Plank: “Let your competitors lose”
The founder of sportswear firm Under Armour has poured scorn on the culture of losing money condoned by so many start-ups saying “losing money is a habit that’s very hard to break”.
Kevin Plank, who founded the company 20 years ago and has steered it to revenues of $4bn last year, explained how he did not understand the laissez-faire attitude of start-up founders around losing money.
Asked what advice he had for entrepreneurs, he explained how at an event the previous week he had been frustrated with two start-up founders who were nonchalant about their cashflow situation.
He added: “I’m thinking ‘what are you doing?’ Winning is cultural, losing money is cultural, it’s a habit, and if you get used to losing money it’s really hard to stop.
“When you get used to making money, and not in some greedy capitalistic way – you’re doing it for your people, or your college funds – go let the other people lose and fail often for his company, go win for yours.
“If I had advice for an entrepreneur today it would be go out and find out if your product could sell. Get out of hypothesis mode and see if someone is willing to exchange cold, hard cash for your product.”
In the keynote interview at SXSW Plank took several digs at competitors such as Nike, accusing them of being slow to innovate and allowing him to steal a march on them in some areas.
Asked why he thought the company’s move into wearable tech would work when Nike’s wouldn’t he explained that his company was more interested in using the data generated to help people in their training, and their careers, as well as product development.
Describing the move as “taking people on a rollercoaster”, he said it was Under Armour’s intention to make sure they “exit via the gift shop” and buy merchandise relevant to their training, based on the data.
He added: “The job or idea for any brand is to give you things you never knew you needed, and once you have them, ask yourself how you ever lived without it.”
Alex Hayes in Austin