Over the course of 16 years, David Allemann, cofounder and co-CEO of On, helped build a $4 billion sports brand with a garden hose, a Roger Federer dinner, and a young designer who watched a Halloween YouTube video. But he says the defining decade for On is still ahead. He breaks down what the first-of-its-kind LightSpray robotic process says about On’s innovation philosophy.
This is an abridged transcript of an interview from Rapid Response, hosted by the former editor-in-chief of Fast Company Bob Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode.
On has been an amazing growth story, the lead player in a new generation of athletic footwear and apparel companies. Is that how you see On, as the next big global brand? You started with a unique sole design, which is also the way Nike started with its waffle shoes. What is your plan?
I think the plan is to be the most premium global sports brand, really based on innovation but also on design. In the end, it’s about making sure that people are excited about sports, that they love to go out. I was out running along the Hudson [River] this morning, and it was so inspiring because there’s such a big group of runners out there. I think when you move, whether that’s running or something else, something happens to your mind as well, and that’s really important for us. Our mantra is “dream on,” and that encapsulates it.
The legacy players in this space didn’t seem to see the competition rising that you’re part of. Nike’s struggling. Adidas seems to be finding its way a little bit. There are the strivers like New Balance and ASICS, and then there are newer players like you, like Hoka, even apparel brands like Tracksmith or Bandit. When you look at that competitive landscape, is there a specific spot that On holds? How do you think about where you fit in that ecosystem?
When we started in 2010, we saw an opportunity to really innovate with a radical new idea, which was CloudTech. It’s not just about having foam, a mattress underneath your foot, but really engineering the run and changing the feel of running.
So we always came from an innovation space, and I think that’s the unique approach that we keep to this day.
I think it also coincides with a radical shift, that sports used to be, probably when we started, still something that you did on the weekend. Now sports and sports lifestyle have moved to the center of society. Back in the day, you had what I would call the leisure class. It was very much about consumption. It was about owning things.
But that has changed over the last 15 years, hasn’t it? I think there’s a new movement class coming along. Sports has moved to the very center of society. It’s the last live moment. It’s what brings people together, and it’s a lot more about experience. It’s about vitality. It’s about longevity. Health is the new wealth. And I think whenever society changes, that creates a big opportunity for absolutely new brands that respond to that and become big.
In the field you’re in, there are so many players. They get inspired by each other. They steal each other’s ideas. Does it drive you crazy that someone else is always trying to track what you were doing?
No, I think that’s exciting because then you always have to push yourself to create what’s next. If you think about the whole luxury space, the whole scarcity model, high-price model, has over the last two years probably lost tens of millions of consumers who are looking for something that’s more accessible, and that’s a huge opportunity for premium products as well.
You have these relationships with celebrities. You’re plugged in with Zendaya, who’s among this year’s hottest stars. Roger Federer is a coentrepreneur at the company. How did those relationships start?
A lot of it has been serendipity. When Roger posted from Roland Garros on his Insta in an On shoe, we felt that was an invitation to a date. So we went on that date, and that’s how the relationship formed. Then a little bit later, you probably remember Zendaya had her Challengers movie.
Yes.
And it was, of course, about tennis, and one of the characters was pretty much formed after Roger with his On shoes. She always had to tie up these On shoes because we had a special closing mechanism, and for her acting partner, she was always lacing the shoes. So that’s how she got to know On up close and personal.
And so that started to form this relationship. It’s been very organic.
With Roger, I understand you went to him and sort of pitched him, even though you didn’t have money for him.
We felt he first pitched us by putting On on his feet.
And he’s Swiss, as you are.
And he’s Swiss, and Switzerland is a small place. So we had some common friends. We went to a restaurant in the inner city of Zurich. He came in with his baseball cap pulled deep over his face, and we hit it off and had a great evening. He was challenging us. He said, “Hey, you’ve been such an amazing innovation player in running, really radically changing the feel of running. Could you change the feel of tennis as well and bring innovation to a tennis shoe, too?”
And that’s what we did. Three months later, we had him at our innovation space, which we called the On Labs in Zurich.
It was a good move on his part, too, because instead of taking money, I understand he took equity, and that has worked out very well for him, given how the company has grown.
I think it worked well. We were a seven-year-old company back then. We felt doing the classical model of just giving money to athletes, a classical endorsement model, wasn’t our way of doing it. We always try to innovate on everything, not just on outsoles but also in how you do the marketing model. So we said, “Hey, instead of us giving you money, why don’t you give us money?” And that worked out very well for everyone.
There is this race in athletic footwear to use more technology. Brooks created a special shoe to help Josh Kerr break the record for the mile run. How do you think about tech at On? I saw a video of this LightSpray machine that you’re using for a particular shoe, which is pretty cool. I think I have a—here’s the shoe.
Yes. Often there are 200 pieces going into the upper of a shoe. So it’s a very classical manufacturing method, with 200 steps until you have a full shoe together. And we had a young designer who had seen a YouTube video of somebody with a hot glue gun spraying a Halloween net. That was his inspiration, and he said, “Hey, if somebody can spray a Halloween net, could I use a hot glue gun to spray a shoe as well?” And he did that, and we had a very scrappy first prototype of that. It reminded us of that shoe where Olivier [Bernhard, On’s other cofounder] had put the garden hose pieces. Back then, we took a conscious decision to embrace a lot of risk and say, “Hey, it sounds crazy, but crazy is good because the night is always the darkest before dawn.” So we said, “Hey, let’s put a few robotics engineers, material scientists, and sports scientists around that designer.” And so we had a small attack team of five people that then came up with LightSpray, which is a technology where you have a robotic arm, and that robotic arm sprays a small filament in polygonic shapes directly on an outsole. So it’s not stitched on; it just melts with the outsole. And it collapses this process of 200 steps into one. This is a shoe that is sprayed by a robotic arm in three minutes.
When an idea like this comes to you, you must get lots of proposals for crazy new ideas. How do you decide what you’re going to invest in?
We have a whole pipeline process. So we probably have, at any given point, 50 to 100 ideas for what we could do. And then we have review meetings where we’re basically saying, “Hey, what is good to go?” We have stage gates and decide what goes down the innovation funnel.
That’s our standard procedure.