Operators Ep 20 Transcript

Delian Asparouhov:

Hi everyone. My name is Delian and I'm a Principal at Founders Fund, a venture capital firm based in San Francisco. This is Operators, where I interview non-VC, non-CEO, non-founder operators that make the startup world go round. Today, I'm interviewing Travis Boyce, head of Global Retail Operations at Allbirds. Travis joined Allbirds when the company was in its first year of operating and its six employee. Prior to joining, he worked in operations and finance at Chobani and in an investment banking at Morgan Stanley. I hope you enjoy the show.

Delian Asparouhov:

Cool. Travis, thanks so much for coming to the podcast. Excited to have you on today.

Travis Boyce:

Thanks for having me. Really excited.

Delian Asparouhov:

Before we dive into the world of Allbirds and what you're working on there, I'd love to rewind to the beginning of your career. So you started to off as a investor banker at Morgan Stanley. What got you into the world of investment banking and interested in finance as you were leaving Princeton?

Travis Boyce:

Yeah. I think as a lot of people, I didn't quite know what I wanted to do and in the sort of time between sophomore and junior year, looked at consulting and banking and ultimately felt my background and my skill set, probably more aligned with consulting, but coming from a liberal arts background, had no financial acumen, didn't understand a balance sheet from an income statement and just felt that would be useful no matter what. So kind of went into banking with that mentality, with the sort of probably knowledge beforehand that it was not going to be something that was long-term, going to be interested in.

Delian Asparouhov:

Then you made a very interesting move, as a Bulgarian, I'm a huge yogurt fan. Huge fan of the fact that you left Morgan Stanley and joined the finance team at Chobani, and operations there as well. What made you in sort of the world of consumer goods and obviously you sort of stayed in sort of consumer goods since then, but how did that sort of come about? How did you sort of discover that opportunity and what got you interested in Chobani of all things?

Travis Boyce:

Yeah. At Morgan Stanley, within the sort of coverage areas, I covered a lot of power utilities, gas and oil, just not at all of interest to me, frankly and it's more traditional utilities. I tried to find some of the clean tech within that group, which was at least more fun and interesting all the above companies were not exactly high flyers at that point, but knew that my passion interest was more consumer products, consumer tech. I started to understand eCommerce a little bit and maybe I sort of had the inkling that'd be somewhere eventually I'd want to go. And Then with Chobani in particular, I just had a very fortunate introduction. I was actually at a wedding and it was with a guy named Kevin Burns, who was a TPG partner, probably more recently known for being a CEO of Juul and now at Alto Pharmacy.

Travis Boyce:

He was just about to leave TPG to run Chobani day-to-day. It's a great product and brand, but was operationally struggling and TPG had come in with a big investment, so he was leaving to run that and just needed some analytical horsepower. So I was fortunate, I got hired by him to come into a pretty sort of broad role sort of helping turn around the company a little bit, but ended up focusing a lot on supply chain manufacturing and reducing waste and sort of sat within the finance group, but covered a lot of the supply chain helping nail a lot of those problems in the first year or so. It was a tremendous opportunity. He's a rock star in my mind and obviously has gone to do a lot of different things, but it was a great place to learn a little bit about more of a real company, real operations, being in a supply chain and while still heavy into the finance side of it. Getting some exposure to that was really, really critical to broaden beyond just sort of DCF models and then looking at LBOs at a Morgan Stanley.

Delian Asparouhov:

Yeah. And I feel like one of the things that I sort of constantly recommend to people partially from my own experiences is, especially in your early career moves, don't sweat so much the exact problem space that you're working on, but more focus on sort of who can you work closely with and ideally as a mentor. It sounds like this role was sort of in some ways right-hand man, maybe on the analytical operations focus side of it, but was that part of what sort of attracted you to there? Was sort of having that type of mentorship from somebody that has such a sort of storied career and obviously since then storied as well.

Travis Boyce:

Yeah. I think part of it for me too, was coming out of the sort of specific sector I was in at Morgan Stanley, I knew that I didn't want to do that and knew I didn't want to be long-term pure finance so the half step for me was getting into a space I liked, which was consumer product goods. I thought Kevin was a superstar and sort of jumped at that opportunity and particularly some of the challenges around a business that was frankly in the verge of bankruptcy before TPG came in and ultimately within a year, he and I started being able to just be a fly on the wall, even in some of the conversations, but certainly help on the analytics and understand where the waste was happening within the business.

Travis Boyce:

I thought it was going to be a great opportunity to sort of solve some fire drills in a company, in a sector that I was interested in. I won't say I was passionate about Greek yogurt by any means, but it got me closer to being in the consumer space in an area that I was passionate about and frankly sort of had a longer-term interest in.

Delian Asparouhov:

I feel like also one of the things that people don't understand from afar, especially about finance is like finance at a 90% gross margin SaaS company is very different than finance at a government contractor versus finance at physical goods, eCommerce, supply chain, yogurt, et cetera. Purchasing. I imagine all of that is quite, quite different. I'd love to understand like what types of skills translated well from the time in investment banking versus what were the things that sort of weren't as obviously where you kind of had to pick up on the fly really on ramp over that short time frame.

Travis Boyce:

I think probably broadly just sort of being more analytical coming out of banking and sort of understanding problems. Again, not saying bankers are necessarily solving everyone's problems, but at least learning how to think about some of them, like some more tactical, even just sort of spreadsheets in Excel is sort of novel coming out of again in liberal arts background and knew that going into Chobani, to your point, the supply chain there, very different than a finance role at a software company or elsewhere. I was literally, I was in the factory in Upstate New York and Idaho, trying to understand where we were losing so much money on things like raw materials and fruit.

Travis Boyce:

Again, I frankly think was more of a learning experience. There's some basic skills that transferred from Morgan Stanley, but it really opened my eyes to, again, a traditional business in that sense and a traditional supply chain and exposure to if not sort of owning or managing, but exposure to all those different functions most of which are relevant to a lot of companies, but at least in consumer and sort of retail and CPG. Pretty translational to any business like that. I viewed it more as just a totally eye-opening experience to learn about those areas of the business that you just aren't going to get in banking and particularly where I was covering sort of semi-regulated utilities and gas and oil.

Delian Asparouhov:

If you had to point to let's say a particular project or a thing that you sort of shipped or changed at Chobani, that sort of had the most impact, what would that be? Was there a particular supplier relationship that you shifted to? Was it some sort of just like waste analysis and decreasing costs? What was sort of the biggest impact you felt like you had on the company?

Travis Boyce:

Yeah. As unsexy as it is, it was probably the waste reduction. Like I said, a great product, great brand. They'd built a brand new multimillion dollar factory, hundreds of millions to sort of support the West coast and expand the business, but it was not operating efficiently. Waste was sort of all over the place and we saw it in the financials, but didn't understand operationally where we were losing all this sort of fruit, all this milk, all this packaging sort of, again, not rocket science or anything crazy, but we couldn't figure out where it was. So getting into some of the sort of ways of capturing that, even sort of impacting how the line was collecting waste and then measuring it by sort of just inputting into simple systems or ERP system was somewhat novel.

Travis Boyce:

I won't say that I was the one who had that idea given this was all new to me, but being able to be part of that really helped understand really where the waste that was driving this company below profitability. Again, within one year top line didn't really grow much. We didn't have to lay off and we're able to really shift into a massively positive, productive business, largely because that waste reduction that was this black hole of where we were losing a lot of what are relatively expensive materials for the business. It's not something that was sexy or you're going to win any awards for, but I felt I had a huge impact on the business and allowed us to then continue to grow and then put a process in place to better understand that going forward and have that be something we're measuring regularly was the waste within the business and within our manufacturing facilities.

Delian Asparouhov:

Yeah. I feel sometimes that unsexy stuff though, is what enables the more fun growth stuff down the line, right? You can't really grow if the underlying fundamentals are rotten, so you got to fix those up before you start to pour fuel on the fire.

Travis Boyce:

Yeah, there's totally more fun I would say, or cool, sexier projects around product development and understanding profitability of new products and expansion into those and that was always really cool to see things that were coming down the pipeline of the new product and innovation lab, but really, I think the most impact was helping get the company back to profitability by reducing waste in our factories.

Delian Asparouhov:

So from there after about two years or so you ended up joining Allbirds just as the company was getting started. Can you tell us a little bit of just how large is the company when you first joined? I think it was like within their first year and you originally joined as basically just kind of strategy and ops. What attracted you to the role? How'd you come across the team? And obviously much, much earlier stage, what was your thinking around joining something so early stage at the time?

Travis Boyce:

Yeah, totally. The first year at Chobani was all about putting out these fires and really trying to help get the company back on track. As we got to the second year, while I was there, things were more stable and by being stable, maybe less thrilling or interesting things to work on, it was a lot of process and repeatable, quarterly, monthly cadences that were certainly necessary, but maybe not the most interesting for someone wanting to continue to develop and learn. So I started to look elsewhere. I'm originally from the Bay Area, and fortunately I had a pretty good network out here in the VC space and elsewhere, and had started to make some friends and people I knew had me on their radar for some early stage businesses. So a couple of folks, a guy I'm sure you're familiar with, [inaudible 00:10:30].

Travis Boyce:

[inaudible 00:10:32] were guys that I sort of bounce ideas off of and talk to and both of them came to me and I had seen Allbirds, they just sort of a very serendipitous introduction to the company. Peterson partners was another way I looped in and ultimately got lucky and bought the product on March 2nd, 2016, the day after launch kind of fell in love with it. Again had this serendipitous introduction and got introduced to Joey the co-founder and co-CEO and sort of discussed a potential role for a couple of months as they were figuring it out and then joined in July of 2016. So just a few months after the company officially launched. When I showed up, I think we had six people and two co-founders.

Travis Boyce:

So it's sort of first 10 employees working out of a... Not even a WeWork, it was like a accounting office that had an extra conference room and it was a total night and day difference from Chobani. Chobani is not an old company, but it's a very traditional company in how it's structured and how it operates and had hundreds and hundreds of people, owned their own manufacturing. Allbirds for me, I got that breath of fresh air to come in and I think on day one we were hosting some marketing or influencer event, and I was the bartender at the event. I was just so excited and jazzed to do something kind of random and weird and it was sort of indicative of how the first couple of years were, where I was just a really scrappy environment and being able to involve myself in lots of different areas of the business.

Travis Boyce:

On the strategy and operations side, I guess the generic kind of tagline that probably a lot of folks get when they join an early stage business with my kind of background, but I really viewed the role as what can I do to take stuff off Joey's plate and make his life easier. As a founder, CEO, you can't delegate fundraising really. You can't delegate some of the admin function and some of the HR and hiring, but one of the areas that he was spending a lot of time on was our supply chain. At that point we couldn't keep shoes in the warehouse. It was growing so fast. So I just started taking on bits and pieces of the supply chain from upstream, the sort of the manufacturing process and sort of placing orders, POs, managing our planning, all the logistics and transportation and all the warehousing and some of that fulfillment and slowly just started managing the existing supply chain.

Travis Boyce:

It wasn't too complicated. We had one product, one factory, it was very linear. It just took a long time and so we could order as many shoes as we wanted that year and we couldn't keep up with demand, which was a great problem to have and made my life easier. There wasn't a lot of obsolescence or old product sitting around at anytime we placed our POs. It was a great, again, sort of experience that I knew some of it because of Chobani. It wasn't owning it at Chobani, I was sort of involved in and sort of aware of it, but that experience, at least I could talk the language and understood the supply chain and quickly could pick up some of the things necessary to run at that point, which was a pretty simple process for us to sort of get shoes from wool, the factory, to warehouse, to customer and really enjoyed that. Sort of again now in my current role, having that understanding and exposure just makes me better at my job, because I understand a lot of the things going on upstream of retail.

Delian Asparouhov:

For sure. It sounds like there's some obviously huge differences between how Chobani and Allbirds are run, but I'm curious in that particular area that you focused on, let's say like supply chain, was it actually relatively translatable in terms of just the way POs were structured and the sort of workload and tools and things like that? Or there's actually quite different between let's say, I assume materials that the shoes are made out of versus perishables that the yogurts made out of, how much of that sort of background translated? Or what were maybe the biggest new unexpected pieces to working in the sort of operations of Allbirds?

Travis Boyce:

Yeah. I'd say at Chobani, we were going through a similar process now, but that sort of dealing with a somewhat legacy type of ERP system and going through that process of extracting data, manipulating data kind of painful and ultimately as with a lot of businesses, things ended up in Excel spreadsheets just because that's what people are comfortable with. I think the translatable part was going and now working in a lot of Excel spreadsheets and still doing what I did before trying to figure out how to make a decision based on sort of the numbers and information I can gather. I think the benefit or the cool part about Allbirds coming in, were some of the platforms and things that we were thinking about are already on. I mean, Shopify being just a perfect example of a company that was such a sort of integral part to our launch and ability to launch so quickly, and we continue to be on it today. I'm so bullish on that company and that brand and what they're doing.

Travis Boyce:

It's night and day difference from the types of systems that we would use at Chobani and I imagine a lot of legacy retailers. Even going so far as when I started Allbirds, we were sort of using some traditional legacy warehousing and distribution logistics companies and actually my first year onboard at Flexport, another example of just an amazing company where Ryan Peterson actually was roommates or sort of drinking buddies with Joey, my boss, in college at Cal. So he came in the early days trying to pitch us and at that point, I was managing, again, spreadsheets with all of our shipments, trying to track where things were and it was not only painful, but it seems so broken and Flexport was just starting to get some traction and so put us on the Flexport system, which we still use today and another great brand where you just saw so many innovative ideas of how you could fix old school problems.

Travis Boyce:

To our point, there are things that maybe aren't the sexiest, but can be such a difference maker and operating your business, keeping head count low, being more efficient in the use of your time. I think that was one of the coolest parts and biggest sort of eye-opening experiences was seeing, and then being able to onboard and work with a lot of these new vendors and partners that were taking these old crappy processes and improving them dramatically, that was a great experience coming into Allbirds.

Delian Asparouhov:

Was there something you were surprised, like let's say now that you were getting to start from a blank slate and you obviously went out and started to work with, I mean, probably they had Shopify already set up, but even just getting to experience that with Flexport, et cetera, is there an area let's say in the world of supply chain logistics that you're shocked is still so old school and that hasn't been really innovated on or that you wish there was any sort of like Flexport like equivalent in it to make your life a lot easier?

Travis Boyce:

Yeah, it's a big problem, but I think that the ERP world is still super messy. I mean, again, there's reasons why you need an SAP or Microsoft AX or any of these Oracle, whatever it might be, I get and we've scaled so quickly that we've had to think about a lot of those and adopt them, but it just still strikes me how poorly they're set up, the complexity of the amount of headcount required to manage them. Even things like the user interfaces are still stuck in the 80s and 90s. I think broadly the ERP space, I get frustrated with, and I know there's a lot of folks trying to solve that in particular and go after specific verticals or types of businesses and solving for just that maybe, that type of customer.

Travis Boyce:

It is one that's a pain point for us and I know a pain point for a lot of others is, when they have to make that jump off of something like QuickBooks or you're managing things on your own in an Excel spreadsheet, for certain types of industries or certain sized businesses, there's not many options that are great and particularly ones that you can scale with and not have to then do another switch or change in the near future. I still think there's a lot of opportunity there and I would love to see someone come out with something. Again, I know there's a lot of people working on that in certain areas, but it strikes me as a place where there's not quite the Shopify yet.

Delian Asparouhov:

It sounds like you debated or discussed with the Allbirds founder for a while about your role. I guess, for a company like Allbirds in terms of direct to consumer, eCommerce, actual physical goods. What do you think is the appropriate time or when is a team typically ready in terms of, let's say this stage of business or complexity of supply chain, where somebody like your skill set is appropriate to bring in where it's also hopefully interesting enough a problem for you to tackle, but also that this sort of business is ready for the founders to let go of that. Do you feel like you Allbirds did it at the right time, should it have been three months earlier or three months later or what do you feel like is the "right time" for this type of company to bring someone like yourself in?

Travis Boyce:

Yeah. I've given some other folks some advice in this one, they've asked me this type of question. I think that the thing that I've gone back to, and when I joined, I would still consider myself a generalist by all means I was not a subject matter expert in any particular area of the supply chain. I knew enough to be dangerous and that's about it. The point I made to most folks is the early days, if a founder getting a few of these utility players that maybe come from consulting banking can be a jack of all trades and support you to a certain scale, can be helpful and you probably need a few specialists, again, we had some CX specialists, we had a couple individuals who were specialists within their function, but a couple of generals can help just take stuff off founders plates, throw at problems and solve.

Travis Boyce:

I think you hit an inflection point where they really start to hire a lot more of these specialists. It could be a specialist within the supply chain. It could be your sort of legal function, your accounting function, someone that has a very specific skill set. I think you reach another inflection point where there probably you get more of like a strategy sort of area or a business development area in the business that maybe one's having some more generalist or someone with just sort of analytical B-School or consulting banking background. So for us, Allbirds in the early days, I thought it was a great time for me. Again, I had a little bit of the supply chain background, but really came in and just jumped on any problems that Joey wanted me to, and the supply chain ended being where a lot of that was.

Travis Boyce:

I think that there's there's an opportunity in the very early days for someone to be a generalist and if they're ambitious and curious and can figure out problems and try to find solutions that there can be a great role for someone, and then they can grow either into something else at the company or find an area that they want to focus on and become that subject matter expert, but I'm a big fan of someone early that can take on a lot of different things or sort of throw at a different problem every day.

Delian Asparouhov:

Speaking of deciding to build up an expert area or taking on something new about a year into Allbirds, you decided to sort of focus on retail. I guess, how did that sort of project move come about and what was the thinking behind it? Was this sort of branding, was there revenue growth that you were expecting? Was it just increasing conversion so people could come in and try out the product? How did this sort of retail calling come about and then sort of why were you excited to step into that role and lead it?

Travis Boyce:

Yeah. There's a bit of sort of a random and sort of luck stumbling into this. I was still running parts of the supply chain. We'd started to hire some of these subject matter experts in warehousing logistics and planning. We were offered an opportunity to run a pop-up in San Francisco for no cost to us. We just had to bring our inventory, some salespeople in a point of sale. So benefit of Shopify, we flipped the point of sale in overnight. Didn't have to do any integration or build out and started to hire some folks and just tested it in a small sort of obscure place, a block in San Francisco. We actually still are today from a headquarters and we have a store there, but it was just an opportunity for testing. I don't think we had any real expectations or understanding, but we wanted to see what a physical experience would look like for Allbirds and trying on shoes is something that people tend to want to do in person.

Travis Boyce:

eCommerce obviously growing dramatically, but it's still something where you want to understand the feel and how it fits on your foot. The touch of our products in particular with the materials we use is really critical and can't be replicated online. So we went in open eyes, just sort of testing and learning and I think we probably knew longer-term, there would be a retail footprint. We have close relationships with folks at places like Warby Parker and elsewhere, and have seen the value and benefit of brick and mortar. I think this put it on a sort of a turbo. We immediately started selling more than all the brands around us. We were driving all the traffic to the neighborhood. We had to hire more people. It just clicked pretty quickly and we weren't doing anything that special or unique in the early days. We just realized that physical experience was going to be important, and so I kind of decided at that point and with Joey, hey, why don't you focus on this and figure out what our next steps are. So went from sort of a little test idea in Jackson Square, San Francisco, to now where we are today.

Travis Boyce:

I'm someone again, I pride myself on being curious and sort of learning, but not someone who had a retail background by any means and have sort of picked that up and figure it out and learn, but it's something that we now and continue to believe is a major part of the business for a lot of reasons that we could get into. One of which is financial, one of which is experienced and probably another big one is acquisition and getting to know people. So I think there's a lot of benefits. There's obviously a lot of challenges with retail right now, too. The narrative of retail is dead or the retail apocalypse, but we still have a really high degree of confidence and I think our stores are really a powerful point for us to sort of meet customers and encourage trying, but they're also really lucrative financially and we're excited about that too.

Delian Asparouhov:

Yes. How did you go from the sort of first pop-up store to... What was the next MVP? Was it a single sort of full build out? How did you guys determine, let's say even just like the square footage, the size, how much to spend on it, and then sort of how did that experiment go or what gave you guys the confidence to then expand? What did that... Let's say first expansion look like beyond what the first sort of real MVP was.

Travis Boyce:

Yeah. I'd say that first opportunity just described, I wouldn't even classify as MVP. That was sort of like opportunity, just jump at it. Costs literally nothing and then the next step for us when we saw some traction was we happen to be moving into an office next door that had a space that dedicated to retail and part of the lease for the office was we need to operate a retail location and we were going to sub lease to someone else to operate, but we quickly said, we'll do our own retail here. I think, it was a very iterative and step-by-step process. We didn't go straight to spending tons of money and invest a lot. We went from $0 in this pop-up test to %5,000 or $10,000.

Travis Boyce:

We had a designer on the team already who had done some furniture, mocked up some simple furniture, had it built out of MDF, brought the shoes in and operated what... if you looked at that, if you looked at pictures today of that store, I'm not embarrassed, that's not the right word, but it's a far cry from where we are today. And was a great first step to continue to sort of understand what was going to be important for us in our retail environment. So we did that for about a year, year and a half, and then took the next step, did a pop-up in New York. The next step, a full build-out and worked with a major design agency to think through that customer experience. But on each step, we really took time to figure out what was important, and again, nothing was, something that was revolutionary, but it really helped us inform how we laid out the store.

Travis Boyce:

We understood that we needed to keep the inventory close to the customer instead of buried in some back room, that you look at another retailer footwear experience, that sales person has to disappear for minutes and you don't know where they are, and then they come out with like five boxes and it's often kind of a poor experience and very time consuming. That simple insight from operating our own store, very cheaply, the learning for us was we had it all behind a wall. We had our inventory in a back room like most, and it took a little bit too much time, we sort of sensed consumers would get a little confused or wondering who was helping them and where'd they go? And so overnight we just knocked down the wall and had the inventory room exposed to the front of the house, which is usually a eyesore for most retailers. And we just said, "Hey, let's test it." And it worked out and it was fantastic.

Travis Boyce:

Customers could see the product, it kind of opened up and sort of had a little area of transparency, but also they could see their sales associates walk and grab the pair and come right back to them. So that was an example of one pretty simple learning that because we did things so cheaply, nothing was precious. We could break something, build something, try something new, and we hadn't invested a ton of money and I think it allowed us to just iterate in those early days, to come up with our own model, which isn't revolutionary I'd say, but it has some really key points like that one, that were insights from the early days of operating in Jackson Square in San Francisco.

Delian Asparouhov:

And then how did you guys think about the financial ROI or how to justify what rate to expand or how much to invest into it? Was there almost a payback period that you guys were headed towards? X dollars spent in the upfront and then here's how many sales with this margin it needs to pay back or were you starting basically, in San Francisco conversion rate doubled after we opened this store, because now people are maybe going in person and trying it on, and then they were feeling more comfortable even buying online, it's affecting digital sales as well. What was the metrics for success that convinced you to continue to investing into this channel and doubling down?

Travis Boyce:

Yeah. I think in the early days, similar to the early days with me in the supply chain, we let the success guide us and we certainly were paying attention to those types of KPIs. We looked at sales, we looked at conversion, we looked at profitability at the end of each month and wanted to make sure that these things were really working. And as those checked out and frankly just continued to grow revenue in store in San Francisco was growing something like 50 or a hundred percent a month for the first year and just became insane. From a zero awareness, zero footprint to a store that we couldn't keep the shelf stock. We had to take on more space. We had to hire a significant amount of people. And as in any neighborhood that, if you're familiar with Jackson Square, is not exactly a retail destination, it's a bit hidden.

Travis Boyce:

That was a great sign. Okay, let's take the next step. We went to New York, a little bit more of a big rent, still a pop up in terms of the term, but same problem happened there. A good problem to have, we could get lines outside the door. We needed to rent an apartment upstairs from the store to store more inventory, so we sort of became tenants of the building and in a residential apartment. We had a storage locker two blocks away at a U-Haul facility and we were using cars to transport shoes back and forth. I don't think we became really diligent on the financials and what our results were or expectations until we got after that and really started to think about how much we wanted to invest from a build-up and cap X perspective, what our return or payback period was.

Travis Boyce:

We've gotten very, very thoughtful about that, but the early days was, again, I think we wanted to learn and we didn't dedicate a significant amount of capital so they weren't necessarily focal points. And it was really sort of figuring out what was going to work from a model perspective, what was going to work from a square footage, and then taking those baby steps. Now we're a lot more buttoned up and have a very clear criteria about the types of spaces we'll take, the rents we'll pay, our expectations on payback, our revenue forecast into the future. We were a lot more buttoned up and traditional in that sense now but the early days, our success sort of guided us and we just kept taking steps to expand and see if the success would continue, and it did.

Delian Asparouhov:

And as you guys were thinking about geographic expansion, obviously New York was the first step up, how did you decide to open stores all around the world? You guys have opened in London, New Zealand, China, amongst various other places. These are all obviously large markets, but they all have, different attributes to them. Was this based off of just looking at these digital trends of who is buying online for Allbirds and using that as an approximation for where you'd have an audience or what gave you confidence to open these retail stores all around the world?

Travis Boyce:

Yeah. I think our brand probably expanded far faster than most into some of these international markets in a traditional retailer. A couple insights that we had that weren't necessarily specific to retail is we started to see a lot of copycats in certain countries and noticed that people were making either Allbirds ripoffs or creating wool running shoes that were pretty identical. We were both positive, but also worried that they could become the established Allbirds of whatever country. So that was one worry. And then the second was... That actually guided us into Europe, was the copycats and some rip offs there that we wanted to make sure we could establish ourselves, so we moved quickly to get into that country. We launched our London store the day we opened UK eCommerce. And so we were the retail opening, was a little bit on the tail of the dog there, that sort of desire for the business as a whole to get into the UK and eventually you really led that and we supported with retail because we found it to be incredibly valuable for customer acquisition, credibility for the brand by having a physical location showed that one, we were committing and two, that customers could come take a look at this American product that they hadn't ever heard of and hadn't seen.

Travis Boyce:

We were the tail of the dog on that kind of decision. For Asia, it was a little bit different in that we continued to see a tremendous amount of inbound search or IP addresses into our US website from parts of Asia and it became so big that we couldn't ignore it. Again, going into mainland China is a major undertaking just the complexity. There's no Shopify there, that's a totally different language, time zone, everything you name it is different there. So that was a major undertaking and we actually committed to both the eCommerce side, committed to T-Mall and the partnership there, but also four retail locations in some of the four major provisional cities, and open those all up two or three years ago, in the same vein of, it's a new brand for the Chinese consumer.

Travis Boyce:

We want to have a place where they can learn about and understand the brand rather than just throw their trust behind an American brand that's selling off of their website. Retail, I think in some of these international markets served that added benefit of introducing a new customer and giving credibility. In the US there's more around expanding our business and understanding where our existing consumers but in some of those international markets, it really is to help launch our business in a thoughtful holistic way rather than just selling off our website in the US and drop shipping to China. We didn't think it was going to be putting our best foot forward as a brand or for a customer experience.

Delian Asparouhov:

So I imagine, over the course of the past year, year and a half operating a business like this and having retail stores all across the world, both supply chain has probably been difficult with COVID, but also just I imagine handling the various lock down rules, openings, closings, yeah. How in the hell have you guys managed it? What have been the hardest parts, the most difficult? What things have been maybe unexpectedly maybe easier or better than expected? How are you feeling about retail in the long term? You kind of touched on this a little bit earlier of the apocalypse of retailers and something that you guys necessarily believe in, yeah. How has it been during COVID?

Travis Boyce:

Yeah, so obviously a tough year for almost everyone and retail in particular. And so for us, I can remember back in March of last year, I was coming back from a site visit in Austin and it seemed like the world was starting to melt down or at least the US at that point and made the early and I think right decision. Convened the board and decided and discussed and then the next morning shut down our stores globally with the exception of China actually, that it started to emerge and were safe. But the US and Europe and other markets shut down overnight and then were shuttered for quite some time and I think that one of the benefits we have, there's a few, but we're still small on the retail side. We at that point had 15 or 16 locations.

Travis Boyce:

So we're not some behemoth with thousands of locations. And so we could really have a personal discussion connection with our team to making sure that they feel comfortable that we could engage with our landlords and manage that on an individual basis for each lease. I don't envy the position of having to go shutting down a thousand stores overnight and having to make broad sweeping rules around how you treat employees or treat landlords or treat... That would be really challenging and probably not very effective is my guess. So we were able to really focus on our team and make sure they're comfortable. We reopened when we felt comfortable in late June and July. But it's certainly been a challenging year and continues to be just with the drop in traffic, the drop in tourism. And so we found ways in particularly leveraging our store teams to help support digital business, but also engage with consumers when they are there.

Travis Boyce:

While traffic is down, we found other ways to leverage our team and use them on other tasks and processes, consumer customer experience and supporting that, is another good example. And again, the other benefit of not having a lot of stores in general is retail was a considerable part of our portion of business this year, or in 2019. 2020 it was not. And we have the luxury of a large digital first business or digital first channel that could help the business and help the retail team and support us while we were shuttered for a number of months. So that was one of the nice benefits of a business like ours that's digitally native or digitally first and had started to get into retail.

Travis Boyce:

It continues to be a challenge to this day. Obviously we're not in a position where we've tackled the virus, certainly not in the US. And so it's a constant conversation with all of our teams. It's really taught us to make sure that we're in touch and communicating with them effectively, that we're really clear on what we're doing to help support them from a health and safety perspective. And we've got teams in cities all over the country and all over the world that we're really staying in touch with and doing everything we can to make sure they feel comfortable. In terms of the future of retail, I think this year we'll start to see some improvement, hopefully in the back half. I don't think tourism is coming back.

Travis Boyce:

I think that's going to be 2022. And we're probably not going to see that full recovery until at least next year. But some bright spots that we see, benefit of having stores all over the world is China is now having the best sort of sales ever for retail. So they're above where they were pre-pandemic and that's just super exciting for us to see, not only for that country, but again, a positive sign for us when we get out of this. And then we have a store in Auckland, New Zealand, which is probably a country that most would say most effectively navigated this. The benefit of being an Island in the middle of nowhere. It can fully lock down and not allow anyone in or out really. So our store there, while it doesn't have tourism traffic, is really performing at a high level because of that.

Travis Boyce:

While we're still struggling in the US and navigating COVID here, I think we do see positive signs, once we do emerge and we're already starting to think about expansion and we'll open a number of stores this year around the country and around the world and we're really excited to get back on the horse of opening but I think it's going to be another challenging year that we are slowly crawling out of. I don't think it's going to be this sort of quick recovery when the vaccine is fully distributed. I think it's going to take a little bit of time from a comfort level for consumers to return to retail.

Delian Asparouhov:

Yes I was about to say it seems like in New Zealand life is basically back to normal/has been for quite some time. I assume that's an interesting case study for you guys to just be able to continue to operate despite everything that's going on.

Travis Boyce:

Yeah, totally. No masks there, there's no restrictions, there's concerts and festivals. It's a totally different world down there. There's no travel, no tourism, so you can't even get there if you want to theoretically, without a massively complex isolation. But the country is now thriving for the most part without... Minus its tourism. And it's again, a good sign that when we were emerge there's a light at the end of the tunnel there.

Delian Asparouhov:

And so you might not have as much exposure as you used to on this side of the business, but I'm curious, have there been any interesting COVID related supply chain issues for Allbirds? I don't think a lot of people talk about diversifying away from pure China based supply chains, reassuring some stuff you'd have to North America, have there been any significant shifts or changes or challenges during COVID for the underlying Allbirds supply chain?

Travis Boyce:

Yeah I'd say a couple of points on one of the benefits for us as a small supplier base, we don't have a million products and a million factories. We have a very small supplier base. It's expanding as we've expanded products but we have great relationship with them. There was very little downtime when China went through its sort of heaviest or most impacted part of the pandemic but ever since back online and manufacturing and factories across Asia and also South America. So, those I think have sort of emerged for the most part. I'd say the biggest challenge frankly is more on the logistics side. Coming out of Asia, coming into the US, just significant delays and not a lot of supply of freight. Shipping by air, which is never a priority or a good thing for us, is exceedingly expensive and more than it used to be.

Travis Boyce:

There's fewer ships on the ocean. There's less containers. There's challenges, the ports with receiving because of COVID, once you get to the US and the number of labor, the amount of labor there. So that's been one of the biggest challenges on the inbound freight side is just navigating that and it causes delays and causes problems. We're fortunate that, again, we have a narrower supply base and we've done a pretty good job of planning and preparing but certainly a challenge to deal with that's a little bit outside of our control. And then one that has started to recover but is probably one of the holiday narratives was the significant uptick in eCommerce put a lot of strain on the local carrier fleet. So the FedEx, the UPS just the challenges they had, the surcharges they would put on anyone going above a certain number of units or packages per day, was something to navigate that, again, we're starting to see that subside, but it was a challenge to go through a pandemic Christmas and also navigate a strained freight carrier network.

Delian Asparouhov:

I think one of the key brand components to Allbirds is eliminating the carbon footprint. I'm curious, how does that type of branding feed into your guys' retail strategy? Whether it's in the build out, the messaging inside of the stores, maybe even in relation to the supply chain, we obviously talked about, air freight being super expensive, it's also, I think a higher carbon footprint than shipping things over container, how does it actually, high-level brain vision feed into a lot of the day to day decisions in the parts of the business that you're involved in?

Travis Boyce:

Yeah. The shorter answer is that it covers everything. So we've started a concept called the carbon number or carbon score that basically means we're measuring our carbon impact across the globe, wherever we are, across all channels and points of our operations. So it starts at the factories and raw materials and goes all the way through to your points of distribution. So all of our stores, in terms of the materials we use, the utilities and electricity we use, transportation and commuting to and from stores or to offices. So it covers everything and we measure that to the best of our abilities every year and we're starting to do that last year. We offset it completely so we pay for that offset and then our goal is to continue to reduce that. Products is probably the place that gets the most sort of focus because it's... The customers understand that they can see hopefully over time as we reduce that score and impact.

Travis Boyce:

And we use that as a tool to share out and hopefully educate people on it. And then to your point on retail, definitely major considerations in how we build the stores, the materials we use for both front of house that are consumer facing where there might be an interesting story around the local natural material but even back of house, making sure all of our things that we install for storage, all of our appliances, all of that, all of our water usage is all considered and something that we also have goals and metrics to track improvement on. So it really does cover the whole business. The products get probably the spotlight on what our carbon score is and what we look to reduce but we actually measure the entire business and every aspect and then offset and reduce it.

Delian Asparouhov:

Super cool. Yeah, not a lot of people talk about that, the carbon offset stuff, but it feels like Allbirds actually, it doesn't just talk the talk, but also walks the walk.

Travis Boyce:

Yeah. I think the key thing is to reduce, if people can measure offset and then not doing anything about it that maybe not the best strategy offsetting maybe, there's obviously a debate on how helpful that is but a big portion, we have an entire team working on continuous improvement. That's not just the quality of the product or the design but the carbon footprint and where we manufacture, looking even up to basically the grids in the countries we are producing and trying to figure out if we can move to a cleaner grid country or factor that has a better or more sustainable energy source. So it's a really comprehensive program that is a big focus of a lot of teams and a specific team not just sort of a tagline or marketing gimmick.

Delian Asparouhov:

Yeah. You can't change what you don't measure. So the fact that you're measuring is probably the right first step. I imagine in this role that you're in, head of global retail, there's a lot of different parts of the business that you have to interact with, whether it's the actual product, marketing for the copy inside, finance to determine the ROI, engineering maybe, include the retail locations on the website product obviously, get the feedback from consumers. Which functions are easiest, let's say for you to interact and discuss with, what's line versus which ones are, let's say trickier and why are they tricky or where are there some times, let's say pairing metrics where your incentive versus other business units incentives, aren't always perfectly aligned and there's in some good ways potentially tension between the two and how have you navigated that?

Travis Boyce:

Yeah. A couple of things I'd say, the first one, I think, one interesting concept for us as a brand that has a physical footprint and digital footprint is this concept of commercial versus creative and the tension that exists there of doing really cool, creative, beautiful things. But if they're not commercial and don't sell shoes and drive the business, they're sort of at odds. And so I think there's a healthy tension there that is always great and there's debates. And obviously the goal, we need to be very commercial and sort of continue to have a business that makes money. If we don't develop the brand and have really interesting experiences that they can help us create, then ultimately that may be more of a short-term mindset if we're just focused on the commercial side.

Travis Boyce:

So I think that's an interesting point that for me as someone who's very left brain, coming from supply chain banking. I have a massive appreciation more so than I did for the creative side of our business and the marketing side of our business. And so that, I think is one interesting point. Another element or angle that I think for us in particularly in retail is, we're digitally first. A lot of our team and the way we're built was to support an eCommerce business and this retail thing was first a little test. We sort of did everything on our own and manage it ourselves. As we scaled, we needed more support from everyone, whether it's finance, HR, tech, supply chain, creative, you name it, we need support from everyone as a channel of the business.

Travis Boyce:

And it's a little tough to get mind share from folks when you're the baby and there's competing priorities and we have limited resources. So that has always been the sort of struggle and challenge. I think we got into 2019 and really started to show some of the benefits of retail, the profitability, the revenue, the customer acquisition, that people then opened their eyes and started to give us a lot more support. But I think that was one where it was a little difficult when you have people that are trying to figure out their priorities. And it's always difficult for the smaller, what people might view as the less relevant or the lower impact part of business to get bandwidth. And I think that's probably existed at any business. And I think we've been pretty good and gotten better at looking longer term and understanding the future viability of the future impact and having people have that longer term mindset of where to allocate resources and prioritization rather than focusing on just what's needed for the next couple months, which probably would put most people's focus squarely on eCommerce alone at this point.

Delian Asparouhov:

Yeah, absolutely. I can't imagine that, 2021, even in terms of revenue split will approach 2019, but probably '22 starts to look much more attractive for your side of the business. If you were to look back on your career, thus far obviously, many years and probably even decades ahead in terms of work that you'll do, but, how do you think these early iBanking, brought exposure, let's say to an industry that maybe wasn't exactly what you were interested in, how did that sort of like prepare you for the world of startups or maybe another way to frame the question is if you were answering a question in front of a bunch of new grads that eventually wanted to get into the world of finance operations, supply chains and these types of physical goods, startups, what are the ideal, let's say first steps or two, or what are the areas that they should be focused on or learning about in order to eventually get to a position like yours?

Travis Boyce:

Yeah. I think a couple of things that say, one, the cliche of figuring out what I didn't like, what I wasn't great at and that was certainly a part of banking in particular. I really didn't like it. I wanted to be more involved in the operations and understand the business. So even just that element and certainly there are the tactical benefits and skillsets I got out of banking. But I think that was one big part. It's slowly figuring out what you want to do and then the other piece of advice, I would say, as I was at Chobani, which was again, the second you start to get a little slower, I started to look around and see friends doing other things that seem super interesting and super exciting in other areas of industry and investing and elsewhere, and I kind of took my eye off the ball and then focused on what other people were doing and not really what I was interested in. And it took me a little bit of time to figure it out, but really then focused on where I wanted to spend more time in what I was interested in and really focused on consumer products, became more and more aware and informed eCommerce in this transition to digital and having more businesses in consumer product business like that and then stumbled upon, Allbirds.

Travis Boyce:

And I think, had I not had that moment of refocus on what I wanted to do. I think a lot of people and I have a lot of people I know who chase after the next best thing and jump at the first opportunity or jump at the next opportunity because it's a little better. And I think something I've seen is that the grass is always a little bit greener elsewhere. I really am happy that I didn't jump at some of the first opportunities when I was maybe getting a little bored at Chobani and wanting to go anywhere else. And I think that, I see that sometimes in younger folks navigating the next role, is optimizing for the wrong things and going after a title or pay. And like we talked about earlier, not maybe focusing on who I'm actually gonna be working for and spending time with 12 hours a day.

Travis Boyce:

And so I think that was one where the decision with Chobani worked in that sense, being able to work with Kevin, even if it wasn't sort of the sexiest, coolest company in the world and didn't have much technology, and then going to work for Joey at Allbirds, certainly felt that way and probably check the box on more of those where I was interested about the industry, excited about it, interested about my manager, boss and Joey and thought would be a ton of potential for me personally. So I think people tend to optimize for the wrong things early on occasionally.

Delian Asparouhov:

Yeah, I a hundred percent agree with that. Well, Travis really appreciate you taking the time to come onto the podcast today. Thanks so much for hopping on.

Travis Boyce:

Awesome. Thank you very much. Really had a lot of fun.

Delian Asparouhov:

Thanks for listening everyone. If you'd like to support the podcast, please sign up for a paid Substack subscription, which we use to pay for transcripts, mics and other improvements. If you have any comments or feedback on what kinds of questions I should ask, who should come on the show or anything else, please do let me know. Have a great rest of your day.