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LINDSEY VONN
CNBC.com web-only interview
Downhill skier Lindsay Vonn

I Am American Business

Kevin Plank

Producer Notes

Under Armour is located in a building complex called Tide Point on the waterfront in Baltimore, Maryland. The old brick industrial buildings used to be home to a Proctor and Gamble factory, and vintage Tide and Ivory soap ads adorn the entryways. The high-energy offices of Under Armour feel like the perfect 21st century replacement for P&G. In contrast with the housewives in aprons in the old ads, the Under Armour images of athletes in action show how far we’ve come. Under Armour products are designed to get you out of the house, running, playing, moving. Their products tackle sweat and stains with technology, not soapsuds. Walking though the halls with Kevin Plank, we passed one breathless employee, clearly on the way back from a workout. “How many miles did you do today?” Kevin asked him. “Just six”, he said. You get the feeling that if you worked at Under Armour, you’d be running faster and farther than you ever did before. And I guess that’s exactly the feeling they’re marketing with their brand.

Video Interview

The "I Am" Q&A

What car do you drive?
Jeep.

What’s your favorite place to go?
Home.

What was your worst moment in business?
Going broke.

When was that?
Eighteen months into the business.

What’s your favorite drink?
Water.

What’s your favorite food?
Sloppy Joe’s.

What’s your idea of fun?
Having your team around you and winning.

And at work?
Having your team around you and winning.

What personal weaknesses do you forgive in someone?
Loyalty’s important, but also decisions must be made and that’s what business is about.

What about business weaknesses?
I believe people change. I think that they can learn from mistakes.

What movie star do you like?
Al Pacino.

Who’s a business hero of yours?
Howard Schultz.

What personal qualities do you admire in a person?
I like people who go, I love energy.

Are you doing anything green? Anything for the environment?
Being green means preventing waste. Those goals are so well-aligned with what we want to do as a company.

What was your greatest moment in business?
Watching us be successful and watching us be a bit impatient too.

What’s your greatest moment in life?
The birth of my son James and my daughter Catherine.

What’s your dream?
To build the world’s number one performance athletic brand.

Do you have a motto?
We’re team-oriented. We’re humble and hungry. Walk with a purpose.

What is your present state of mind?
The adjustment, it’s excitement about where we’re going.

Transcript


CNBC:
What is the power of a brand?

KEVIN PLANK:
Brand is not a product that’s for sure; it’s not one item. It’s an idea, it’s a theory, it’s a meaning, it’s how you carry yourself. It’s aspirational, it’s inspirational. I think that’s what we’ve really been able to capture and define as a company is this idea that Under Armour is something that makes you better. It’s knowing what do you want to be. Do you want to make varsity, do you want to play college sports, do you want to lose twenty pounds? What’s the role that Under Armour can play for you and what’s the meaning that it can have?

CNBC:
How did this idea come about?

KEVIN PLANK:
I wasn’t a great athlete by any stretch and looking for any advantage that I could get on the field. And you think about innovation in sporting goods and it’s always been limited to: “we’re going to make this shoe one ounce lighter. We’re going to fix this helmet or take this pad and create it and make it lighter and more efficient.” And nobody had ever really paid attention to apparel. And as an athlete, you're issued these cotton T-shirts. And there was no alternative. And cotton T-shirts dry would weigh about six ounces. When it got wet, it would weigh somewhere between two and a half and three pounds. And so the idea that I had was why not make something of more of a synthetic-like material that wouldn't hold the moisture’s weight? So I went to a local fabric store, bought some material. Took it to a local tailor, brought him a tight little white Hanes T-shirt and said “Sir, can you make as many T-shirts that look like this out of this material as you could?” And seven prototypes and four hundred and sixty or seventy dollars later, I took them back to my teammates in Maryland and had them try them. And I realized when I set out that I wanted to build the world’s greatest football undershirt. And of the seven prototypes I passed out there was also one baseball player was on our team. Another one of the guys was also a lacrosse player. And they also took them back to their other sports. And the way it came back was “Kevin this is great. The other guys on the lacrosse are saying; can you get more of these?” And the same thing from the baseball team. And I realized that we didn’t just build a better T-shirt for football, but this was this whole category, which was really much bigger and much larger in scope.

CNBC:
Were you thinking you were going to make the greatest T-shirt ever?

KEVIN PLANK:
I wanted to make the world’s greatest football undershirt. But I realized that no team sport had equipment for apparel. Apparel was an afterthought. And so the idea was to build product that would stand the test of time, that could be thought of as equipment, that would be a performance enhancer instead of just something that was another layer between your skin and the equipment or your jersey.

CNBC:
What were you doing at Maryland?

KEVIN PLANK:
I was a general business major, which meant that in any business school and particularly at Smith School, which is a very good school, you do a lot of team projects. Well I was the guy who gave the presentations for the team projects. It gave you the perspective of marketing, it gave you the perspective of finance, and it gave you the perspective of accounting and how the pieces worked together. And that was one of the things I was very proud of. I always thought of myself as an entrepreneur. And I think I’ve lived that way and I think it’s come through in our business that there’s no job that’s too small or too big. And that’s a part of the process you learn in a large university like Maryland: how to get through school, how to deal with a team of people, and how to put a team of people to work toward the same common goal.

CNBC:
Were you actually sitting on the bench when you had the idea?

KEVIN PLANK:
No sitting on the bench. I may have spent enough time sitting on the bench. I remember the first time that I drew up the picture of what is Under Armour. And it was sitting on my couch, in my room with my roommates at school. And I’m not a very good artist and it’s one thing you’ll find is that to be successful, you need to know what you're good at and what you're not good at. And I think one of my talents is being able to identify something, whether it’s commercial or not. So I remember sitting there and I scribed out what the Under Armour T-shirt would look like. And I showed it somebody and I said, so what do you think of this? It was a square T-shirt that was drawn; I said this is my idea. And I had lines drawn to try to show that it was compressive and that it would help with all the moisture management and things. And people didn’t really get it at the time. And so that’s when I realized that presenting yourself was, particularly as a very small business, it’s a business that’s much larger than yours. Now remember when I went back to my teammates at Maryland and telling them I’ve got this idea, this concept, you have to try it. It was never this is my idea or concept. It was I’m doing work with this company. And I want you to try these things and so I was always very ambiguous about sort of who was in charge.

CNBC:
Why?

KEVIN PLANK:
When I started, I used to carry two business cards with me. I carried one that said, Under Armour, Kevin Plank, President Under Armour. And I’d carry another one that said Kevin Plank, sales manager Under Armour. The reason for that is, when you're dealing with vendors and, you want people to know that the buck stops here, that I can answer any questions that you have. That if you're going to be paid, that I’m the person that will give you my word and you’ll have certainty to it. And then on the other side when you're out there and you're trying to do sales because as an entrepreneur in your grandma’s basement and you're trying to act like a company much bigger, you want people to think that there’s a home office somewhere. And you also want people to think when they’re asking for a lower price, you’d say, listen I’d love to give you a better price but unfortunately, you know, the old man with the bag of money in DC or Baltimore, they’ll never go for it. So here’s the only price I can get you. So you want to be careful with balancing those two things.

CNBC:
Now they know who you are.

KEVIN PLANK:
Yeah so that’s why our team won't let me come in the room. I’m the yes guy, so you need yes people and you need no people. And so when I come in the room it usually doesn’t leave much room to give the no. [So I like good news.

CNBC:
You sold T-shirts at rock concerts and bracelets and you had that entrepreneurial streak. How would you describe that?

KEVIN PLANK:
It’s a fire, it’s a passion to get out and to create and to innovate. And that I’ve always enjoyed and I’ve always been very proud of is that the people I’ve done business with, the people around me have always made money. And whether it was pocket money or fifty or sixty dollars for the Cupid’s Valentine Rose Delivery which was my rose business when I was on campus in College Park, or whether it’s been the shareholders of Under Armour, it’s been important to reach those milestones and to see that the company continues on a progression which is much greater than they are today. That belief is very powerful. I think our brand and our role as a growth company is one that consumers, shareholders alike, embrace and they see that is the American way. And as much as I say that, I also spend a lot of time overseas. And I realize that other places are getting very good as well. And that we need to stay sharp and that the idea of the entrepreneurial spirit, the idea of inventing change and finding ways to solve problems and to think about businesses with new ideas, new concepts, is important to our economy and I think Under Armour embodies that spirit.

CNBC:
So you had that from a pretty young age?

KEVIN PLANK:
Sure. There’s the old slogan from salespeople where they say, salesmen are not made, they’re born. I’m not sure that entrepreneurs are much different. It’s a fire that you have when school gets canceled and you're a ten year old kid, you're jumping up and down because you say I got to wake up at 6:30 and go shovel snow all morning and make a pocket full of cash. That’s the attitude I think all of us should have. Is that I’m not a big believer in sleep. I believe in energy, I believe in getting out, waking up, attacking the day. And I think that comes through with the culture of our business and our company as well. Is that we’re not a passive company, we’re a company that does continue to attack each and everyday to look for the new categories, to not be satisfied, not be complacent. But that’s something that comes and I think is driven from team sports. I like to say that we run this company much like a team. Sales and marketing are like offense. Manufacturing and distribution are like defense. Finance and IT are like your special teams, and what you find is that these different groups, and whether the American football team, acts more like a European football team. Where everyone seems to be on the field at the same time. This was my experience, this is why I came right out of school and I started my company. And I think that works and that team mentality is where there are no stars, there’s no just one person that’s bigger than the whole team. And that’s something I think that, hopefully comes through when you see our brand at retail.

CNBC:
Can you talk about the identity of an athlete and how that relates to the identity of the brand?

KEVIN PLANK:
Athletes always want more, right? Athletes are aspirational by nature; they’re aspiring for greatness. That’s what sports is about, is that records will be broken, right? The way that you approach and attack, each day, your own mentality of what that record is, and what you're trying to achieve. That’s what makes all of us great. And that’s no different in business. In business you find that the world doesn’t need a slightly better athletic brand. But what Under Armour does and our goal is to recreate and reinvent what is the sporting goods company of the future supposed to look like. And how do we do it new and different? And those are challenges that are exciting, those are the things that you know, get you up and have you jump out of bed each and every day.

CNBC:
What’s happened to your stocks since you’ve gone public?

KEVIN PLANK:
The decision to be a public company was one we took on several years ago and it was probably the day that we brought in our first bit of private equity into the business. Under Armour was never supposed to be a nice small family-owned business. Under Armour always wanted to be big brand. And big brand wasn’t a definition by revenues as much as a definition by greatness, and that was through product, and the goals that we create for people that say I want to be a part of what the Under Armour brand represents. And the value that we created from going public was important. It allowed more people than even just the employees and the teammates in our company to enjoy. The day that we went public, I think we priced thirteen dollars. And we opened at more than twenty-five or twenty-six dollars that day. And the ride that we’ve had since then has been one of what you're supposed to do. Businesses are supposed to grow, businesses are supposed to improve each and every day. And while we’ve never made a habit of commenting on our stock price, stocks are important, because it is a way for us to evaluate ourselves.

CNBC:
What’s it been like for you to go on this kind of ride?

KEVIN PLANK:
I think being a public company is a special thing. Six thousand businesses are started in the US every year. Six hundred of them make it through the first five years. And sixty of those end up going public at some point. And you look at the growth, the run, the ride that we’ve had as a company, as a public company and it’s been something that you always know that you do well and you hold yourself to a high standard. But you know your stock price is an indication of how does the market see you, how does the market accept you? And I don't think that we’ll ever allow short-term market decisions to frame the business decisions that we make on a day-to-day basis. But I do believe that it’s an important indicator over the long term and that’s how stock prices should be judged. It’s not on a daily, weekly, or monthly basis. But it’s over the years. We became a public business to set ourselves up for the next five, ten, fifteen, twenty years as a company, and that’s the growth and that’s I believe the opportunity that’s in front of this company. I think that our opportunity it is to be the next great brand. And that’s not just in the area in the US but it is the next great global brand. And I believe that the completion of that cycle is something that’s, it’s up to us. And that’s what will define us as a company. But if we make great product, if we tell great stories, if we service our business and we build great teams of people to helps execute on all these things, our stock price will take care of itself.

CNBC:
You’ve also said that you like being the underdog or that you are sympathetic to the underdog players, how does that relate to your brand strategy?

KEVIN PLANK:
First of all I don’t know if we ever had a choice but to be the underdog. We’ve got big competitors out there and we’re very aware of what they’re capable of. I think we respect our competition as well. But at the same time, we’ve never been consumed by our competition. I think part of our success has been our focus on ourselves and on what we’re doing. And frankly based on the market share that we have which is seventy eighty-plus percent around this technical category, if we can get the consumers to make the decision to get out of cotton, get into performance, seven to eight times out of ten, they’re going to choose our brand anyway. If we’re doing our job correctly, we’ll continue to have a smaller percentage of the overall “performance pie.” But what I believe one of the greatest strengths that our business has is our capability to expand whole markets. And what you’ve seen is this concept that performance continues to grow much quicker frankly than any one brand’s growth rate.

CNBC:
You had an early line that you would use. Can you tell us about it?

KEVIN PLANK:
Cotton is the enemy! That’s what our brand is about. To get consumers out of cotton. Get them to try performance. I believe the vision that this company has is that everyone is going to continue to expect or demand more from the products that they wear. We’re showing consumers that you should expect and demand more. You should expect lateral support, you should expect moisture management. You should expect the fact that your shirt shouldn't stink. You should expect the fact that your apparel should have UPF30 protection in it. And that your product should be able to stretch and move with your body. That’s sort of the DNA that we put into every product that we build. When we say cotton is the enemy, it means that our brand doesn’t make basic product. It begins with the fibers, begins with the fabrics, begins with the way it feels and of course it always ends with the way it performs for the athlete. That’s what our brand is supposed to be.

CNBC:
Are stories part of Under Armour?

KEVIN PLANK:
Stories are everything with Under Armour. I mentioned sort of the likening of a business to a team. So I don't manage the company much different than that. In my office, still today I keep these boards that have everything from depth charts to slogans and sayings that are on them. In the center of my board I keep what I call my job description and there’s four components to my job description. Number one is to make great product. Number two is to tell a great story about our product. Number three is to service our business and number four is to build a great team of people to help us do that. And so I realize and I look at that every morning when I get to work and every night before I go home. And I ask myself am I working toward this today? And if I’m not, I’m not doing my job. You know we are a product company first and foremost. But probably one of the best products that we build and manufacture as a company is our ability to tell stories. The way they communicate with the consumer. And what we’ve done is I think opened up the thinking and the ability for people to say, it’s okay for me to be technical about the apparel that I wear. And that is part of the theater, that is part of the stories that we tell, I believe as a business, and that the consumer says I’m willing to invest in this brand.

CNBC:
Not a T-shirt without a great story…

KEVIN PLANK:
Without a great story, it’s just an expensive T-shirt. And so you need to think about how do you convince the consumer that this is worthy of investing? What we did initially was we created a great product. But we also created price points for our retailers. We put the build into the product itself. And that is part of the storytelling. And that storytelling starts at the retail level, at the branding, the commercial level. But it’s also experiential and it’s something that people need to try and embrace and say wow when I wear this shirt, I feel the difference from wearing that basic cotton product. And the more that we can get one person to try it and to work out in, in technical product or Under Armour technical product, the advocates that they’ll become forth, telling people about this, this new way of being, this reckoning that’s happening with people getting out of cotton, throwing it away, and getting into technical performance product.

CNBC:
What’s the thinking behind targeting the high school and college athlete?

KEVIN PLANK:
We didn’t target the high school and college athlete. The high school and college athlete responded to what we were doing. Now maybe that was, when we started we were fresh off of being college athletes. And as we get older and as I add gray hair you need to start thinking about how do you speak to that consumer, how do you stay relevant to them? But I think the one thing that’s been consistent over the years. We continue to talk to the athlete. We continue to build product that makes them better, that gives them an edge. Our product mantra is that we won't build or create a product unless it has some featured benefit better than what’s currently available on the market. We won't just put a logo on a product and say, we can sell some units, we can get into this category. That’s brand damage in my opinion and so we’ve been very thoughtful about the categories that we’ve gone after and that we’ve entered.

CNBC:
What about the young female athlete?

KEVIN PLANK:
Well she’s a bit of a newer approach for us just in the fact that we’ve been doing women’s products now for the last four or five years. And what I can tell you is that that gives our brand the leg up I believe over anyone else. There’s this consumer out there. She is young, she’s athletic, she’s a competitor, and she wants to look great. And I don't believe she’s had a brand that’s spoken to her. Is, there’s labels who sort of solve some of the niche issues that athletes have. But there’s never been a brand who’s spoken to that teen athlete. That’s what we want to represent to consumers and that’s what we’re hearing from our customer when they email us, when they call us, when they interact with us at the store level. And the statistic I love to give is that in the early seventies when Title IX was signed and again, I believe Title IX was one of the most successful pieces of government legislation ever. One in twenty-five high school females participated in team sports. Today that same statistic and because what Title IX is that for every dollar spent in men’s sports, the same amount of money needs to be spent against women’s sports. And that’s created this whole environment of collegiate team athletics.. And from that, today that same statistic of girls participating at the high school level is one in 2.5. If you think about the growth, the trajectory, the amount of participation that is now, you know inclusive of that and there’s no one speaking to that. And we believe that our brand does. And we know that because you know we used to see it in our sizing. Where we’d sell so many more smalls and mediums at the retail level because she didn’t have a brand and she was buying our men’s product. And so we started making product specifically for her. And we’ve developed not only a voice, but also a point of view for the female athlete. We call her Ms. Varsity Blues, and we continue to speak to Ms. Varsity Blues each and every day through every product offering that we present to her.

CNBC:
Can you talk about how you gave the product away and how the interest in the product spread?

KEVIN PLANK:
In getting Under Armour started, like any business I think number one, you need a great idea. But it’s also about who you know. And I was fortunate enough to have gone to a prep school called Fork Union Military Academy, and I wanted to play Division I football. So I went to this school where we had a special group of guys. From one high school class, we signed twenty-two players from our team signed Division IA scholarships. Of that, thirteen of them had gone on to play in the NFL. Now unfortunately for me, I wasn’t one of them. But that was okay because I realized that very early in life. So between the athletes I knew at Fork Union that included three first round picks, one guy actually won the Heisman Trophy, his name was Eddie George. And the other players that were there, and the guys I knew from Maryland who’d gone on to play in the NFL. I had this database of thirty, thirty-five different athletes I had access to. And not well enough to say “hey congratulations. You're on television, you’ve got this exposure, you're making all this money, and can you loan me five hundred dollars.” But it was “hey I’ve got this product idea. Let me send you a couple shirts and if you like it, wear it. And if you really like it, give one to the guy in the locker next to you.” And so from that, that’s where the Under Armour brand came from. It was a product that we built developed out of athletes’ need. You know we started with this simple concept of Under Armour the brand. I thought it was the name of our first shirt. And then we realized well this was a warm weather shirt, so we ended up calling it Under Armour Heat Gear. Well if we had Under Armour Heat Gear, then we needed a cold weather shirt. We developed Under Armour Cold Gear because that’s what the athletes were seeing throughout the course of the season. So from that use of not only getting athletes to try to wear it, not because we were paying them money, but because they believed in what our product was doing.

CNBC:
Can you talk about what word of mouth did for you?

KEVIN PLANK:
In the early days when we got going, our product and brand wasn’t marketing. It was only word of mouth. We made one great product and one athlete told another athlete about it, and from that that word of mouth spread. And it was four or five years into our business before we sold our first retail customer. We sold NFL, Major League Baseball, you know the National Hockey League. And then one team plays another and is saying, hey what are those things? And that’s something, which is so real that you can’t recreate it. And then we finally got to that point where we were ready to take our product out to the market, and there was this mystery around it. You know you're not going to see this on TV. But if you go in the locker room, you’ll see this is what the players are wearing. And that’s what really built, I believe, much of the credibility that lives and exists in our brand today.

CNBC:
What are some of the things that you stand by?

KEVIN PLANK:
We use this saying; we call it our universal guarantee of performance. When you think about what’s the role that our brand plays with our consumer, is that I believe we’re the advocates for the athletes of this generation. You stop and you think about that, the responsibility, the role that our business has is kids, consumers out there, when we put a slogan out there and we say “Click-Clack,” it’s echoed. And we’ve changed the name; the way kids refer to their football cleats. That we are the voice of this generation, these kids are looking for us to point them in the right direction, to give them you know what is the athletic meaning. And listen kids are going to, they’ll do what they want to do. But our job is to interpret, what are they saying? And so it’s bringing that information in and having those conversations with them and explaining that back to the consumer through not just lets throw a logo on it. That’s a responsibility and that’s something, which I think we take and hold very seriously.

CNBC:
Where did the logo come from?

KEVIN PLANK:
When we first came up with it, we had this great name called Under Armour. So the big idea I had for our logo was the name was Under Armour, and I pitched three different artists. I picture this guy like Hercules, standing up, he’s got a shield over his head. And the world’s on top of a shield, so he’s Under Armour. And they sort of listened and gave my creative feedback and they did what they wanted. And where it ended up was one of them came back to me and said that what she thought would be neat would be putting these two little scratches that make this U and the A, and she decorated each corner of the shield with the U and the A. And we saw that there was something very special there. And we looked and we saw what the U and the A formed and it was perfect, it was our logo. It was about balance, the top was the same as the bottom, the left was the same as the right, and it felt right.

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