The Exchanges

Q What a coincidence. And your size, it's 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, presenting that to retailers, expos, was that difficult in terms of customer education, telling them about this fundamentally new shoe that looked so different?

A 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 and 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 decided to do something unconventional in the industry. Let's forget about all the decoration and the, you know, kind of 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 you need the running shoe bling because that's, that's gonna put you at a disadvantage and we did it anyhow. And so at first it probably was almost a littl…

AI assessment note: “at first it probably was almost a little bit an inhibitor, Um, but it made it”

Q 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?

A 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 labs 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 mindsets 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.

AI assessment note: “Actually nothing.”

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

A 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, uh, Acclaimed kind of positions in companies. And so first of all, we had to convince each other that we actually do this. And there's no better way 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 view got better and better, we had 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 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 Chip quit his job. Um, Olivier. Stuff to do, um, his, uh, his athlete coaches, and we really fully committed and then fully started at the beginning of 2010.

AI assessment note: “I quit my job. Casper Chip quit his job... fully started at the beginning of 2010.”

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

A Well, venture funding came a little bit later. We had a privilege that we had built a, 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, 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 were, we had some external co-explorers together with us, um, also Philip 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 U S also to the tech investor community. So we had actually, uh, quite a bit of, uh, tech investors who love the shoes, who came in very early, um, into on. And then, uh, a few years later, Stripe, Uh, uh, and, and venture capital from, from New York who's, 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 connect, uh, VC investor.

AI assessment note: “good friends who were able together with us to put a little bit”

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

A 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, uh, Acclaimed kind of positions in companies. And so first of all, we had to convince each other that we actually do this. And there's no better way 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 view got better and better, we had 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 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 Chip quit his job. Um, Olivier. Stuff to do, um, his, uh, his athlete coaches, and we really fully committed and then fully started at the beginning of 2010.

AI assessment note: “I quit my job... we really fully committed and then fully started at the beginning of 2010.”

Q 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. 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's existing works? Let's leave that versus no, we can innovate. How do you think about that?

A 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 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 add on are, are always resource. So we always question ourselves. At some point you probably find out, Hey, um, the solution that we find is probably not so far off from, uh, 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.

AI assessment note: “the solution that we find is probably not so far off from, uh, industry convention”

Q of experience respectfully in the shoe making business. When you think about the benefits of naivety, often we're told about entrepreneurs, it's good to be naive. 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?

A You know, 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 digital marketing agency, one of the first ones. And so we brought Olivier, the amazing athlete who has a direct connection from his big toe to his brain. And so if you give him a shoe, he knows exactly what has to be tuned. And so we brought an eclectic Casper who, um, who, 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 naivete that you mentioning, because if you know what's coming your way, you probably don't, we wouldn't have started in the first place.

AI assessment note: “if you know what's coming your way, you probably don't, we wouldn't have started”

Q 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 converted customers?

A So there were probably two other important pivot points for us. So we also, um, being a very much 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 we go out there and say, hey, now we, we did the, 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 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 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 2000 and, uh, and 12, I believe. And so we launched this D to C presence as well. And that was right. Infliction point when of course social started to rise. Then also the pivot from desktop to mobile. You remember iPhone, 2008. 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 three, 400, um, fund runs, community runs, uh, all o…

AI assessment note: “we also went out and said, Hey, we also want to have a direct connection”

Q Can I ask you, you mentioned the explorer mentality there. I love that. How do you think about, like, bloody everything looks like it's 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?

A 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 went broke. So they're 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, uh, got the materials out. And now it's assembled, we're assembling in another factory. That's not it. That was not exactly my assignment. Uh, but in hindsight, they're probably pretty happy that, uh, they didn't completely understood me right, but it's something that only an explorer would do to, to save, to save on essentially.

AI assessment note: “we had some difficult moments in the early days.”

Q Can I ask you, you mentioned the explorer mentality there. I love that. How do you think about, like, bloody everything looks like it's 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?

A 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 went broke. So they're 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, uh, got the materials out. And now it's assembled, we're assembling in another factory. That's not it. That was not exactly my assignment. Uh, but in hindsight, they're probably pretty happy that, uh, they didn't completely understood me right, but it's something that only an explorer would do to, to save, to save on essentially.

AI assessment note: “we had some difficult moments in the early days”

Q 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. 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's existing works? Let's leave that versus no, we can innovate. How do you think about that?

A 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 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 add on are, are always resource. So we always question ourselves. At some point you probably find out, Hey, um, the solution that we find is probably not so far off from, uh, 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.

AI assessment note: “the solution that we find is probably not so far off from industry convention”