We’ve been following Allbirds since they hatched as Wool Runners (which we profiled here) with a minimalist running shoe featuring an all-wool upper, funded through Kickstarter in 2014. Then, in March this year, the company (now rebranded as Allbirds) launched its first publicly available shoe.
Back in New Zealand from the company’s new headquarters in San Francisco, co-founder and co-CEO Tim Brown says that Allbird’s flight from Kickstarter curiosity to critically-acclaimed, VC-backed sneaker company been anything but direct. After a year of “battling massive headwinds” fulfilling the promises made to thousands of Kickstarter backers, he was getting ready to call it quits. “If I’d known how hard it would be,” he says, “I never would have started.”
Thankfully, a friend in Silicon Valley convinced him that, with the hardest part done, he should go to the US to find some investment. After a few close calls and near misses, he got a meeting with Ben Lerer, CEO at Thrillist and managing partner at Lerer Hippeau Ventures, who specialises in direct to consumer brands, including Warby Parker and Everlane.
15 minutes later, Allbirds had a lead investor: “I’d been through so many cycles and nearlys and things that had almost happened and I was just in that phase of just complete honesty,” Brown says. “I remember just sitting down and going ‘Here's the good bits, here’s the bad bits. This worked really well, this is shit. I feel great about this, I don’t know how we're going to solve this.’ And he just was like ‘Yes, I'm in. We've been looking for footwear and this ticks all the boxes’.”
Lerer didn’t care about the team’s lack of footwear experience or the production difficulties Brown had faced with the Kickstarter shoe. Lerer saw immediately that Allbirds was in a position to do in footwear what Warby Parker was doing in eyewear – selling quality products and controlling every aspect of their distribution.
“When you build direct-to-consumer, you can control the brand experience, you can think about every touch point and the infrastructure for online business is immense,” Brown says. “Going through a retail/wholesale model, why would you do that? They can’t tell your story very well and you don’t have the same margins to do the things we want to do with packaging and natural material innovation. If we were selling through Footlocker, we’d be like all the other guys and we'd have to make the shoes for $9. So we have an opportunity from our margins to make it out of 16 micron New Zealand wool.”
“Our investors looked at the footwear space and saw a big opportunity and we just happened to be right time, right place," says Brown. “What they’re doing is looking at pattern recognition. They’re looking at these huge markets and when they see a consolidated situation like the footwear market they see an opportunity.”
Allbirds raised US$2.25 million and went to work setting up a US office, designing what would become its first commercially available shoe and completely rethinking the brand.
On the investor’s recommendation, Brown went to Red Antler, a New York-based branding agency that specialises in start-ups (clients include Foursquare, Vevo and Behance). The rebranding included the name (Allbirds is a reference to New Zealand in its pre-human state) as well as the design direction of the shoes themselves.
Rather than being woollen running shoes, the brand decided to simplify the shoe to its most basic form and focus on the sport-inspired casual market. “It’s not about performance, it’s about comfort and simple design, and a focus on sustainability,” says Brown. “Everyone else is screaming and we’re kinda whispering.”
Allbirds’ designer Jamie McLellan, who has been involved since the initial design stage, says that the lack of footwear experience has freed the team to simplify the shoe to its most basic form. “It ended up being so stripped down, partly because of our beliefs and partly because we've got this fabric and why would you want to stick anything else on when the fabric is so special,” he says. “So it did always feel like we were undesigning the shoe, to the point where Tim's become pretty dogmatic about our ethos, so every time a get a bit of confidence, he shuts it down very quickly.”
"The product is so austere,” Brown says, continuing McLellan’s thought. “The way we approach it is almost dogmatic in the stripping away. And the mistake we made the first time was not creating this big brand world around it. So the second incarnation wasn't about performance, it was about travel, about seeing the world, about building a brand that could be bigger than wool, that could be bigger than just one shoe, that might even be bigger than shoes."
The brand also brought in illustrator Toby Morris to produce graphics for packaging, communications and social media. Brown had seen Morris’ work on The Wireless and took him an open brief to give the brand a personality that would further separate it from the sport-based footwear establishment.
"There’s so much room in this space to take it all too seriously and it becomes a bit too earnest or too cool,” says McLellan. “That was something we didn't want the brand to be – more broadly accessible and whimsical. And I think the illustration is a way you can do that. You can’t do it with photography or in any other medium."
Morris says his playful cartoons and animations – many of which feature Peter, Allbirds’ anthropomorphic sheep – were inspired by an abstract take on the qualities of the shoes. “I felt like it needs to be human and be clean but not too polished,” he says. “And have a bit of warmth to it.”
Three months after the launch of the first Allbirds shoe, the brand is preparing the launch of a new range of colours and increasing supply after struggling to keep up with initial demand. Brown says that Allbirds has already sold more shoes than it’d projected to sell in the first year.
But to expand, and expand fast (as is required by law in San Francisco), it’s going to take money. Lots of money. So this year, Brown will go out to raise another round of capital. He’s tight-lipped about how much and when, but the plan is to continue its expansion, into other styles, other markets and even other materials.
“We've started with wool,” Brown says, “but there are a range of other natural materials that have been ignored by the footwear industry.”