David Allemann: How I founded On Running; Working with Roger Federer; Brand Marketing Tips | E1021

1. 0:00 – 0:59

   Intro

   1. HSHarry Stebbings0:00

      How did it come to be that Roger and On came together?

   2. DADavid Allemann0:02

      Roger said, "Hey, I would love to get involved." Said, "Hey, that's fantastic, but, you know, you know, something like classic sports, sports star endorsement, us giving money to you, that's not, that's not really On style, because we've always been growing out of the community, and that's not in our playbook. But how about not us giving you money, but you giving us money and becoming a co-investor and a co-entrepreneur together with us?" And to our surprise, Roger said, "Yes, that's what I'm going to do."

   3. HSHarry Stebbings0:32

      David, I am so excited for this. As we just said, I am one of the biggest On fans, so this is a personal highlight for me, and thank you so much for joining me today.

   4. DADavid Allemann0:41

      Mm-hmm. Hey, Harry, thanks a lot for having me. Great to be with you.

   5. HSHarry Stebbings0:46

      Now, I've been following the On story for years, and it's just such a great one. So, I want to start at the beginning with 2010, two other co-founders. What was that co-founding aha moment for the three friends?

2. 0:59 – 15:52

   The Founding Story of On Running

   1. HSHarry Stebbings0:59

   2. DADavid Allemann0:59

      You know, it was actually 2009 in the rainy morning when, uh, Olivier, my co-founder and, uh, duathlon, um, uh, world champion, tri-ath- triathlete, he said, "Hey, I have this amazing idea of a new running shoe," um, and invited Casper and me for a, for a test run. And so it was a morning, it was raining, he had some wet shoes because he had already had some tests, done some testing. And he had shaved off a pair of running shoes and glued rubber pieces that he had gotten from cutting his garden hose underneath the shoe. So, these hollow elements. And, yes, Casper and I had said before, "Hey, why let we, uh, l- why do we let Olivier invest his hard-earned athlete money into a crazy idea?" But then we took the shoe for a spin, and it was just an amazing sensation.

   3. HSHarry Stebbings1:51

      Can I ask, why was it an amazing sensation? What did it feel like?

   4. DADavid Allemann1:54

      So, Olivier, um, obviously as a triathlete had had a lot of time to think while running.

   5. HSHarry Stebbings2:01

      (laughs)

   6. DADavid Allemann2:01

      And, um, he, he a- he asked himself, "Hey, um, I go for these training runs on very cushioned shoes, but then when you compete, you literally run in, in shoes that are called racing flats."

   7. HSHarry Stebbings2:16

      Mm-hmm.

   8. DADavid Allemann2:16

      "And so they're very hard, and you feel it the next day. Wouldn't there be a way to engineer it that you have, that I have best of both worlds in one shoe?" And that was the breakthrough idea. And what these hollow elements do is they give you a lot of cushioning when you land, but then they fully compress and they give you this flat surface so that you can push off with all your energy. And so that made this sensation of being super soft, but also super responsive and explosive when you push off. And, uh, and that got us. So, because we also had been a generation that first discovered suspension, um, bikes, full suspension mountain bikes and, uh, carving skis. And in both of these occasions, it was a revelation where you felt, "Hey, wow, this changes skiing for me," or, "This changes biking for me." And so on this morning, we had that, uh, pattern recognition of, "Hey, this could change running for me."

   9. HSHarry Stebbings3:14

      Okay. So it's, uh, you know, you have this revelation that this can change running for you and millions of other people. What'd you do then? Like how do you make the first shoe, and what was that process?

   10. DADavid Allemann3:25

       You know, that was a little bit messy at first because we were full in, um, in, in exploration stage. And so we weren't sure about it yet. So, it was this unsure, confused phase that is the, the start of innovation. So, um, we went out to athletes and had them test shoes, just kind of to give us confidence as well. And many of them said when they stepped into the shoe, they said, "Wow, that's different." So, that's what we, the word "different," that's what we always heard. Um, Casper went off to talk to first, um, specialty running retailers. So, the, the hardcore running, runner mom and pop shops, a little bit outside in the, in the village where all the serious runners go to to get the best advice. And I was actually boarding a plane to Asia, uh, because a friend of mine had given me the contact to somebody who, uh, who knows somebody who works in a, in a, in a shoe factory.

   11. HSHarry Stebbings4:22

       (laughs)

   12. DADavid Allemann4:23

       And so, uh, we have ne- We, we didn't come from the sports industry, so I went there and learned how to make shoes.

   13. HSHarry Stebbings4:30

       What did you learn learning how to make shoes in Asia? Like, how was it? You rock up to a shoe factory and you're like, "I've got an idea for these new form of shoes"?

   14. DADavid Allemann4:39

       (laughs) Yeah. Yes, it was pretty much like that. And, uh, of course, they said, "Hey, you know, we have hundreds of guys that are coming to us telling us that they have an, a new idea for a shoe, and you have especially complicated one because you want to do these hollow elements," um, which later became CloudTec, uh, in the shoe, "and it's impossible to make these molds" because putting holes into a sole, you need kind of tooling that puts almost sticks into the sole and how do you get the tooling out and it's complicated. And so first, I had to convince them that it's possible to build a tooling like that.

   15. HSHarry Stebbings5:17

       How did you convince them?

   16. DADavid Allemann5:18

       You know, I brought them some prototypes that Ollie had done and then, and asked them to step into the shoes. By the way, Olivier and Casper were doing the same. Olivier with athletes, Casper with first retailers. And that was always the replication of the aha moment that we have had on that rainy morning that happened for many, many other people. And in fact, uh, uh, I came back then with first prototypes out of the factory, and then we sent it to, uh, to the, to the largest, uh, sports expo, EXPO in Europe. And they called us two weeks later and said, "Hey...... you won the ISPO Gold Award, which is the innovation award for new sports innovation. And a week later, Tecla Lorou called us, we didn't understand her name, and, and, and she just told us in broken English on the phone, "Hey, somebody has given me these shoes and I just ran from Germany to the Pope on a peace run, and it was the best shoe ever." So we kind of understood she, she probably ran quite a distance, so she must have to do something with running because we didn't understand her name. Then we found out that she's a, that she's a, a marathon, um, world champion. And so a lot of things happened at the same time, that was January, um, 2010, just a few weeks after we had founded the company.

   17. HSHarry Stebbings6:38

       And so were you, were you doing this full-time at the time? The three of you full-time? D- like, had you put your own money in? Did you have supplies when she got given them, could you send her more?

   18. DADavid Allemann6:50

       So 2009 was kind of our exploration phase, probably second half of 2009. And, you know, we had well-paid jobs, kind of very, um, uh, kind of, um, acclaimed kind of positions in companies. And so first of all, we had, uh, to convince each other that we actually do this, and, uh, there's no better way to, to do that than on a long hike in the Swiss mountains, and that's exactly what we did. And while we were climbing the mountain and the, the view got better and better, um, we had a, a realization. And that is if you're coming out of Switzerland, you're coming out of one of the richest, safest places on the planet, and that sometimes can be an ihi- inhibitor because then you're in such a safe place that you probably don't take risks anymore. And so we asked ourselves, "If, if we can't take a risk of doing something crazy like this, who can?" And, and that was the challenge to ourselves. And so after that, I, um, I quit my job, Casper j- quit his job, um, Olivier started to do, um, his, uh, his athlete coaches and we, we really fully committed and then fully started at the beginning of 2010.

   19. HSHarry Stebbings8:06

       When you look at kind of that start in 2010, we hear about winning the award, the, you know, the incredible marathon runner who's, like, globally renowned, loving your product, it seems like the dream start. What were some of the really hard elements in that first year or two that you go, "Oh, that was hard"?

   20. DADavid Allemann8:24

       Hey, i- i- it was the dream start, but then, of course, reality sets in as well. And so, uh, some of the retailers told us, um, at ISPO, because they already wanted to write orders, they didn't wri- realize that we were just showing them prototypes that we'd just gotten out of the factory, "Hey, if you can't deliver in June, um, you don't, don't bother because then the season, my running season is over." And so, uh, I boarded a plane right after ISPO to make sure that we have shoes in June, so pushing out that first batch of probably 2,000 shoes.

   21. HSHarry Stebbings8:56

       And you were paying for this yourself at that point? You were funding it yourself?

   22. DADavid Allemann9:00

       No, at that point, not anymore. Kind of through the first flights in 2009, we all paid ourselves, but then we had first, um, we had put all our money into the company, and so, uh, I always flew from, I think, from Zurich to Dubai to Hong Kong and then took the train because that was the cheapest option. And so, um, pushing shoes out, but then also for Casper and Olivier who visited a lot of retailers, getting that first conversation opportunity to present the shoe was hard. So their tactic was to call a retailer up, uh, the local running shop, um, "Hey, I just happen to be in town, what's your size? Um, and, ah, by the way, I just have your size with me, can we go for a, for a run over lunch?" So it was really one by one, uh, the hard groundwork of getting your first wins.

   23. HSHarry Stebbings9:54

       I mean, I, my favorite is that, "Oh, I just happen to be in New York today." (laughs) That is fantastic. Can I ask, when you look at-

   24. DADavid Allemann10:01

       (laughs) What a coincidence.

   25. HSHarry Stebbings10:03

       Uh, what a coincidence. And your size? It's just here, baby. Um, my, my question is, you know, the brand is so synonymous with the design, in particular. When you look back at the early design and kind of, you know, bunting, presenting that to retailers, expos, h- was that difficult in terms of customer education, telling them about this fundamentally new shoe that looked so different?

   26. DADavid Allemann10:27

       No, it's interesting, um, because part of the DNA of On, I mean, biggest part of the DNA of On is, of course, running and, um, and performance and this innovation company, but from the very beginning, uh, design was part of the DNA because that's, that's part of, um, of my background and also of Thilo's background, our head of design who was with us even before we started the company. And, uh, um, we had, we had asked Thilo because he's a product designer not a, not a shoe designer, he had never designed a shoe, and so we felt that's a good fit with us because we also never were in the shoe business, so let's completely break conventions. And so what we did is this outsole, which is very much visual technology, so if you see the shoe in a, in a shoe wall, you gravitate to that, so that's definitely a win. But then we also decide to do, uh, something unconventional in the industry. Let's forget about all the decoration and, uh, you know, kind of the lines and the shiny things on the shoe to, to yell, "I'm a performance product," but let's completely strip it down, let's do form follows function where we make it very minimal and very much in a, in a Swiss design tradition. And at the beginning, people told us, "Don't do that, that, uh, you need the running shoe bling because that's, that's gonna put you at a disadvantage." And we s- did it anyhow. And so at first, it probably was almost a little bit an inhibitor, um, but it made it to a very distinctive design, so people gravitated to the technology, it was very unusual, it was a different aesthetic, so at the end it helped us.

   27. HSHarry Stebbings12:07

       You mentioned there that, you know, Thilo and the product design background he had and your lack of experience, respectfully, in the shoemaking business, when you think about the benefits of naivety, often we're told by entrepreneurs it's good to be naïve, but then bluntly, if you were starting another shoe business today, I'm sure you would know a lot more and be a lot more efficient in the way that you started it. How do you think about the benefits of naivety when starting businesses?

   28. DADavid Allemann12:34

       You know, uh, I think what we, what we lacked in, in knowing, uh, knowing about producing shoes and selling shoes, we probably brought some different background to the table. So Casper and I spent a lot of time in, in marketing and in advertising. I spent a lot of time in, uh, in one of the leading design companies, Vitra. I had built, um, just out of university, a, a digital marketing agency, one of the first ones. And so we brought Olivier, the amazing athlete who has direct connection from his, uh, big toe to his brain. And so if you give him a shoe, he knows exactly what has to be tuned.

   29. HSHarry Stebbings13:13

       (laughs)

   30. DADavid Allemann13:13

       And so we brought an eclectic Casper who, um, who, w- who, who, who, who wrote his thesis about sports marketing. So we brought a lot of, um, different... an eclectic mix to the table. And sometimes it's probably good to have an eclectic mix, but then also that naivety that you're mentioning, because if you know what's coming your way, you probably don't... we wouldn't have started in the first place.
3. 15:52 – 27:38

   The Expansion of On Running

   1. DADavid Allemann15:52

   2. HSHarry Stebbings15:52

      The US in year two is a very big decision. It's a big investment to go into such a big market. And respectfully, in year two, you didn't own the market in Europe or didn't have such a dominant position like you do today. What was the decision-making process behind the decision to move to the US so soon in year two?

   3. DADavid Allemann16:11

      The, um... It was very clear to us, if you want to be a sports brand, you have to be in the US and you have to be firmly rooted in the US, as you have to be, um, in many other countries like Japan, UK, so some of the biggest running coun- countries. And so we wanted to do that from the very start. And we also spent quite a bit of time in the US in our previous lives, so we, we, we knew the country, we had some connections, um, so we just ventured out there.

   4. HSHarry Stebbings16:38

      And then tell me, so that's a massive decision, number one. How do you launch US. It's a big market, it's a crowded market. How did you approach the launch strategy for, respectfully, On, an unknown Swiss-European brand?

   5. DADavid Allemann16:53

      It's not, essentially not so different than from any other countries. If... It's, it's been the, the same grassroot approach that we had in Switzerland, in Germany, in, uh, in, in, in, in, in France, in the UK as well. We just go out and start with some of the most important influencers. In the US, you probably don't go out to the whole country at once, but you, um, you, you select your metropolitan areas. So for us, it was, for example, at the very beginning, it was New York. And, uh, and then other, other parts like, uh, San Francisco; LA; um, Miami; um, Portland, of course, where our, um, where our office is in, in, in the US. These were then attached, and, and we started to work with the local community.

   6. HSHarry Stebbings17:43

      Can I ask, is it enough to just get it in running stores? 'Cause once it's in running stores, you need people to engage with it. You need the retailers to want to continue to buy it from you. How do you turn "it's in store" to sales and converting customers?

   7. DADavid Allemann17:58

      So there were probably two other important pivot points for us. So we also, um, being a very much a, a, a digital native company, we decided in year two as well, hey, let's really partner with the best retailers because we feel it's much more effective if they talk about the shoe. If we talk about... There's been so much said about running shoes by so many different brands. If you go out there and say, "Hey, now we, we did the b- the, the most amazing running shoe on the planet," nobody will believe you. So you need some allies. And that's...... that's been very much also the incredible role of our, uh, partners. At the same time, we also went out and said, "Hey, we also want to have a direct connection to our community." And so we built our first website and our e- first e-commerce presence, and so we were very happy that, uh, in the first month, I think we sold 50 pairs of shoes, uh, back in 2012, I believe. And so we launched this D2C presence as well, and that was right inflection point when, of course, social started to rise. Then also the pivot from desktop to mobile. You remember iPhone 2008?

   8. HSHarry Stebbings19:11

      Mm-hmm.

   9. DADavid Allemann19:11

      So that was only two, three years after the first iPhone launch. And so we fully leaned into that, um, to make sure that we also have the digital connection, apart from all the physical stuff that we were doing. So we were hosting at least 3, 400, um, fun runs, community runs, uh, all over the planet. But at the same time, we also built a digital connection.

   10. HSHarry Stebbings19:33

       This is so cool for me as such a fan, I get to ask, like, all the questions I wanna know. My, my, my first here would be, you said about influencers earlier. Do you just... Like, in the early days, did you just send them, like, famous marathon runners, famous triathletes, famous athletes? Did you just send them shoes? Did you ask them to wear them? What was that process like?

   11. DADavid Allemann19:53

       Yes, absolutely. And, of course, Olivier is fully ingrained in that community, and so, um, he, he, uh, he called all his friends, and, uh, his friends called all their friends. And so we made sure that some of the best athletes were in our shoes. And I remember a moment in, I think it was 2013, so, uh, three years into the journey where Frederik Van Lierde, um, um, uh, one of the top talents and contenders for, um, for the, the, the, the Ironman Triathlon on Kona for the, for the, for the World Championships, um, he wore our shoe. And it was a prototype, so Olivier, uh, was always cycling behind him on the running route because Olivier was afraid that the shoe is gonna fall apart. But it didn't fall apart, and Fred won the World Championship in triathlon in our shoe and was on that podium wearing the Kona crown, which is the trophy of, uh, the World Championship, uh, of the, of the Ironman. And so that was a, that was an amazing moment for us to... That probably stands for how we connected to the athlete community and really built On out of core running and together with athletes.

   12. HSHarry Stebbings21:07

       Can I ask, were you ever worried that the alignment of such brilliant athletes would alienate normal people, the general public? You become known as the, th- you know, I think bluntly, Hoka are often known as a running brand just for very extreme ultra-marathon runners, as an example. Or were you worried about cornering a market too niche into real athletes who are pros, not the general public?

   13. DADavid Allemann21:35

       No, I think we weren't because we always knew that you have to come at... As an innovation brand and as a sports brand, you have to come from the core. And if we would have been afraid of that, then we would have definitely be put at ease probably in 2014 because we, um, uh, s- s- at some point, we saw Variety magazine. And on the Variety magazine, um, there was the Oscar winner, the three-time Oscar winner in, uh, in a tu- in tuxedo on the red carpet of the Oscars, and he was wearing the, the Cloud. And so that was for us a sign that now On is crossing over into popular culture.

   14. HSHarry Stebbings22:17

       That is such a cool moment. Can I, can I ask, when you think about, like, you know, the movement into clothing as well, that seems like a big decision, too, because you go from, like, a beloved s- you know, footwear brand to, "Hey, we're gonna do clothing as well." When was that decision, and why did you decide to make that decision?

   15. DADavid Allemann22:33

       It was quite a, quite... As many things at On, it was quite organic. So, uh, at some point, we just said, "Hey, we hate to run in, uh, gear from other brands." And, uh, and so Thilo and I started to work on a first, uh, little capsule collection of apparel, just a few pieces, 10 pieces, the perfect running short, the, the perfect T-shirt, the perfect lightweight jacket. And so we presented that internally, and then we decided that we start selling that. And I think it's a, it's a, it's a natural progression for a sports brand. Um, now we're much more serious about that because we feel if you're building a global brand, you wanna happen on the full body, and you wa- also want to bring the capability of what your technology and innovation team can do to the full body. And so the same team that brought you the On shoe, um, is also bringing you apparel.

   16. HSHarry Stebbings23:32

       What was the hardest element of launching clothing alongside the very successful existing shoe brand?

   17. DADavid Allemann23:38

       One of the hardest part, so is... I think the innovation part, what we wanted to have was pretty clear and also, um, all the detailing and the cuts. What was hard is sizing, because shoe sizing itself is hard, and we learned a lot about shoe sizing, and then apparel sizing is even different. And then do you build for the typical, um, uh, w- what body shape are you, are you building to? Um, because, um, it can't be too, um, too wide at the beginning, and so, um, getting the sizes right. The second thing is finding the right partners to sell apparel, because selling apparel is a completely different thing than selling shoes.

   18. HSHarry Stebbings24:24

       How so? Sorry, I'm, I'm fascinated. Why is it so different?

   19. DADavid Allemann24:27

       Shoes you put on a wall, and you immediately... Shoes have volume, and so you can put them on a wall, and you understand the product. If you just hang apparel on a hanger, it's not gonna sell.

   20. HSHarry Stebbings24:41

       So what did you do?

   21. DADavid Allemann24:42

       So, you have to, you have to understand how you present apparel, how do you create almost scenes, how do you combine it. You're not just s- buying one apparel piece, like in shoes, where you probably buy one pair, but you're buying a full look. And so you have to have the right partners who understand how to create that universe around apparel, put the right looks together. We also had to learn it not just with our partners but also on our website. How do you, how do you present apparel? And so that's, I think, something that we're still learning.

   22. HSHarry Stebbings25:16

       On the retail partner side, I'm fascinated. That, that's not an easy thing to do. "Hey, we want to create a scene in your already very busy store. We want more real estate. We want t- to make it come alive." How did you convince retail partners to give you more space, more time, more energy than hanging on the rack like all the other brands?

   23. DADavid Allemann25:37

       Often, I mean, uh, our... These are long partnerships that have been growing over time. And so, um, with partners like, for example, uh, Nordstrom or, um, now, uh, Dick's or Footlocker or then also, um, tastemaker doors, like, uh, Kith or Beams. Um, these partners, of course, know how to sell apparel because they've done it for ages. But they're very invested in our brand as well because they just saw On growing incredibly fast, one of the fastest-growing brands in, uh, over the last decades, and so they're very committed to make apparel happen for us as well, and we partner with them.

   24. HSHarry Stebbings26:17

       When did you decide to do your own stores? 'Cause we mentioned before the show, I love your store in London. W- when did you decide that, actually, we can own this experience as well, and we should do On Retail experience ourselves?

   25. DADavid Allemann26:31

       We had a perfect timing. We decided that probably a little bit more than a year before COVID, and so we selected our first location in, uh, in New York, and we came up with the concept, and then we built the store, and we launched it during COVID. So, uh, that was what you call an, uh, soft launch, I would say, um, because, uh, it was really in the middle of it. But hey, uh, it was actually great because we could, um, get into it, learn, and we could also connect because there was almost no tourist traffic to, uh, New York. So, we also partnered very much with the local run community. When covid, covid was coming to the end and people were coming out again, and you remember the running boom, so a lot of runs, community runs, started, started at our store. And so we partnered with the community. Now every day, runs start at the New York store. Um, but now, of course, you have the full traffic back. And so, um, we felt it's a very unique experience that we also developed, and so we are now, um, coming to other cities around the, around the world.

4. 27:38 – 29:55

   Biggest Lessons in Retail Sales

   1. HSHarry Stebbings27:38

      What have been your biggest lessons in what it takes to make retail work so well?

   2. DADavid Allemann27:43

      You know, um, probably the biggest question that we had when we developed the retail concept is, why would you go back to a shop to buy shoes and then also apparel? Why would you not just do that on a website? And we realized that often if you go to a sports store that you don't spend so much time with actually the people of the brand and of the store, because it's about, "Hey, what i- what is your size?" And then somebody disappears for, uh, five minutes somewhere in a locker room, uh, or in a, in a, in a, in a, in a, in the back room and comes back with a size, and then it's probably not the right size, and then this person disappears for another 10 minutes, and then after 20 minutes, you're there with a lot of boxes, and, uh, and it's the first time that you speak to, to each other. And so our thought process was, how can you reinvent that? That's again, at On, we always try to do things a little bit differently, and so we created a huge piece which we call the archive, and you see every shoe of On on that big archive. It's landed like, uh, like, uh, an, an object from outer space in that, uh, in that space. And then there's the magic move, which is with a secret button, you can open this archive, and you pull out the drawer, and then of each of the shoes, you have one size, uh, all the sizes of that shoe. So within seconds, that shoe is on your feet. And then if you decide that this is the model, then of course we get you a fresh pair from the, from the back room. And so things like that, how can you innovate on retail were important for us, and it's been so rewarding for us to see that it really works. So people love it because it's, uh, it's, it's maximizing the interaction time and not the transaction time.

   3. HSHarry Stebbings29:33

      Can I ask, how do you think about the things which are great to be different on, like that amazing experience, versus things that are fine the way they are? We don't need to change that. May- maybe it's the way that people pay in stores. Maybe it's the, the bag that they carry out. But it's like, you know what, what, what existing works, let's leave that, versus, no, we can innovate. How do you think about

5. 29:55 – 31:24

   The Culture at On Running

   1. HSHarry Stebbings29:55

      that?

   2. DADavid Allemann29:55

      On has a very, On has a very strong culture, and so, uh, we have, um, we have, uh, five spirits that are important to us, and, uh, one of these, probably my favorite spirit, uh, is the explorer spirit. And so it's the spirit that, uh, you, you try to discover something new, and you, you, you, you set sail, and you don't call back the next day. So it's very much, hey, you embark on that journey, and so we also very much empower a- our team to think for themselves and to assemble a great team of, with different skill sets, uh, because you need that on an explorer boat. And so many things, I think, at On are, are always resource. We always question ourselves. At some point, you probably find out, hey...... and the solution that we find is probably not so far off from an industry convention, but in many cases, we find, hey, there's, there's an opportunity to do it slightly different or sometimes radically different, like in the core technology, which is the first engineering play actually in the, in the shoe industry, not a, not a, not a material play like normally in better forms.

   3. HSHarry Stebbings31:05

      Can I ask you, you mentioned the explorer mentality there, I love that. How do you think about, like, blundering everything that was like has just worked, David, if I'm being totally honest. What have you explored on that hasn't worked and how do you think about how long is the right amount of time to give something before deciding that it doesn't work?

6. 31:24 – 34:54

   On’s Near Death Experience

   1. HSHarry Stebbings31:24

   2. DADavid Allemann31:24

      You know, I mean, we had some difficult moments in the early days. So, when we started out and we also scaled production, at some point, uh, I remember very clearly in 2013, uh, our, our, um, our production partners called me and said, "Hey, David, we have a little problem. Just our factory vent broke." So they shut down and all the materials for next season's production are already in there, but they haven't been assembled. And so that was pretty much a near-death experience. And I told them on the phone, "Hey, you have to find a way to get the raw materials out so that we can assemble somewhere else." So they called me back, uh, the next morning and said, "Hey, we found a way. Somebody climbed over the fence and got the, got the materials out, and now it's ass- we're assembling in another factory." That's not the... That was not exactly my assignment, uh, but in hindsight, I'm probably pretty happy that, uh, they didn't completely understood me right, but it's something, uh, that only an explorer would do to, to save, to save On essentially.

   3. HSHarry Stebbings32:34

      I mean, that is one hell of a moment.

   4. DADavid Allemann32:36

      That was an incredible moment. And so it also made... Because back then we were probably something like 30 people and a lot of things were on, um, Kasper's, Olivier's and my shoulders and we realized we have to bring other very experienced explorers in together with us to just create the bandwidth. And that's probably been a realization, um, that I would wish I would have known from the very beginning. Don't go too far alone and risk the, the company, but bring great people in. And Mark and Martin, uh, who are now the co-CEOs of On, um, joined us back then and they took a lot of the responsibility, especially when it comes to finance, operations, execution, and they have been brilliant, um, to... In scaling On with us together.

   5. HSHarry Stebbings33:34

      How do you know is the ri- when is the right time? Often we hear this kind of idolization of founders. I totally agree with you, by the way, in terms of bringing in great people and working with you. But founders are idolized today and go the distance. You need to be CEO, David, until the company is, you know, a thousand years old. When is the right time for founders listening to maybe think about bringing in the co-CEOs that you mentioned here? Amazing.

   6. DADavid Allemann33:58

      I mean, in our case, when you know, you know, because, I mean, if, uh, if things start to fly around and break, you pretty much know that you, uh, that you have to, um, bring other people to the team who, who complement you. And that's been great at On anyhow from the very start, because, uh, it was three founders from the start. So it was not one founder, it was a partnership from the beginning and that very much informed how we built the team as well. On very much operates as a partnership. And also if you look at our senior leadership team now today, these are roughly 10 people, uh, half of them are, uh, female, so actually, all the regions D2C is all in female hands at On and we just were able to bring an amazing group of people together at On.

   7. HSHarry Stebbings34:49

      Can I ask you, there's two more topics that I think are really, like, fascinating and, uh, we haven't touched

7. 34:54 – 36:42

   On Running & VC Funding

   1. HSHarry Stebbings34:54

      on yet, but we, we mentioned kind of funding earlier. You didn't raise venture funding in the way that we see today. Why did you not decide to raise venture funding first?

   2. DADavid Allemann35:04

      Well, venture funding came a little bit later. We had the privilege that we had built, uh, in, uh, in previous years before On, um, quite good connections. Switzerland is small, so, um, we had, uh, good friends who were able together with us to put a little bit, uh, uh, o- of money into that starting jam jar. And so that got us off the ground and, uh, they were great. They were actually, uh, even helping operationally partly in the business so I, uh, remember particularly when, uh, with one of our early investors, with Eric, I was dressing mannequins at one of the first, uh, running events in Austin. Um, so they were very hands-on and that was, uh, a great time that we've ever had some external co-explorers together with us. Um, also Phillip. And so these were the foundational years. Um, but what was great as well, um, was that our community around us also helped us to be very connected to the US, also to the tech investor community, so we had actually, uh, quite a bit of, uh, tech investors who loved the shoes, who came in very early, um, into On. And then, uh, a few years later, Stripe, uh, an, a venture capital firm from New York who was, uh, uh... And they are greatly connected at the intersection between consumer brands but also tech, um, so very much in the innovation space as well. They were, uh, they were our first, um, true VC connec- uh, VC investor.

   3. HSHarry Stebbings36:39

      You mentioned VCs loving the brand early and being big

8. 36:42 – 41:34

   Working with Roger Federer

   1. HSHarry Stebbings36:42

      advocates. You also have a very, uh, well-known advocate in the form of Roger Federer. Um, uh, when I put it on social that you were coming on the show, um, many comments were about Roger.... how, how did that happen? Just tell me the story there. I'm too interested. How did it come to be that Roger and On came together?

   2. DADavid Allemann36:59

      Again, as so often in our journey, it was, um, quite organic. So, um, we saw him posting, um, from Paris on his Insta account in On shoes, and we said, "Wow, uh, Roger now, uh, that he's not working with another company anymore, he seems to be a big fan of On." And, uh, some of our friends in Switzerland noticed as well, and Switzerland is a small place, so they said, "Hey, you should have dinner together." And, uh, this we did. So, um, so, uh, we met in, in Zurich in a little restaurant. Roger came in with base- his baseball cap deeply into his face. Um, he brought a friend as well, and we just had a great conversation over that dinner. We talked about, of course, sports, about innovation, about technology, because Roger has a lot of history in, um, in, especially in shoe development, but also apparel. Uh, we spoke about design as well, uh, popular culture, so we felt there was a connection, and he extended a challenge to us and said, "Hey, could you bring your unique patented CloudTec to tennis shoes as well?" So we met again two months later, and we showed him an outsole. We had a printed outsole that brought CloudTec in a hidden form factor into a tennis shoe. And, uh, two years later, he was actually doing his comeback in Wimbledon in, uh, in the, in the Roger Pro that had this, this, this sole, um, coming, uh, coming to tennis.

   3. HSHarry Stebbings38:31

      And can I ask, how did he come to be a shareholder? Did you say, "Hey, we want you to be a part of this, like, take advisory shares and be an ambassador"? How did the deal come about?

   4. DADavid Allemann38:41

      So we said, uh, at this, at this meeting in the lab, we said, "Hey, Roger..." Uh, or Roger said, "Hey, I would love to get involved." And we were super honored and said, "Hey, that's fantastic. But you know, you know, something like classic sports, uh, sports star endorsement, us giving money to you, that's not, that's not really On style because we've always been growing out of the community and, um, and that's not in our playbook. But how about not us giving you money, but you giving us money and becoming a co-investor and a co-entrepreneur together with us?" And to our surprise, Roger said, "Yes, that's what I'm going to do." And it has turned into a fantastic partnership and friendship where he now probably spends 30 days, 30 to 40 days per year with us here in On Labs working on products and, um, our, um, uh, we're completely aligned.

   5. HSHarry Stebbings39:39

      How impactful was it, Roger wearing it for the brand? Like, uh, h- I think he's obviously, and you'll agree, done a lot for the brand, but like, was it a boom moment with Roger coming on board?

   6. DADavid Allemann39:49

      Yes, definitely. I mean, um, when we launched... So I remember we launched, um, our collaboration with, uh, a big run through Central Park in, in New York, and of course, we were on morning shows, um, uh, we were doing the whole tour, and it was exploding. Now, um, so Roger, um, did a- an amazing... Contributed in a very significant way to the, to the, to the awareness for the, for the brand. And of course, also, there are millions and millions of people who love Roger, so one of the most, um, loved sports stars, probably, on the planet. And so that did a lot for On. At the same time, Roger is also very committed to build our second sport, tennis, with us. But Roger is also very much interested in the core running space, so we also talk a lot about next running shoe innovation, so it's really... We, we work together as co-entrepreneurs.

   7. HSHarry Stebbings40:51

      Can I ask you, what's been your biggest observation or takeaway from working with Roger? As you said, 30, 40 days a year there. What's a big observation or takeaway from seeing him in action off the, kind of, court and actually in the lab with you 30, 40 days a year?

   8. DADavid Allemann41:06

      I think Roger comes as he's perceived, um, publicly. So his public, his public image is very much reality, and so it's just incredible to see how Roger is super, super humble, but at the same time, super engaged, and he asks a lot of question, which is great because that pushes us.

   9. HSHarry Stebbings41:28

      I love that. It's so lovely to hear. I, I do... We mentioned kind of the, the increasing brand profile. Before we do a quick

9. 41:34 – 48:46

   Lessons on Brand

   1. HSHarry Stebbings41:34

      fire, I wanted to ask, brand is thrown around a lot, David, but On has a truly great brand, which is rare. What does brand mean to you in terms of what brand is?

   2. DADavid Allemann41:46

      I think, uh, a brand, in the core, is a community and an idea. And for us, On has always been not just about equipment for better performance of your body, but we feel running, but also hiking, other sports, are so much not just about doing something for your body, but they're doing something very much for your mind as well. Uh, I mean, I'm sure, Harry, then the last time when you went out for a run when it was raining, you probably... You, you probably have this sh- few seconds of hesitation, "Should I go?" But you're never coming back from a run saying, "Hey, I regret it, uh, because it was bad weather," because you're always coming back refreshed, a little bit more optimistic, probably a new idea, probably even a new small or even a big dream. And so, that's part of that, uh, that claim that, that we use, "Dream On." So it's very much an, an, an, an, a condensation of our mission, which is to ignite human spirits through movement, so we feel movement, running, and...... the spirit are very much connected.

   3. HSHarry Stebbings42:57

      Is that what you want people to feel? When people hear On and when people go into an On store, what do you want them to feel?

   4. DADavid Allemann43:06

      We want them to feel that we very much care about product and t- innovation and the sports that it supports, but that it's more than that, that it's not just about reaching your new personal best, but that it's reaching the best of you. And so that it is about movement, yes, and about sports achievements, but it's very much about lifting your spirit as well.

   5. HSHarry Stebbings43:32

      You've gone through an incredible brand journey. What do you know now about brand that you wish you had known back in 2009 at the very beginning?

   6. DADavid Allemann43:40

      We built, uh, the brand very much as a grassroots movement because we, we had to. So we, uh, had very humble and nimble beginnings, and that also we continue to do that, so we try always to operate nimble. Probably, um, back then, uh, we probably waited a little bit long until we started to invest into On being, um, bigger out there and being... also having this cultural relevance. And so the moment where we s- you switch from building a grassroot-level brand to then also building broader ba- brand awareness, that's something that we probably should have started a little bit earlier. Now, Roger definitely helped, and we're very much working on bringing big moments to our community to also let the world know, um, what we're trying to do.

   7. HSHarry Stebbings44:37

      Do you wish you'd raised a lot more venture capital or just capital earlier to invest in that? Or actually, do you think that you benefited from not having tens of millions of dollars to invest early and it was better to be leaner?

   8. DADavid Allemann44:49

      It's interesting. Uh, our, uh, American friends always told y- us, "You're a... you're so European," and our Swiss friends told us, "You're so American," and so that probably, uh, describes our DNA, right, at the, at the brink of that, uh, very well. So we, we, we always wanted to grow very fast, but at the same time, we wanted to have durable growth and, um, be a profitable company as well. And so I don't regret at all that we always, um, drove that line because being a profitable company now, and at the same time, a growth company, I feel, is very good for On right now.

   9. HSHarry Stebbings45:30

      You mentioned brands. I'm fascinated. You know, you, you spoke earlier about the scene of running in the store and how you bring that to life. When you think about a brand that you most respect, other than On, obviously, what's the brand that you most respect and why?

   10. DADavid Allemann45:45

       If I would ask, uh, my, uh, friends at On and my team around me that, uh... they would say, "Hey, David loves Apple." Um, so to this day, um, most... all computers at On are Apple. And, uh, so I've been a, I've been a big Apple fanboy from the very start, and I'll tell you why. First of all, I feel Apple did an amazing job in reframing what a computer is from the very beginning, so bring together the technical innovation with design and the human aspect of it. And if you think back, it unfortunately doesn't have it today anymore, but the breathing light on a laptop that indicates that the laptop is asleep. Um, is that tech or is it design? And so I feel it's right at the, at the intersection. And so I think that's where magic happens. Um, same for scrolling on the iPhone. Remember that moment when you first saw the scroll on the iPhone?

   11. HSHarry Stebbings46:49

       Mm-hmm.

   12. DADavid Allemann46:49

       Is that now tech or is it design? It's that, it's that magic that happens. And then Apple... so I think that Apple built that combination, and I admire brands that are able to build innovation and technology, but then also that design layer on top of it to create magic. And then, of course, Apple built a great brand out of that as well.

   13. HSHarry Stebbings47:11

       Final one before our quickfire, but you mentioned that kind of the scrolling, you mentioned the breathing light. How do you retain simplicity, simplicity in products with expanding features, with more breathability, with lighter weight, with x, with, with y? How do you retain simplicity with time and with expanding features?

   14. DADavid Allemann47:31

       Hey, it's a, it's a, it's a... it's a big challenge, uh, as you grow. Um, we, as founders, probably spend 40, 50 days per year in the lab. And together with an amazing team, we're trying to always shave off again as well. So how can we... first of all, you try to make it more features, bigger, better, and then how do you can... how can you simplify down again? Because I feel that simplicity creates amazing products. I give you one example from the early days of On. So when, um, we created the Cloud, uh, still one of our most known shoes, um, an amazing engineer called Thilo, who is actually our head of design, asked, "Hey, couldn't we do a special lacing system that you don't have to, to tie?" It's a speed lacing. And he invented the speed lacing system, and it's so simple, and people love it, and that's a big part of the success of the Cloud.

   15. HSHarry Stebbings48:34

       I love that. I did not know that. That's so cool to hear. Listen, I want to dive into a quickfire 'cause I could talk to you all day. So I'm gonna say a short statement, and then you give me your immediate thoughts. Does that sound okay?

   16. DADavid Allemann48:45

       Sure.

10. 48:46 – 54:36

    Quick-Fire Round

    1. DADavid Allemann48:46

    2. HSHarry Stebbings48:46

       Okay. So you can have dinner with one person, dead or alive. Who is it and why?

    3. DADavid Allemann48:51

       That would be Cleopatra because I feel, um, there's not so much space anymore on this planet today to really explore something that you've never seen. So meeting Cleopatra would, to a certain extent, also mean space travel to a place very distant but what... which was big in innovation.

    4. HSHarry Stebbings49:11

       What do you know to be true that others do not agree with?

    5. DADavid Allemann49:15

       I feel 120% beats 80/20.

    6. HSHarry Stebbings49:19

       Unpack that for me. What do you mean? Going all in on one thing versus...

    7. DADavid Allemann49:24

       I feel doing something to perfection in many cases beats kind of optimizing for efficiency, especially when it comes to product. Not always true, but as somebody who's very much focused on product, I'm more 120%.

    8. HSHarry Stebbings49:41

       What have you changed your mind on in the last 12 months?

    9. DADavid Allemann49:45

       Probably on the future of technology for humankind, and what... how AI is going to change our world.

    10. HSHarry Stebbings49:54

        H- how has it changed? Um, y- y- that's a cliffhanger.

    11. DADavid Allemann49:56

        I feel just, just AI was a very, very, um, abstract concept, and we always felt, hey, the, the more mundane tasks will be at some point automated through machine learning. And now there's this amazing pivot where we learn, hey, potentially some of the most creative functions will be disrupted through AI. And that's a, that's a, that's a, that's a, that's a 180 in a certain sense. And still grappling what that means for creativity as well, because, uh, we now have to think how can we potentially not just be creators but also great curators, um, that, that orchestrate AI.

    12. HSHarry Stebbings50:43

        Tell me, if you could be CEO of another company for a day, which would it be and why?

    13. DADavid Allemann50:49

        Uh, probably OpenAI. I would want to see what's, uh, what's coming.

    14. HSHarry Stebbings50:54

        I, I, I totally agree. Sam has a fascinating seat. If you could have one star adopt On as their shoe and brand of choice that hasn't yet, which would it be?

    15. DADavid Allemann51:05

        That hasn't yet? I, I, I alway- already wanted to say Roger because, I mean, that's been a dream partnership. Uh, so I would say it can't be one person, but it has to be the people who are really passionate about running and the running culture, but also very much in a creative sense, that should adopt On.

    16. HSHarry Stebbings51:30

        Tell me, who's your mentor, and what have you learned from them?

    17. DADavid Allemann51:34

        I think, um, the, the team at On has very much been, uh, my mentor over the last years. And we have a great, um, culture at On, amazing people, and we challenge each other a lot, um, uh, also among the founders, the partners, the team overall. So, I think we grow through that challenge. It's not always easy, so you also have to, you have to be willing to expose yourself. You have to willing to let go as well. So it's not always easy, but it's a great mentorship in the team.

    18. HSHarry Stebbings52:09

        Penultimate one. You mentioned one near-death experience earlier when the factory shut down and went broke. What's another near-death experience for you from the journey which really stands out?

    19. DADavid Allemann52:19

        Actually, nothing. So, um, On over the last years has been... it has been so rewarding and such a privilege to work with a team that is exploring and executing on so many dimensions. So we're, we're ourselves amazed how this is working. And just to give you one example, when we were coming back after COVID, we just had built, um, our office in Portland but also our own On laps here, and we had our opening party. And we realized that we left the old office with 200 people, and then we moved in with 700 people, so it was 500 people that had never been in a physical space together. And just to see what an amazing job our team did to hire the next generation and the next generation that brings the same culture and mindset to the team, it felt, hey, this is the team that we know despite the fact that we didn't know, um, two-thirds of the people present.

    20. HSHarry Stebbings53:28

        David, final one for you. Five years time, where is On then?

    21. DADavid Allemann53:34

        Where is On in five years, Harry? On in five years will be a global sports brand that still very much resonates with our core community, with runners, but also has built a second sport called tennis and is happening for you on the full body. So, uh, not only shoes, but very much also apparel because we want you to go out, to run, to move your body, but also to elevate your spirit. So that's the mission, and we hope that together with our community, we can achieve that.

    22. HSHarry Stebbings54:09

        David, listen. I have so loved doing this. As I said to you at the start, I have been the biggest On brand advocate, uh, not quite, uh, as famous as Roger Federer, sadly. Uh, but it has been a joy to do this, to tell the story, and you have been incredible. So thank you so much for joining me, David.

    23. DADavid Allemann54:26

        Harry, thanks a lot. Let me know whenever you're near. I will let you know when I'm near. And then, uh, we, uh... as the two countries that are not part of Europe, we should definitely meet.

Episode duration: 54:36