Changing the World, One Step at a Time – Allbirds Bonus Episode

Joseph: 

Welcome to Radically Personal.  

I’m Joseph Ansanelli, CEO of Gladly, where we’re on a mission to help companies reinvent customer service and deliver on the promise of radically personal customer experiences. 

In our last episode, we talked with my friend, Joey Zwilllinger—CEO and co-founder of Allbirds—and we had so much good content left on the cutting room floor that we just couldn’t bear to leave it there.  If you haven’t listened to our first episode with Joey, I highly recommend that you go back and give it a listen—once you’re done with this one of course. 

In today’s episode, we hear more from Joey, including his thoughts on entrepreneurship, and why he became an entrepreneur himself. 

Joey:

Having a chemicals and material science background, I would say ethanol was a contributing factor.

Joseph:

And we’ll also hear about the Allbirds approach to promoting sustainability, while still making more great products 

Joey:

Climate change is the North star for us to combat and we think it’s the beating heart of the planet.  

There’s a lot of other environmental issues that matter to us but if your heart stops beating, the rest of them don’t matter so much. Climate change is number one. How do we align everything related to that?

Joseph:

And applying the best ideas of software iteration to improving the design of their shoes.

Joey: 

We have a very high threshold that we keep, but we also know that we’re going to get better.This is Radically Personal.

To kick things off, I’d love to talk a little bit about entrepreneurship, and what your experience has been like. Allbirds was the very first company you started right?

Joey:

Yes, first for a profit company.

Joseph:

We also have a connection because you were a Wharton MBA student, I was at Wharton undergrad a few years before you, and while you were there there was this like whole cadre of people that have started these iconic companies.  

Allbirds obviously, Warby Parker, Harry’s, like that whole crew that was there.  

What was happening at that time that inspire you all to start these companies? Did someone put something in the water?   

What was going on, was there something that was going on then that sparked that creativity? 

Joey:

Yes, having a chemicals and material science background, I would say ethanol was a contributing factor, if you’re familiar with that ingredient, it makes up what you consume and beer and other alcohol.

Joseph: 

[laughs]

Joey:

There was that. It’s quite a remarkable thing but it’s not coincidental.

Those guys are some of my closest friends in the world. They’re my mentors, friends, business partners, one of them’s on my board, they’re all investors in Allbirds, we all invest in each other and other companies and other entrepreneurs that inspire us. 

We’ve helped each other along the way and I’m deeply indebted to their help in the early stages and continuing today for what Allbirds has become.  

It’s something where, if you think entrepreneurship is something of some single founder, breaking through walls and doing everything, you probably haven’t tried it before, because it’s like a village of people supporting and helping you make really hard decisions that can be quite lonely even though I have a fantastic partner in Tim, it’s still lonely [chuckles].   

You’re making really hard decisions and having that network and having that support group of people who have developed scars has been incredibly influential and helpful in our success. 

Joseph:

Yeah, I did a session with a class at Wharton, that was one of the topics we were talking about. 

You know, the importance of mentors, the importance of advisors, friends, just people around you, you can’t underestimate the impact that that has and I just encourage everyone is like, “Go talk to as many people as possible, build some close relationships and spend the time,” I mean, that’s great.   

If you had to say, the most important lesson in entrepreneurship that you wish someone had actually taught you before you started the company? What is it?  

Joey: 

Say no to 99 things for every one thing you say yes to.

Joseph:

Yeah.  

Joey:  

I cannot stress it enough and it’s so easy to lose sight of that when you think you’re having a little bit of success. I try to remind everyone in our companies all the time now: we are a little fly on the butt of an elephant. We have barely even started.  

We are so far from making 1%—there’s 20 billion pairs of shoes made every year—if we made 1% of that, we’d be a monumentally huge company, we’re so far from that.  

I do in different ways, it’s like sports analogy, we’re three nothing down in a soccer game, we’re not two nil up.  

We got to keep focusing and keep being clear and because there’s so much noise for consumers, to break through that noise, you need to keep hammering the same message over and over and over in increasingly smart and sophisticated and fun ways. Otherwise, you’re never going to breakthrough.   

Anyways, so that’s critically important. 

Joseph:

Yes, I agree, saying no, is one of the most important things you can do every single day. 

In our last episode with Joey, he spoke about Allbirds’ revolutionary SweetFoam(TM) material that they helped design and which they use to make carbon negative shoe soles.  I wanted to dig in further to understand what it means to be carbon negative and where Allbirds stands against the rest of the industry.

Joseph:  

So Joey, you mentioned that SweetFoamTM has a negative carbon footprint—and that’s the stuff that you used to make the soles of your shoes. You said that it actually takes more carbon dioxide out of the atmosphere than it takes to create. That seems pretty crazy and amazing.   

For the layman—layperson I should say—what does carbon footprint mean? How do you measure it? How does Allbirds compare to the rest of the world with respect to shoes? 

Joey: 

Part of the problem with the word sustainable and sustainability is that it means 10 different things to 10 different people.  

We’re on a journey to educate right now because– If you get a chance to read our vision, you’ll find that climate change is the North Star for us to combat that.  

We think it’s the beating heart of the planet. There’s a lot of other environmental issues that matter to us but if your heart stops beating, the rest of them don’t matter so much. Climate change is number one. How do we align everything related to that?  

So we look at the carbon footprint of every shoe. What that means is, you draw a boundary around the very, very first molecule that you use to make a product. You start from the growing or the harvesting or whatever it is of that molecule. And you follow it all the way into the manufacturing facility of that finished product, include all the energy used in manufacturing. Do you think about the transportation that it takes to get it to your customer? Do you think about the energy that’s consumed during the use cycle of that product, and then on disposal?  

All of those attributes contribute to the full carbon life cycle of a product.  

We’ve always known that 60% of any consumer product, the life cycle is born through the materials of that product. So we wanted to focus there first and foremost, which is why SweetFoamTM, our sugar cane product, is so important to us.  

That’s how we organize the company. And then we developed a tool to track this quite quickly and that allowed us to then understand exactly what our footprint was, how much greenhouse warming gases we were omitting in any one of those cycles.  

And then we are able to count it, then we can try to reduce it, and along the way, we offset it so we’re fully carbon neutral. We actually pay for all that pollution by buying carbon offsets.  

Then, we actually now have increased accountability and transparency where we show consumers what that actual carbon footprint is on the product.  

And that allows us to help educate people on what matters. Helps educate people on where we are relative to the industry. We’re typically at least 40% lower than the average for a specific kind of product that we’re comparing to. And we’re on a journey to get to zero or better than zero.  

That is the path that we’re on and we put a whole bunch of incentives and processes in place inside the company to do so. But we think consumer education and accountability on our companies is one of the more important ones. 

Joseph:  

Okay that’s great. I love the fact that you’re putting that carbon footprint right on the box and the product itself. 

It’s like the calorie count that you get on the food that you buy.  

And knowing what the carbon footprint is on products will help people to make better choices, which I think is a net benefit.  

But how do you reconcile that, at the end of the day, one of the ways to reduce carbon emissions is actually for all of us to consume a lot less, with the fact that you’re selling products.  

I mean, they’re great products, don’t get me wrong! But how do you think about that? 

Joey:

Yeah, interesting question. Because we’ve been so forward with our values and so clear on our strategy, we get challenged a lot.  

And there’s often perceived tension between a company that endeavors to make the world better from an environmental perspective, with one that makes stuff and sells it to customers.  

We talk about this a lot with the company.  

What we do believe is that consumers’ behaviors are going to change over time. We’re not going to dramatically impact their consumption in terms of, are they going to drink two cups of coffee or three cups of coffee in a day from a, whether they think that’s good or bad for the environment.  

If they’re going to buy a pair of shoes and they buy it from us, we know that we’re making a significantly positive impact on the planet because they but it from us instead of the competitor.  

If we can start to make, not just make stuff for stuff’s sake to sell, but if we can make things that people need and want, and reduce the number of items, so it’s kind of fewer things in their closet but they’re better things. They last longer, they do something in a better quality and they have a lower environmental impact, that’s where we win.  

So we tend to talk about and reinforce this vision and values and how it translates to the day-to-day conversation with what we do so that we then have confidence in the belief that if we make more products under those clear set of values and customers buy them, we are actually doing something that positive for the planet.  

I do believe that that is a very important distinction that needs to be clear for a retail company.  

And if we’re successful in being more like a tree than a typical product company, then we’re the Holy Grail. And if we can get to a place where we actually are better and where you actually pay dividends to the planet by buying our product, now we’re in a different place and that’s our aspiration.  

We’re a long ways from that but that that’s the goal. 

Joseph:  

One of the other things we talked about is what the benefits are of being a shoe company in the heart of Silicon Valley. 

Joseph:  

One of the things we talked a bunch about Joey, is how you’re taking a lot of design principles and product principles from software—like at Gladly for example, we release every single week (we actually sometimes release multiple times in a week).  

Most hard good product companies, that make shoes for example, they don’t do that. Yet you’ve shared a bunch of how you actually take a lot of those iteration principles and use them in your products.  

Can you share a little more about how you do that? Because it is pretty special and unique. 

Joey: 

We had a view that if we treated a company like ours with an ambition to make a low carbon footprint and a phenomenal product for consumers, and we treated it a little bit more like a software company thinks about things than what a traditional footwear company thinks about a product, we might go with a very high threshold for our first product out of the gate—we don’t believe in a minimum viable product, throw out a piece of crap and then make it better, we have a very high threshold that we keep—but we also know that we’re going to get better.  

An example of that, when we launched our Wool Runner, March of 2016, March 1st, within two years, we’d made over 30 changes to that product.  

When you bought it in March of 2018, that had 30 individual changes that summed up, created something that was a much better experience from our perspective and also a much better sustainability profile.  

One aspect is the continuous change. And that’s only unlocked because we’ve committed to doing a vertical model where we don’t have wholesale partners, where we have seasonal drops and then we only get one chance per season to change a product.  

We do this every month and that’s unlocked because of our distribution model.  

When we engage with customers, they give us so much insight into our products; what’s wrong? What’s going great? That we learn from them every day, we need to invest in technology that allows us to be tightly connected with them. 

The value around getting feedback and utilizing pattern recognition in that feedback to improve your product, that’s very difficult to quantify because what that does is make a better product, you get better reviews on your product, get more coverage from the media, and then all of a sudden you have a massive new market potential that you’re tapping.  

That’s very difficult to quantify but if you don’t have a customer-centricity, even if you’re a consumer company that’s dealing with many, many, many thousands or millions of customers, you’re going to lose that opportunity and I would say that’s devastating to your business. 

Joseph: 

Thanks for listening to this bonus episode of Radically Personal with Joey Zwillinger, CEO and co-founder of Allbirds. 

A big thank you again to Joey Zwillinger for the great conversation, friendship, and partnership. As well as to the whole team at Allbirds.
  
If you haven’t listened to the first episode, I highly recommend it. 

I’m Joseph Ansanelli, CEO of Gladly.  

If you enjoyed the episode, please be sure to subscribe on Apple, Google, Spotify, or visit us at radicallypersonal.com. We’ll see you next time. 

Thanks for listening. This is Radically Personal.