20VC What Larry Paige, Mary Meeker and Ben Horowitz All Have In Common, Why You Have To Build A Movement Not A Brand & Why This Really Is A Great Time To Be An Entrepreneur with Joey Zwillinger, CoFounder @ Allbirds

In this episode of the 20 minutes vc, host Harry Stebbings interviews Joey Zwillinger, co-founder of Allbirds, a company that has revolutionized the footwear industry with its comfortable, wool-made shoes. Zwillinger discusses his journey from an engineering background through various roles, including investment banking and venture capital, to founding Allbirds with a mission to use the private sector for positive environmental impact. He emphasizes the importance of simplicity and customer focus in the direct-to-consumer model, contrasting Allbirds' approach to the overwhelming choice and cost-cutting strategies of traditional retail. Zwillinger also critiques the commoditization effect of Amazon on brands and shares his vision for Allbirds' sustainable manufacturing leadership and material innovation. The conversation touches on the changing retail landscape, the significance of brand building, and the potential of simplicity in the direct-to-consumer space.

• Joey Zwillinger is the founder of Allbirds, a startup known for making the world's most comfortable shoes out of wool.
• Allbirds has received funding from various venture capital firms including Mavron, Lira, Hippo, and Slow Ventures.
• Joey has a diverse background, having worked in investment banking, venture capital, and biotechnology before co-founding Allbirds.
• Harry Stebbings expresses his excitement and admiration for Allbirds and thanks Rebecca Caden at Mavron for introducing him to Joey.

"Well, they all love Allbird shoes, and so I'm thrilled to welcome Joey's Willinger to the show today. Joey is the founder at Allbirds, the startup that makes the world's most comfortable shoes."

The quote introduces Joey Zwillinger and Allbirds, emphasizing the popularity of the shoes among notable figures and the unique selling point of comfort.

• Joey's journey from an engineer in biotech to founding a fashion and shoe startup is unconventional.
• He studied engineering in college and had a passion for math and physics.
• After college, Joey sought to understand business and found a passion for using the private sector to positively affect the environment.
• He joined Industry Ventures in San Francisco, focusing on clean tech deals.
• Joey felt venture capital wasn't the right model for renewable energy and aimed to join a private company as an operator.
• He chose to work at Solazyme, a company that engineered microorganisms for chemicals, cosmetics, and food, and led their chemicals business unit.
• Solazyme went public in 2011, and Joey learned about the challenges of marketing sustainability in a B2B context.
• Joey realized the need to build a brand to effectively market renewable materials, leading to the creation of Allbirds.

"I was an engineer working in biotechs, which is not your natural transition into becoming a cobbler."

This quote highlights the unconventional career path Joey took from engineering to shoemaking, setting the stage for the story of Allbirds' origins.

• Joey's passion was to use the private sector for environmental impact.
• He observed that venture capital wasn't ideal for renewable energy technology companies.
• Joining Solazyme provided insight into the difficulty of selling sustainable products to big brands.
• Joey concluded that creating a consumer-facing brand was necessary to showcase the potential of renewable materials.
• He identified a gap in the footwear industry for sustainable leadership.
• Allbirds was founded to create an aspirational brand in casual footwear, focusing on sustainability and creating a consumer movement.

"And what I wanted to use that private sector for was to positively affect the environment."

This quote explains Joey's motivation to leverage the private sector's dynamism to make a positive environmental impact, which led to the founding of Allbirds.

• Joey faced challenges in marketing sustainable products to larger brands.
• He learned that changing established brand positions and product ingredients is extremely difficult and slow.
• The low cost of petroleum puts pressure on brands relying on renewable materials.
• Joey recognized the need to connect directly with consumers to demonstrate the benefits of renewable materials.
• Allbirds was created to fill the sustainability void in the footwear industry and to build a movement around the brand.

"The big brands just don't understand how to take that and market it effectively."

This quote reflects the struggle Joey observed with big brands being unable to effectively market sustainability, which influenced the direct-to-consumer approach of Allbirds.## Retail Industry Trends

• The retail industry is experiencing significant negative trends, likened to the Titanic's inability to change course, indicating a decline.
• The democratization of retail, led by Amazon, has altered the consumer's buying experience, emphasizing price and convenience.
• Despite the shift to online shopping, consumers still value the tactile experience of trying on items, especially for discovering new brands.
• Brands and multi-product retailers face pressure due to the consumer's desire for the best price, often leading to shopping on cheaper platforms after an in-store experience.
• Nike's decision to sell on Amazon is seen as a significant indicator of the industry's direction.
• Amazon is viewed as commoditizing products, which negatively impacts brands trying to differentiate themselves.
• Cost pressure on brands leads to a focus on discounting and rapid style turnover, with product developers primarily aiming to cut costs.
• Despite challenges, the retail industry is buying more products than ever and is on the cusp of an exciting phase of innovation in branding, technology, and business models.
• The high switching costs in retail, such as long-term leases, have slowed change, but the industry is now entering a transformative period.

I think the headlines being retail as we know it is dying, I think is absolutely accurate.

This quote emphasizes the speaker's agreement with the negative perception of the current state of the retail industry, highlighting its decline.

You have an environment where the democratization of retail, particularly then dominated by Amazon via the Internet, has created a very unique buy sell relationship for any consumer.

The speaker is describing how Amazon's influence has fundamentally changed how consumers purchase goods, focusing on a new dynamic between buyers and sellers.

And with information being cheap and free, I think a lot of consumers at the end of the day, they're price shoppers and they want to get the best deal.

This quote suggests that the widespread availability of information has led consumers to prioritize finding the lowest prices due to the ease of price comparison.

I think Nike just announced that they're going to start to sell on Amazon as well, which I think is quite a bellwether for the industry.

The speaker views Nike's move to sell on Amazon as a significant indicator of broader industry trends and potential future changes.

Amazon's job is to commoditize products and to give you a flea market, kind of a high end, tech enabled flea market, to buy everything that you want at the lowest price you can get it.

The quote criticizes Amazon's role in making products seem undifferentiated and solely competing on price, likening it to a high-tech flea market.

So I'm absolutely thrilled about where we're at as a company. I'm thrilled about where the industry is at because I think it's just an exciting time for change.

Despite the challenges, the speaker expresses optimism about the opportunities for innovation and transformation in the retail industry.

• Amazon is not considered a necessary retail channel for all brands; some actively avoid it to maintain brand integrity.
• The platform's focus on low prices and abundance makes it difficult for brands to distinguish themselves beyond price and basic web features.
• The presence of knockoffs and similar products on Amazon can dilute a brand's unique value and market position.
• Brands must be cautious when considering selling on Amazon due to the potential impact on their image and differentiation.

Absolutely not. No. I mean, we stay away from them as far as we possibly can because.

This quote conveys the speaker's strong stance against relying on Amazon as a retail channel due to its negative impact on brand building.

But the whole premise of the Amazon marketplace is to get the lowest cost products to consumers.

The speaker criticizes Amazon's business model, which prioritizes low prices over brand differentiation and could undermine a brand's value proposition.

If you look at how Amazon does, even when you're not selling on their channel enough people have typed in Allbirds on Amazon.com such that there is a lot of knockoffs and other, perhaps you would call it, similar looking products that are now sold through Amazon to try to rip off our market.

This quote highlights the issue of counterfeit and imitation products on Amazon, which can harm the original brand's market by confusing consumers and eroding brand trust.## Direct-to-Consumer (D2C) Business Model

• D2C has been successful for brands like Casper and Raiden.
• Simplicity is considered fundamental to success in the D2C market.
• Consumer behavior in D2C is influenced by a desire for a simplified shopping experience.
• Overwhelm from too many choices can be mitigated by a focused, curated product offering.
• Joey Zwillinger emphasizes the importance of cutting through noise and focusing on a singular product to enhance customer experience.

"And he said before, though, that success in d to C is fundamentally about simplicity."

This quote highlights the principle that simplicity is key to success in the D2C market, as confirmed by previous experiences and experts in the field.

"When we launched our company, this is only 16 months ago now, March 1."

Joey Zwillinger points out the recent establishment of their company and its early success, attributing it to their focused approach.

"We said no to almost everything in the company building phase of this before we launch. We said no to a thousand different things."

This quote emphasizes the company's strategy of saying no to numerous options to maintain simplicity and focus on the customer experience.

• Decisions are filtered by what provides the best customer experience.
• Rejecting common e-commerce tactics like pop-up discounts to avoid spamming customers.
• The launch strategy involved focusing on a single product to ensure quality and customer satisfaction.
• Every decision made within the company is scrutinized to ensure it aligns with customer-centric values.
• The collective impact of these decisions contributes to the company's virality and reputation.

"Just one absolutely simple filter, which is make the absolute best experience for the customer and absolutely everything else can fall away."

Joey Zwillinger describes the company's guiding principle for decision-making, which is to prioritize the customer experience above all else.

"We said, do you want to come out with twelve different products when you launch out of the gate, or do you want to just do one and do one product really, really well and create and focus on the customer to make the best experience and literally every decision we made was centered around that."

This quote explains the company's strategic choice to launch with a single, well-developed product to ensure a high-quality customer experience.

• Physical goods require a different approach to iteration compared to digital products.
• The company has made numerous improvements to their initial product based on customer feedback.
• Continuous innovation and responsiveness to consumer standards are crucial.
• A balance is struck between releasing a perfect product and the minimum viable product (MVP) concept.
• The company's approach is more conservative with physical goods, aiming for near-perfection at launch.

"I think there's a difference between consumer Internet and web products and a physical good."

Joey Zwillinger distinguishes between the rapid iteration typical of web products and the more measured approach needed for physical goods.

"We made probably 30 changes in the 16 months to that first release product."

This quote demonstrates the company's commitment to refining their product post-launch based on customer input.

• Company culture is seen as a determinant of success.
• The Mars project exercise was used to establish core company values.
• The exercise involved imagining colonizing Mars and determining the values needed for success.
• A clear set of mission and values guide the company's actions and decisions.

"We think that culture kind of creates what you see as the output of a company almost exclusively, is the thing that will make or break the success of our company."

Joey Zwillinger expresses the belief that company culture is the primary driver of a company's output and success.

"We ran that exercise. It took a long time, and we came out with a crisp set of mission and values, which are the guideposts for how."

This quote details the process of establishing the company's core values through the Mars project exercise, which serves as the company's guideposts.## Company Values and Visioning Exercise

• Joey Zwillinger discusses the importance of having a unique set of values to guide company success.
• Values mentioned are to live curiously, act intentionally, and simplify naturally.
• The visioning process involved a team exercise inspired by Zingerman's deli, projecting ten years into the future to envision the company's trajectory.
• A detailed document emerged from this exercise, outlining every aspect of the company and its strategic perspective.
• This vision document is shared with potential hires late in the interview process to provide a clear understanding of their role and the company's mission.

"And we came up with a set of values which are, for us, very unique to us and what we think will make us successful, which is to live curiously, act intentionally, and simplify naturally."

This quote outlines the core values that Joey Zwillinger believes are fundamental to his company's success, indicating a strategic and intentional approach to corporate culture and identity.

"We took a visioning exercise, and we had the same Mars group of people, Mars team, come together and wrote down, put themselves ten years in the future."

Joey describes a visioning exercise that involves imagining the company's future state and its achievements, which is a strategic planning technique to align the team's efforts towards a common long-term goal.

• Joey Zwillinger keeps up with industry news and reads Dan Primack's daily deal sheets and First Round Capital's blog.
• He finds podcasts to be a valuable learning resource during his commute, listening to about ten different podcasts simultaneously.
• His favorite podcast is Radio Lab, emphasizing the importance of content that helps unwind and inspires personal improvement.

"So I read Dan Primax stuff for the Daily deal sheets. I do read the first round Capital's blog pretty religiously as well."

Joey highlights his reading habits, focusing on industry news and insights from reputable sources, which informs his understanding of market dynamics and investment trends.

"I listen to about ten different podcasts at a time and consistently have those subscribed and rolling."

This quote indicates Joey's preference for auditory learning through podcasts, which allows him to stay informed and engaged with new ideas during his commute.

• Joey Zwillinger appreciates the current favorable conditions for entrepreneurs, with ample funding opportunities.
• He values VCs who focus on the people behind the startups, emphasizing the importance of individual relationships and team dynamics.
• Joey suggests that a more people-oriented approach from VCs would lead to a different and potentially more successful startup ecosystem.

"The best ones that stood out for me are the people who focus very myopically on my team and me as an individual."

Joey emphasizes the significance of personal attention from VCs to the entrepreneurs and their teams, suggesting that this focus can lead to better investment relationships and outcomes.

• Joey Zwillinger aims to grow Allbirds into a global brand leading in sustainable manufacturing.
• Allbirds plans to extend its product line beyond wool and focus on material innovations for a sustainable product range.
• The company views itself more as an innovator than a traditional shoe or fashion company, with a commitment to natural materials.

"I would love to grow this brand to something that is very big, very global."

Joey expresses his ambition for Allbirds to expand significantly on a global scale, indicating a strategic focus on growth and market penetration.

"We're developing a suite of material innovations that create uniquely differentiated experiences for customers that are just phenomenal shoes to slip your feet into."

This quote highlights Allbirds' commitment to innovation in materials, aiming to provide unique customer experiences through sustainable and renewable products.

• Harry Stebbings expresses his pleasure in having Joey on the show and excitement for Allbirds' future.
• Joey thanks Harry for the opportunity to share Allbirds' story.
• Harry promotes Pendo, an analytics and user engagement platform, and Treehouse, an online coding school, both resources for product managers and developers.

"I'm so excited for the future ahead with Allbirds, I really am."

Harry Stebbings shares his enthusiasm for Allbirds' vision and products, underscoring the positive reception of the company and its market potential.

"Pendo helps companies create products that customers love."

Harry provides a brief introduction to Pendo, a tool for product teams to improve user experience and engagement, which is relevant for listeners interested in product development and management.