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Tuesday, September 7, 2010

Why Didn't I Think of That? SwitchFlops, the $30 Million School Project

At 16, Lindsay Phillips came up with the idea for a flip-flop with interchangeable straps during art class. Today, she's running a $30 million company.

Now 25, Phillips came up with the idea for SwitchFlops at 16, as part of a high school art project. Today, her company -- Lindsay Phillips -- employs 35 full-time staffers and is projected to bring in $30 million in revenue this year.

The idea is simple -- SwitchFlops are sandals with interchangeable straps. So instead of buying several pairs of sandals, customers can instead own one sandal with multiple straps. In the wake of the Great Recession, a 3-in-1 shoe (or, heck, 50-in-1) is tailor-made for shoppers on a budget.

The basic sandal itself costs $35, and additional straps are $12. Officially launched in 2007, SwitchFlops are now sold in more than 4,000 stores around the world, and Phillips' line has evolved into other footwear like ballet flats, wedges and espadrilles. The company also makes shopping bags, scarves and sandals for children. Lindsay Phillips, the company, is currently building an overseas office.

It didn't hurt that Phillips, at the ripe-old age of 23, had the wisdom to know what she didn't know -- and brought aboard a CEO, Jeffrey Davidson, 50, who has a lot of experience in growing companies.

Which isn't to take away anything from Phillips, who had the initiative and vision at age 16 to craft her art into something with commercial potential. She made some flip-flops -- ceramic flip-flops that had straps with "fun, funky buttons" on them. "It made sense when I came up with this idea," says Phillips, who grew up in Tampa, Fla. "Everyone wore flip-flops to school, all the time."

Her parents proudly displayed the colorful sandals in their house. And guests noticed. One woman even tried to put them on. "They're ceramic," Phillips told her, but the teenager suddenly had the idea that she should make some actual flip-flops.

"I bought some fun buttons and tried to put them on some sandals, but they kept falling off when I'd go to the beach, so I came up with Velcro, and started lining it to the shoes," says Phillips, who gave out her prototype sandal straps to family members and friends.

It was just a hobby at first, until a relative said, "This is really an amazing idea. You need to patent this."

"I'm 16," Phillips replied. "I really don't know what a patent is. Can you help me?"

She wound up going to a sympathetic but skeptical patent attorney, who told her to do some research and make sure there wasn't anything similar already on the market. If she couldn't find anything, he said he would work with her. She did her research, turned up nothing, and to the attorney's astonishment, he couldn't find anything either. They began the process of applying for a patent. It took four years.

Phillips finished high school and started college in the meantime. She majored in art history at Rollins College and minored in communications, instead of focusing on business. "My parents told me to study what I enjoy because I'd probably do business for the rest of my life," she says.

But her innovation was always top of mind. Phillips worked summers at Polo Ralph Lauren's leather goods division in New York, honing her merchandising and manufacturing skills, and traveled to Europe in a Semester at Sea program -- until she was ready to unleash her creation to the world.

The patent was granted in 2004, and after that, Phillips partnered with her mom, Liz, and began looking for a manufacturer. SwitchFlops made their first real retail appearance in January 2007 at the Surf Expo Trade Show in Orlando.

"We started with 10 straps," Phillips says. "Basic colors, but we wanted to start off with the basics, and it's been very successful. We find our typical customer owns three pairs of shoes and 10 straps, and for them to be able to go and customize them -- well, they get very excited and really enjoy doing it. We really think it's all about versatility and value."

Phillips has managed to tap into the growing customization zeitgeist. While people have always wanted to stand out from the crowd, technology has really allowed consumers to tailor products to their own tastes in recent years -- and businesses are increasingly offering an interactive, design-your-own experience.

As marketing guru Randy Gage, author of Why You're Dumb, Sick & Broke... and how to get Smart, Healthy & Rich, notes, "I was always told, 'Find a need and fill it,' but that's actually bad advice because people don't usually do what they need, but what they want. Better advice is, 'Find a want and fill it.'"

Phillips, of course, has managed to do just that. "SwitchFlops allow you to express yourself," she says. "Everyone wants to be a little unique, and while we might have the same bag, we don't want it to be exactly the same."

Phillips recalls meeting one of her customers who had eight pairs of her shoes and 30 straps, and seeing women staring at her displays like kids in a candy store, as they selected straps and matched them up with shoes. "It's amazing to be in the store and watch it happen because everyone picks out something different," she says.

And being different, of course, is the whole idea.

Geoff Williams is a regular contributor to AOL Small Business. He is also the co-author of the book Living Well with Bad Credit.