Listen Podcast in Spanish

By Juan M. Muñoz, (CEO de Artichoke)

(8min reading)

A proper hipster never leaves his or her home without the mandatory white airpods perched upon the earlobes, a tall cup of coffee in hand … and a pair of Allbirds gracing the feet. Ben Affleck, Ashton Kutcher, Chuck Norris, Hugh Jackman, Matthew McConaughey and Barack Obama, among others, have been known to wear them.

Where did these oh-so-minimalistic, self-defined “most comfortable sneakers in the world” come from? From New Zealand sheep, of all places. From the antipodes, literally.

Legend has it that the founder, Jim Brown, a former soccer player with a fondness for design, grew tired of overpriced, eyesore sports shoes covered with big logos and flashy colors. So he set out to create simpler, lighter and more comfortable shoes.

Brown was born in New Zealand, where merino sheep wool is a big industry. It is fabric used, among other things, in high end suits by brands such as Tom Ford, Armani and Gucci. Demand for this sustainable and endearing raw material, however, was going through a bit of a rough patch back in 2014.

This is where opportunity knocked on our soccer player friend’s front door: he pitched his idea to the New Zealand government and received a $200,000 grant to develop it.

Brown worked with a group of scientists to create a Merino wool-based design that was strong enough to form a shoe yet flexible enough to be comfortable.

Want to hear the story from the horse’s mouth?

Click here (farm animal pun not intended):

 

What’s not to love? Cute jock, impeccable hair, wool sweater, cameo by adorable knitting mom with adorable lady friend, breathtaking New Zealand landscapes, inspirational lofty music. It’s like you died and went to Instagram heaven.

But wait, there’s another player in the game. Vision needs execution. Enter co-founder. Joey Zwillinger, an engineer, who’s seems to be somewhat camera shy yet holds a critical job description: production, logistics and and supply chain. Do you remember Apple’s co-founder, Steve Wozniak?

Life’s a pitch.

Brown and Zwillinger are multimillionaires now.

In successive rounds of funding they raised $77.5 million from, among others, the one and only Leonardo DiCaprio. How much money does a tweet like the below costs in terms of earned media? Seven figures? Eight figures? Impossible to measure.

Proud to be an investor in @Allbirds, a company committed to creating things in a better way. Yesterday, the team announced the Allbirds Carbon Fund to offset 100% of their carbon footprint. https://t.co/GX2cBKMOrQ

— Leonardo DiCaprio (@LeoDiCaprio) April 23, 2019

Come Q3 2019, Allbirds was already a full-fledged unicorn (Silicon Valley parlance for startups valued at $1,000 million or more). A cool $1.4 bill, to be precise. Next order of business: going public. IPO coming soon.

The keys to success

The business model Allbirds created is certainly unique. Disruptive. In my humble opinion, the founders have followed checklist masterfully, in one critical aspect specifically.

Let’s see:

Various things they have done very well (following the classic 4 Ps of the marketing):

1. Product

They nailed a combination that is not quite easy to achieve: style + comfort.

Distinct yet minimalist design. Comfortable, lightweight, washable, adaptable (shoes can be worn with or without socks in depending on the temperature, odor-free, cool-looking and guilt-free: proven environmental sustainability.

2. Price

The original model, the Wool Runners, goes for $95. The very definition of “affordable premium” right below the $100 psychological price threshold. With the addition of a “no playing games” policy: do not expect discounts, coupons, sales, BOGOs or promotions of any kind. Ever. This is possible thanks to the company’s go-to-market model, the third “P”: Place.

3. Place

Allbirds is, to this day, a pure Direct To Consumer (DTC) brand: its products cannot be purchased at or from multi-brand retailers, physical or virtual (namely Foot Locker, Dicks, Amazon, Zappos or Zalando). It is only sold through their website and their own stores. End of story. Whoever wants Silicon Valley’s favorite shoe has to buy them from its inventors. Not unlike Spain-based fashion behemoth Zara. It must be noted though that Allbirds reverse engineered its sales pipeline: they started out with ecommerce and once they found their footing online they moved on to brick & mortar.

Their chain of proprietary stores is still quite small with just 9 in the USA, 2 in Europe (Berlin and London) and 5 in Asia. More openings are on the way with the staunch commitment to keeping the user experience at its best in the footwear category: ambiance for personal customer interaction is intimately and strictly aligned with the company values of comfort, design, and sustainability, to wit: only a small selection of the catalog is displayed, possibly to keep the experience pleasant and to avoid that pesky feeling known as “overchoice”; all furniture is designed ad-hoc in natural materials and chairs have a convenient hollow space under the seat to lodge the shoeboxes and have the right shape to lean over to try on an item.

This self-contained sales model gives Allbirds a great deal of control over pricing which, as we well know, is a key part of a brands message, in other words, the fourth P of the equation: Promotion.

4. Promotion

Don’t let the environmentalism fool you, the main promotional focus of the Allbirds brand is not ecology. In Brown’s words, “People don’t buy products because they are sustainable, they buy them because they are brilliant.”

The fact of the matter is, Allbirds operates on two levels of communication.

The rational focus is COMFORT. After all, Allbirds is perched in the so-called “casual comfort” category. The promise is literal. And self-confident, to a fault: “the most comfortable shoe in the world.”

SUSTAINABILITY, nevertheless, is the emotional side and it is palpable every step of the way: advertising, POS signage, web, everything about the brand transpires ecology. The company never misses a chance to stress its commitment to environmental and social responsibility. Its policies and initiatives in this regard are described in detail for everyone willing to read it about them.

In 2018 they launched “The Tree Runners”, footwear made of eucalyptus fiber, which seems to have great cooling qualities which make them ideal for hot climates.

Wool shoes for winter and eucalyptus shoes for summer: it doesn’t get more single-mindedly self-explanatory than this.

The one thing they have done great: keeping it simple.

Everything about Allbirds exudes the utmost simplicity. It is a tenet of the brand and applies to many areas of the company.

First: the PRODUCT DESIGN itself. You simply couldn’t take anything out of it.

The company was launched with ONE SINGLE MODEL. In the purest Henry Ford style: “A customer can have their car the color they want, as long as it is black.” Or Steve Jobs, which launched in 2007 a single smartphone, the iPhone, compared to the wide assortment of the then leaders (Nokia, Motorola, Siemens, SonyEricsson).

This simple strategy allowed Allbirds to streamline their processes to the maximum and lowers production costs.

A UNIQUE AND UNTOUCHABLE PRICE.

A UNIQUE PROPRIETARY SALES CHANNEL, on and offline.

And a very simple and consistent communication, which is unusual in the fashion world always exuberant is stimulation, lifestyles, celebrities, and influencers. Allbirds just focus on the product and its advantages. Nothing more and nothing less. Excellent storytelling with a hint of humor, which never is at odds with simplicity.

And here comes the paradox: the only thing that is not unique is the USP (Unique Selling Proposition). They invented the DSP (Double Selling Proposition). Design & comfort.

Appendix: And the “tributes” arrived

There’s no better proof of a product’s success than the emergence of the imitators. In this case, a pretty scary one. Enter Amazon and it is own brand of knockoffs at half the price.

Co-founder Joey Zwillinger was graceful enough to acknowledge the rip-off with New Zealander gentlemanly manners: “We are flattered by the similarities that his private brand shoe shares with ours and we hope they also include eco-friendly materials (…) If you replace the fossil-fuel-based materials in your supply chain with our natural substitutes, maybe together we can positively impact the environment. Please try and steal our approach to sustainability too”.

In Spain, where the Allbirds have not yet arrived, we have the Yuccs.

I encourage you to enter their website and look for differences.

Epilogue

The origin of the name “Allbirds” refers to New Zealand. When the first settlers arrived on the island they were surprised because there were only birds and no signs of mammals.

Conversely, Hispania (“land of rabbits”) is the name the Romans gave the Iberian Peninsula. Any entrepreneurial ideas pop to mind? Call me to discuss!