Baabuk's All Wool, No Bull: Choosing the Best Next Step
Baabuk, a Swiss based start-up with a branded offering in wool footwear was founded in 2014 by the married couple Dan and Galina Witting. Since then and to 2018, the founders have grown the firm to now offer three product lines of wool footwear, employ 5 staff and book CHF 1.4 Mio net revenues from selling its products across online, distributor and retail channels. The case introduces Baabuk's history, current business and financial situation. The case also highlights the competitive environment with specific focus on Allbirds, a venture-capital backed US start-up. Allbirds has a similar core product to Baabuk. Whilst Baabuk has remained self-financed, Allbirds has raised a number of funding rounds with a most recent valuation of US1.4bn. The case presents the founders in a position where they feel the potential of the product has been clearly demonstrated but also face an increasingly competitive environment. Their primary concern is to formulate the right channel and pricing strategy, but they are also considering external investment to help scale the business. They are in a dilemma as to how to take Baabuk forward and wonder whether they are asking themselves the right questions.