On November 3, 2021, footwear company Allbirds listed on the NASDAQ exchange and hit a US$4 billion ($5.5 billion) market cap — just 60 months after being founded. The company’s share price surged 93% on its first day and since then has settled between 45% and 66% over its listing price, making it one of the most successful startup listings of recent times.
Allbirds’ story is all the more noteworthy given its commitment to sustainability and how the business puts planet right beside profit. It’s also a company I have a personal connection to; my stepdaughter Lisa was employee #13 at Allbirds and still helps lead product development for the company.
So what are the secrets to success for this New Zealand business that has put its best foot forward on the global stage?
Kiwi professional soccer player Tim Brown had captained his national team, and over the course of his career had received many shoes to “test”, finding many of them cheaply made of plastic and surprisingly uncomfortable. When he retired from sport in 2012, he began thinking seriously about making a logo-less, understated, uber comfortable shoe from sustainably harvested, New Zealand merino wool.
In 2014 he received support and a $200,000 development grant from the New Zealand Wool Industry and Grow Wellington to create a wool sneaker. He launched a Kickstarter campaign for ‘Wool Runners’, hoping to sell a few hundred pairs and raise $30,000. A few days later, after selling 1064 pairs of wool runners and raising $119,000, he had to shut down the campaign because he didn’t have enough material to make any more.
This demand led Brown to San Francisco where he teamed up with a friend (and one of his initial Kickstarter backers) Joe Zwillinger, who at the time was running the chemicals business unit of a biotech company in San Francisco.
The two were well matched to co-found a company. Brown had experience leading winning teams and product vision, while Zwillinger had experience in managing company growth, consulting and investment banking.
Most importantly, they shared the same mission — to build a footwear company that would tread lightly on Mother Earth, using natural, recycled and renewable materials.
The paid raised $2.7 million in seed funding, followed soon after by another $7.25 million from venture capitalists, and began to execute on their vision. In 2016, Allbirds was officially launched.
Two years later, the business had sold its one millionth pair of shoes, and reached a market cap of US$1 billion ($1.37 billion) — one of the quickest companies in Silicon Valley to achieve unicorn status.
In 2016 Time Magazine described Allbirds runners as “the world’s most comfortable shoe” and in 2018, the magazine identified Allbirds Sweetfoam as one of the best inventions of the year.
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One of the first things Brown and Zwillinger did was recruit an experienced team of people who shared their mission.
A great example of this is my stepdaughter Lisa, who they recruited to head up product development. She had held a similar senior role at Reebok but became disillusioned with the excesses and waste of the footwear industry. When she heard about Allbirds and met Brown and Zwillinger, she realised she could achieve her personal vision by helping Allbirds achieve its corporate mission.
Five years later, on the day Allbirds went public, she wrote me that she was so happy that she had found a way to achieve her personal vision of showing the industry that footwear can be done in a better way.
“More than anything, I’m proud of that.”
Brown and Zwillinger hired many senior executives like Lisa. Their experience meant Allbirds could ‘hit the ground running’ — helping it to sprint to IPO in just five years.
Today, Allbirds is a 350-person business with a market cap of US$4.7 billion ($6.44 billion). The day it went public, it sent an email to all customers:
“We’re writing to let you know we might be in the news today because we’ve gone public — which is a really exciting milestone for us. But it’s even more exciting because we’ve been working tirelessly to make our company about so much more than financial buzzwords and market trends.
“Today we’re introducing the world to the SPO framework. That stands for Sustainability, Principles, and Objectives framework. It means we’ve applied a new framework developed by a team of leading experts designed to hold our business accountable to the planet, not just the bottom line.
“To be totally honest, it would have been much easier for us not to do any of this. to just roll through operations as usual. But at the core of our brand is a belief that we can build a Better Business — one that puts the planet right up there next to profit.
“Before we wrap up, we like to focus on you for a second. Today and all the days leading up to today wouldn’t have been possible without you — your support. encouragement, and push to get better. It’s what got us here, and we promise that in this next chapter of Allbirds you’ll see more products, for more people — all built in the spirit of doing better for you and the planet. Thanks for everything — we can’t wait for what’s next.”
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Allbirds is actually a sustainable materials innovation company that happens to make shoes and has expanded to clothes. In the future, it could offer a multitude of other products made of its sustainable materials.
Allbirds is proof that a company can build a successful business by putting the planet next to profit.
Jana Matthews is the ANZ Chair in Business Growth and founding director at the Australian Centre for Business Growth at the University of South Australia. She has a doctorate from Harvard, has founded five companies and written eight books, and was selected as one of the most influential women in Australia in the AFR and QANTAS 100 Women of Influence Awards 2018.
