Split screen: Allbirds crash lands as Koala takes flight
The direct-to-consumer (DTC) revolution disrupted traditional retail and set the standards it must now compete against. Here Four Pillars co-founder Matt Jones takes us through the DTC brand journey using the experience of a failure (Allbirds) and a success (Koala) to illustrate his points. One big question is whether the now-publicly traded Koala can maintain its edge.
The author Matt Jones
I was there when it happened. By “there” I mean living in New York City. And by “it” I mean the dawn of the millennial DTC boom, when Warby Parker launched its disruptive eyewear business. It was February 2010, the same month my daughter was born. She’s 16 now, approaching adulthood at speed. Warby Parker and its 2010s DTC peers are all approaching their own milestones too.
A couple of those milestones showed up last week, as Koala launched on the ASX and the once mighty Allbirds crashed down to earth. But I’m getting ahead of myself. It’s 2010, we’re still counting my daughter’s age in days, Warby Parker has just launched, and woollen Tree Runner sneakers and mattresses in boxes promoted through provocative OOH advertising are still just a twinkle in the eye.
Warby Parker was founded by four MBA students and arrived with an East Coast preppy confidence that made it feel instantly relevant and authoritative. Vogue and GQ wrote about it back when prestige print still moved the needle. It crafted a stylish digital experience. It built a sizeable customer database at speed. It staged stunts in the New York Public Library. It partnered with brands tastefully. And it made buying a pair of prescription glasses feel like participating in culture rather than an overpriced clinical transaction. But the cleverest part of Warby Parker’s model wasn’t the aesthetics or the brand building. It was the way they engineered product confidence.
Because the hardest problem to solve in those early DTC categories wasn’t desire. Desire was relatively straightforward. These new brands were born native to a digital and social-first world of millennial aesthetics. From Warby Parker to Away (luggage), Casper (mattresses) and Everlane (apparel), everything looked cooler than the incumbents. The photography was better. The storytelling was more engaging. The partnerships and activations were culturally savvy. The brands looked, sounded and acted like they were made by people who actually lived in the decade they were selling into.
Really interesting, but I’m wondering if this reads less like a brand story and more like a coordination shift. Perhaps the question here isn’t why Allbirds fell: it’s whether that part of the market still exists.
The middle isn’t just getting squeezed—it’s losing its function. DTC brands sat in a layer that aggregated demand and transferred trust. Platforms made aggregation cheap. Networks are now making trust cheap. Once both functions can be performed elsewhere, the old mid-market role (“good quality at a fair price”) doesn’t have much left to do.
What’s left is a commodity floor and a set of relationship-driven overlays. Everything that lived in between starts to look unstable. This feel less like a split-screen and more like a quietly disappearing category.