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How Silicon Valley Darling Allbirds Became a Footwear Phenomenon

One Tuesday morning this month, food entrepreneur Vince Cao and his daughter Kaylee, 3, drove to the Allbirds store in San Francisco’s historic Jackson Square neighborhood, about an hour away from their home in San Jose.

The duo was on a special mission: to buy some new Smallbirds wool runners for the toddler, who already owned two pairs. Both her parents regularly sport Allbirds, too.

“My older daughter is so bummed she can’t get them,” Cao told the label’s co-founder Tim Brown, who was holding court at the packed boutique, located inside the company headquarters. (The mini-me line is sold only in toddler sizes, for now.)

A few steps away, Joey Zwillinger, the brand’s other co-founder, kneeled down to fit Kaylee with her new “Kea red” kicks and talked to her dad about the children’s book Zwillinger wrote to support the Smallbirds launch. “Sadie Shaves the Day” is a heartwarming and educational tale with a subtle nod to the label’s sustainability mission.

The execs, who are both 37 and also share the CEO title, understand the power of great storytelling. And they’re the perfect narrators for Allbirds — a startup that has quickly evolved from a Silicon Valley darling to a sustainable-footwear phenomenon with a following that spans generations.

In March, on the same day they went on “CBS This Morning” to unveil a style made from the pulp of a eucalyptus tree, Zwillinger and Brown revealed that the brand sold 1 million pairs of its wool shoes in just two years.

The entrepreneurs — who had no prior footwear experience — managed to pull off that $100 million feat during a tumultuous time in fashion. While many companies have floundered or disappeared altogether, Allbirds has succeeded by doing things differently.

When it debuted in March 2016 with a single style, a $95 wool sneaker, Time magazine called Allbirds “the world’s most comfortable shoes” — a stroke of luck no one could have predicted.

That early endorsement gave the founders confidence to push ahead with their ambitious master plan. At the heart of it was a desire to create shoes in a better way and drive positive change in the world. “We decided early on that we didn’t want to spend this huge chunk of our lives on a small business that didn’t have impact,” Zwillinger said. “We wanted to have a purpose-driven entity.”

While things seemed to be moving quickly, Allbirds had been a long time in the making.

Years earlier, Brown, then a professional soccer player, saw an opportunity to create a sustainable shoe venture with merino wool from his native New Zealand — and he set out to develop the material while still playing competitively.

Allbirds’ newest Tree shoe, launched in March.
CREDIT: Jason Henry

After retiring in 2012 and attending business school in London, Brown launched a Kickstarter campaign two years later to gauge consumer interest in wool shoes. “I wasn’t sure if I was crazy or if there was potential,” Brown recalled. “Joey was one of the first customers. The thing blew up. We sold $120,000 worth of shoes in four days.”

There was so much demand that Brown didn’t know what to do next — and that’s when his wife suggested he meet with Zwillinger, an engineer based in San Francisco who was married to her college roommate and close friend. “I cooked him a lamb stew, and we walked around the hills for three days near my house in Marin County,” Zwillinger said. “We basically came up with the business [strategy] that is close to what we’re working with now. We took a month to write it all down. Once we made the hard decisions, we knew we could execute it.”

The footwear outsiders set out to challenge some of the industry’s tried-and-true models, from design to merchandising to distribution. Brown and Zwillinger emphasized simplicity, stripping away all the unnecessary elements of a shoe to put the focus on comfort, materials and sustainability. The company, which has never discounted a style, doesn’t employ traditional designers — though the team does include skilled technicians and engineers who understand the intricacies of footwear making.

“You have this business that’s been trained to reinvent things. The forms and the design and execution have become convoluted,” Brown noted. “It’s taken a group who didn’t know what they’re doing to actually do it differently. We’ve been able to come at this with a purity of thought and have taken a complicated and crowded category and tried to simplify it. It came with massive pressure.”

While Allbirds didn’t reinvent the sneaker silhouette, it broke the mold with its material. Allbirds uses 17.5-micron superfine New  Zealand merino wool, which it developed with a premium Italian mill. The shoes are produced in South Korea.

The upfront messaging and unique material story resonated with customers — and Allbirds’ original style became an instant classic, sparking demand for the entire wool category and eventually driving prices up. As momentum was building, the founders worked hard behind the scenes on the Tree series, which is made from eucalyptus. Zwillinger said the concept was in development for more than two years — even before the company officially launched. Allbirds produced more than 37 prototypes of the Tree Skipper style before it landed on the final product.

Inside Allbirds’ San Francisco store.
CREDIT: Jason Henry

“We don’t operate like a regular shoe company where it’s, like, three samples and we’re in production,” he said. “We do way more volume with less styles. It goes through this crazy number of iterations. We have to keep innovating, but it’s not about fashion innovation. It’s about hardcore research and development with the materials and manufacturing.”  (While the execs wouldn’t divulge sales numbers for Tree, they said it sold out at launch and has been restocked several times since.)

The duo’s relentless pursuit of creating the perfect product goes hand in hand with their direct-to-consumer strategy. While brands like Greats and M. Gemi have also embraced the DTC model, it’s been most successful outside the shoe industry. Eyeglass maker Warby Parker and Everlane, a purveyor of apparel basics, are two oft-cited case studies. Like Allbirds, they have compelling stories behind their products.

“A lot of [names] have come up in a short space of time. Consumers want to understand the product and the materials,” Brown said. “They want to have transparency into the supply chain. They want to trust the brands they support to do something more.” The Allbirds crew relishes every opportunity to talk to consumers about their mission. The staff, which has grown to 100 people, takes turns working at the two boutiques in San Francisco and New York, which were both buzzing with activity during FN’s visits. Online interactions are just as important, and the company responds to hundreds of customer comments every week.

“We want to have that interaction with everyone who buys our product. We want them to tell the story,” Zwillinger said, noting that the business is about 55 percent female and 45 percent male. “It’s a lot of millennials, but it’s great for older people too. Our price is accessible to almost anyone.”

The tech community, which isn’t typically known for setting fashion trends, helped fuel initial excitement around the brand, which is now part of the Silicon Valley uniform. “It’s all anyone wears,” said one Facebook insider.

Now that the brand is trending everywhere, evangelists are popping up around the world — from Hollywood to Brown’s beloved New Zealand. Gayle King gave best friend Oprah the wool runners for her birthday in January. Kiwi Prime Minister Jacinda Ardern gifted her Australian counterpart, Malcom Turnbull, and his wife with a pair on a recent state visit.

While high-profile support has helped generate buzz, Allbirds’ authentic connection with everyday consumers has been more powerful. (New York is Allbirds’ biggest market, while Atlanta is its best per capita.) “Our family is absolutely an Allbirds family,” said Jenny Cohen, a New York mom.

Allbirds San Francisco headquarters
A look at the headquarters in San Francisco.
CREDIT: Jason Henry

Her daughter Carson, 2, has an attachment to her Smallbirds sneakers, but she likes the children’s book that came with them even more. (It’s now sold separately on the Allbirds site.) “She requests it nightly as part of her bedtime routine. She loves the characters and the story,” Cohen said. “I’ve even taught myself to draw Sadie and Kiwi as a surprise and delight for her when we color together.”

Cohen and her husband, Jeremy, have also purchased the shoes for other friends and family members.“This has been a word-of-mouth story. That’s an old-school phrase, but that’s really what it is,” said Matt Powell, VP and senior industry adviser for The NPD Group Inc., who was wearing his dark gray wool runners during a recent business trip in Los Angeles. “They weigh nothing and almost look dressy. I take them on almost every trip I go on.”

Back in San Francisco, Zwillinger and Brown were happy to be at home with their families — and their team — after a frenetic travel period. In March, after the Tree collection debuted in New York, the team headed north to launch a website in Canada and mark its collaboration with Nordstrom. Through May 20, Allbirds is available at nine Nordstrom locations — including two in Canada — as part of the department store’s popular Pop-In series.

“We have seen a nice mix of customers who are already fans of the brand and those being introduced to it for the first time,” said Olivia Kim, VP of creative projects for the department store. “Last week, we had a woman come into our store in downtown Seattle and purchase four pairs of shoes for herself and another six pairs for the rest of her family. When her husband came in to make an exchange for his correct size the next day, he ended up picking up an additional pair because he loved the way they looked and felt.”

Nordstrom’s customer-centric strategy is attractive to Zwillinger, who has relished the opportunity to learn from the legendary retailer. But he stressed the move wasn’t part of a larger plan to expand into wholesale.

“If we went and did omnichannel, we would sell more shoes, but we would get into discounting. We don’t want to do that. It would commoditize a product we think is really special,” Zwillinger said. “One of the things that has been a key part of this journey has been saying no to a lot of things.”

Allbirds San Francisco
A look at the product development area at Allbirds.
CREDIT: Jason Henry

But Allbirds, which has received $27.5 million in investment so far, also is saying yes to some new opportunities. It just opened a second headquarters building — across the alley from the original digs. The sleek space features a product development area and several co-working spaces to encourage constant interaction among employees, who joined the founders for an opening bash this month and got the next day off.

But there won’t be a lot of down time in the near future. The founders are hatching plans to open additional boutiques in yet-to-be-disclosed U.S. cities as well as expand to the U.K. and Asia. Revamped store concepts will soon be rolled out in New York and San Francisco.

While all cylinders are firing, Zwillinger understands that taking the business to the next level will come with a new set of challenges. “We’re scared about a million things,” he admitted. But he and Brown are even more determined than when they started. “We’re starting to believe we can be a real leader in sustainability and manufacturing,” Brown said.

Zwillinger said the firm’s mission necessitates scale. “We want to be gigantic. It’s very feasible for us to be a billion-dollar company.”

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