Allbirds Final Proposal


To:                  Clark Hansen, CEO
From:             Garrett Silverman, Research and Development Analyst
Date:               11 March 2019
Subject:          Allbirds, The Next Generation of Shoes
Opportunity
As a member of the Research and Development staff, you have asked me to find a business that follows our structure of being socially responsible, environmentally sustainable, and economically profitable. I decided to venture into the shoe market to explore a firm that is making waves. Allbirds is a start-up company that is goes above and beyond our investment standards. Allbirds is beginning to prove to competition, investors, and customers that the shoe market is not over-saturated. I have broken down my proposal into the following categories:
·       AMDP’s Ethical Standards
·       Allbirds Background
·       Environmental Praise
·       Economic Growth
·       Recommendation

AMDP’s Ethical Standards
The Triple Bottom Line
The Triple Bottom Line consists of the three P’s which emphasize the economic and social standards of all AMDP businesses.
People: The most important factor to the success of a business is the people who are involved, from the factory employees to CEO.
Planet: Environmental concerns are at the core of many 21st Century businesses. As climate change becomes an increasingly pressing issue, environmentally friendly businesses will be relied on to lead change.
Profit: At the core of most businesses is profit which drives the economic feasibility of companies.
Corporate Social Responsibility
Companies show Corporate Social Responsibility (CSR) when they hold themselves to standards higher than are called for. Director of Trading & Investing Content at Investopedia, Jason Chen, includes that for a company “to engage in CSR means that, in the normal course of business, a company is operating in ways that enhance[s] society and the environment” (Chen). The effects of CSR relate to all aspects of business and often positively impacts AMDP’s other investment standards.
Social Enterprise
Another standard for AMDP investments is a social enterprise. A business that is a social enterprise generates a revenue, but also looks to reinvest part of its profits to the community or non-profits to make the world a better place (“What is…”). In a social enterprise a business strives to meet a social goal as much as it strives to earn a profit.  
Carbon Footprint
A carbon footprint is the estimation of how much a company contributes to climate change. Carbon footprints consider CO2, but also focuses on other greenhouse gases that accelerate climate change. We can measure a company’s carbon footprint through many calculations, but the two main ways to measure a carbon footprint are a Lifecycle Assessment and an Input-Output analysis. These two tests allow for entities to examine how much they are emitting for each product they create. It is important for companies to reduce their carbon footprint as it has a direct relationship to climate change. With environmental impacts becoming increasingly important, businesses must reduce their footprint to spark cultural change. (Clark)

Allbirds Background
Allbirds was founded in 2014 by entrepreneur Tim Brown and Engineer Joey Zwillinger. The duo had the goal of making “an entirely new category of shoes inspired by natural materials, and an ongoing mantra to create better things in a better way” (Brown). From the simple idea, a growing start-up from San Francisco has begun turning heads. At the core of their success are the company values of:
·       Simplicity in Design
·       Confidence in Comfort
·       Made from Nature
Simplicity in Design
With a marketing strategy aimed at targeting teens and millennials, the product takes on a very modern design. The shoes have no prominent logos and rather draw attention to the functionality of the shoe. In a market where shoe companies inundate consumers with logos and branding, Allbirds uses a simplistic approach which captures a younger generations attention.
Confidence in Comfort
Allbirds is also known for their amazing comfort which comes from the shoe’s materials. The materials are all sustainably farmed to make the high-quality wool and eucalyptus have a snug fit. The company strives to pursue comfort as one of their core pillars.
Made from Nature
All the materials for the shoes as well as its packaging are natural or recycled which allows for the company to have low environmental impact. The care towards nature allows Allbirds to be a successful B Corporation.

Environmental Praise
The founder, Tim Brown is from New Zealand where he was raised with over a six to one sheep to person ratio. Brown developed an idea to sustainably harvest wool, and engineer Joey Zwillinger created the product. The result is a new shoe style is environmentally friendly and comfortable to wear.   
Allbirds is an environmental leader in the shoe industry. Their shoes have soles made from refined sugar rather than rubber. The eyelets and laces are made from recycled plastic bottles, while the upper is made from wool or eucalyptus cloth. Additionally, the packaging is made from 90% recycled cardboard, so every part of the product is environmentally conscious.
Allbirds receives much praise for its environmental practices, and Business Insider put them on their list of 10 B Corporations which also make great products. Business Insider opens the article, praising “we also love that each collection seems to get even better at optimizing natural materials — without ever raising prices or changing the quality that has made these shoes such a… favorite” (Leighton). The business world is admiring Allbirds environmental mission especially as the company continues to expand.

Economic Growth
Since the first shoe was shipped to a customer in 2016, Allbirds has began to soar as a profitable company. In October of 2018, the company completed its Series C investments, which totaled $50 Million, giving the once-small-start-up a $1.4 billion valuation. The quick monetary rise was given high praise as The Wall Street Journal even stated “[the company] has sold more than $200 million of shoes over the past two years” (Copeland).
While Allbirds still has a long road until they are among the likes of Nike, Adidas, or Under Armor, they are headed in the right direction. The company has done $200 million in sales with only around $75 million of invested money (Bain). Additionally, the company has been profitable each of its years – which is incredible for a start up – and is only projected to progress (“Allbirds Profile”).

Recommendation
After researching the Northern-Californian start-up, I highly recommend that we invest in Allbirds. When we think of buying shoes, we envision expensive plastic shoes made from foreign labor and mainly sold by a large company like Nike or Adidas. But it doesn’t have to be that way, Allbirds is an environmentally friendly shoe company that prides itself on natural, inexpensive, and comfortable products. Allbirds is pioneering the way people think about shoes, and now it’s time for AMDP to put on their shoes and invest in Allbirds’ next step.

Works Cited
“Allbirds Profile.” PitchBook, 2019, www.pitchbook.com/profiles/company/137065-51.
                                                               
Bain, Marc. “The Newest Billion-Dollar Brand Makes Ultra-Comfortable Wool Sneakers.”
Quartz, Quartz, 11 Oct. 2018, qz.com/1421570/the-newest-billion-dollar-brand-makes-ultra comfortable-wool-sneakers/.

Brown, Tim. “Our Story.” Allbirds, www.allbirds.com/pages/our-story.

Chen, James. “Corporate Social Responsibility (CSR).” Investopedia, Investopedia, 11 Feb.
2019, www.investopedia.com/terms/c/corp-social-responsibility.asp.

Clark, Duncan. “What's a Carbon Footprint and How Is It Worked out?” The Guardian,
Guardian News and Media, 4 Apr. 2012,
www.theguardian.com/environment/2012/apr/04/carbon-footprint-calculated.

Copeland, Rob. “Sneaker Startup Allbirds Laces Up $1.4 Billion Valuation.” ProQuest, Wall
Street Journal, 11 Oct. 2018, search-proquest-com.libproxy1.usc.edu/docview.

Leighton, Mara. “B Corps Are Businesses Committed to Using Their Profit for Good - These 10
Are Making Some Truly Great Products.” Business Insider, Business Insider, 5 Mar.
2019, www.businessinsider.com/b-corp-charitable-business-2018-8#allbirds-1.

“What Is Social Enterprise?” BC Centre for Social Enterprise,            www.centreforsocialenterprise.com/what-is-social-enterprise/.

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