Joey Zwillinger: From $4.1BN to $142M Market Cap;Why Public Markets Have Written Allbirds Off |E1078

1. 0:00 – 1:16

   Intro

   1. HSHarry Stebbings0:00

      (instrumental music plays) The company went public at 3.75 billion. Today, it's sitting at 127. What happened to cause that?

   2. JZJoey Zwillinger0:07

      I, I would say it's a combination of the market is a bit of an abstract concept. A large part of it is just algorithms. When we get momentum, there is gonna be people who will fully understand where we're heading. People love innovation and they're always willing to try, and they love to figure out something that's gonna do something new for them. I think the consumer is in a more delicate and fragile situation than people understand. It's gonna be more difficult and there's gonna be less spending than people think in the coming six months.

   3. HSHarry Stebbings0:37

      When do you think you'll be profitable?

   4. JZJoey Zwillinger0:40

      Um...

   5. HSHarry Stebbings0:43

      Joey, I am so excited for this. You know I've been a Allbirds fan for a long time, so thank you so much for joining me today.

   6. JZJoey Zwillinger0:49

      I've been a fan of your show and also just what you do in life, and the platform to invest, the platform to, uh, learn through you with, uh, really interesting people, so I'm pretty delighted to be back on the show.

   7. HSHarry Stebbings1:01

      Well, you are far too kind and flattery will get you everywhere, by the way.

   8. JZJoey Zwillinger1:04

      Mm-hmm. Mm-hmm.

   9. HSHarry Stebbings1:05

      Um, I, I wanna start with just the context, which is, you know, we see the incredible Allbirds brand today. What was the founding aha moment for you with Allbirds and you committing 10 years plus of your life to this business?

2. 1:16 – 5:15

   Brand Origin and Development

   1. HSHarry Stebbings1:16

   2. JZJoey Zwillinger1:16

      I'll try to do justice to why Tim and I started this brand together, uh, in a really brief time, but we come from very different backgrounds. So, Tim Brown's my co-founder. He was a professional athlete, but he happened to have a design background. He's from New Zealand. He became the captain of the New Zealand national soccer team all the way through the 2010 World Cup, so obviously quite, quite good at his trade, and was sponsored by the big sportswear companies during that time. And, and you know, just like most entrepreneurial journeys, it starts with, uh, with, with a moment where there's a problem out there that's not being solved for you individually, and he certainly had that, and left wanting something. And it was around these gigantic logos on the side of his shoes. It was around the fact that the world had casualized and the footwear industry just really hadn't kept up with it. So, he had this really unique and intuitive sense for the consumer, for the industry, and, and wanted to do something. He ended up throwing a Kickstarter up to like get it out of his system frankly, and that was in 2014. Uh, I was one of the first customers of that Kickstarter because our wives happened to be, uh, really close friends and were roommates in college. Uh, and as all good things happen in life, it's through the people who support you. Uh, and, and our wives are, are certainly, uh, n- no, uh, no exception to that rule. At the time though, what I was doing, I, I had caught the itch to use entrepreneurship for the benefit of the environment and, and the dynamic nature of the private sector in general, I knew could make a profound impact on the problem of our species, the existential threat that we all face. And, um, that is more true today than it ever has been. And, and it certainly was in my mind back in, in 2016 when Tim and I launched Allbirds. With that itch, I took that and, and for the better part of a decade was working at a biotechnology company. It was called Solazyme. And we manipulated microalgae to eat low carbon intensity inputs. We used, we used the waste streams from sugar cane processing, and we would, through that manipulation of the microalgae, we would enable this, this microbe to multiply and grow and produce any kind of replacement for petroleum. And so I led the petrochemical replacement area, which is kind of green chemicals, uh, and, and would go out and talk to brands around the world, talk to other businesses about the idea that you could replace what you use today, have a higher performance, and no carbon impact on the world. And it was like breathtaking, like, "Yes, of course we want that." And then all of a sudden it was three conversations later it's like, "You know what? We actually just need margin. Can you make this plastic stuff just, and make it cheaper?" And so it was a Sisyphean exercise for me where I, I realized that while the technology existed, the consumers wanted it, it was, it, this no compromise offering was there for the taking and brands could not position it correctly. And so Tim and I came together and saw that one plus one could equal three. We could blend his, his design and instinctual, uh, sense for the consumer with, with my material science background and, and experience in entrepreneurship, and we decided that this was a worthwhile endeavor for leadership, for business, and, and for a legacy that we thought our, our grandkids would be proud of.

   3. HSHarry Stebbings4:28

      I mean, you intellectual savant dropping a Sisyph- Sisyphean, which is for people listening is the kind of the, the idea of pushing a rock continuously up a hill really and going, uh, not very far. (laughs) But I love that in terms of dropping that in, in the intro. Incredible. Um, listen, I said that we'd just be direct. Dude, the brand is amazing. Yeah, everyone loves the brand and it's a very well-known brand. Obviously, the company went public. Uh, it went out at 3.75 billion. Today, it's sitting at 127 million. And I, and that, I think we chatted before and it was like that's the same almost kind of give or take as the Series A. Can I ask a really stupid question, but just educate me? What happened to cause that?

   4. JZJoey Zwillinger5:13

      Well-The, uh, y- you

3. 5:15 – 8:20

   Valuation Fluctuations

   1. JZJoey Zwillinger5:15

      know, there's... I, I would say it's a combination of exogenous factors, uh, and, and then there are some controllables as well that we, we didn't do as well as we should have, uh, on the same token. You know, I take responsibility for all of that because regardless of what happens in the external environment, you need to be prepared to, to, to grab it now. I'll just say valuation is something that I don't control. Um, all we can control is, is how strong the business results are. And, you know, we had oriented the business around, um, a significant growth in, you know... In the early days of, of Allbirds, we started in 2016, and up until, uh, the pandemic happened in early 2020, we were growing exceptionally high rates, and started making investments to continue to capitalize on that. When the pandemic happened, w- we were in a, a, a position where, uh, we were not set up for what was to come over the next two to three years, and I think those, those factors, uh, that, that happened from, uh, what the consumer was doing, how fast they were changing in terms of, uh, the direction of what they wanted from different brands, and the fact that they gravitated to brands who had incredibly high awareness and they'd been around for a long time contributed very significantly to, uh, a situation where it was difficult to parse the signal from the noise for us. In that, uh, chapter of the company, uh, we made some fantastic decisions, uh, and then we also made some decisions that, that were not as good, and, and the external environment also was super tough. And so along the way, we, we continued to believe that the, the brand was a billion dollar brand and the business just needed to do some catching up, uh, and we wanted to further capitalize the business and make sure that we could control our own destiny, could, uh, capture the vision that we, we believe in. You know, how you started that question is really important. The brand foundation is incredibly strong, and we see this every day whenever we do consumer insights work, and we do that a- a lot and quite regularly being a consumer insight, being a consumer-driven business. The health of the brand is incredible. So we now have a brand that's, you know, close to $300 million in revenue, uh, we have recognition within a really interesting group of consumer, albeit we still have less than 15% aided brand awareness, meaning only 15% of the US, uh, population knows that Allbirds exist. And we know that when people try our products, they love it and they come back. One of the biggest issues for us is just making sure a lot more people find out about us and we say a, say a nice hello so we have them fall in love and we'll be well back on the journey for, for having that business catch up to the promise of this brand.

   2. HSHarry Stebbings7:55

      Joey, I know you. You're an incredibly thoughtful and reflective person. When you are reflective and you think back on the internal... 'External' is freaking hard, (laughs) like in this world, you know, you can't take credit for the external. Uh, internal elements that you made mistakes on, what do you think are the core one or two?

   3. JZJoey Zwillinger8:16

      Yeah. And, and you know, look, when, when, when the externals are good, I, I won't take credit

4. 8:20 – 9:39

   Founder's Personal Mistakes

   1. JZJoey Zwillinger8:20

      for that either. (laughs) And, and I think there are some things in 2016 that we saw, we identified, and we, we capitalized on those opportunities that were real tailwinds for us. And, and frankly, I see, uh, some of those tailwinds coming back with incredible vigor now. A- and I think if you think about what's happened from, uh, over the last couple of years with this, like, maximal build in the trend of, of, of how shoe companies have been coming to the consumer marketplace, and, and the fact that now quiet luxury is really coming back and people really want to celebrate this, um, almost anonymous luxury with this very elevated premium experience, that's something that is, uh, that is gonna be a tailwind for us in the coming years, and, and I'm pretty excited about that. But again, I won't take credit for it. We'll just try to capitalize on the opportunity that we see. But, you know, if I look back, um, uh, on the, on the things that we can control, there's tactical decisions in the business, whether it's specific products or inventory buys or things like that. Those are all really, really important.

   2. HSHarry Stebbings9:20

      Was the move into running and athletics a good decision? Because my, my, my, (laughs) my, my take as a consumer is like, "No, no, no. You're like a, a great luxury leisure brand."

   3. JZJoey Zwillinger9:31

      Mm-hmm.

   4. HSHarry Stebbings9:31

      I go to Nike for my running.

   5. JZJoey Zwillinger9:33

      Mm-hmm.

   6. HSHarry Stebbings9:33

      Not a fan.

   7. JZJoey Zwillinger9:34

      You can't change the perception of a brand overnight, that's for sure. What we have found

5. 9:39 – 12:21

   Strategic Business Decisions

   1. JZJoey Zwillinger9:39

      over the, over the course of, uh, of the last year in particular, in terms of how we position to the consumer and what we stand for and the role that we can play in their lives to best serve how they see our brand and, and how they see our products, is in this, like, active life area. And, and I've talked about this quite extensively, um, externally, and that's... It's, it's this crossover place between an informal and casual lifestyle with an active health and well-being oriented existence i- in life. And our shoes deliver something with versatility of style and incredible outsized comfort that's perfect for that. And so that is the core of where we started the brand and that's where we're, we're gonna bring everything back to, with a really sharp clarity for the consumer, and, and the potential when we do that is gonna be pretty significant. So I, I think in, in, in part, you're, you're, you're very right about that and where we, where we should live into the future.

   2. HSHarry Stebbings10:32

      So you thought maybe product expansion or lack of was one mistake? Is, is that it?

   3. JZJoey Zwillinger10:36

      In some respects, but t- to answer your question directly, I, I think all of the success that we've had and all of the stumbles that we've had, it, it always comes back to people and, and the entrepreneurial journey as a leader. You know, we're a very small company, and we started eight, less than eight years ago.And along that journey, the balance of who you select, this balance of entrepreneurship and, uh, ambition and, and thinking that you can reshape, uh, a little bit of the world, the little segment that you exist in as a brand, in a way that can, can match a future that's different than what we see today, that's an important element. There's also an incredibly important element around bringing in people with a sharp expertise around the functions and the industry expertise that's required to be excellent at all of the fundamentals. I often talk about, uh, with, with our leaders that what they bring in is deeply needed and deeply respected, but we need to think about it as a reference book, not a playbook. And what we're doing is slightly different. We have different contours of, of distribution than the rest of the industry. We have a different position, positioning that's ever existed in, in the sneaker world. And so it needs to be a reference book. And sometimes we've gotten that right, sometimes we've gotten that wrong in terms of o- of the people that we've had. And, and, um, they're all almost to a person incredible people, incredibly high integrity people. But there's a right time and a right place for each of these leaders to, to exist in a business to help us be extremely effective. And honestly, it boils down to that, both the successes and, and the failures along the way.

   4. HSHarry Stebbings12:14

      Do you regret going public?

   5. JZJoey Zwillinger12:15

      No, I don't. Um, you know, we have, we have a mountain of cash.

6. 12:21 – 13:31

   IPO Reflections

   1. JZJoey Zwillinger12:21

      We have control of our destiny. And the fact that Wall Street's written us off, uh, a- a- as a fickle beast as it is, the markets are, are unforgiving and our market cap is a, is a, uh, reflection of the fact that we've essentially been written off by people. And until we start delivering quarter over quarter incredible financials that, that trend towards and then eventually meet our long-term targets for how this business is structured, we will suffer in that space. And, and so our, our job as a company is to urgently march towards that, uh, with all the sharp insights that we, we have and, and drive towards that. And when we do, the market will come back and come behind us. So, you know, it's a matter of timeframe that you think about these things through and, uh, a, a couple of years of re-shifting on what we need to do for the right long-term thing for the business will pay off for anyone who wants to jump on board now or, or in the, in the near future.

   2. HSHarry Stebbings13:17

      Do you consider yourself a fashion company or a technology company? 'Cause for years it was kind of, as you put it, in the technology bucket. Are you a fashion company or a tech company, do you think?

   3. JZJoey Zwillinger13:27

      We are a product company first and foremost, and we need to tell amazing

7. 13:31 – 20:34

   Private vs. Public Company Dynamics

   1. JZJoey Zwillinger13:31

      stories around those products. That, that is what we are. And we happen to exist in a category where style and fashion is incredibly important. That, that is how I think about the company. Now, we have developed an incredible set of data and technological infrastructure that is at the bleeding edge of, of how companies in our space exist, and we need to leverage that in a, in a wonderful way to be eventually as successful as we need to. And that comes back to consumer insights, even just listening to our consumers and how we come to market and how we then, uh, iterate that feedback back into the product life cycle. That is incredibly important and something that we have, uh, uh, in spades relative to our, our competition no matter what their size. Even if they're, uh, many, many billion dollars in size, we have, uh, we, we are, uh, leading in terms of the infrastructure and the tech enablement that we've been able to bring into the business.

   2. HSHarry Stebbings14:26

      What do you think is the biggest difference between being public and being private, Joey?

   3. JZJoey Zwillinger14:31

      Everyone's seeing everything you're doing every single day. And, you know, businesses don't, uh, don't happen on quarterly cycles, but financial reporting and public markets do. And so y- you know, you do have to face the reality that, uh, every single thing that you're doing from, from that point when you become a public company into the future is exposed for all to see, the good and the bad. That's a, a stark difference from when you're a private company when, uh, you can do, uh, you can make certain decisions that, that, um, have zero implication, uh, because you happen to be, uh, reporting at that specific quarter. And, and in this case, it's not. And so in some ways, the discipline is excellent. It forces you to have a cadence that is, um, driving urgency towards the business. And in some cases, it could be a little bit in tension with the long-term build of the business, but we've tried to structure things in a way, um, both from a governance perspective and from a capitalization perspective that allow us to be, uh, really good stewards of any investor who, uh, has belief in the brand for the long term and sees the, the potential of, of what we've created from the early days and now just need to execute on, on the business side to bring it, uh, bring those, bring those two things in convergence.

   4. HSHarry Stebbings15:45

      You said about Wall Street writing you off. Does that anger you? Like, I'd be pissed off. That's like, if someone writes me off, I'm like, "I'm, I'm annoyed."

   5. JZJoey Zwillinger15:54

      It's humbling, no doubt. Uh, you know, when you, when you, uh ... We went public at $15 a share and now we're at, like, a dollar, dropping more than 90% of the value for shareholders that you orient the success of your business around. Um, and I take that responsibility incredibly seriously, uh, as does everyone at our company, up and down, from the, uh, the person who just started yesterday on the, on the planning team to our board members, um, and including myself. That is of, of our utmost concern. And so when we don't deliver for, for those people, um, that is, that is a humbling experience. And, you know, there's a lot that happened in the capital markets when interest rates went up significantly that was unavoidable for us to expect that everything would be exactly the same. However, uh, it doesn't absolve any of the responsibility that I feel to drive the shareholder value that we create. And so I'm not annoyed. I'm not angry. Uh, I'm, I'm emboldened to, uh, make sure that we get it back and deliver much more than, uh, when we came out. Uh, like I've always en- envisioned that the IPO price that we came out with was a good starting point and that people that invested alongside us, uh, at the IPO would make lots of money in the fullness of time. You know, given the way things have changed, uh, they're gonna need to hang on for a couple years right now. And, and as we, as we do that, um, and, and as we execute, I think the, the future can be incredibly bright.

   6. HSHarry Stebbings17:18

      I think a lot of people honestly say it's like, "Ah, this is case that DTC doesn't really make sense and that actually, like, nah, kind of undifferentiated products and actually it's just bad unit economics." To what extent do you say...No, you don't get it at all.

   7. JZJoey Zwillinger17:36

      Yeah, that... I, I mean, I think that, that characterization, being lumped into a, a, a group of companies that's called the DTC group of companies, that, that-

   8. HSHarry Stebbings17:45

      Does that piss you off? Yeah.

   9. JZJoey Zwillinger17:46

      It... I just think it's a generalization that lacks any kind of understanding of what we do, and so y- y-... We're a brand, we're not a channel. DTC i- is a way to do business. There's been great retailers who started this in our industry, if you broaden it beyond footwear into apparel, like The Gap in the '90s, and Lululemon has done a really wonderful job of being a great DTC company, but they're a product-first company. They happen to use a DTC channel to reach consumers, um, and that's what we envisioned was the best way to start our journey. We are a brand first, and we've always envisioned that omni-channel operation where we reach consumers where they wanna shop is the right way to structure the business. However, you gotta start building a deep fan base and a deep loyalty and a love between your company and the consumer, and the best way for us to do that was, was through, uh, an incredibly immersive and wonderful store experience, and a great digital ecosystem and shopping experience for them to enjoy our products with. And we've become a great retailer, uh, in the process of doing that, and as we broaden now into, um, into the wholesale marketplace in the US and eventually in, in the international geos that we serve, we're gonna grow awareness, we're gonna reach a lot more consumers, and they're gonna fall in love just like the early, e- e- early groups of, uh, of, of consumers who we reached, um, through that direct, th- through that direct approach. And so there are businesses out there that I'm well aware of that take a commodity product and try to cut the middleman out and reach the consumer directly, and that is the business model, but as I said, we're a product company where we make magical product. We do it through a deep R&D process where we focus on naturally derived or bio-based products that can create differentiated and positive consumer experiences that no one else has produced. And consumers never get tired of innovation. While a shoe you might think of as a commodity marketplace or, or a commodity that you just need to have, it's a utility that you need to have, it is so uncommoditized within the space that we play, and we are so differentiated and, and when we, when we are at our best, we offer something to the consumer that, uh, they haven't experienced before and they love, and I know you're one of those, Harry. So, um, so that's-

   10. HSHarry Stebbings19:58

       Can, can I- can I be direct then and just actually kind of press you and say, do you think you do a good product marketing job then? Because if we think... I, I, I agree with you, I don't think your shoes are commoditized at all, but I think On... I'm sorry, this might be a real trigger, (laughs) I think On actually market the technology very well, the scientific approach to the bubbles in the shoes. They're also visibly, like, scientific 'cause it stands out, you can see it very... Do you think you product market the innovation well?

   11. JZJoey Zwillinger20:27

       Uh, when we're at our best, I think we've done wonderfully. If you think about, like, there are some intuitive cues, I, I think is

8. 20:34 – 24:45

   Marketing and Product Innovation

   1. JZJoey Zwillinger20:34

      what you're pointing to, that, that suggest that it delivers something, uh, of benefit to the consumer that's tangible. And, and I think when you, when you look at the materials that we've selected, these are premium, uh, n- like, nature-derived, uh, materials and textiles that give you this tangible luxury that you feel when you slip it on your foot. And, and I think if anyone is listening here has, has tried on a pair of Allbirds, you know it just feels a little bit different than any other shoe you've ever put on, and, and that feeling is signaled through the materials that we have and, and the intuitive del- design language that we've delivered through, uh, the whole suite of our products. There's been moments in time, particularly in recent times, uh, if you think at the start of the pandemic where companies who were focused on athletic performance positioning in a moment when people who hadn't run in 15 years decided they needed to buy another pair of running shoes for the first time, and those companies often had, uh, because the whole industry is structured like this before we started, was, you know, 70, sometimes 80% wholesale, uh, distributed. There's a lot of touch points for the consumers to, um, connect with that brand, and in a moment when everything got shut down, that was an incredible asset for, for a lot of companies. And so you can see that there's, there's, um, very significant momentum created by some of those external factors, and, and some companies did really good job of, of, uh, grabbing onto that momentum and, and continuing to execute while others didn't do as good of a job of that. And I think we were in the unfortunate position of not being structured in a way that, that could capitalize exactly on the, the dramatic change that had happened in that world, but we're, we're getting back to a little bit more normalcy here.

   2. HSHarry Stebbings22:15

      What would have allowed you to capitalize on it?

   3. JZJoey Zwillinger22:18

      Well, I, I mean, we, we didn't have an athletic positioning, um, at all at that time, and, you know, we were 100% of a casual lifestyle shoe offering in 2019. Uh, we launched our first, uh, I would call it, like, light active shoe in the Dasher in 2020, which was really fortunate because that w- that did capture, um, some of the zeitgeist of what had happened. That's one really important element where, where that was just a moment where you can look at the athletic sneaker market and it just absolutely surged during that, that time period. That's okay. We didn't need to be, um, a big part of that. And, and as I said, I think that the next five years are gonna be shaped by something quite, quite distinct from that, which is, uh, exciting for me. The second element is, you know, we, we had, um... I remember in my... in the Series A, uh, fundraising deck that we put together, we had this map of, by year, uh, w- what channel we wanted to reach consumers through and which segments of the consumer population we would be reaching via those channels. And along the journey there, we expected that we would start to, uh, expand our product assortment and be able to put these products into the right, into the right channels and reach the right consumers with those, uh, with that, with that connection point. That slide, h- as it said, was, you know, we would start with a digital ecosystem, add stores starting in 2017, and then branch out to wholesale, uh, when you get to 2020.... 2020. Uh, we, we kinda hit the pause button on that 'cause of everything that was going on, and now we're kinda back on that journey. A- and, and that omni-channel vision is the right vision. And, and as I said, we're a brand, not a channel, and so it's important to reach consumers profitably wherever they need to be, uh, wherever they prefer to shop. Had we, uh, been in a situation where we had a bunch more wholesale distribution, we had elevated awareness through that, that expansion of channel, I think when people shut down and started looking for a product that they were familiar with and knew the brand, they would've, um, had, had much more opportunity to discover our brand and then eventually see the, the f- delightful experience that our products deliver.

   4. HSHarry Stebbings24:24

      We're in a new world where people are leaner than ever and kind of questioning large fundraisings. When you look back, do you feel that you needed all the money you raised or do you wish you'd gone lighter on fundraising?

   5. JZJoey Zwillinger24:36

      The way I looked at these fundraisings, at every step of the journey, and, and I looked at my own role along the same, uh, paradigm

9. 24:45 – 27:05

   Fundraising Strategies

   1. JZJoey Zwillinger24:45

      that I'll explain here, is that you set out a set of expectations to a group of people that you, you say, "I need this money. I'm gonna invest it here and it's gonna generate these outcomes and these milestones." And then you take the money and you go deliver. And we had an incredible history of success of wildly out-delivering to the expectations that we set when we took money. And then in the process of, of delivering on those expectations, you start to say, "Okay, can we move the goalpost a little further? Do we think that the brand potential and the ambition of what we have requires us to continue to deepen the investment?" And when we took extra money, it was because the answer to that was yes, in our view. And we thought we had both the, um, capabilities and, and the strategy, uh, and the, and that profound connection with a group of consumers that, uh, in a very large marketplace that would suggest that, yes, this investment is important to make if we're gonna eventually capture the potential of this brand. And, and so that's when we took the money. Looking back, um, I could quibble on a detail here or there on, on, on a fundraise in terms of the exact amount of money, but that was never important to me. It was about creating something really special, a multi-generational brand that withstood the test of time and redefined how consumer products and consumption could actually be, be done, not just in the footwear industry, but much more broadly. And I think we're well on track to do that, um, and, and, and yet business is never a straight line up into the right. It's pretty squiggly. And so that's, uh, that's the fun of it.

   2. HSHarry Stebbings26:18

      Dude, I, uh, I heard that actually some of your investors at the series A were, like, not forced, but kind of ushered to sell then. Was that true and how did that happen?

   3. JZJoey Zwillinger26:31

      In the series A?

   4. HSHarry Stebbings26:32

      Yeah.

   5. JZJoey Zwillinger26:33

      We've... I've never told someone to sell or not sell. Um, I, I'm, I'm always fine if they want to. Um, but-

   6. HSHarry Stebbings26:40

      (laughs)

   7. JZJoey Zwillinger26:40

      ... but, um, no. I, I'm not, I'm not sure what you're referencing.

   8. HSHarry Stebbings26:44

      Terrible, terrible references that people give us, clearly. Can I ask, did you have acquisition offers along the way? I think often a lot of founders hear shows and they, we, they don't actually hear this side. Did you ever have acquisition offers?

   9. JZJoey Zwillinger26:56

      You never know i- if an acquisition offer is a real acquisition offer until the piece of paper is in front of you and, and you have the opportunity to sign it.

10. 27:05 – 29:01

    Acquisition Discussions and Exit Strategy

    1. JZJoey Zwillinger27:05

       And so nothing ever got to that point. Um, but we've had, we've had a number of companies, um, in the footwear space and in the kind of ecosystem of, of apparel and footwear more broadly come to us and, and ask us if we were interested in selling. It's nothing I'm ideologically opposed to. Same for Tim. Um, we wanna, we wanna achieve the multi-generational brand potential that we've, we've created in the early years and if that's best done with a partner, that's something we would consider. And if it's best done independently, um, then we'll take that path. And so far, it's been, it's been the latter.

    2. HSHarry Stebbings27:40

       Can I ask a really unfair question?

    3. JZJoey Zwillinger27:42

       Please.

    4. HSHarry Stebbings27:42

       At this market cap, are you not like, "Fuck it. Tim, let's take this private again"?

    5. JZJoey Zwillinger27:48

       Nothing ideologically opposed private or public. I think we have everything we need right now. The, the, the, uh, to, to control our destiny and to do everything we believe we need to do to, um, build an incredible, incredible business and an incredible brand. If along that journey, uh, the, the public markets don't see the value that we're creating and there's a, a big gap between the value that we are creating and, and what the enterprise value is of the company, then I think it's, it's prudent to consider all options. And, and we have a board that does their duty quite responsibly to make sure we're thinking about all the options all the time. And, and when we see a huge gap between, between that for a very prolonged period of time, then it's, it's something that has to be considered.

    6. HSHarry Stebbings28:33

       I'm really just going for it, but we know we can edit it out if we need to. So fuck it. It's a Friday night. You can't see, but it's actually dark here.

    7. JZJoey Zwillinger28:40

       (laughs)

    8. HSHarry Stebbings28:40

       Uh, did you, did, did, did you manage to take any secondaries off the table? A lot of founders did in the last few years, and I think it's very helpful often to realize upside to have the relief of financial pressure. Did you manage to?

    9. JZJoey Zwillinger28:53

       I, I think how you just framed that's really important. I mean, like, if I could, um, guide anyone o- on this topic, um, whi- which I wouldn't say I've, I've

11. 29:01 – 35:24

    Leadership Evolution

    1. JZJoey Zwillinger29:01

       done perfectly, like, understand the life you wanna live first. And, and if you, uh, if you really want to, um, live a, a life of, of material luxury, you should try to sell things as quickly as possible at as high a price as possible. Um, if you're interested in making sure that you can, uh, have financial security for yourself and your family, that more than that is not gonna be particularly useful to you. Like, the diminishing return on that extra dollar is quite, quite significant. That kinda camp and that thinking is how my wife and myself, uh, have sort of oriented ourselves around this business and the financial potential that it would create. I like to give our shareholders the opportunity to make their own decisions on that. If they wanna sell at any point in time-... um, they should be able to and, uh, I think it's fair for me to have that opportunity as well, of course. Um, but everything now that we're public is, um, is quite out there. So, uh, I've sold extraordinarily little. At the IPO, I sold nothing, and then after that, um, I've sold incredibly little. And frankly, it's just really to meet that, that bottom of the, of the Maslow's for me. And, and some might, some might judge the amount differently, but it's not much so, uh, and, and, and particularly in the place we live. So, um, I, I feel very financially secure and in a place that's great for myself and my family. And in the future, if there's more, that's, uh, that's wonderful too and I can say that, uh, it doesn't take anything away from my, uh, focus on creating as much value as we can because I know that I can do great things with extra money, even if I don't need to spend it on a nice car.

    2. HSHarry Stebbings30:40

       Judging by my mother's appetite for Chanel, I think she would have a preference for me selling every single thing-

    3. JZJoey Zwillinger30:44

       (laughs)

    4. HSHarry Stebbings30:44

       ... that I own now, to be quite honest with you, Joey. Um, so (laughs) -

    5. JZJoey Zwillinger30:48

       No judgment in one way or another. Just understand what you, what you, what you want in life.

    6. HSHarry Stebbings30:52

       I think honestly, dude, like, I look back at some hard things that I've been through and they shaped me a lot, um, it's why I look so much older than I am. I'm still actually 14. How have you changed as a leader over what is a tough time, given market performance?

    7. JZJoey Zwillinger31:10

       Yeah. You know, the last couple of years have been, I've probably got more growth and wisdom in a short period of time than I've got in the whole, uh, rest of my life, and a lot of that comes into leadership. And, and, you know, victory has a thousand fathers and failure has only one, so (laughs) , uh, as the saying goes. And, and so, you know, making sure that, um, there's a constant, uh, a constant self-awareness, that there's discipline in the good times and the bad times, that there's an even-keeled nature across that approach to leadership, and that you're authentically trying to get the best out of everyone around you, and, and making sure that the leaders that are coming along for the journey, uh, have that same dedication, resilience, and work ethic that you do, and also that same discipline to do things right, both when things are going great and when things are going not great. That is something where we hadn't been tested so much in terms of, um, when things weren't going great prior to this period and, and we've pulled back on a bunch of investments in the business, and as a result, the sales have declined this year for the first time in the history of, of the company.

    8. HSHarry Stebbings32:24

       What did you pull back on, if you don't mind me asking?

    9. JZJoey Zwillinger32:26

       Lo- lots of things. I mean, we, we pulled back on distribution. So really, it's like product and distribution in our business, and then there's marketing. We got too fat with inventory, so we needed to pu- like, clean that up. So this year has, that's been the number one priority for, for our business this year is honestly, from a financial perspective at least, is cleaning up inventory. Along the way, we gotta, um, refresh the product, improve it significantly to get back to that really active core that you, that you referenced earlier. And in the process of doing that, we wanted to pull back on distribution, so we stopped all store growth, we pulled back on some of the wholesale expansion, and we then pulled back probably, I don't know exactly, exact number, but high teens marketing, um, in terms of, uh, year-over-year comparisons on the dollars we spent. So, all of that has been pulled back, and as a result of that, of course, like, you're, you're, you're likely to see, um, a sales decline. But that, that's actually, well part of the plan for us, and when we come through this year, which is quite transitional, we'll have a very healthy and clean inventory. Uh, we will be poised to, uh, lean into the products that we come to market with and the innovation that we come, come with, and, and that we can bring joy around those products through the marketing we do. Uh, and, and that's, that's a recipe for a really nice rejuvenated and renaissance for the brand, which I'm, I'm pretty excited about.

    10. HSHarry Stebbings33:49

        To what extent do you think Wall Street has a flexible mind? I know that seems strange, but sometimes you see irrationality in the minds of Wall Street where it's like the decision is made.

    11. JZJoey Zwillinger33:59

        The market is a bit of an abstract concept, um, they're actually, a large part of it is just algorithms, and then there's real people on the, and the real buyers of it. And when we get momentum, um, from a business perspective and a brand perspective, there's gonna be people who, who will fully understand where we're heading and will see the transformative aspect of what we've done, particularly in the last 12 months, and how that will translate to incredible value in the future years, and they'll get on board. Equally, there's gonna be doubters that will say, "I don't believe it," and, and that it's not gonna work out, and, and, and maybe it was a fad, whatever, whatever the reason is, there's always gonna be doubters and there always has. But that's the market, you know? And that, that's, that's how it is, and then, uh, uh, like, like we've done, um, historically and like I, I expect we'll continue to do, we're gonna put up expectations and then wildly over-deliver on them. That's the, that's the ambition for any, any person running a company. That's my full expectation of what we should go out and, and do, and that typically silences the doubters.

    12. HSHarry Stebbings35:03

        I had Jen from, uh, Rent the Runway on and she really nailed home the drive towards profitability. Like, that was something that she really echoed time and time again. When do you think you'll be profitable?

    13. JZJoey Zwillinger35:15

        What we've said to the market, and we've gotta be pretty consistent with that, uh, on your podcast as well, uh, is, is that we'll be cash flow and EBITDA profitable

12. 35:24 – 36:36

    Profitability Goals

    1. JZJoey Zwillinger35:24

       in, uh, 2025.

    2. HSHarry Stebbings35:26

       So, just so, uh, everyone understands that listening, what's the alternative to ca- cash flow and EBITDA profitable? I'll take a bit out, but, like, what does that actually mean? Does that mean profitable? I'm, I'm naive here, even. I-

    3. JZJoey Zwillinger35:37

       Those are the best metrics to judge profitability, um, in terms of how a business should be valued in our space. So, anything we make in the future from a cash flow perspective is...... that, you know, discounted back to today's dollars is the value of our company, and so those are the best metrics to, um, to look at to gauge, uh, what the value of our enterprise should be.

    4. HSHarry Stebbings35:58

       Got you. Okay, that makes sense. Can I ask, on retail, it's a fucking beast. What do you know now that you wish you'd known when you started the retail strategy?

    5. JZJoey Zwillinger36:07

       Uh, being a good retailer's hard, um, no doubt, and, uh, but I think we've proven that we can create a really wonderful retail experience. Uh, I would say some of the things that were difficult to see, b- you know, particularly, sometimes you sign leases a year ahead of when you actually open up a store, is the changing patterns of consumers, um, over the last two, three years. And it's not only, um, what they wanted to consume, but where they were buying things has changed really significantly. In the

13. 36:36 – 39:23

    Consumer Behavior Trends

    1. JZJoey Zwillinger36:36

       wake of so much uncertainty, um, you know, we, we, we had shaped some perspective around the fact that things would get back to the way they were, and I think s- they are getting back to the way they were. (laughs) And I actually think that's true. Just the time horizon that that's, um, that that's taking people to kind of regain a semblance of, of their former lives, and some things are lost forever, so...

    2. HSHarry Stebbings36:57

       Wha- when you say, "Get back to the way they were," you mean, like, shopping in stores, that physical experience, you thought it would happen quicker than it has?

    3. JZJoey Zwillinger37:03

       Well, there's a whole bunch of factors to that, you know? It's, it's like think about the urban environments that historically people have worked in, and now it's, you know, in San Francisco, it's three days a week in the office if you're, if you're at a, a, a company who's, like, draconian in the sense of, of, of thinking that working together in a physical space is a good idea. And some are completely remote, that used to be, have a physical office presence, and so people are consumers. Those e- employees are commuting into work, they're in the restaurants, they're walking around the city, uh, and they're shopping in those areas after work or, or whatnot. And so that is the, um, that, that is things that have changed.

    4. HSHarry Stebbings37:40

       All my companies, five days a week.

    5. JZJoey Zwillinger37:43

       Yeah.

    6. HSHarry Stebbings37:44

       We're back to old times.

    7. JZJoey Zwillinger37:45

       (laughs)

    8. HSHarry Stebbings37:45

       We do work together.

    9. JZJoey Zwillinger37:47

       That's not happening in San Francisco quite yet, I would say, um, and I'm not suggesting that that's the way of the future, but I do think, um, there is a, um, people talk about productivity. The conception of what productivity means is far too narrow, and particularly in an industry like mine where creativity and physical products are central to what we do, eh, not being together is, uh, is impossible. And so that, that's the way that we've thought about, um, coming back, and, and most of the people who are closest to the, the central aspects of, of product creation and, and design and marketing are, are coming in, uh, uh, for four days a week, and we've done some other things with some of the more, um, adjacent functions beyond that, but...

    10. HSHarry Stebbings38:29

        Speaking of, like, being together, you know, I, I, I really like and respect you, Joey, and you did the show years ago when you really didn't need to, and I always remember your kindness. I hope it's okay for me to ask, but, like, have you had any semblance of balance at all over the last year or so since going public? Like, I think th- I think people don't actually have enough humanity for the torrid time that it can have on a person.

    11. JZJoey Zwillinger38:56

        I don't think balance is the right word.

    12. HSHarry Stebbings38:58

        (laughs)

    13. JZJoey Zwillinger38:58

        Um, because for the last decade, or, or frankly, more than that, if, when I was at my previous jobs, I, I, I, like, I just think about what I do. If I'm, if I'm gonna pour the majority of my n- like, waking life to something, like, it's gotta be super meaningful, and the only way that I, I, I can do this is to two things. I really try to integrate my, uh, family into the work, and

14. 39:23 – 41:12

    Work-Life Balance

    1. JZJoey Zwillinger39:23

       I really involve, uh, in a way that's quite meaningful to me. You know, my, my, my wife, uh, her name is Liz, she's a behind-the-scenes hero to the company, and I don't just say because she supports me or whatever, which is true. It's because of the insights that she's brought to the business, and, um, the help that she does in thinking through problems with me, and, and that, uh, you know, I think she gets some, some joy out of, out of being a part of that, and that helps, um, bring my personal life into my business life. And so that, that's one aspect of it. The second thing is, my kids don't give a shit what I do. They, uh, you know, when they were little, it was like, um, chief executive one, uh, o- one hour, and the next I was like chief butt wiper the next. So they don't, they don't care, right? And they still don't care, they're older now, but, um, uh, they de- they just wanna be with me and be ... and, and have a great time. And so what I try to do is just be present for the kids, um, not touch my phone, uh, for a large portion of the time that I'm with them, and certainly the, the, the beginnings every time I come home from work, and when I'm at work I try to focus and prioritize that. So, those are the two elements, and now what's overlaid over the last two years has been a layer of anxiety and stress that is, um, been much more than, than previous in my life, and so that's different than balance. That's, that's something that e- you know, every person, including myself, just need to figure out a way to, um, to deal with so that you can have that focus when you're, when you're, when you're prioritizing one or the other.

    2. HSHarry Stebbings40:48

       How has how you deal with stress changed? I remember some of my hardest times showed me the pits of how bad times can be, um, how I deal with stress today is I remember those to pers- gain perspective as to how bad it could be. (laughs)

    3. JZJoey Zwillinger41:03

       In the last two years, I would say probably the biggest change has been, um, the reliance on the team that I work with a little bit, um, differently.

15. 41:12 – 43:35

    Personal Challenges of Leadership

    1. JZJoey Zwillinger41:12

       Having a focus on giving room, for myself included, to really express what people are thinking, and what those anxieties are in a room very regularly, uh, with those people who are on the team is been not just cathartic, but also really helpful, 'cause some of those anxieties are grounded in, in reality, like, "You should be anxious about this. Like, there's something not going well. Like, why are you losing sleep about this?" So I'd say that's, that's one element, and the other stuff of, of, um, fitness and stuff like that that I need to do, and hobbies on the side that I need to do just to keep myself sane, like, that's been pretty consistent.

    2. HSHarry Stebbings41:52

       Are you anxious about the macro ahead?And I know that sounds like a very kind of big and shit matter question, but it obviously has a knock-on effect on, on luxury, on retail. You know, LVMH-

    3. JZJoey Zwillinger42:03

       Mm-hmm.

    4. HSHarry Stebbings42:03

       ... posted not-so-great numbers for the first time almost in my fucking memory. And when did LVMH not post good numbers? Jesus, then we are in trouble. Um, but does that worry you?

    5. JZJoey Zwillinger42:14

       No. The consumer is in a more delicate and fragile situation than people understand, and that it's gonna be more difficult and there's gonna be less spending than people think in the coming six months, but that's just a reality. That's my belief. And so we're structuring the business around that belief. Um, and, and that means a little bit more conservatism and investment, and playing offense in the areas that we think we can really generate value for, for th- for the people, f- f- for our business. If your question is, do I think that there's weakness ahead? Yes. If I am anxious about that, the answer is no. And anyone who has that belief, I, I would hope that they're doing something about it, (laughs) to structure their business in a way to be extremely resilient within that framework, uh, 'cause there's gonna be cycles up and down and, and it's, it's how you structure and respond to those that, that, um, that create the value or not.

    6. HSHarry Stebbings43:07

       Are consumers loyal? I had this debate at dinner with my girlfriend last night, and I said, uh, sorry, uh, "Running shoe-wise, I'm Nike. I don't wear anything else. I'm Nike. I have been for years." And she's like, "No, no, no." Like, "I actually do this, this..." Are consumers loyal or not when it comes to shoes?

    7. JZJoey Zwillinger43:25

       Yeah. I mean, I think... Look, the, the average American consumer buys eight pairs of shoes a year. That's man, woman, and child. And, and so

16. 43:35 – 45:14

    Customer Loyalty and Market Trends

    1. JZJoey Zwillinger43:35

       that's about two and a half billion pairs of shoes sold every year. There's a bunch of very specific uses within a person's closet that they're looking for a shoe to deliver, and then there's, um, uh, probably a little bit more, uh, broader-based, uh, opportunities. And within certain areas of the closet, I'd say, there's, um, there's, there's varying degrees of loyalty, m- and there's always an open-mindedness to try. Like, the, the, the amazing thing about... In, in, in the US in particular, this is true. Like, people love innovation and they're always willing to try and they love to be... uh, to figure out something that's gonna do something new for them. And so there's always, always some willingness to, to try. Um, that said, I think once you build a really deep connection with a consumer, um, they are incredibly loyal. And how does that translate in terms of business and purchase frequency? Different for every business, but we've found incredible love from our consumers and, and, um, we try to respect that deeply with very transparent communication and listening to their feedback and building that into the products as quickly as we can.

    2. HSHarry Stebbings44:42

       Final one, I promise, and then we'll do a quick fire. But you see On really hard now pushing to expand wallet and expand spend with clothes, with accessories. How do we expand spend beyond shoes with Allbirds?

    3. JZJoey Zwillinger44:54

       There's gonna be natural extensions for us to go. Um, you know, look, I'm wearing, um, the best T-shirt in the entire world right now, and it's a-

    4. HSHarry Stebbings45:02

       Love that. Th- little massaging of the chest there, Joey. (laughs)

    5. JZJoey Zwillinger45:05

       It's... Yeah. It's an Allbirds, um, it's an Allbirds Anytime Soft Merino tee. Um, it's 45 bucks. It's a ridiculous value, and it's,

17. 45:14 – 48:11

    Brand Expansion Plans

    1. JZJoey Zwillinger45:14

       uh, it is the best T-shirt in the marketplace.

    2. HSHarry Stebbings45:16

       I'm wearing a Sunspel, which is $200. (laughs)

    3. JZJoey Zwillinger45:19

       Ah, man. We will out-deliver that any day. So, uh, y- give it, give us a try. Um, but, so, so I think there's, there's natural extensions. Look, what we're, what we're best at is looking in places for consumer experiences from natural fibers and natural materials that no one else is looking for those opportunities. And when we see something that speaks to the lifestyle of what we're creating with shoes, we can have an opportunity to extend that comfort and that, and that, uh, and that aesthetic and that just tangible luxury feel. This is a great example of that. And it doesn't need to be huge. It doesn't need to be big categories, because y- you know, as I said, people buy, in the US, eight pairs of shoes a year. In, in the UK, it's, it's probably the same. The market is absolutely enormous, and if we just get really good, really, really good at just a few shoes, we can be a billion dollars in sales and go well beyond that. And so it's just sharpening the focus and being clear for the consumer and not getting tired, er, y- o- of the, of the story that you're telling to consumers before they do, which, it takes a long time for consumers to get tired. It's much quicker for employees to get tired. So just remembering that and keeping a focus on that very sharply is, is what brings us to the promised land and what we're working on today, so...

    4. HSHarry Stebbings46:33

       Totally. Uh, employees get tired much quicker (laughs) than consumers, for sure. I always say as a leader, when you get bored of telling the story and the mission, you're just starting.

    5. JZJoey Zwillinger46:42

       Mm-hmm.

    6. HSHarry Stebbings46:43

       Like, it should be boring.

    7. JZJoey Zwillinger46:44

       That's right.

    8. HSHarry Stebbings46:44

       You need to embrace that.

    9. JZJoey Zwillinger46:45

       That's right. Yeah.

    10. HSHarry Stebbings46:46

        Um, I wanna do a quick fire-round. So I say a short statement, you give me your immediate thoughts. What do others not know that you know to be true, Joey?

    11. JZJoey Zwillinger46:55

        There's a survey that goes out, um, from a couple of different companies. Every single survey that comes back about social issues that consumers care about, environment's number one across almost every single one, with the exception of, like, blips in time when something major happens in the world. So for a six-month period, maybe it's that one. But at the same time, they go out and buy a $3.78 polyester T-shirt or sweater from SHEIN and have no connection between their value orientation around what matters and what they consume. So this say-do gap, as, as it would be referred to, is pretty vast at the moment. I do think that that will close, and when that closes, um, the companies who are positioned where they're delivering excellence on every dimension that the consumer wants from the product outside of sustainability, but also delivering, um, on that promise around alignment with their values, those are gonna be the biggest companies of the next generation, and that's what we're trying to build. So there'll be more skeptics than not skeptics on that perspective. Uh, however, I think that's the great unlock for the next great generation of brands.

    12. HSHarry Stebbings48:02

        You can be CEO of any other company for a day. Which would you be CEO of?

    13. JZJoey Zwillinger48:06

        Interesting question. You should've sent me these in advance.Or maybe I should have just listened

18. 48:11 – 52:14

    Quick-Fire Round Insights

    1. JZJoey Zwillinger48:11

       to your other podcast recently to know exactly what you would have asked me. I'd say one of the most interesting companies out there are the ones leading, um, the new large language models in AI technology, like OpenAI, but I don't think I would want to bear that burden of responsibility for humanity, so I, I'll eliminate those. I'd say a company that, that has, um, done a really nice job in an area that I take a lot of inspiration from would probably be Tesla, which is around performance and quality of a product and an aesthetic and a beauty that delivers in and of itself, and the free gift with purchase is that it's much more sustainable for the planet, and that's kind of what I aspire for Allbirds, so that'd be a pretty fun one.

    2. HSHarry Stebbings48:52

       You can have dinner with anyone, dead or alive.

    3. JZJoey Zwillinger48:55

       Nelson Mandela.

    4. HSHarry Stebbings48:57

       Why, why Nelson, above anyone?

    5. JZJoey Zwillinger48:59

       Pretty long journey in prison and the resilience and the long-term view that he had and the actual, uh, tenacity to take a, uh, a whole country and shape that around the vision that he had, uh, with determination and unrelenting, unrelenting focus on what that future could be, with fairly, uh, thoughtful and non-violent outcomes that you might be tempted by in the short term, uh, but would jeopardize the long term. Uh, that's a guy that we can all learn a lot from.

    6. HSHarry Stebbings49:27

       What's your favorite brand and why them? Other than Allbirds, obviously.

    7. JZJoey Zwillinger49:32

       (inhales deeply) Uh, yeah, yeah. Um, I kinda like Traeger.

    8. HSHarry Stebbings49:37

       What are Traeger? I didn't even know Traeger.

    9. JZJoey Zwillinger49:38

       It's a, it's a smoker. It delivers incredible flavor to all the food we cook and takes the magic out of barbecue and allows, uh, a lot more people to make phenomenal food that people can enjoy without, uh, the intimidation of an open flame.

    10. HSHarry Stebbings49:53

        (laughs) I'm not a cook so, uh, I'm, I'm, uh... Clearly they have some brand awareness to do or maybe I just need to actually leave a room once in a while.

    11. JZJoey Zwillinger50:03

        (laughs)

    12. HSHarry Stebbings50:03

        Um, Joey, final one for you. 10 years time, it's 2033, where are you then?

    13. JZJoey Zwillinger50:10

        What I think about most is, um, where, where Allbirds is gonna be. Um, we wrote a vision in 2016 and we, we situated ourselves, uh, in the summer of 2026 when we wrote that vision. And, and frankly, we're marching right down that, um, right down that path, and, uh, I have a high degree of confidence that we're gonna achieve everything that was written in the, in that vision at this point, so that's a pretty good start. So extending that by seven years, I think, look, the business has to be big. We've done a great job of aligning what our impact objectives are with our financial objectives. And what I mean is, every time you buy a shoe, you're doing something fantastic for my business and you're also doing something fantastic for the world. And if we can take that model and extend it and scale it very large, um, we're gonna be really important. Uh, within that importance and that cultural relevance will come, uh, great business success and, and those two things are, are very mutually aligned and, uh, propel one another. And, and that alignment of our business model, uh, means that I want this brand to be enormous, and I want it to capture the multi-generational opportunity that it, uh, that it has, um, as a result of, of an amazing, uh, team of people who, who worked really hard with sharp focus, uh, particularly in the early years of the business, and that's all I can think about. And it's gotta have wonderful financials and we have to stay true to our values while we do it so that, um, that the, that, that, that, uh, that model stays tightly aligned.

    14. HSHarry Stebbings51:39

        Joey, listen, I can't believe it's been, like, six years since our last show. Thank you so much for joining me today, and thank you for putting up with my slightly prying questions. (laughs)

    15. JZJoey Zwillinger51:48

        Been, uh, been great to do it, and I'm, I'm, uh, uh, I've learned a lot, um, not sure if I've shared too many nuggets of wisdom today, but, um, that journey is, is both difficult, uh, but incredibly rewarding, and with a future as bright as I believe it to be, it keeps me incredibly motivated, and I hope, uh, I hope some people are learning about Allbirds for the first time today with your show and give us a shot.

Episode duration: 52:14