This week, in an open letter to Amazon CEO Jeff Bezos entitled "Dear Mr. Bezos," Joey Zwillinger, the CEO of the wildly popular online shoe company Allbirds, did exactly what you would never expect a small retailer competing with Amazon to do.
He asked Bezos to copy his idea.
Allbirds, which sells direct-to-consumer shoes, has seen incredible growth since its founding in 2016, even being recognized in 2018 as a nominee for Inc.'s Company of the Year.
The founders, however, are not interested in accolades or awards. Zwillinger, a chemical engineer, and Tim Brown, a former professional athlete, had set out to create a shoe that could sustainably reduce the impact on the environment.
In doing so, they designed a shoe made of sustainable materials, including wool from companies that observe "high standards of farming, land management, and animal welfare," according to their website.
Moreover, the company patented the material used in the cushioned soles of the shoes, called SweetFoam. Made from recycled sugar cane, the company claims the practice is "so self-sufficient ... that when it's processed, its biomass is extracted to literally power the mill and fertilize the next year's crop."
This commitment to the environment has created a passionate and loyal consumer following -- including investors, which have valued the company at $1.4 billion in just two years.
Like with any product that gets traction this fast, there were bound to be imitation products. In an interview with Axios, Zwillinger stated that while knockoffs were expected, they were shocked at what they found on Amazon, the largest online retailer in the U.S.
Amazon's private-label company, 206 Collective, began offering a remarkably similar-looking shoe to Allbirds' bestseller, the Runners. Amazon's shoe, however, was priced at $35, compared to $95 at Allbirds, and was not made from sustainable materials.
Moreover, according Zwillinger, Amazon had been able to use its resources to relentlessly bid on keywords and search terms in search engines, and then replaced inquiries related to "Allbirds" with Amazon's offering.
One might think that Amazon would be embarrassed at being caught and called out for this practice, but the company has embraced its strategy and shrugged off the allegations. In a statement to Business Insider, an Amazon spokesperson said, "Offering products inspired by the trends to which customers are responding is a common practice across the retail industry. 206 Collective's wool blend sneakers don't infringe on Allbirds' design. This aesthetic isn't limited to Allbirds, and similar products are also offered by several other brands."
In other words -- "So what?"
So, how do you compete with a trillion-dollar behemoth that can use its powerful algorithm and bottomless resources to track trends and quickly create knockoffs with its own private label?
One option, and probably the first one that most entrepreneurs might consider, is for Allbirds to sue Amazon and protect its brand. Allbirds could also put more money toward marketing and competitively bid for their own search terms and control the search outcomes.
The problem of course is that when competing with a company as big and cash-rich as Amazon, small companies -- even one valued at $1.4 billion -- typically do not have the resources to endure this long-term strategy.
As Zwillinger puts it, "It is like bringing a knife to a gunfight."
Moreover, Zwillinger does not want to sue or outspend Amazon, even if he could. Allbirds has a much more altruistic vision -- the environment -- that requires the effort of more than just his company.
For that reason, the patent for Allbirds' sustainable SweetFoam formulation has been made public, open-sourcing the recipe to the entire world. The founders understand that in order for their idea to have an impact on the world -- and to drive down the cost through higher demand -- their carbon-negative alternative to plastic needs to be adopted by more than just fans of Allbirds.
So the company will continue to bet its future on the quality of its products, the loyalty of its fans, and the uniqueness of its experience, but the founders are embracing the challenge posed by Amazon by graciously asking Amazon do simply continue doing what it's doing -- but do it better.
As Zwillinger asked in his letter to Bezos:
We are flattered at the similarities that your private label shoe shares with ours, but hoped the commonalities would include these environmentally-friendly materials as well. Alas, we're here to help. As we've done with over 100 other brands who were interested in implementing our renewable materials into their products, including direct competitors, we want to give you the components that would make this shoe not just look like ours, but also match our approach to sustainability.
Please steal our approach to sustainability.