When Allbirds, which was once an environmentalist shoe company, announced its pivot to AI on Wednesday via a “$50M convertible financing facility agreement,” it didn’t cushion the blow with niceties. The move came across as ice cold, paying zero lip service to any “mission” or “values”—other than the value of monetary returns for shareholders, of course.
So it’s all the more fascinating to rewind the clock to 2019 and listen to just how idealistic Allbirds, which will now be called NewBird AI, used to sound back when its reputation was all about sustainability:
Joey Zwillinger, who has a background in industrial engineering, was one of the co-founders of Allbirds in 2015, and was its CEO during its 2021 IPO. Zwillinger spoke at a German tech conference called Bits & Pretzels in 2019 and his company pitch naturally relied on environmentalist values. Allbirds, in Zwillinger’s telling, was a shoe company that used sustainable materials without any compromise in terms of quality or style. And that, he explained, was the core of its success.
There’s a perceived tension between what’s sustainable and what’s a good product, Zwillinger acknowledges, “and we fundamentally believe that that is a tension that shouldn’t exist.”
2019 was a strange time—near the end of an era in which Big Tech CEOs were still superficially coded as the idealists and liberals of the corporate world, and more to the point, as opponents of Donald Trump. With that in mind, it makes all the more sense that the co-founder of a shoe company was at a tech conference talking about sustainability and values. “I think the thing that made us successful early, I’m quite convinced, is the clarity of message, and the singularity that we offer to consumers,” Zwillinger says.
At the company’s launch, he explains, “We realized that there was a giant opportunity to take what the footwear industry does—which is make 20 billion pairs of shoes every year—without really much thought towards the environment, and use that as a platform to release something special.”
“You can’t miss what our values are,” he adds later.
He says customers intuit this, but only when they buy Allbirds products as repeat customers:
“At the point of sale, when they’re giving us money they’re doing it because the product is fantastic. They then stay loyal to the brand I think afterwards because they align with the values of the company, and they understand that we can make a positive impact in the world and also make money, and people would like to reward us for that.”
What’s more, Zwillinger claims that this kind of values-oriented corporate style is the wave of the future, and that those who don’t ride the wave are missing out. “We’re at the front end of a multi decade trend where brands do have to stand for something more than just making money, and if they don’t there’s no real way they’re gonna actually thrive and survive on the global stage.”
Consumers, Zwillinger says, “are asking companies to do more than just make money for their shareholders and we provide a really clear path to doing that even in the way we’ve structured our organization.”
Allbirds was, at the time, structured as a public benefit corporation. Public benefit corporations aren’t just money-generating entities, and actually do have missions built into their corporate governance schemes. “Our charter says environmental conservation is our stakeholder as well as our fiduciary responsibility to shareholders and that is what I believe consumers are asking for,” Zwillinger explains.
Setting aside the motives of those who bought Allbirds products for environmental reasons, this public benefit factor would, in theory, have been an important calculation for anyone who bought a stake in Allbirds—including retail investors after its IPO. Allbirds’ poor stock performance became a sort of object lesson in values-based investing, and, perhaps, avoiding it altogether. Zwillinger stepped down as CEO in 2024.
But late last month, when Allbirds, the publicly-traded corporation sold its shoe business to American Exchange Group, it basically became an empty shell. If you owned stock in it, what you owned was sort of a mystery for a couple weeks.
As of Wednesday, when the company now called NewBird AI announced its $50 million loan to buy GPUs, it also announced in an SEC filing that it recommends doing away with its environmental mission:
“Because the anticipated Electronics Infrastructure Business would be less focused on the public benefit of environmental conservation, which is stated in the Company’s Certificate of Incorporation, stockholders are being asked to approve the Charter Amendment Proposal (as defined herein) to remove references to the Company being operated for the environmental conservation public benefit. Such amendment will also reflect our new corporate name, because as described herein, the Buyer in the Asset Sale will own the ‘Allbirds’ tradename and all related intellectual property following the closing of the Asset Sale.”
For whatever reason, shares in the company formerly known as Allbirds skyrocketed 582% on this announcement. If you were a confused Allbirds investor on Tuesday, holding shares in a mystery company, on Wednesday your mood must have improved.
If you invested in a company with environmentalist values back in 2021, and then watched your investment turn to dust when the stock got wiped out back in 2021, Wednesday’s performance was nowhere near enough to make up for the value that disappeared. But if you bought the dip, your portfolio just got a big AI boost. You’d better hope AI, not values-oriented investing, is the real wave of the future, and that this time the wave will never crash.
Gizmodo reached out to Allbirds for comment. We will update this article if we hear back.
Read the full article here
