Ben Fahy, Idealog publisher and editorial director: You’re probably best known as a Phoenix player and being a professional athlete is something that a lot of kids dream about. Being a shoe tycoon, probably not so much. I am sure you've been telling the story a lot recently, but how did you get into the business and when did it all start?
Tim Brown, co-founder of Allbirds: Yeah it’s a good question, thanks for having me on. I was back playing football for the Phoenix in Wellington, I had time on my hands and I didn't want to use my afternoons playing Playstation so I was experimenting with a range of different projects really. One of those became what is really Allbirds. I started off being really interested in shoes, I saw an opportunity in the shoe space to create a brand that was about simple design materials and while I was still playing I applied for and won an innovation grant to develop a woollen fabric. It kind of just occurred to me that wool would be an amazing material for shoes and that it had never been done before and my early research and experiments suggested that there was an innovation opportunity there. I got this grant and it was the beginning of falling down the rabbit hole of this project.
A lot of people really like sneakers in general, but it seems that people really love your sneakers in particular. Your company has about $10 million in capital in addition to some more early money; you are a bit of a media darling and a whole heap of media brands are singing Allbirds’ praises; you're practically part of the startup uniform in San Francisco, it seems; and even I bought a pair, and I've got to agree, they are pretty close to outdoor slippers. That all kind of overlooks the trials and tribulations though. What was so hard about it and what kept you going through those tough times?
It’s like any sort of achievement. You look at it when it’s become public and it looks all glossy, shiny and new and simple. As is always the case, there is a lot of heartache in between the glorious moments. It’s the same with me and my football. We managed to go to a World cup in 2010 in South Africa. Everyone kind of wanted to be my friend as a footballer then but there was plenty of lonely moments, plenty of on trial moments wandering around the world trying to find a paying gig, doubting yourself, all those sorts of steps before you are able to achieve this great thing at the end. It has been the same with the business. I really had no large plan to build the business that we are starting to build now. It was really all about curiosity if I am honest. I looked at a product category like shoes and thought, ‘shit, there was potentially a better way of doing something here’ and as I got into it with all my naivety about the footwear industry I started to ask questions about better ways of doing things.
The Indian bus ride example is completely accurate. You remember the scenery, you forget the diarrhea.
They're two good traits really, curiosity and naivety. When you talked to us in June I think your quote was:" If I had known how hard it would be I never would have started” and that's a comment you hear from a lot of entrepreneurs.
Yeah it’s completely true, completely true
What kind of mistakes along the way have you made? Can you pick out the best mistake? Some of those are quite defining moments in the evolution of a company. You maybe got a kickback or you put it into the market and it’s not quite what the market wants. Have you had to change the way that your designs have come into the world?
So many [mistakes]. Operationally, initially getting sizing wrong You name it, I've made that mistake. There is a funny sort of thing. I look back, and it’s a personality quirk or trait or weakness, whatever you want to frame it as. Every single time you get knocked back you want to go harder again and I sort of think I was empowered by the negativity around the idea. Each time someone told me it was a silly idea I think I got more determined to try and prove them wrong. I think it’s just like anything, starting something is hard. Like I said with the football I had this powerful thing driving me, which was playing for New Zealand. It meant something immense. And we have been able to discover the same thing with footwear. The idea that there is no one trying to make shoes more sustainably. I mean it just doesn't really feel like there is. So I think we feel our mission now is to try and do that and I think that's what has been a powerful drive through all the ups and downs.
It feels a little bit like an overnight bus ride in India. At the time it’s kind of terrible but when you look back on it, there’s a glow of nostalgia. You look back at it fondly. Is that how you see it? I’m sure it’s also been hugely rewarding. But do you look back on it and say I am pretty proud of where things are now? And how has that level of growth and attention surprised you?
The Indian bus ride example is completely accurate. You remember the scenery, you forget the diarrhea. I think that the worst time I had when I finished football when I retired was when I went through the period of not knowing at all what I was meant to be doing. In the thick of this thing it was all quite good fun and I was doing the things that I should be doing. You lean on the people around you, your family, your friends and all that stuff. I am constantly on a day to day basis humbled by the early success that we have had but I certainly – myself and my co- founder [Joey Zwillinger] – we are just getting started here. I don't think there's any sort of counting of chickens.
You mention the help that you've had along the way. Innovation and invention is sometimes pegged as solitary pursuit but you have hooked up with a range of very smart people along the way, including local designer Jamie McLellan and illustrator Toby Morris for your branding, which was very impressive. But how important was the outside expertise for this idea to fly? Was it hard to give up control or was it a sense of relief?
No, it’s the best part of my job. There is absolutely no way that I could achieve this alone. The first people that I met on this journey were through Tony Parker, who's the head of design school of Massey University. I reached out and said ‘look I have this vision for a product and I need some help’. He connected me up with Jamie McLellan who is just this incredible industrial designer, who's become a friend and a key collaborator on this project that we're doing at the moment. And then Toby who I went to Wellington College with. We reconnected with all these people and over time we've been bringing in these creative resources and pushing them towards our mission and developing our product. It has been just an awesome thing. It’s a whole community of people that have touched us.
The product itself is pretty simple and stripped back. There is no obvious logo and quality basics seem to be quite popular at the moment. You have called it anonymous luxury, which I quite like. You've also said we're whispering when everyone else is screaming. Was that a response to the overkill perhaps used by some of the mainstream brands that you were associated with over the years?
Yeah, totally and if I went back to the key thing that sort of kicked it all of for me I was playing football and I was sponsored by Nike and everything had logos all over it and I had to wear it. I sort of found that there was a big deficit of products in the footwear space that were simple and plain and clean and there was sort of Chuck Taylors for shoes, but if you didn't like them and you thought that they were crappy quality there was nothing up until the Common Projects, which is a very expensive leather shoe brand. I saw an opportunity and I think there's a larger macro trend, which is the line between work and play are blurring. I think our sense of separation of putting on a suit and going to work and hanging out socially, all these things have changed. There’s a very clear sense that brands are not about logos anymore. They’re about simplicity and authenticity and I think that we've managed to capture some of that sort of spirit in what we've created with the wool runner.
You've also managed to capture the entire process, from production to online retailing. You see direct to consumer brands like Warby Parker who you've dealt with closely through David Gilboa, one of the founders, who is also an investor in Allbirds. You have also got Everlane selling direct to consumer. Was controlling the process your plan from the start? What kind of benefits does it provide you?
It’s critically important. If you're going through a third party retailer you sell bottled water and you go down to New World and they will tell your story for you. When you're direct to consumer you get to control every touch point, for better or worse. It is incredibly challenging. We make the product, we are the only ones that sell it and post-purchase if there are problems and issues and they don't fit properly you can call directly into our customer service team that’s right in the middle of our office here. So it presents some large challenges here but it also brings with it big benefits, which is if something is going wrong you can hear about it very quickly and you can change and try to improve it, which is great. You have the ability to sort of tell a story at every touch point, you have the ability to change, we are not tied to the fashion cycle or orderly releases. We can release new products whenever we want.
On top of that there this kind of margin room. What I mean by that is when you are selling shoes at 100 bucks and you're selling it to a retailer, the retailer takes half that margin. So fifty bucks is gone straight away. All of sudden you go down what room you have to actually make the product, so sort of ten to fifteen dollars really. The types of materials that you can use, the types of processes you can use or employ. That is our sense of where sustainability falls down. It’s too expensive and it’s too hard. It’s been a bit of an opportunity for us to use things like wool and merino, which other brands would overlook because they just don't have margin room.
You’re telling your story in a different way as well. Startup companies like yours traditionally don't use those mainstream channels. They tend to sneak in the back door with some positive PR and word to mouth, which you’re getting a lot of, particularly in San Francisco, it seems. A few billionaires wearing your shoes is always good for business and there's a fair bit of Facebook advertising. Have you found it easy to get the word out there when the product is so good?
When you’re in the consumer products business, or any sort of business, you can market anything, but you have to fill a need and you’ve got to solve a problem for your customer. I think that otherwise you’re sort of wasting your time and I think that's what really started us. I think I saw a problem and then we've tried as a business to try and solve that and the great thing is I think we have done a reasonable job at that and people are telling other people about it and off it goes. There is so much more that we have got to do and so much we have to improve. The great thing about the direct to consumer model is it allows us the room to do that really well and we don't have a sales force, it’s all pretty simple in some ways. I think it’s been a great way for us to start the business.
Speaking of simple, wool has had a bad rap in a way over the years. Sometimes the perception is that it's hot and scratchy. The synthetics industry has used its sizeable marketing budgets to convince consumers that the high-tech textiles are what you need. It seems that there's a trend moving back towards existing technologies and refining them to make them better. You see wind power coming back into vogue, butter is more popular than margarine. Are natural materials and sustainability your main point of difference and is that enough these days?
No I don't think it’s enough. I think people make a huge mistake with the topic of sustainability, whatever that really means. You make the best product you can. I just think it's the duty of all business to make whatever they’re making as sustainability as possible. I think that there's a seismic change in the fashion and apparel industry going on that is being preceded by a similar change in something like the food industry where people are eating their omelette and they want to know where the eggs come from. They want to know the story. The fashion industry has done a pretty poor job of telling that story and I think that's changing. The example of Everlane, who disclose their supply chain, is a great example of a brand doing it well and there are many others and I think that what we are doing is not perfect, it’s not in any way special but we are trying to do things different and I think that is the point of difference. I don't think it is necessarily something to be proud of, I think that it is something that everyone should be doing.
On a personal one to one level, New Zealanders go well in the states. They’re confused, it’s very Flight of the Conchords stuff. But New Zealanders are very well-received here.
Another company that has gone down that track that is probably pretty close to your heart is Icebreaker, in terms of showing where merino wool comes from. They've also done a lot of work to change the perception of merino as a fabric along with people like John Brakenridge of NZ Merino. Has that helped you? Have you been kind of riding on the coat tails of that change of perception of merino to get your product out there a bit more?
Yes, those are great examples. John Brakenridge and the NZ Merino company are an incredible story, but more specifically from my point of view as I've stumbled into this as a person that knew nothing about it is that the wool industry has done a horrible job at marketing itself. I think if you look back to the '70s we might have had 70 million sheep. All of a sudden the synthetic industry, which didn’t exist until the '50s, sort of come out of nowhere with a cut price product and cut wool’s lunch. Now the sheep population is less than 30 million in New Zealand, no one is growing up wanting to be a sheep farmer I don't think and yet you have this miracle fibre, this incredible product for which New Zealand is famous for and it’s just sitting there. I think that the tide is really starting to turn and I think wool is having a moment. Obviously this has been going on for a while and Icebreaker’s an example of a brand that New Zealand has made. I think more broadly, certainly in an American context, they’re starting to understand that's it's not the scratchy jumper that your grandma knitted. It has broad appeal, it’s soft and silky, and it does a whole bunch of things that synthetics never will. I think that it’s a very interesting time and I think that Icebreaker has led the way for that movement.
Speaking of New Zealand, we like to think of ourselves as being well loved in the world. But not a lot of people know very much about us at all. When we interviewed the guys from Stolen Rum they said they basically wanted to be the opposite of 42 Below and not focus on the New Zealandness because it was limiting if you want to become a global brand. But you have obviously mentioned the connection to New Zealand quite a lot in your marketing material and some of your interviews. Is that proving to be a differentiator?
I mention New Zealand a lot because that's where I am from and it’s a huge part of my identity and it’s very important to me. I think in terms of the brand itself we like to try and capture a lot of the spirit of New Zealand. It’s coloured by the fact that we are using New Zealand merino in our product so that's a very literal connection. But certainly I think we're selling in America predominantly, and in New Zealand as well, and nowhere else. I think what's really interesting about the American market is that New Zealand is so well received and perceived. There are zero unfavourables. The worst case scenario is no one knows where New Zealand is. The best case scenario is they love it. But there's absolutely no negatives, so in terms of the opportunity for New Zealand business, I think America its immense. There has been some notable examples like Xero, the accounting firm, and I hope that there is a range of New Zealand businesses that look to Asia, obviously, to Europe but also to America much more. I think it’s an immense opportunity. Even on a personal one to one level, New Zealanders go well in the states. They’re confused, it’s very Flight of the Conchords stuff. But New Zealanders are very well-received here.
Is it important for you to be in that market? A lot of New Zealanders talk of the weightless economy, being able to work from New Zealand. But often that seems to be more of a nice idea than a reality. How important has that been for you to be amongst the people you're selling too?
I think there is some context for me, which is my wife is American and my co-founder is from San Francisco so we’re here as a sort of an American-based business. I think it’s slightly different. A lot of it is conditioned by the product or the service being sold. The tyranny of distance, you can’t get away from it. New Zealand is a long way away. If you’re an internet business then I think that all of a sudden that makes it a lot easier. If you’re selling products and focused on the American market then you almost certainly have to be here. Xero has an office just down the road. There’s a cultural aspect to this. It is a very difficult thing to do if you’re not here without feet on the ground. I think that any business that is trying to crack it has to be here to understand the cultural differences, get in front of people, they have to sit down and make something happen. We’ve been really fortunate to be here and based here.
Trust me I’ll stay away from the turtle necks.
I know you haven't really talked about sales in the past but are you able to give a sense of how well things are going for the company?
We haven't told anyone that for a couple of reasons. We keep that really close to our chests. It’s funny. We raised our growth capital from a venture fund, about $7 million. To me it’s an enormous amount of money. But in the context of the San Francisco market it is completely small. The numbers are kind of meaningless. We've been able to come out really strongly out of the gates. I think we have been able to exceed a lot of our expectations. To give you some sort of indicator we sat down and wrote a business plan, and anyone that has written a business plan knows that you basically make up numbers, for lack of a better way of putting it, and we were able to hit our target in like three months.
For the year?
For the year.
That being said, and going back to my earlier point about counting the chickens, I do feel like there is still a long way to go. We’re not celebrating. There are so many things that could go wrong. It’s like a sporting mindset, you come in and you try to get better, you try to solve your problems. You try to make the shoes fit better and make the experience better. So that's why we keep it pretty close to our chests.
You've said you want to continue innovating with natural materials. I was reading a story in Wired magazine last night about the creation of the self-lacing Nike shoes, the HyperAdapt 1.0, which were based on the famous shoe from Back to the Future. You missed out on that opportunity unfortunately, but what's next? Maybe some velvet boots or hemp loafers? Maybe, given you’re already part of the startup uniform you might need to have a black merino turtleneck in there as well?
Trust me I’ll stay away from the turtle necks. I think that part of our thesis is the footwear industry goes to synthetics or leathers and they overlook things like wool and other natural materials because they’re too expensive, too hard or whatever reason it is. But to us there is a big opportunity to innovate in natural materials. We have started with wool and we have a couple of others in the pipeline that are really interesting. I think that 2017 is going to be an exciting year for us to launch our next product. It will be a different product to the sneaker that we already offer. I think all going well hopefully there will also be another material innovation. So I think the Allbirds brand started with wool, we will always have a place for wool, it is very dear to our hearts. But we are looking more broadly at the footwear sector and the footwear space and seeing opportunity to solve different problems for our consumers in that space. Different design for different moments. And that’s where we’re trying to take the brand
Speaking of the brand, what's with the name? Was Allsheep taken?
It’s funny, it’s one of those things. Anyone who has started a business will know that the worst thing is coming up with the name, at least it was for me. It feels like it’s been a quick success. But I started on this project in 2010, so five or six years of chipping away at it. We had a couple of different names before I landed on Allbirds. Basically the gist of it was when people first showed up in New Zealand there was nothing here but birds. It is a subtle nod to our mission as a brand to tread a little more lightly in the products that we create. It’s also kind of fun and we've also been able to get the ".com", which was cool, and a whole bunch of practical considerations. It’s been a cool thing for us and it’s working out pretty well so far.
Excellent. Thanks for your time, Tim. We appreciate it and we will look forward to keeping track of that mission of yours and hope it goes well over the next few years.
Appreciate it, great to chat.