The first version of the first shoe On was so ugly that the founders called it “Frankenstein,” David Allemann, one of the three founders of Swiss running brand On, said during a video conference on Wednesday, a few hours after the company’s IPO in New York.
Allemann remembers when over ten years ago his friend, former Iron Man pro-athlete Olivier Bernhard, introduced him to his shoe idea and another friend, Caspar Coppetti. “The shoe looked ugly as hell [and was] tinkered together. But when Caspar Coppetti and I ran [in] that, we said ‘Wow, that’s a unique feeling.’ [Similar to] riding full suspension bikes or carving skis, ”he says, describing a product designed for one purpose, in this case, running.
The ugly shoe that felt great to wear gave the three friends the opportunity to improve the running shoe offerings of Nike, Adidas, Puma and New Balance, and start a business. The three men co-founded On Holding AG in Zurich in January 2010 and quickly gained a base of joggers happy to pay around $ 180 a pair for premium running shoes.
The company emerged from the pandemic as a global brand with a loyal following and revenue of over $ 425 million in 2020, up 59% in one year. More recent results indicate further growth: On’s net sales for the first half of 2021 reached $ 343 million, up 85% from the same period in 2020. By 2020, On had moved 10 million pairs in the world. All of this helped boost On’s visibility and lead to its IPO. On Holding’s shares began trading on Wednesday. At the end of the day, the show company had a market cap of around $ 10 billion. The list gives the founders a collective net worth of nearly $ 1.7 billion.
Based on Thursday’s close, Olivier Bernhard’s stake in the company stands at $ 623 million, while David Allemann and Caspar Coppetti have stakes of $ 567 million and $ 579 million, respectively. . Not bad for a shoe that started life, as Bernhard claims, from “pieces of a garden hose” he had “stuck” under an old pair of competitive running shoes.
On Roger, and sneakers
The sales, the sight of these new shoes everywhere, and a central idea – to get rid of vulcanized rubber and redesign a shoe around the takeoff and landing point of the foot – also caught the eye of the most famous man in town. Switzerland, Roger Federer, 20 times Grand Slam tennis star.
“Switzerland is a small country,” says Allemann. “At one point he called us and said. “Let me buy you dinner. And so we had dinner together [and] he said: “I am a huge fan of your product, everyone around me wears them.” We said, hey, why don’t you become a joint venture with us. We want to have a lot of your time – if you’ll allow it – because I think we can do great things together. Fortunately, he said yes. He invested his own money in On. And he spent 20 days in the lab with us developing the professional tennis shoe.
Federer, who knows better than anyone the size, power and reach of the gigantic global sportswear giants, appreciates the intimacy of the product and its relationship with On. “They are smart, really nice people, passionate about what they do.” Plus, he adds via email, “they’re incredibly nimble – they’ve adapted so quickly to the pandemic and the need to move into e-commerce.” It looks like a harmonious relationship. Federer says: “We work closely together on product design. They really listen and they want to get as close to perfection as possible. “
For Federer, developing tennis shoe technology was a great way to get past his containment in the event of a pandemic. He says Forbes, “It’s amazing that this wonderful company is headquartered so close to my home. Because the pandemic has forced me to stay home so much over the past 18 months, I have had the opportunity to work with them much more than usual. ”
In 2019, On was announced that Federer had invested an undisclosed amount in On. The company describes Federer as a “friend and partner” who “spends many days with us in the On lab working on his namesake sneaker franchise and competitive tennis shoe.” The size of Federer’s stake would not be confirmed, as it falls below the 5% threshold that requires public disclosure; Federer would not comment either. Sportico estimated its stake at around 3%, worth around $ 300 million.
We are the brainchild of Bernhard, 53, six times Ironman champion of the green hills of the Swiss Alps who, in 2009, after the end of his career, felt that something was missing from his shoes and therefore began to experiment. His eureka moment came after gluing pieces of household material to the sole of the shoe to accommodate what he called the “shear forces” of running, improving landing and direct thrust with every step. Bernhard described the ubiquitous vulcanized soles used in most running shoes as a “dead mattress” and said that over the past 10 years, an “engineered solution” to a running problem had been developed.
Friends Caspar Coppetti and former McKinsey staff member David Allemann joined us a year later in 2010 to grow the business beyond Bernhard’s original idea. In the years that followed, We found a place to serve fitness enthusiasts looking for a high performance running shoe, but also what the company describes as the “lifestyle consumer obsessed with.” culture ”more likely to integrate environmental and ethical concerns into their purchasing habits.
This particularly resonated with American customers. While its sneakers are sold in nearly 60 countries, about half of the sales go to Americans. An explanation why? “Word of mouth,” Bernhard says today. Adding that “If it hadn’t been for the strength of technology, it would have been impossible.” But the combination of an innovative product, sold at a higher price both online and in higher-end fitness stores, helped On to ride a wave of sales for those who hoped that by spending a few extra dollars, they might better burn calories made worse by hours of confinement on the couch.
We are certainly not the only one to benefit from it. While Covid closed gyms across the country last year, millions have turned to online workouts at home or hiked the running tracks. Biggest winners included Peloton, the cult of $ 2,000 exercise bikes, treadmills and rowers, and its now billionaire CEO John Foley; Beachbody and its now billionaire founder Carl Daikeler, and iFIT, the parent company of NordicTrak, which is preparing for its own IPO, and its billionaire CEO Scott Watterson.
None of On’s founders – or its top investor – are billionaires yet. But we are fixed on the road ahead.