Speaker 1: Welcome to Calling Bullshit, the podcast about purpose washing, the
Speaker 1: gap between what companies say they stand for and what
Speaker 1: they actually do, and what they would need to change
Speaker 1: to practice what they preach. I'm your host, time Ontogue,
Speaker 1: and I've spent over a decade helping companies define what
Speaker 1: they stand for, their purpose and then help them to
Speaker 1: use that purpose to drive transformation throughout their business. Unfortunately,
Speaker 1: at a lot of organizations today, they're still a pretty
Speaker 1: wide gap between word. Indeed, that gap has a name.
Speaker 1: We call it bullshit. But, and this is important, we
Speaker 1: believe that bullshit is a treatable disease. So when the
Speaker 1: BS detector lights up, we're going to explore things that
Speaker 1: a company should do to fix it. This episode is
Speaker 1: our second positive case study, when we do a deep
Speaker 1: dive on a purpose led company that we think is
Speaker 1: getting it right. Today, All Birds. We're going to talk
Speaker 1: to All Birds co founder and co c e O
Speaker 1: Joey's Willinger about what it's like to run a purpose
Speaker 1: led business and ask him what works, what doesn't, and
Speaker 1: how he thinks about the future. Before we get to Joey,
Speaker 1: let's catch up on the All Birds story. Sneakers have
Speaker 1: come a long way. Since their invention in the eighteen
Speaker 1: hundreds and since the fifties, sneaker companies have touted a
Speaker 1: variety of technological innovations. Here fiers with a magic wedge
Speaker 1: that helps you run your fastest and jump your highest
Speaker 1: look the ground rip and tread on red ball jets
Speaker 1: gets you off like a rocket stops you on a dime.
Speaker 1: The exclusive arch guard supports your foot, puts comfort in
Speaker 1: spring in every the rebop pump when I pop up
Speaker 1: my size thirteens get support, protection and a custom fit.
Speaker 1: So Michael, my man, if you want to fly first class,
Speaker 1: pomp up an air out today. There are a multibillion
Speaker 1: dollar industry start to jump over the one d billion
Speaker 1: dollar mark in a few years. But one place innovation
Speaker 1: has been sorely lacking is in materials. Most sneakers are
Speaker 1: full of petroleum based foam and plastics, non biodegradable, with
Speaker 1: a high carbon footprint, so they're pretty hard on the
Speaker 1: planet environmentally. The fashion industry enter Tim Brown, native New
Speaker 1: Zealander and former professional soccer player, who had worn more
Speaker 1: than a few sneakers in his lifetime, Tim new sustainability
Speaker 1: was an important issue for the future and for customers,
Speaker 1: and he found a way to move sneaker materials away
Speaker 1: from oil. His first innovation, wool. Tim got a grant
Speaker 1: from the New Zealand Wool Trust for his concept and
Speaker 1: developed it further during an entrepreneurship course, but the professor
Speaker 1: pulled him aside and told him his sustainable sneaker was
Speaker 1: a terrible idea and suggested he just put it on Kickstarter,
Speaker 1: where he assumed it would tank quickly. Here's Tim in
Speaker 1: that original Kickstarter pitch video. You can't grow up a
Speaker 1: kiwi and I understand how good wool is. It's tough,
Speaker 1: regulates temperature, reduced the smell, wicks away moisture, and importantly,
Speaker 1: as a sustainable and bidegredible resource. We need you will
Speaker 1: help to shake out the shoe industry and take New
Speaker 1: Zealand wool and we'll run us to the world. He
Speaker 1: began the campaign hoping to raise thirty dollars, but within
Speaker 1: just five days he'd raised over a hundred and twenty
Speaker 1: thousand dollars. But there was a good reason that making
Speaker 1: wolves aakers had never been done before. It was really hard.
Speaker 1: Enter Joey's Willinger, a materials engineer and one of Tim's
Speaker 1: early Kickstarter customers. Joey had focused his whole career on
Speaker 1: making environmentally friendly materials, but kept running into people who
Speaker 1: just didn't get it. I had this just recurring nightmare
Speaker 1: of a meeting. Every time I'd get advanced discussions in
Speaker 1: business development with with customers and potential customers, it would
Speaker 1: devolve into this sourcing conversation of can you just do
Speaker 1: what we do now and just do it cheaper? Every
Speaker 1: single time, I was like, you guys are missing the
Speaker 1: big picture here, like the consumers do want this. Tim
Speaker 1: and Joey met through their wives who were roommates in college,
Speaker 1: and they hadn't even considered a potential partnership until Joey
Speaker 1: invited Tim to visit him in California to talk about
Speaker 1: the idea that would soon become All Birds. We spent
Speaker 1: like three days really walking around the hills just north
Speaker 1: of San Francisco talk king about why the world needed
Speaker 1: an issue company. I'd come out of this career in
Speaker 1: sport that you know, I'd unlocked this incredible amount of
Speaker 1: meeting and playing for my country, and I found myself
Speaker 1: in my first real job post business school making shoes,
Speaker 1: and I didn't really know why. And I think the
Speaker 1: best thing about that meeting was it unlocked out why.
Speaker 1: It wasn't just about disrupting the shoe industry or creating
Speaker 1: a comfortable sneaker. It was about creating a direct consumer
Speaker 1: brand and business that made sustainability a non negotiable. So
Speaker 1: they got to work engineering a sneaker made of wool
Speaker 1: and fundraising. In sixteen, they raised seven point to five
Speaker 1: million dollars from investors like Leonardo DiCaprio and Mavron, and
Speaker 1: they used that money to launch their website selling the
Speaker 1: Wool Runner, a sneaker that was soon recognized as the
Speaker 1: world's most comfortable shoe by Time magazine. By the next year,
Speaker 1: the company had fifty employees in their San Francisco headquarters,
Speaker 1: forty in its Nashville warehouse, and three fifty contractors in
Speaker 1: a factory in South Korea. And as they grew, they
Speaker 1: didn't stop innovating. In March, All Birds launched a sneaker
Speaker 1: made from South African eucalyptus fibers, called the Tree Runner,
Speaker 1: the first shoe to receive certification from the Forestry Stewardship Council.
Speaker 1: Then All Birds invented a foam derived from sustainably sourced
Speaker 1: sugarcane rather than petroleum based plastic, that they called Sweet
Speaker 1: Phone and now sweet Foam is used in all of
Speaker 1: their shoes and I absolutely love this. They open sourced
Speaker 1: the recipe for sweet Foam to encourage other footwear companies
Speaker 1: to use it too, and instead of being upset when
Speaker 1: All Birds copycats showed up on Amazon, Joey's Willinger wrote
Speaker 1: an open letter to Jeff Bezos challenging him to copy
Speaker 1: their materials and their environmental commitment to funny Amazon never responded.
Speaker 1: In August of All Birds moved into apparel, starting with
Speaker 1: socks made from yet another material innovation, Trino, a mixture
Speaker 1: of marino wool and eucalyptus tree materials used in their footwear,
Speaker 1: and they've recently launched a new material made of crab
Speaker 1: shells called XO like Exo skeleton. In November, All Birds
Speaker 1: went public under the symbol b I r D. The
Speaker 1: stock initially surged, valuing the company at four billion dollars.
Speaker 1: So how do we make more stories like this one happen?
Speaker 1: I asked All Birds co founder and co CEO Joey's
Speaker 1: Willinger to tell us what he's learned about being a
Speaker 1: leader in environmental manufacturing and running a purpose native company.
Speaker 1: That conversation after the break, I am very excited to
Speaker 1: introduce the co founder and co CEO of All Birds,
Speaker 1: Joey's Willinger. Joey, welcome to calling Bullshit. Thank you so
Speaker 1: much for having me. I'm glad i'm here. I'm glad
Speaker 1: to be talking to you. I would love it if
Speaker 1: we could just start out and learn a little bit
Speaker 1: more about your background. Sure, winding all the way back
Speaker 1: to upbringing, I had two very socially conscious parents and
Speaker 1: not particularly environmentalists, but pushed me in a direction of
Speaker 1: making sure they didn't care what I did. They just
Speaker 1: wanted to instill in me that I had to do
Speaker 1: something that contributed a little bit broader than my family
Speaker 1: or myself for certainly for just money or something like that.
Speaker 1: But they did help push in a good direction with
Speaker 1: a high level of curiosity. And I was an engineer,
Speaker 1: and that got me really interested in exploring innovation and
Speaker 1: a whole bunch of different opportunities, which not knowing business,
Speaker 1: I was like, okay, let's go get a basic education
Speaker 1: out there and did consulting and then I did a
Speaker 1: little investing in early stage companies through a venture capital firm,
Speaker 1: and that that really was the first time I got
Speaker 1: introduced to entrepreneurship in its true form, and I I
Speaker 1: was thrilled with it, and I started to fall in
Speaker 1: love with the idea that you could do so much.
Speaker 1: I had so much dynamism in entrepreneurship, that you could
Speaker 1: create the rules yourself and create this little organism of
Speaker 1: a culture and make an impact on the planet that
Speaker 1: was so significant with a little bit of creativity, uh
Speaker 1: and a great team. Around that same time, I also
Speaker 1: realized that the biggest crisis that was facing our species
Speaker 1: of truly existential crisis. That was a very big moment
Speaker 1: for me where I realized I wanted to dedicate my
Speaker 1: professional life to doing as much as I could for
Speaker 1: the environment. That sent me down a path, and I
Speaker 1: think entrepreneurship was so interesting that I started hunting down
Speaker 1: the path. I joined a company called Solos I'm as
Speaker 1: a result of that, which was a biotechnology company where
Speaker 1: we engineered micrology to replace petroleum, so basically a carbon
Speaker 1: neutral version of any kind of petroleum derivative, whether it
Speaker 1: was fuel or chemicals or even cosmetics. Ingredients. I ran
Speaker 1: that the chemicals group, so I was replacing petro chemicals,
Speaker 1: and I was I was out there doing tons of
Speaker 1: business development, trying to design molecules that could outcompete petro
Speaker 1: chemical and do it on a zero carbon emission basis,
Speaker 1: and everyone was so excited about it. And then they
Speaker 1: just passed me to the sourcing guy at their company,
Speaker 1: and that person just asked me to do whatever they
Speaker 1: did then cheaper, and that was very frustrating. That was
Speaker 1: where I realized that politicians were lagging and consumers were
Speaker 1: going to lead the way. I was convinced of it
Speaker 1: that consumers wanted a no compromise offering for whatever the
Speaker 1: product they were buying and consuming, they wanted it to
Speaker 1: be amazing. And if it was shoes, could you imagine,
Speaker 1: You're just there's twenty billion pairs of shoes every year
Speaker 1: bought and sold, and they are made with plastic. Almost
Speaker 1: every person you look around the street is wearing a
Speaker 1: pile of plastic. That's all they are. And it's just
Speaker 1: mind blowing to me, the dissonance between what I knew
Speaker 1: the consumers wanted and what the brands were making. So
Speaker 1: I thought there was just an opportunity. I didn't know
Speaker 1: it was going to be sneakers. Unfortunately, my my night
Speaker 1: and shining armor was Tim Brown, my co founder, who
Speaker 1: swung in with an idea with the wool shoe, and
Speaker 1: we really connected on the idea that this could be
Speaker 1: a really big platform and a really big opportunity as
Speaker 1: a business opportunity, but also to lead on environmentalism in
Speaker 1: this space. Yeah, that, let's pivot to all birds. How
Speaker 1: do you guys articulate all birds? Purpose? We say, make
Speaker 1: better things in a better way, and I'll unpack it
Speaker 1: a little bit. Making better things we say that first,
Speaker 1: and that means that whatever you're using it for. In
Speaker 1: our case, if it's shoes, it needs to be more comfortable,
Speaker 1: look better, help you perform better. If you're using them
Speaker 1: for athletics, they're just better and done in a better way.
Speaker 1: For us, is about helping to reverse climate change. If
Speaker 1: the planet has a heart, it's it's Climate change is
Speaker 1: the issue that that is most analogous to helping you
Speaker 1: as a human stay alive. It's it's the heart needs
Speaker 1: to beat, and if our climate goes away, that is
Speaker 1: existential problem. So for us, it's all about helping to
Speaker 1: reverse climate change, and so we measure everything deeply against
Speaker 1: that purpose. Yeah, it is the issue of our time.
Speaker 1: How do you guys think about the let's call it
Speaker 1: the dominant system that all birds is trying to improve upon.
Speaker 1: Oh man, it's like a drug. We're competing with the
Speaker 1: system of this drug of fast and sheep synthetics. And
Speaker 1: for a hundred years since Rockefeller did a great job
Speaker 1: and found kerosene to light lamps and then turn it
Speaker 1: into fuel for Ford's to you know, model ts. Since
Speaker 1: that time, chemical engineers, very smart people have been working
Speaker 1: with all of their energy to squeeze out another dollar
Speaker 1: from the barrel oil. And there's a lot of heat
Speaker 1: and pressure and chemical engineering expertise that goes into squeezing
Speaker 1: that last value from the barrel of oil to make
Speaker 1: chemicals and cheap synthetics. And what that has resulted in
Speaker 1: is an industry that relies exclusively on polyesters, nylons, synthetic
Speaker 1: foams from petroleum, and then cow leather as well, which
Speaker 1: are all horrific for the environment. It's a terrible direction
Speaker 1: in terms of its contribution to global warming and and
Speaker 1: twenty billion pairs each year. There's a lot of feet
Speaker 1: out there. That's how much are consumed every single year.
Speaker 1: So this is this is the system that we are
Speaker 1: disrupting against. We are creating a system. We call it
Speaker 1: vertical retailing, but everything is sold directly to the consumer.
Speaker 1: We connect that to our innovation model where we unlock
Speaker 1: this amazing customer experience so better products. And we do
Speaker 1: that on the backs of highly evolved and naturally derived
Speaker 1: innovations things from fibers, from nature, green chemistry, you know,
Speaker 1: a whole bunch of different processes that unlock amazing value
Speaker 1: for consumer us without denting the earth. Yeah, it's incredibly
Speaker 1: impressive what you've done with materials, and I do want
Speaker 1: to get deeper into that too. But just to kind
Speaker 1: of level set, what is the carbon footprint of the
Speaker 1: average sneaker, the plastic ones that you guys are trying
Speaker 1: to replace. Yeah, so the average sneaker, best we can estimate,
Speaker 1: and most most of the legacy companies in our in
Speaker 1: our category don't disclose this information, so best that we
Speaker 1: can calculate this, and we've run our own models on
Speaker 1: what we estimate too as well as seeing the disclosures.
Speaker 1: Is about fourteen kilograms of carbon dioxide equivalent emissions, and
Speaker 1: I say that kind of jargon ee sounding word. But
Speaker 1: C O two E, which i'll refer to for the
Speaker 1: rest of this is is just carbon or carbon dioxide.
Speaker 1: It's not just carbon dioxide. It's also methane or other
Speaker 1: greenhouse warming gases, and they're multiplied to kind of show
Speaker 1: the greenhouse warming potential of that emission. And we package
Speaker 1: that all into a single metric So it's about fourteen.
Speaker 1: And just to give you what that means and context,
Speaker 1: hamburgers about six kilogram of tomatoes about two point two
Speaker 1: pounds of tomatoes in the grocery store. That's about nine emissions.
Speaker 1: So a sneaker is fourteen on average, and the ones
Speaker 1: that we make are typically under ten. Right, I noticed that.
Speaker 1: Hang on, sorry, I just wanted to show you. I
Speaker 1: just got my first pair nice and I did see
Speaker 1: you know your purpose on your box, which was cool.
Speaker 1: You also labeled the carbon footprint right on the shoe,
Speaker 1: which I thought was interesting. We wanted to understand our impact,
Speaker 1: so we had to develop our own tools so that
Speaker 1: we could measure down to the gram of carbon dioxide
Speaker 1: emissions what we were doing across the whole life cycle.
Speaker 1: That means from like the farm to the consumer and
Speaker 1: even through their use phase and end of life of
Speaker 1: that product. So we had to develop a pretty sophisticated model.
Speaker 1: Once we understood the impact, we decided we would be
Speaker 1: carbon neutral. So we went through and created the strategy
Speaker 1: to try to get down to zero carbon emissions ourselves.
Speaker 1: But along the way we had to know what it was. First,
Speaker 1: we had to start to reduce it from all our
Speaker 1: internal activities, and then we also had to offset it
Speaker 1: along the way, so we made it carbon neutral. We
Speaker 1: then released the tool publicly and we also started labeling
Speaker 1: our products around the same time, and we decided that
Speaker 1: singular metric is best analogized by calories on the back
Speaker 1: of a food label. It's a way to contextual, as
Speaker 1: in a simple single metric, your impact on whether you're
Speaker 1: contributing and exacerbating the problem on climate change or you're
Speaker 1: helping combat it. So we wanted that accountability on the company,
Speaker 1: and we wanted it put it on right on the
Speaker 1: product so that everyone could start to evaluate quality of
Speaker 1: product and price of product and also the environmental and
Speaker 1: climate change impacts. And now now there's a way for
Speaker 1: people to do that. We hope a lot of people
Speaker 1: copy us, which is why we we kind of open
Speaker 1: source and release this tool to the industry. That's awesome.
Speaker 1: I love that. And in a way, you know, when
Speaker 1: as I was reading about you and watching some videos,
Speaker 1: it really does seem like you're a materials innovation company
Speaker 1: as much as you are a shoe and apparel company.
Speaker 1: Like you've developed brand new materials like tree and sweet foam,
Speaker 1: great names, by the way, can you talk a little
Speaker 1: bit about those those innovations. That is how we think
Speaker 1: about ourselves actually, Like the reason for being for us
Speaker 1: is innovation on naturally derived materials. We think about ourselves
Speaker 1: as a purpose native company, meaning we established this company
Speaker 1: with the idea that we would use it so that
Speaker 1: every shoe we sold and every dollar we made in
Speaker 1: revenue was going to increase our environmental impact in a
Speaker 1: positive way. So that alignment between mission and financial outcome
Speaker 1: was essential for us. And so the only way we
Speaker 1: could get at that is to focus and constrain our
Speaker 1: research and development process to naturally derive low carbon intensity materials.
Speaker 1: And so every new innovation that we go and look at,
Speaker 1: it's got to do four things. It's got to be
Speaker 1: amazing for the consumer, it's gonna just feel better. That's
Speaker 1: the first and foremost the most important thing. The second
Speaker 1: is that it's got to be a reasonable cost, because
Speaker 1: you know, we have to deliver this at an approachable
Speaker 1: value for customers. We have to have enough of it
Speaker 1: in abundance so that it's durable, sustainable, and we can
Speaker 1: make a lot of shoes out of it. And lastly,
Speaker 1: it's got to be very low carbon intensity, and and
Speaker 1: the best way to do that is to take the
Speaker 1: best of nature and in a highly renewable fashion and
Speaker 1: package it into a shoe that that does all those
Speaker 1: great things that we try to do. So Tree was
Speaker 1: a wonderful example where we use Forest Stewardship Council certified
Speaker 1: eucalyptus fibers to make the uppers of our shoes. Sweet
Speaker 1: foam is such a special one. We we knew when
Speaker 1: we started the company. We really we wanted to be
Speaker 1: very good and a big hole with the bottom of
Speaker 1: the shoe, the soul and in the entire foot where
Speaker 1: and all of it is made from petroleum. And we
Speaker 1: knew from my background, we knew we had an opportunity,
Speaker 1: particularly if we convinced this one company down in Brazil
Speaker 1: to take the waste stream of sugar cane processing and
Speaker 1: convert that through a number of biotechnology and the chemical
Speaker 1: steps that we could actually replace the most ubiquitous foam
Speaker 1: and all of the footwear industry. It's a it's a
Speaker 1: chemical called e V A and and you can take
Speaker 1: that and you can make it from the waste stream
Speaker 1: of sugarcane processing, which actually makes it, in carbon accounting,
Speaker 1: a carbon negative material that actually absorbs more carbon out
Speaker 1: of the atmosphere than it takes to create it, So
Speaker 1: you're a net positive every time you use this component.
Speaker 1: And so we we use that, and we then we
Speaker 1: converted into a foam which we call sweet Phone, and
Speaker 1: we open sourced that based material to the whole industry
Speaker 1: because it's so ubiquitous and using such high volumes in
Speaker 1: the sneaker industry that if everybody used it, the planet
Speaker 1: would be wildly better off, and it would also drive
Speaker 1: the cost of that material down, so it would be
Speaker 1: a win win for everybody. And so that kind of
Speaker 1: collaborative approach to sustainability is often better than the traditional
Speaker 1: super competitive method of innovation I P. Protecting. So you
Speaker 1: and source these materials, so these materials are available. Yeah,
Speaker 1: with our partner brass Can, we we co developed this
Speaker 1: thing and then we we open source to everybody. And
Speaker 1: some big brands are using and a lot of small
Speaker 1: brands are using, and there's a lot of brands that
Speaker 1: have yet to use it, and shame on them. You
Speaker 1: should use it. Yeah, completely agree. That's that's super cool
Speaker 1: and and obviously wool is also a huge part of
Speaker 1: your proposition. So why wool, Well, you know, Tim is
Speaker 1: from New Zealand and there is a lot of sheep
Speaker 1: in New Zealand, a lot of sheep. There's like thirty
Speaker 1: million sheep and a whole bunch of those of marino sheep,
Speaker 1: and so Tim had a indoctrination from that bringing in
Speaker 1: in the value of wool, and marino wool in particular.
Speaker 1: It's a miracle fiber. It absorbs moisture and you don't
Speaker 1: feel damp when you're wearing. It regulates your temperature, it
Speaker 1: feels incredibly soft and touch and it's got some like
Speaker 1: great strength characteristics. And it's not only is it wonderful
Speaker 1: for all of those attributes making it an incredibly comfortable product,
Speaker 1: but it's also from nature and particularly when you utilize
Speaker 1: regenerative farming practices, which is one of our biggest initiatives
Speaker 1: to push all the farmers we work with in New
Speaker 1: Zealand and beyond to use regenerative farming practices. This too,
Speaker 1: can be a carbon negative material, and so that the
Speaker 1: power of harvesting wool in a regenerative manner and packaging
Speaker 1: it into a product that feels better, performs better is
Speaker 1: that magic sweet spot of where all birds exist and thrives.
Speaker 1: Do you think leading a purpose led business is harder?
Speaker 1: I asked that, because, for instance, you have a lot
Speaker 1: more stakeholders to think about than the CEO of, for instance,
Speaker 1: a traditional company who normally just thinks about shareholders. It's
Speaker 1: an interesting question. I've never really thought about that, but
Speaker 1: I kind of think it's easier. As long as you
Speaker 1: intelligently designed the business system so that you're truly purpose native,
Speaker 1: where which I define as as the financial and impact
Speaker 1: incentives are exactly aligned, then I find it easier because
Speaker 1: it's a tool that I use so much to make
Speaker 1: sure that the purpose is resonating with our consumers so
Speaker 1: they gravitate to our products more. The purpose resonates with
Speaker 1: our employee base, so we get amazing talent. You know,
Speaker 1: the purpose frankly resonates with our investors, like the the
Speaker 1: idea that you can allocate your capital as a capital
Speaker 1: allocator against opportunities that both make money and make great
Speaker 1: impact on the world. These are all super aligned. So
Speaker 1: I I find that the paradigm that is often assumed,
Speaker 1: which is that these stakeholders are inherently intention is a
Speaker 1: legacy of how business has skewed too far in one
Speaker 1: direction around profit only and forgot that we all live
Speaker 1: in a system. And so I find it quite a
Speaker 1: lot easier. It's the tool I leverage the most great answer.
Speaker 1: So at some level, proclaiming that All Birds is a
Speaker 1: purpose led business makes the company target. Even if by
Speaker 1: comparison you're a beacon of hope in your industry, do
Speaker 1: you ever feel that pressure? Sure, And look, we try
Speaker 1: to be very careful to say, uh, and we're pretty
Speaker 1: clear about this that we are not perfect, like, but
Speaker 1: there's lots of holes in what we're doing. You know,
Speaker 1: the fact that we are above zero carbon emissions for
Speaker 1: the products that we make means that we're not doing
Speaker 1: a great job against our mission. Yet, like we need
Speaker 1: to keep running super hard and working every day, which
Speaker 1: is what we do to make amazing products that people
Speaker 1: love and want to spend their money on and that
Speaker 1: make a lower impact. Yet at the same time, there's
Speaker 1: a lot of different perspectives on what ideal looks like
Speaker 1: from an environmental perspective and what you should be fighting
Speaker 1: for recyclability, circularity to others, it's climate change that lots
Speaker 1: of people have a definition of of what this is.
Speaker 1: So you're always exposed and when you put your neck
Speaker 1: out and try to take a leadership role in anything
Speaker 1: in life, people want to shoot you down when you
Speaker 1: get up to a certain level. That's part of the job,
Speaker 1: and I'm completely comfortable with that and also comfortable knowing
Speaker 1: we may make some mistakes and all we can do
Speaker 1: is transparently describe what we're doing and why we're doing
Speaker 1: it and what our views are. And then you know,
Speaker 1: it's up to consumers or other people to to make
Speaker 1: a judgment on whether they believe in what we're doing
Speaker 1: or not. I will humbly submit that I think we've
Speaker 1: done a very good job of creating a system that
Speaker 1: is logical and ladders up to making a very positive
Speaker 1: impact on the most important problem our species faces, and
Speaker 1: we do a lot of disclosure, you know, just as
Speaker 1: an example, we're a public company. We do earnings calls
Speaker 1: where we talked to investors every quarter and in the
Speaker 1: beginning of the year. Typically a company, a public company
Speaker 1: will give guidance for the next year on what you're
Speaker 1: gonna do for your financial targets, what's revenue gonna look like,
Speaker 1: what's profit going to look like. We also gave a
Speaker 1: carbon reduction target in our earnings called guidance, and as
Speaker 1: far as we know, we're the first company to ever
Speaker 1: give a carbon reduction goal for what we're gonna do
Speaker 1: in our R and D process to drive down carbon
Speaker 1: emissions of our products throughout the next year. And that's
Speaker 1: all aligned and budgeted against our goal to be a
Speaker 1: zero emission company without the use of any offsets. That
Speaker 1: gives you a sense of how we put ourselves out there,
Speaker 1: how we try to drive accountability, how we try to
Speaker 1: be authentic leaders and admit that we're not going to
Speaker 1: be perfect all the way, but show people why we're
Speaker 1: doing it and how we're doing it. It's interesting. I
Speaker 1: want to dig into that for just a second because
Speaker 1: it feels like in let's call it old school business,
Speaker 1: transparency was something to be afraid of, Like you were
Speaker 1: supposed to hide your flaws. You had to present this
Speaker 1: kind of facade to the world that everything is perfect.
Speaker 1: You're just making me think like being transparent in a way,
Speaker 1: it's the best defense, right if you call yourself out
Speaker 1: on things before anybody else does, you're sort of pre
Speaker 1: disastered in a way to deal a line from the world.
Speaker 1: According to Garb, like the worst has already happened in
Speaker 1: a way, great great booked. Yeah, well, you know, I
Speaker 1: I think there's another factor that contributes to that trend
Speaker 1: that you're identifying is that information spreads more quickly than
Speaker 1: it ever has. So if you're out there and you're
Speaker 1: saying something to a consumer that becomes untrue your the
Speaker 1: ability for your reputation to be snapped immediately is so
Speaker 1: high and will happen so fast that you'd be a
Speaker 1: fool not to be authentic and transparent in this environment,
Speaker 1: because at some point that you know, the music stops
Speaker 1: and and and that's when the dancing stops. All Birds
Speaker 1: began as a purpose led business, but there are a
Speaker 1: lot of companies that didn't begin that way that are
Speaker 1: now trying to figure out how to make the transitions.
Speaker 1: So what advice would you have for the c e
Speaker 1: O s who are just beginning their purpose led journey. Yeah,
Speaker 1: it's a great question because I do empathize with that situation.
Speaker 1: You know, there's a lot of businesses that have been
Speaker 1: around long before it was practical to be an environmentalist
Speaker 1: in business, and long before even environmentalists got their hands
Speaker 1: around what the problem looks like and how severe this is.
Speaker 1: But that doesn't give an excuse for not acting with
Speaker 1: extreme urgency right now. And I guess the thing I
Speaker 1: would point to the most is that alignment of financial
Speaker 1: outcomes with impact outcomes. And you know, corporate social responsibility
Speaker 1: CSR is an acronym that's thrown around a lot that
Speaker 1: to me often trivializes what businesses need to do in
Speaker 1: terms of creating a truly purpose led enterprise. The reason
Speaker 1: I'll say that is because CSR is often an appendage
Speaker 1: that's off to the side of the business, and it's
Speaker 1: it's saying, Okay, now we've made our profit, like, let's
Speaker 1: do some philanthropic giving to this group that we think
Speaker 1: is going to make a splash for consumers or make
Speaker 1: our employees feel proud to work here. Whereas typically companies
Speaker 1: who make products, sixty plus percent of the impact that
Speaker 1: they make on the environment is born out of those
Speaker 1: products and the materials they source to manufacture that products,
Speaker 1: and the transportation and all that stuff. Focus on fixing
Speaker 1: that for anyone that makes stuff, fix that and make
Speaker 1: sure that it ladders up to the metrics that mean
Speaker 1: the most. And so I would say, act with urgency,
Speaker 1: act with purpose, create a system of incentives, even incentivize
Speaker 1: the people who lead the business like these systems need
Speaker 1: to be laddered up. So I told you that carbon
Speaker 1: emission reduction goal that we stated alongside our financial guidance.
Speaker 1: I'm paid on that. If we don't hit those reduction
Speaker 1: targets for carbon emission, I don't make as much money.
Speaker 1: And same for all of the executives and and and
Speaker 1: leadership team at all birds. We've done it all the
Speaker 1: way down to that human level, and it all matters.
Speaker 1: You've got to have this system with a singular or
Speaker 1: simple set of metrics that you can manage a company
Speaker 1: to just like your financials, measure your impact on that
Speaker 1: and drive results. Yeah, No, I agreed, effort follows money,
Speaker 1: just following the thread of money for a second, there's
Speaker 1: people who ding purpose led companies because some folks claim
Speaker 1: that you have to make a choice between purpose and profit.
Speaker 1: In your mind, does being purpose led mean being somehow
Speaker 1: less competitive or somehow having more modest financial goals? No,
Speaker 1: let me let me reframe that for you. If you're
Speaker 1: making a product, Let's say you're making a T shirt
Speaker 1: and you have the opportunity to use super high end
Speaker 1: fabric that feels incredibly comfortable, drapes perfectly, gives everyone the
Speaker 1: perfect fit, but it costs a ton of money. Do
Speaker 1: you use it or not? Some materials cost more, some
Speaker 1: materials cost less, and you still got to make a profit.
Speaker 1: So you have to make these judgments on the quality
Speaker 1: of a product. We make the same kind of decisions
Speaker 1: on sustainability, and you try to objectively make these into
Speaker 1: a framework how much money can I spend? How much
Speaker 1: money will my customer be willing to afford? In the
Speaker 1: same way, we try to objectively arbitrate these decisions when
Speaker 1: it comes to whether this is going to make a
Speaker 1: strong enough environmental impact for us to absorb the additional
Speaker 1: cost on two and and the way we objectively view
Speaker 1: that is through what we believe is the best estimate
Speaker 1: of the social cost of carbon and carbon emissions. All
Speaker 1: of that has been estimated. Most people believe it to
Speaker 1: around fifty bucks. We try to target about a hundred
Speaker 1: bucks per metric ton of carbon diox that equivalent emissions
Speaker 1: into the atmosphere. If it's above or below, that line
Speaker 1: helps us make that trade off, and we've inextricably linked
Speaker 1: our value to customers, so it's not just a cost conversation.
Speaker 1: But we know that if we launched a product and
Speaker 1: it doesn't have a hero material that's derived from nature
Speaker 1: and it makes them perform better or feel more comfortable,
Speaker 1: we are not delivering on the promise. So this is
Speaker 1: it's a non negotiable for us, and we try to
Speaker 1: objectively arbitrate this just like you would quality and cost conversations.
Speaker 1: Does being publicly traded ever create pressure to compromise on
Speaker 1: any of those values, you know, going back to that
Speaker 1: alignment of financial outcomes and an environmental impact, It really
Speaker 1: doesn't get in the way for us. If tomorrow we
Speaker 1: came out with a fully plastic shoe that was made
Speaker 1: from all synthetics, like sure, maybe some people would buy
Speaker 1: it for a while, but like the house of cards
Speaker 1: would come down quickly in that case, so just feel wrong.
Speaker 1: Kill it would feel wrong of course, So it doesn't
Speaker 1: get in the way, um in that sense. And we've
Speaker 1: always had the view that every time we've ever taken
Speaker 1: money from anybody, friends and family, venture capital people, or
Speaker 1: public investors, we have been very, very transparent and clear
Speaker 1: about how we're established as a company. You know, we're
Speaker 1: we're incorporated as a public benefit corporation with our public
Speaker 1: benefit being environmental conservation equal in our responsibility to our
Speaker 1: fiduciary responsibility. So you know, it's it's all out there,
Speaker 1: like it's all legal. Everything we do comes from our
Speaker 1: orientation around meeting this like critical and important consumer or
Speaker 1: trend of associating what you consume with your values around
Speaker 1: the environment. Yeah, that's incredibly inspiring. Use the phrase public
Speaker 1: benefit corporation, and sometimes it's it's a little confusing because
Speaker 1: public benefit corporation that designation gets wrapped up or confused
Speaker 1: with being a B corp. And you are both, as
Speaker 1: I understand it, that's right. Could you just help us
Speaker 1: understand the difference between those two things. So a PBC
Speaker 1: a public benefit corporation, is a legal framework and it
Speaker 1: allows us as management team of the company not only
Speaker 1: to do things on behalf of the stated public benefit
Speaker 1: in our case environmental conservation, it actually implores you to
Speaker 1: and and you actually haven't have an obligation to support
Speaker 1: environmental conservation because that's our public benefit in the same
Speaker 1: way that you have an obligation to protect the interests
Speaker 1: of your shareholders. That would be called a fidy share responsibility.
Speaker 1: And so because those two things are legally entwined, the
Speaker 1: reason we did that if Tim and I are no
Speaker 1: longer with this business, the next management team would also
Speaker 1: have to have that obligation because it's truly inside of
Speaker 1: the legal charter of the company, and you'd have to
Speaker 1: have two thirds of your shareholders approve any kind of
Speaker 1: change to that. And if we're no longer here, it
Speaker 1: lives on. The B corp on the other hand, is
Speaker 1: largely an assessment tool. It's a one size fits all
Speaker 1: test that compares how All Birds does versus how the
Speaker 1: local grocery store does, the local bedego whatever. Everyone can
Speaker 1: be a B corp and so it asked you questions
Speaker 1: about everything under the sun around wages and social impact
Speaker 1: of your supply chain and environmental issues and a whole
Speaker 1: bunch of different things. And it says, are you a
Speaker 1: balanced stakeholder led company where you are attenuating various issues
Speaker 1: for all stakeholders, not just whatever your public benefit is
Speaker 1: on your PBC and corporation documents. It's quite a bit
Speaker 1: of work. Yeah, it's very becoming a corp. It's like
Speaker 1: very very very very extensive. And I'm proud to say
Speaker 1: that every time we take the assessment, our scores get
Speaker 1: better and it helps hold us accountable to being good
Speaker 1: to all stakeholders, employees, supply chain partners, customers, the environment,
Speaker 1: all the above. That's great. I have one or two
Speaker 1: final questions to ask you. First of all, on calling BS,
Speaker 1: we define BS as the gap between word indeed, and
Speaker 1: we have a tool that we use called the BS
Speaker 1: scale where we rate organizations on that gap, zero being
Speaker 1: the best zero gap between word indeed and a hundred
Speaker 1: being the worst basically total BS. So, taking into consideration
Speaker 1: that you're on a journey, nobody's perfect, where would you
Speaker 1: rate all birds on that scale today? UM, I'm gonna
Speaker 1: I'll answer the question, but let me qualify my answer.
Speaker 1: I would I would put our industry that we operate in. First,
Speaker 1: I'll say, to give a contextual is this, I would
Speaker 1: put it at like a like a eighty. There's worse
Speaker 1: industries out there. There's like, you know, single use plastic
Speaker 1: baggy companies that say they're sustainable. So so Sho's shoe
Speaker 1: industry is not the worst in the world. At your
Speaker 1: BS gap meter, I give our industry and a D
Speaker 1: and I would put us probably at a twenty. But
Speaker 1: I think we should actually talk about what we do,
Speaker 1: maybe even more than we talk about it, because I
Speaker 1: think that people inside our organization have a lot to
Speaker 1: be proud of because of how rigorous and intellectually honest
Speaker 1: we approached the idea of making sure that our our
Speaker 1: impact is positive and that every time we sell a
Speaker 1: shoe and you choose to buy All Birds instead of
Speaker 1: some other brand out there making shoes, you're doing something,
Speaker 1: even if it's a small thing, you're doing something very
Speaker 1: positive for the environment, and hopefully you'll love the product too. Joey,
Speaker 1: this has been a great conversation. I really appreciate you're
Speaker 1: spending the time with us today. So um, thank you
Speaker 1: for being here. Yeah, thank you so much for them.
Speaker 1: It's a topic you're talking about time. I appreciate you
Speaker 1: do in your work. Oh, I appreciate that. Thanks. I'd
Speaker 1: like to end the show today by giving All Birds
Speaker 1: an official BS score. The scale goes from zero to
Speaker 1: a hundred. Zero means zero gap between word indeed, and
Speaker 1: a hundred means the gap is huge total BS. So
Speaker 1: you've heard Joey give himself a twenty. That's a low score,
Speaker 1: and based on what I've heard today, I'm going to
Speaker 1: agree with them because though the reality is no company
Speaker 1: is perfect, All Birds has done so much to bake
Speaker 1: their purpose right into their business. To weigh in with
Speaker 1: your thoughts, visit our website Calling Bullshit podcast dot com.
Speaker 1: You'll be able to see where All Birds ranks on
Speaker 1: BS compared to the other companies and organizations we've featured
Speaker 1: on the show. And if you're starting a purpose led
Speaker 1: business or your think king of beginning the journey of
Speaker 1: transformation to become one, here are three things that Joey
Speaker 1: said that you should take away from this episode. One,
Speaker 1: like Simon Sinex says, find your why. Your why is
Speaker 1: the animating purpose that will inspire you, your employees, and
Speaker 1: your customers. And your why is the real description of
Speaker 1: the business that you're in. When Tim and Joey walked
Speaker 1: the hills of northern California, they realized it wasn't the
Speaker 1: shoes they were passionate about. It was making better things
Speaker 1: in a better way. All Birds is a sustainable materials
Speaker 1: innovation company that happens to make shoes. Your why will
Speaker 1: be different, of course, but make sure it describes the
Speaker 1: reason your company actually exists. Often, like All Birds, a
Speaker 1: good why doesn't even mention the product you make. Two,
Speaker 1: your business model really matters. In a truly purpose led company,
Speaker 1: your business model and your purpose are aligned, meaning the
Speaker 1: more of your products that you sell, the better off
Speaker 1: society in the world will be. As Joey said, when
Speaker 1: purpose and business model align, your business actually resonates more
Speaker 1: powerfully with customers, employees, and suppliers, and it makes your
Speaker 1: job as a leader much easier. Three. Define the metrics
Speaker 1: that matter. Purpose led businesses strive to make a positive
Speaker 1: social or environmental contribution to the world. Measuring that impact
Speaker 1: and tying it to remuneration at every level of the
Speaker 1: company is key. As Joey said, if All Birds doesn't
Speaker 1: hit their carbon reduction goals, then he and tim don't
Speaker 1: get paid. Your impact goals may be different, but defining
Speaker 1: them clearly and tying them to financial reward will get
Speaker 1: everyone in your company aligned and inspired. Thanks for joining
Speaker 1: us today, Joey, and thanks to the whole All Birds
Speaker 1: team for helping make this episode happen. You can find
Speaker 1: Joey's social media handles in the show notes, and if
Speaker 1: you have ideas that we should consider for future episodes,
Speaker 1: you can submit them on the website too. And if
Speaker 1: you thought this episode was all right, rate and review
Speaker 1: us on Apple Podcasts and subscribe on the I Heart
Speaker 1: Radio app, Apple Podcasts or wherever you get your podcasts.
Speaker 1: And thanks to our production team Hannah Beale, Amanda Ginsberg,
Speaker 1: Andy Kim d s Moss, Hailey, Pascalites, Parker Silzer, Basil Soaper,
Speaker 1: and me Jehan Zulu. Calling Bullshit was created by co
Speaker 1: Collective and is hosted by me Time montegu Thanks for listening.