #2: their stock price has dropped ~65% in the past 3 years. As reference: Southwest’s stock has dropped ~27% over the last 3 years.

Milton Friedman was a smart man, but even the smartest people are sometimes wrong.  Companies exist in a larger community beyond their shareholders.  Those companies which look at their existence in a more holistic way, with a time horizon well beyond the next bonus, are the ones that are much more likely to be successful in the long run. For those who want to make money between “now and next Thursday,” please go to Vegas and get out of the way of companies doing great things in the larger community beyond Wall Street.

Check out the Aspen Institute’s Corporate Values Strategy Group and B Corporation for more information.

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80% of It is Out of Our Hands

Give a man a fish and you feed him for a day.
Teach a man to fish and you feed him for a lifetime.

-Unknown

A few weeks ago, I was reading EcoTextile News.  This is a relatively new trade publication that addresses a variety of issues around the environment and every link in the textile chain from fabrics, dyes, and finishes to design, development, and production.  One article addressed apparel’s impact on the environment.  The article cited a recent study, which concluded that 80% of a garment’s impact on the environment comes from consumer care.  Translation: the washing and drying of your clothes impacts the environment 4x more than garment production and transportation to you.

I always knew that consumer care of apparel had a significant impact but never realized it was that much.  This presents an interesting challenge (or opportunity depending on your point of view) as we work to add more products to the Atayne line.  From day one, our goal was to develop high quality performance and lifestyle apparel that is sensitive on the environment and safe for the people who make and wear it.  We now realize that our vision needs to extend well beyond using recycled materials and making our products in close proximity to our consumer base.  A significant part of our adventure will be to develop products that will minimize the “care” required by the people who buy them.

So why the totally cliché quote at the beginning?  Much like the idea of teaching a man (or woman) to fish, we need to set up our Atayne friends for success.  Telling them to wash and dry their Atayne apparel less will only go so far.  We need to design our products from the start to require less care, and this is something we are well on our way to doing.

Material Unput #1

Material Unput #1

Material Unput #2

Material Unput #2

Currently we have two items in our line, our Men’s and Women’s Short Sleeved POV Performance Tops.  This will soon change as our Long Sleeve tops are being shipped to us as I write!  For the fabric in all these tops, we are using recycled polyester (derived from plastic bottles) and Cocona (activated carbon derived from coconut shells).  Cocona is a natural and safer way to enhance fabrics for performance.  Traditionally, fabrics are treated chemically to enhance them.  This is something we want to avoid due to the treatments’ questionable impact on people and the environment.

Cocona provides a variety of benefits for performance apparel.  The most significant ones include:

  • Enhanced Moisture Management – Because Cocona is inherently porous, when it is embedded in fabric it disperses moisture, enabling the fabric to dry faster.
  • Odor Control – The Cocona traps bacteria, preventing it from growing and releasing odor.
  • UV Protection – Because Cocona has a dark gray color, it blocks UV rays.  It is rated at 50 SPF.

We believe this total package of function and benefits translates into better performance.  We’ve had several reports of people having incredible PRs (Personal Records) in Atayne tops.  Personally, I dropped 15 minutes off my PR in my first marathon wearing an Atayne top.  We like to think you will run, bike, ski, etc. faster without the weight of the world on your shoulders.

Now back to testing the benefits that come from our fabric selection.  In the past we have put our tops through a variety of real world tests including a trip through the Mojave Desert, a 4 Million Step Journey from Maine to Florida, and numerous ultra, full, and half marathons.  In every instance, the tops have performed beyond our expectations in terms of their moisture wicking and UV protecting properties.

More recently we have started some “fun” testing of the ongoing odor control properties of our tops.  Here is how the experiment goes:

  1. Workout in top
  2. Rinse while you are in the shower
  3. Wring out and hang to dry
  4. Repeat steps 1 through 3
Atayne's Official Mascot, Jackson

Atayne's Official Mascot, Jackson

What are we testing for?  How long we can go without washing our tops while avoiding offending our own noses or others, infiltrating Camp Atayne with the smell of our active lifestyles, or sending Jackson’s incredible sense of smell into overload.

Preliminary results have been positive.  We have found it easy and non-offensive to go a full week without washing our tops using laundry detergent in a washing machine.  But these results are based on only a few test subjects.  We need more to make this statistically significant (at least that is what my statistics professor told me).

If you are interested in contributing data to this study, please join us in our crusade against washing.  Post a comment or email us about your experience at adventure@atayne.com.  All stories are welcome.  Tell us: 1) your workout routine, 2) how many days you go without washing your Atayne top, and 3) how often you eat red meat. (Yes, what you eat affects your natural odor. Yet another reason to cut back on red meat.)  Basically, share with us what works and what doesn’t.

We would love one brave soul to break the record for continuous workouts without washing (currently set at a very meager 7 days).  And the prize for setting this record?  Plain and simple. Bragging rights!  What else could you ask for?

P.S. Check out Mike’s latest Polka Dot Shorts entry for updates on our most recent event activity.