In a row house in Georgetown, Kevin Plank started a company with about $15,000, some locally purchased fabric, and an ambitious plan to shake up the athletic apparel industry.
It took the former University of Maryland football player five years to turn it into a $5 million dollar company. A decade later, Plank had built Under Armour into a billion-dollar sports apparel and equipment corporation.
“All that growth really comes back to lessons we learned in the early days,” said Plank, the founder and chief executive of the Baltimore-based company. “There have been all sorts of ups and downs, but we have learned at every stop and we have used those lessons to make ourselves better.”
Plank says the company is just getting started. Under Armour is on pace to reach $3 billion in sales in the coming year, and he has visions of tripling in size in the near future.
“We have a chip on our shoulder, and that chip doesn’t go away, because there’s not a finish line,” he said. “It’s not about hitting some number. It’s much greater than that, and frankly, it’s much more purposeful than that.”
In an interview, Plank shared the story behind Under Armour, taking us back to the early years at that D.C. row house and sharing some of the lessons he learned along the way. He also outlined his vision for the future of the company and discussed the ways his team has found to give back to the local community. What follows is a transcript of our interview, lightly edited for length and clarity.
Harrison: So let’s start at the beginning. What was the spark?
Plank: I was a not-big-enough, not-fast-enough football player who wanted a little bit of an edge on the field. I figured my own sweat, if I could get that off my body, and more importantly, the weight that stood behind it, that would help. So the idea was why doesn’t someone make a better alternative for a short-sleeve cotton t-shirt in the summer and a long-sleeve cotton t-shirt in the winter. It was so incredibly obvious to me at the time, wondering why no one had ever addressed this issue. Innovation in sports and sporting goods was limited sometimes to a shoe, every now and then to a piece of equipment, but apparel was always an afterthought, and I just wondered why. Someone had to create a better alternative.
Harrison: Where did you turn to get started?
Plank: A place called Minnesota Fabrics in Beltsville, Maryland, about a mile from the University of Maryland campus. It was really that easy. I think sometimes entrepreneurs can get caught up with theorizing, hypothesizing, business planning - at some point, put the freaking pen down and go do something. Go find out if you can make your product. Once you make it, stop projecting what’s going to happen, and go find out whether your product can sell. Find out whether someone is willing to take hard-earned cash out of their pocket and exchange it for your product.
Harrison: Can you tell me about the very first products?
Plank: The first shirts I made were at a little tailor where I brought him a tight little white Hanes t-shirt and brought him some fabric that I had bought from Minnesota Fabrics. I asked him, “Sir, can you make as many t-shirts that look like this tight little white Hanes t-shirt, but out of this stretchy, synthetic material?” That got us started, but I realized I needed to be a lot more sophisticated about fabrication and where we manufactured. So I got in my car, drove up to New York City, parked on the corners of 34th and 7th Avenue, and walked around a place I had only seen in movies called the Garment District. From there, it was about figuring out how to make a great shirt.
Harrison: How did you finance the business during those early years?
Plank: I had about $15,000 in cash, and I had established pretty good credit. I had about $40,000 in credit cards. Cash is king, and one of the mistakes I see are with these perpetual entrepreneurs; ones who are constantly in money-raising money, always looking for the next round. My reaction to that is always, “Why don’t you do yourself a favor, you keep the equity, and go sell the inventory that you have to raise money for.” If it doesn’t sell, there’s probably something wrong with your business. If it does sell, then you don’t have to give half your company away and you can be the one making the decisions for the long term. We did that, we bootstrapped, and my first year in business, we did $17,000 in sales out of a little townhouse on the corner of 35th and O Street in Georgetown.
Harrison: Right, your grandmother’s house. Can you take back to that town house — what details do you remember?
Plank: It was three floors. I was living upstairs, and the kitchen was up there. I had a sales office on the ground floor, which was essentially the dining room and living room. In the basement, we kept inventory. And in the corner of the sales office, we kept “The Price is Right” on the television.
It was a challenge, and I had to learn to really focus on my business. But acting like a professional company and running it out of a residential neighborhood is not the easiest thing to do.
Harrison: Do any stories stand out from your time in that space?
Plank: We were actually still in that little house in Georgetown when I signed my first deal with the NFL, becoming the official supplier to the NFL Europe League. I remember the guys from the NFL called me up one day and they said, ‘Kevin, we’re going to be in D.C. today, we want to come by the office and see you.” — which had me looking around Grandma’s house thinking “Oh my gosh, don’t do that.”
So I said, “Tell you what, let’s meet for lunch at Morton’s, I’m buying, see you there.” Who knew if the credit cards were going to work, so I went by the bank to pull everything I had out so I had enough cash to cover the lunch tab.
Everything was about perception. Everything was about projecting yourself as being more so the company you see yourself as, not the company you were.
Harrison: How did you come up with the name Under Armour?
Plank: I considered a few different concepts. First, I was going to call the company Heart, thinking that you wear your heart on your sleeve. I had a friend whose company helped me negotiate the patent and trademark process, but Heart didn’t go through. My next idea was Body Armor, and I thought that was the perfect name. Back then, it took a couple weeks for the trademark process, and by the time those two weeks had gone by, I had told everybody I was going to name my company Body Armor.
One morning, I got a call from my friend saying we would never get Body Armor, because there were some body shops up in New Jersey and some ballistic vest manufacturers all named Body Armor. I was a bit dejected, but I had lunch plans that afternoon with my oldest brother, Bill. So, I show up to pick him up, knock on the door, and he looks down at me the way only an older brother can look at a younger brother, and he asks, “How’s that company you’re working on, uhh. . .Under Armor?”
Whether he was just messing with his younger brother or whether he was intentional with it, it doesn’t matter at this point. I cancelled lunch, went back to grandma’s house in Georgetown, filled out the paperwork, sent it to the patent and trademark office, and three weeks later, we were clean and clear.
Oh, and the reason we added the U in Armour is that I was skeptical at the time about whether this whole Internet thing would stick. So I thought the phone number 888-4ARMOUR was much more compelling than 888-44ARMOR. I wish there was a little more science or an entire marketing study behind it, but it was that simple.
Harrison: Was there a moment or key event you can point back to that helped the company take off?
Plank: I remember the first time we had an athlete on the cover of USA Today wearing one of our mock turtlenecks with the logo exposed. It was maybe 1996 or 1997. I saw the paper early in the morning, and I remember thinking to myself, “My Gosh, the phones are going to blow up, this is going to be a massive day for us.”
Nobody called. Well, my mom called, and it was great to talk to her, but other than that, it didn’t resonate. Nobody knew what it was or how to get a hold of us. I realized then that it wasn’t going to be one shot or moment when an athlete wore our hat after the game and all of a sudden you blow up. And I had seen that — like when Mike Tyson would throw on a hat after a fight and the company would immediately take off. I dreamed of that lottery-ticket moment, as well, but what you come to find out is that nothing in life is easy and it doesn’t happen overnight.
Harrison: What other lessons did you learn as you started to scale up?
Plank: One was from the opportunity we had in the movie Any Given Sunday, with this massive roster of stars directed by Oliver Stone. I sent them some samples, and they loved the product, said it was some of the best they had seen and they asked us to send them a thousand of these, a thousand of those. I thought, “this is great,” but then I asked where to send the invoice. They were like, “Invoice, are you kidding?”
I’m looking around Grandma’s basement - yelling turn down The Price is Right - thinking we have a big order on the line. It’s a little know fact, but with Oliver Stone and Any Given Sunday, for all the exposure that we got from Cameron Diaz to Jamie Foxx’s jockstrap with the Under Armour logo in the center of it, that was something they paid over $40,000 for all the product that they bought from us.
What I hear over and over again is “this is good marketing,” “you gotta give it away,” or “I’m giving it away only for a little bit.” Don’t ever, ever devalue your product. Ever. It’s the worst thing anyone can do to hurt your brand. I had people threaten that if we didn’t give it to them, they wouldn’t wear it. But I’ve found that, if you make a great product, and you charge a fair price, there will be a market for it.
Harrison: What was your mindset as you built a team of people around you?
Plank: You’ll hear people say that the same people who got you to $1 million aren’t the same people who will get you to $10 million. I think that’s true and it isn’t true. It’s true in the sense that there may be factors that are just part of life that may prevent people from going forward. But if someone chooses to stick with you, and you have the right team, there’s no such thing as an all-star stable of studs. It’s just the best people that you know to accomplish a task that you have at hand, that are good teammates, and that believe in the mission of the company and are willing to believe and fight and struggle and sacrifice and all those things.
Harrison: What are some of the challenges you now face as a larger organization?
Plank: You know, we’re a slogan-based company. I keep these whiteboards in my office, three across and five down, that say things like “Overpromise and deliver,” “Walk with a purpose,” “Done, done, done.” At the center though, and the only one written in red ink, it says simply, “Don’t forget to sell shirts and shoes.” We get caught up with lots of other things, signing teams, signing athletes, do all these things — but our company rings the register and we build profit when we sell lots of shirts and shoes.
Harrison: What are some of main benefits of the company’s success?
Plank: We like to say that, when we do well, we can do good. Fortunately, we’ve had a great run as a company, and that gives us the opportunity to do good in our local communities. We just finished renovating a place called Banner Field, named in honor of Francis Scott Key. It serves Digital Harbor High School and Francis Scott Key Middle School, which didn’t have a field to play on before.
We did the same thing a year ago at Dunbar High School, and those are the things we are going to make practice of going forward, especially because we see the limits of what government can and cannot do. There’s an important role there for the private sector to play. We embrace that and there’s plenty more to come.
Harrison: I know the company is also behind the upcoming Fight Night (this Thursday) in Washington. How did you get involved with that event?
Plank: Joe Roberts, who started it, was a good friend. I made a pledge to Joe when he found out that he was terminally ill that we weren’t going to let Fight Night go away. I liked what he was doing and I liked what Fight for Children meant. Also, as a D.C. guy who made Baltimore my home, I don’t want it to be D.C. and Baltimore, I want it to be a region. I like our region. When I bring people here from outside the area and outside the country, I want them to see all the beauty that is Baltimore, Annapolis, Washington, and so on. So when we think about giving back in our backyard, that doesn’t stop at the Baltimore city lines.
Harrison: So what’s next for the company? Where do you go from here?
Plank: I believe we have the opportunity, the resolve and the chops to be the next great athletic brand. I’m incredibly bullish about our future, and I think we have a chance to play a much bigger role than just a typical apparel and footwear supplier. We want to deliver the most innovative and technical gear that delivers on our mission, which is to make all athletes better.
What’s written on our wall isn’t “let’s be really, really good.” What’s written on our wall is let’s be the greatest company in the history of the world. Respect to Silicon Valley and all the great companies that are out there, but we feel we are just getting started, we have a long way to go, and we like our odds.
Harrison: What’s one piece of advice you think is critical for up-and-coming entrepreneurs?
Plank: Success doesn’t happen quickly. It happens from doing the same thing over and over, becoming great at it, and delivering great value to consumers. It takes time, and that’s why I’m such an advocate for, if you have an idea, get it out there, find out if it can sell, and if does, move to version two, move to version three, and find a way.
Check out earlier installments in this series: