Hello Gobbledeers,
How’s it going? Today we’re going to talk about Allbirds - if you hadn’t seen, they were sold to American Exchange Group (a company that licenses other brands) for $39 million, a 99% haircut from their highest valuation a few years back.
What happened there was as much a positioning problem as anything else (though, of course, there wasn’t just one thing that went wrong.). They made a good product, but ran a terrible business.
Also - quick reminder we have one spot open in the Gobbledy Messaging Cohort that starts Tuesday, April 7th. Sign up here (or email me with questions).
Anyway - hag sameach and happy Easter.
Fly, little bird
Dearly beloved, we are gathered here today to remember a true friend. A soul that brought comfort when our soles were ailing. When life pounded us, it provided a soft landing. It sheepishly wrapped our tootsies in wool, while others offered nothing but stiff leather.
Oh Allbirds, how did we lose you so soon?
I remember when we first met. In fact, I wrote about it here in this very newsletter:
One of my favorite unexpected positioning opportunities is how founders dress.
If you wanted to go out to Silicon Valley and raise some cash money back in the early 2010’s, you may have untied that tie, put on a hoodie, and then flown to San Francisco and asked guys* for $75 million.
(*Yeah, they weren’t ALL guys, but also they were all guys.)
Those guys weren’t wearing hoodies. They were wearing Allbirds. The guys giving out the $75 million wore Allbirds to suggest/imply that they’re guys who don’t JUST care about tech, they also care about how they look, and also maybe (?) they invested in Allbirds, and look how well rounded and smart they were for that!**
(**Until recently.)
Those were crazy times, back in the mid-2010s. It’s hard to even remember, but just 10 years ago there were venture capital firms who thought that a company that made shoes out of wool was worth $4 billion on $277 million in revenue. That was funny.
Y’know what else was funny? It raised more than $250 million in venture funding. $250 million. To sell shoes. Hardy har har.
Oh I remember how excited you were when you raised that. In fact in your press release announcing the deal you said something that maybe should have caught our eye:
“Despite the retail industry’s unprecedented challenges, the size of Allbirds’s Series E is an indication of investors’ continued enthusiasm for its stakeholder-centric business model that produces products that are better for consumers and the environment.”
DESPITE THE RETAIL INDUSTRY’S UNPRECEDENTED CHALLENGES????
Oh, Allbirds. We loved you so much that you thought your soft, woolen shoes somehow were immune to every other retail company’s “unprecedented challenges.”
That naïveté - that youthful optimism - is one of the reasons we loved you so much.
Well, that and that well, goddammit - I promised myself I wouldn’t cry - your shoes were so freaking soft.
You had articles written about you that said things like, “Allbirds is not merely an apparel company today. It has now become a materials innovation company disrupting how clothes are made.”
Unfortunately that was a bunch of bullshit. Positioning yourself as a “materials innovation company” was goofy late 2010s ridiculousness. But that didn’t matter - you WERE a shoe company. And a damned good one, at that.
Allbirds, you remember that I’m a runner, and after going for a long run, I would come home and shower and put on - you remember - my Allbirds. Because it was like wearing no shoes at all. And aren’t no shoes the best kind of shoes?
And you appealed to so many, Allbirds! So many!
Yes, you were on the feet of all those west coast venture guys. They wanted to show that they don’t just care about software. They care about textile technology! Any doofus can invest in a new personalization platform (and all the doofuses did!), but it takes a certain kind of doofus to invest in shoes. Shoes that are also technology.
But then you were on the feet of the east coast venture guys - all the guys who wanted to show that east coast venture guys take a back seat to no other coast’s venture guys! Sure, they showed up on east coast venture guys’ feet like 9 months after they were on the feet of west coast venture guys, just like how Madonna bracelets showed up on the wrists of New Jersey junior high school girls in 1983 roughly 9 months after they appeared on the wrists of New York City teens sneaking into Danceteria.
Then those tech guys on both coasts went to visit their parents and their parents would ask about you - “what is up with those funny-looking shoes?” they would ask, while wearing their own moderately comfortable New Balance.
“Oh these?”, you would say, “everyone in tech is wearing them, they’re incredibly comfortable.”
And your dad would respond, “I want comfortable shoes! What store sells them?”
And you would say, “None! No stores sell them!”
And he would say, “How is it a business if no stores sell them?”
And you would say, “How do you not understand Direct-to-Consumer??? You just buy them online.”
And he would say, “Can you show me how to do that?”
And you would say - after thinking about what it would take to show your dad how to buy something online in 2015 - “I’ll just buy them for you.”
And he would thank you! Profusely!
As my father-in-law did! He has the biggest, most, uh, uniquely shaped feet I’ve ever seen. And he suffers from some sort of hammer toe situation (HIPPA laws, be damned here), which kind of makes me want to vomit, but also made me think of you, Allbirds.
And rather than try to show him how to purchase Allbirds himself - because God knows life is too short for that - I just bought him a pair. And what father-in-law would not be thrilled that his son-in-law bought him the most comfortable pair of shoes he ever wore in his life (even counting his pre-hammer toe days!).
Oh Allbirds, this is what is so hard to talk about. If you hadn’t raised $250 million from people who thought you could somehow triple your revenue every single year for eternity, you could have had such an amazing business.
You were so loved. So, so loved.
You could have just kept introducing new colors. And collaborations. And drops. And new packaging. And distribute in new, fun places.
But no.
You had to fly so, so, so close to the sun. You had to keep growing.
You had to open 21 stores in 2020 and had 58 open just 2 years later. Do you know how much it costs to open that many stores?
And you had to expand your product line. You introduced Tree Dasher running shoes, because you thought you were an athletic shoe brand for some reason. And the running shoes you made weren’t good enough to be actual running shoes. And nobody believed you were a running shoe company. In fact, all successful running shoe companies started as running shoe companies and then expanded out. You - you optimistic, naive fool, you thought you could do that backwards.
Oh Allbirds - you never realized the love people had for you. You never appreciated that you weren’t Nike or Hoka. You were Ugg. You were a comfort shoe that could offer a handful of styles for the rest of eternity, combining quirky style, with an amazing use of wool and extraordinary comfort.
Or why - in the words all those tech investors would have understood - didn’t you “create a category” (vomit) and be the world’s best Recovery Shoe? The shoes you wear AFTER you go for a run. Why?
Why didn’t you realize you were loved?
Why did you think you were an apparel company? Why did you have to introduce leggings? Or jackets? There are Allbirds puffers. Puffers! Why puffers??? Why????
Hiking shoes?
Trail running shoes?
You never appreciated your own beauty, Allbirds.
You never looked in the mirror, and saw what you were - the world’s most comfortable shoe.
You had to hang around with that fast crowd. That crowd that pushed and pushed and pushed.
Those weren’t your real friends. Your real friends have hammer toes. And sore feet from running. And blisters but still need to put something on their feet to walk outside. And something to wear on vacation when you’re going to walk more than you ever did before.
And yeah, some of those people aren’t the most beautiful. Or have perfect bodies. Or are older than 24.
But there’s something to be said for loving those who love you.
And oh, Allbirds. You were loved.
See you on the other side, Allbirds.
As always, thanks for reading to the end - it’s the best part.
P.S. - If you’d like to bore anyone at your seder, feel free to share this Gobbledy Classic (tm) about how Maxwell House haggadahs ended up at your seder table.
Please don’t ever stop gobbledy-ing.
My husband mourns with you.