Hokas vs. Allbirds
July 21, 2023
Kevin Schulman, Founder, DonorVoice and DVCanvass
Even non sneaker geeks probably recognize one or both brands, Allbirds and Hokas. Both started as niche, specialty shoes catering to unique markets. Allbirds first gained traction as eco-friendly, casual sneakers with the finance-bro, Silicon Valley crowd. Hokas gained popularity with hard-core runners and specialty running shoe stores.
So far so good. But Allbirds founders seemingly had a grow strategy that started with G, ended with W and that’s it. It rarely ends well when your strategy, plan and tactic are a number.
Allbirds was launched in 2016ish, got tons of outside money, went public with a 1.4billion dollar valuation and has since lost 95% of its value.
The 1.4 billion valuation (i.e., made up number) is ironic since it matches the actual revenue (sales of a product to paying customers) of Hoka, which also exhibited massive growth but with a foot on the brake the whole time.
A longtime analyst of the sneaker industry affirmed this view, “the short-term gains are the easiest ones to get. It’s the long-term gains that make you a successful brand.”
This is no less true for charity brands…
Hoka has never deviated from its core competence of a funky looking but functionally good running shoe with maximum cushion. Their market has grown beyond the hardcore runner to the casual but not compromising on the core product.
They intentionally hold back supply below demand to preserve their premium price point.
Contrast this with Allbirds whose only mantra was “more”. They quickly diversified into adjacent and not-so-much product categories, running shoes and clothing respectively. They incorrectly thought their eco-friendly material and message would carry the day regardless of product. Turns out the eco-friendly messaging didn’t trump comfort, price and quality.
The company lost focus, unsure if it was selling to sneakerheads, specialty athletes or soccer moms.
Growth is not a strategy. Be Hoka, not Allbirds.