This video is sponsored by Shopify. Soft, cozy, sheep, shoe. Soft, cozy, sheep, shoe. Allbirds is listed as the world's most comfortable shoes
and said to be more luxe than Yeezys. Valued at over $4 billion,
a rarity in the footwear industry. Its shoes can be spotted on the feet
of the biggest leaders in Silicon Valley, from Google's co-founder
to Twitter's former CEO, and a wide range of celebrities from Oprah Winfrey
to former President Barack Obama. And it all started
with a professional soccer player whose World Cup dreams were cut off before
coming up with the idea behind Allbirds. Not knowing anything about shoes,
it would take 200 prototypes and dodging a questionable deal
for the company to take flight. In 1981, Tim Brown was born in Congleton, United Kingdom,
and raised in Wellington, New Zealand. His father worked with non-profits
and his mother was a nurse. From an early age. Tim found himself passionate
about playing soccer. However, some family members
were disappointed that he wasn't interested in New Zealand's
national sport — rugby — instead. Still, Tim continued to play
and told himself that he would die happy if he could make New Zealand's
Under 20 team. After graduating from high school, Tim received soccer scholarships
from a number of colleges. He ended up choosing the University
of Cincinnati since he began to develop an interest in design and saw
it offered one of the best programs. Tim's parents supported his decision
and even got a loan against their home to ensure
he wouldn't run into financial issues. The University of Cincinnati's design
program was an intense five-year commitment. Tim found himself struggling to balance
both his studies and playing soccer for the university, since it involved
practicing 40 hours a week and the field was located
opposite from his classes. Eventually, Tim begged his coach
to allow him to miss warm-ups so he didn't have to leave
class early for practice. "When I look back on it, it was a fair amount of pressure,
but I I'd found something that I was in love with." After graduating from university, Tim was recruited by the Newcastle Jets
in Newcastle, Australia. But within less than a year, he joined the Wellington
Phoenix in Wellington, New Zealand. Tim was a midfielder and wasn't
the quickest or most technical player. In fact,
he often got penalties and was red-carded. However, Tim was good at throwing off
opponents, getting the ball away from them and giving it
to the better players on his team. He also continuously tried
to improve his skills since he believed his team would one day
have a shot at the FIFA World Cup. "That was the special sauce
that drove me to kind of get through the humdrum,
you know, routine of professional sport." Around
this time, Tim got a sponsorship deal with a major sportswear company,
which he refuses to name. What was supposed to be an exciting moment in his career
ended up being a dreadful experience. Growing up, Tim watched his father
remove logos off his clothes since he was a minimalist
— a habit that Tim picked up and became even more ingrained in him
was studying design. He hated having to wear clothes and shoes
plastered with logos because of his sponsorship
deal. Eventually,
Tim began to wonder why there wasn't a major sportswear company offering shoes
that had no logos and were comfortable. It bothered him so much
that he decided to try and make his own. Whenever he had free time,
he would think about the design and material and look up factories
in New Zealand online. But after realizing
all the factories ceased operations due to the industry shifting to Asia,
Tim settled on one in Indonesia and even traveled there
when he had a month off from soccer. At the same time, he and his team were still focused
on qualifying for the World Cup. After Tim's trip to the factory
in Indonesia, he placed an order for the kind of shoes
he'd always envisioned for himself. However, he soon regretted his decision. Since the shoes were made with canvas
and leather, Tim had to visit a tannery for the first time and quickly realized
how many toxic chemicals go into making the material. By then, it was too late to cancel his order,
and he was stuck with 1000 pairs. Fortunately, Tim's brother
helped to sell some at a pop up shop and Tim's roommates bought a few as well. And while many resonated with the concept
of simple, unbranded and comfortable shoes, Tim felt they needed
to be differentiated in a bigger way. An idea would soon come unexpectedly. Enjoying the video so far? Be sure to subscribe to Hook
and ring the bell to stay up to date with new stories
about today's most successful companies! One day, Tim was reading a magazine about the merino
sheep wool industry in New Zealand. It had always been an iconic part
of the country's history and known as the finest in the world, but it began
to suffer from being less in-demand in favor of cheaper
and synthetic materials. Knowing Merino was a miracle fiber
with many natural, renewable and biodegradable benefits,
Tim wondered why it was never once used on shoes. "What if we could do that?"
He thought to himself. "That would be huge." Following his instincts,
Tim submitted a grant proposal to develop a wool fabric for shoes
to a funding board that was looking for new ideas
to keep the wool industry alive. Later that year, Tim won $200,000 from the funding board
and a contracted research lab began to work on developing a wool fabric
for shoes. Soon after, Tim received news
that changed his life in an instant. New Zealand qualified for the 2010 World
Cup — marking the second time in history
the country entered the competition. Tim was selected to play both as a vice-captain
and midfielder, but a sudden turn of events
would force him to sit on the sidelines. Leading up to the World
Cup, New Zealand, nicknamed the All Whites, played a warm-up
match against Australia. During the first half, Tim found himself
tangled with competing player Vince Grella, as they both chased the ball
— leading to Tim falling to the ground. As Tim
put his hand down to support himself, Vince fell on top of Tim, injuring
Tim's right shoulder. Tim played on and only
went to the hospital after interval. After getting a CT scan,
the doctors discovered he had fractured his shoulder
and would need surgery immediately. Two weeks after the operation,
Tim made a miraculous recovery and was cleared by medical staff
to head to South Africa for the World Cup. Still, Tim was never given the chance
to step onto the field. Instead, he looked on as his teammates
drew 1 to 1 against Slovakia and then Italy, proving
the All Whites weren't the World Cup's biggest dud — like the Wall Street
Journal claimed. But in spite of the All Whites impressive
performance, they were sent home just days later
after a scoreless draw against Paraguay. Their journey to the World Cup was over. "I realized like this—. That's the end of this. This is the moment where I depart." Two years later, Tim was finally able to hang up his cleats and announced his retirement
from professional soccer. Afterward, he decided to apply to LSE's
International Management Master's program, thinking a business education would complement
his undergraduate degree in design. LSE didn't exactly see Tim
as a potential star student and suggested he take a class
to improve his calculus skills. Tim followed their advice. Afterward, LSE
finally took a chance on Tim. After a couple of semesters at LSE,
Tim headed to Northwestern University for an eight week
entrepreneurship course as an elective. There, the professor and former
CEO of Walmart.com, Carter Cast, instructed students to pitch
a business idea in under three minutes. Following,
the class would form teams around the best ideas to execute them
for the remainder of the course. Tim decided to pitch his idea
of creating shoes with merino wool. "How is it possible to turn scratchy wool into shoes?" Tim's classmates questioned. Tim explained that wool from merino
sheep was different. Its fibers were incredibly soft
and comfortable and could wick away moisture and regulate temperature. While some classmates began
to open up to the idea, others laughed. Tim's professor even pulled him aside
to tell him his idea was horrible. "Throw this out on Kickstarter
so it can quickly fail and you can get on with your life,"
he instructed. After the Northwestern course
ended and Tim graduated from LSE, Tim created 200 prototypes
before settling on a design. Afterward,
he forged ahead with facing his fears and setting up a Kickstarter campaign. To kick off the launch,
Tim decided to shoot a promotional video
at a Family Friends farm in New Zealand. When Tim arrived, the family friend herded the sheep together
so that they could be in the backdrop. At that moment, Tim began to have doubts. "This
is dumb," he admitted to his brother. "Just do it. His brother
insisted while dragging him to the farm. "What's the worst that could happen?" Tim reluctantly obliged and move forward with the shoot. Later that year, Tim's Kickstarter campaign went live,
introducing his shoes as the world's first merino wool runners as three over
seven. The campaign
highlighted the shoes' natural, renewable and biodegradable benefits,
including being machine washable. Anyone who pledged $98 or more to back
the project would receive a pair. Tim had hoped to raise $30,000 within 30 days,
but reach that goal within the first day. And just three days
later, the amount rose to almost $120,000. Tim was then forced
to shut down the campaign since he didn't have enough wool to make shoes
for more Kickstarter customers. On the outside, it had seemed Tim achieved
major success. But on the inside, Tim felt otherwise. He still wasn't sure
how exactly the shoes could be made in spite
of contracting a factory in Portugal. "I remember being scared. Like I have to go deliver on this now
and execute it and this is going to be really, really hard." Tim wasted
no time in trying to figure things out like production, but found himself
running into one challenge after another. The factory he contracted
had made the men's and women's shoes the same size
and then suddenly went bankrupt. Tim had no choice but to send what he had
to his Kickstarter customers and then fly to Portugal
to rescue the remaining wool — tapping into his savings
that were now drying up. Tim then began to question if his idea for wool
shoes was still worth pursuing. It didn't help that his father began
to refer to him as a cobbler, and his circle of friends
didn't take him seriously. "We'd go out for dinner,
go around the table, and I would dread when it would come to me
and people would ask what I was doing. My body would curl up into a little ball
and I would sort of say wool shoes. And when we'd leave the dinner,
people would pat me on the head and say, that's lovely
that you're pursuing this little thing and good luck with that little feller. It was awful." Unbeknownst to Tim, he would soon receive an offer
that would lead to turning his venture into a billion-dollar company
— a rarity in the footwear industry. One day, Tim received an unexpected call from an investor who had just learned
about his merino wool shoes. He was impressed by the idea
and Kickstarter traction, and asked Tim if he could invest. Tim agreed to consider his offer and
hopped on a plane to meet him in New York. During the visit, the investor took his time to walk
Tim through the details of his offer. However, he only gave Tim two weeks
to make a decision. Tim was unsure about what to do. The deal would relieve him
from financial stress, but it would leave him with only
a small stake in his own venture. "You need to speak with Joey about this,"
Tim's partner, Lindsay, suggested. "He comes from this world
and he's one of your customers." Joey was Lindsay's best friend's husband
who consulted for management and investment firms before running
a biotech startup in San Francisco. Tim took Lindsay's advice
and reached out to Joey. While some of Tim's friends took a look at the deal, Joey thoroughly reviewed
the terms. "It was vulturous in the way I read it. I thought that it was taking advantage
of a great idea and trying to sink their talons
into this business. And what Tim would have been left
with was not great." Joey advised him to not take the deal
and suggested an alternative to help his venture succeed:
becoming partners. At the time, Joey was researching
sustainable clothing materials
and pitching them to multinational brands. Many of them were excited by his ideas,
but never followed through since they preferred to do things
the cheaper old way. Joey became extremely frustrated,
especially after realizing that even a struggling venture like Tim's dared
to do things differently and better. In the U.S. alone, the average American buys
eight pairs of shoes a year, most of which are made
with toxic chemicals that cannot be recycled,
and end up in landfills. Meanwhile, Tim's shoes were biodegradable. Since wool is a natural material. "It really resonated with me
from a sustainability perspective. But it was also about an opportunity
to sell shoes in a totally different way than the industry
had had ever done before." For both Tim and Joey, it was obvious that there was
the potential to become great partners — given their many similarities
in attitude and approach. So after spending an entire weekend
getting to know each other better, they decided to make it official
and become co-CEOs. Tim then moved to San Francisco to work alongside
Joey and his mother-in-law's garage. That same year, Tim and Joey managed
to find a textile mill to produce a high quality, certified-sustainable wool
fabric, and a factory operating within one of the cleanest
electric grids in the world. Later, the two even secured a $2.8 million investment
from Great Oaks Venture Capital. Tim and Joey
then rebranded their joint venture as Allbirds — a nod to New Zealand
since its first settlers described it as "a land of all birds"
when they first arrived. Next, they decided to build their website
and sell directly to consumers online through the sponsor
of this video, Shopify, an easy to use and affordable e-commerce platform
that allows anyone to set up an online store — regardless of technical
or design ability and experience. "Direct to consumer as a concept
has been around for a while. But the technology has developed,
and so [Shopify] allowed us to take advantage of things quite
inexpensively from that infrastructure." Within just seven months, Allbirds managed
to officially launch its website, offering its first line of shoes
called the wool runners. After a week and a half,
the shoes were already sold out. And by the end of the month,
Allbirds brought in $1 million in sales. Over the next year, Allbirds
took the world by storm. Times Magazine listed Allbirds
Wool Runners as the most comfortable shoes in the world, and Forbes described them
as more luxe than Yeezy's since its wool is the same level of quality
used for brands like Gucci, Giorgio Armani and Tom Ford. New York Times then dubbed Allbirds
as Silicon Valley's cobblers, given it was being worn
by the likes of Google's co-founder, Twitter's
former CEO and venture capitalists. Following, CNBC highlighted the Allbirds
trend expanded into mainstream fashion as it was spotted on celebrities
like Oprah Winfrey, Gwyneth Paltrow
and even former President Barack Obama. By then, Allbirds had raised an additional $2.7
million from Lerer Hippeau Ventures, $7.3 million from Maveron and $17.5 million
from Tiger Global Management. And only one year later, Allbirds
secured an additional $50 million from T. Rowe Price at $1.4 billion valuation. Placing the company in the unicorn club. Today, Allbirds is valued at over $4
billion, and remains committed to doing business
differently through being a certified B-Corp, labeling its carbon footprint, and offering
innovative and sustainable materials beyond wool — leading to a line of shoes
made with eucalyptus called Tree, and another line made with sugar cane
called SweetFoam. Times Magazine even listed SweetFoam
as one of the best inventions that could help save the world
since it replaces the need to use EVA, common synthetic material used in shoes
that's considered carcinogenic and a developmental toxin. On top of that, Allbirds has made the materials
open source so that others could use them, leading to collaborations with competitors
who realized the demand for natural materials,
like Nike and Adidas. Allbirds also continues to sell directly
to consumers through Shopify, but has opened stores in the U.S.,
New Zealand, U.K., Netherlands, Germany, China, Japan, and South Korea. As for Tim and Joey, the two continue to work together
as co-CEOs and prioritize managing their working relationship
just as much as the business strategy. In an interview with NPR, Joey shares
whether or not their success is the result of luck
or skill and hard work. "I think they're
they're inextricably linked. I've always thought of luck
as some random event happening to you. But that happens
and then what are you going to do with it? And I think we've had the good fortune
together to have great timing across
a whole host of things. Like, we started a business,
put up a website in seven months and reached 10,000 people in a week. But we also seized and capitalized
on that opportunity, worked super hard,
and made some good decisions along the way to turn that luck
into something that was really positive." This is the story of how two men from very different
backgrounds partnered up to create a billion-dollar shoe company
leading the footwear industry. If you're inspired to build
a successful business of your own like Tim
and Joey, you can go to shopify.com/hook to find ideas
and start with a free 14-day trial. And for more inspiring stories, don't
forget to subscribe to our channel!
