On athletic shoes: Olivier Bernhard and Caspar Coppetti

Swiss triathlete and Ironman champion Olivier Bernhard was warned not to challenge the goliaths in the sneaker industry. But, inspired by the cloud-like sensation of a prototype running shoe made with strips of garden hose, Olivier set out to make a new sneaker for elite runners. He initially tried to pitch the design to “big guys” like Nike and Puma, but they weren’t interested. He soon partnered with two fellow Swiss with backgrounds in branding, and gradually, their highly technical shoe found its way to the feet of top runners, and eventually caught the eye of one of the best athletes in the world: Roger Federer. When he became an investor, On transcended running to become a full-fledged sneaker company that in 2023, netted $2 billion in sales. This episode was researched and produced by Katherine Sypher with music composed by Ramtin Arablouei. It was edited by Neva Grant. Our audio engineers were Robert Rodriguez and James Willetts. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:45Guy Raz?

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• 1:30Guy Raz?

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  So they asked over 100,000 people their hopes and their fears and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI. Here it is. If everyone has access to something that can help them write the business plan, build the prototype, analyze the market, maybe even come up with the idea. What separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. If you travel often, you'll want to hear about this unprecedented offer.

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• 4:23Guy Raz?

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• 5:07Guy Raz?

  Visit mobili fuels.com for details. Hey, really quick before we start the show, we have an announcement about a really exciting new thing we're launching, a newsletter. And like our show, the newsletter is designed to be interesting, informative, inspiring, and most importantly, fun. It's 100% free. And to sign up, just visit guyraz.com. That's G U Y R A Z dot com.

• 5:44Guy Raz?

  So the three of you decide to start this company, but you say, here's the agreement. If one of us has another job, you're out. This is all in.

• 5:54Speaker 01

  Yes, we actually wrote in our shareholders agreement and it lived there all the way through the IPO. We put down this thing when if someone of us took another job or even like a side hustle or any income from any other source, we would have to give back our shares. We wanted to be fully committed. Our thing was, if we're going to fail, we're not going to fail for lack of effort. We're going to put it all on the line and see how far we get.

• 6:29Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:40Guy Raz?

  I'm Guy Raz, and on the show today, how a few strips of garden hose inspired a new sneaker called On, and how its founders set out to make it the number one running shoe in the world.

• 6:58Guy Raz?

  Athletic footwear is massive. The size of the category is somewhere around $150 billion. And the biggest players are also some of the most successful brands on Earth: Nike, Adidas, Puma, New Balance. But in recent years, an upstart brand called On has become the fourth most valuable footwear company in the world. On was only launched in 2010, and it was started by three guys with almost no capital and no experience in apparel. At the time, the shoe was developed by a runner for runners. And what made the On shoes stand out, and still stand out, was its design. They look like no other athletic shoe out there.

• 7:43Guy Raz?

  The original design was inspired by a prototype that was literally a pair of Nikes tricked out with cut tubes of a garden hose that were glued to the bottom of the soles. The story of On is as improbable as any we've told on this show. Besides having no cash and no experience, the founders started their brand in Switzerland, a country better known for watches, bankers, and chocolate than apparel. But what the founders did have was their complementary skills. Olivier Bernhard had been a professional triathlete, so he knew something about the mechanics of shoes. Casper Coppetti and David Alamon spent a few years at an ad agency, so they knew about marketing and branding.

• 8:28Guy Raz?

  We'll hear from two of those founders, Olivier and Casper, in the show today. They both grew up in Switzerland in the 70s and 80s. Olivier, in a small town in the Alps that was perfect for all types of sports. And the sport he loved the most, it was running.

• 8:46Speaker 02

  I really recall, Guy, I really recall doing my first running race, a fun race, a 2K, so a little over a mile, race when I was five, you know, with maybe 10, 20, 50 other boys lining up. And then when the gun goes off, you hear, you know, the beat of your heart and the heavy breathing, the air in your hair, and obviously also the footsteps, right? All these noises, I really liked. It reminded me a lot of like horse racing, and I loved it.

• 9:17Guy Raz?

  Were you good from the beginning? I mean, were you faster than than most other boys around you?

• 9:23Speaker 02

  I was, yeah, I was. I think I was pretty talented. I was, I was always the smallest kid. I was, I was light, I was skinny. Spectators would always, you know, point at me and say, oh, look at that little kid, how fast he goes. And obviously that gave me that extra boost, you know, to, to pass another two taller guys.

• 9:42Guy Raz?

  And I guess eventually you, you would move on to, to triathlons, and that, that would become your focus, which we'll talk about. But when you were around 18, there's, there's national service requirements in Switzerland, and I guess you, you, you had to do some kind of government service around that time for a year or so. What, what did you do?

• 10:02Speaker 02

  Oh, just a clerk, you know, at, at the office.

• 10:05Guy Raz?

  Yeah.

• 10:06Speaker 02

  And even after that apprenticeship, three years, I worked, and funny enough, it was for the tax offices.

• 10:13Guy Raz?

  The tax office?

• 10:14Speaker 02

  Tax office, yeah.

• 10:15Guy Raz?

  That sounds really exciting.

• 10:16Speaker 02

  And, but the funny thing is, I didn't do it because of taxes, because I didn't care so much about the numbers and anything. But the system was set up that I had to travel, and I, I could travel by bike. So I could train at the same time I was working.

• 10:29Guy Raz?

  Oh, wow.

• 10:30Speaker 02

  You know, usually they, they, these people would come up, you know, in high suits and ties and everything, and I would come with very tight cycling shorts and shirt and sweaty sometimes because it was up steep hill. But very different and after half a year they got used to it and they thought this is really special and obviously I still hear this story, you know, after doing that for a year or two and then becoming professional and becoming a world-class athlete, they referred to me and saying, oh yeah, of course, I remember you, you came by with the bike and it was fun. We always said you had this talent, right?

• 11:07Guy Raz?

  Yeah, I mean, you actually went pro, like you became a professional triathlete and you would go on to win a number of Swiss championships and even world championships in a few races. And I guess you also, you would eventually do that like crazy long-distance version of the triathlon, the Ironman. And just remind me, the Ironman, I think it's a marathon, it's like a two-and-a-half-mile swim and like a 10-mile bike ride or something or a 50-mile bike ride?

• 11:38Speaker 02

  It's a 112-mile bike ride, yeah, and a marathon at the end.

• 11:43Guy Raz?

  112 miles and a full marathon?

• 11:46Speaker 02

  Yeah.

• 11:47Guy Raz?

  It's insane to me. It's totally insane.

• 11:50Speaker 02

  Guy, it's also insane when I look at the number now, you know, being 56, I think, wow, how could I ever, you know, how can someone even do that? And I did it in not under eight hours, but very close to eight hours.

• 12:03Guy Raz?

  And were you able, when you really were fully in the world of professional competitions, were you making like significant money? Like, can you, I mean, at the level you were competing at, can you make enough money to really sustain a decent life?

• 12:21Speaker 02

  It's always a question, right, what's a decent life and salary? But hey, at the very beginning, the first three years, I remember, it was enough money to get me, you know, sign up for the next race.

• 12:33Guy Raz?

  Right.

• 12:34Speaker 02

  Pay for the flight and hotel. But later on, you know, obviously I got to make some money, but hey, it's not the big numbers, but that's not why I, you know, decided to become a professional athlete. And I think still now, triathletes don't decide to, you know, become a professional athlete because there is high money involved.

• 12:53Guy Raz?

  Right, right. It's obviously about something much bigger. All right, I want to turn to Casper here because I know you've been sitting here quietly. I know you were also born in, I believe, in eastern Switzerland and maybe not that far from where Olivier was born.

• 13:11Speaker 01

  Yeah, I grew up in a small town in the Swiss Alps, maybe 3,000 inhabitants. Actually, about maybe 20 minutes as the crow flies from where Olivier grew up.

• 13:21Guy Raz?

  And I guess, just like Olivier, you were also really into sports. But for you, I think your thing was snowboarding, right? And again, at a pretty elite level. Like, as a teenager, I read that you were competing in races all over Switzerland and even beyond, right?

• 13:38Speaker 01

  Yeah, at 14, I was already sponsored and I was traveling to races across Switzerland and some in Europe as well. And that just gave me a great sense of independence. And I obviously had a lot of influence. Everybody else was much older. It was a pretty wild scene back then.

• 13:56Guy Raz?

  But I guess when you reached college age, you decided that you didn't want to focus on being a professional athlete, right? Like, you decided to go into, to study economics, to go into business.

• 14:07Speaker 01

  No, I wanted to be an entrepreneur. I mean, I knew that probably around 14, 16. I'm very independent minded and at the same time, I have a lot of ideas.

• 14:17Guy Raz?

  Yeah.

• 14:17Speaker 01

  So, you know, it came natural. Maybe it helped that my dad was an entrepreneur.

• 14:22Guy Raz?

  What did he do?

• 14:23Speaker 01

  Well, we had a family business, like a midsize enterprise, maybe 800 people or so. And we manufactured machinery for injection bolting, plastic injection bolts.

• 14:34Guy Raz?

  Oh, wow.

• 14:35Speaker 01

  Airline parts, swatches, CD ROMs, stuff like that.

• 14:41Guy Raz?

  And that was a business he started?

• 14:43Speaker 01

  That is, my grandfather started it.

• 14:47Guy Raz?

  What happened to the business?

• 14:50Speaker 01

  Yeah, this was in the early 90s. It was a pretty dramatic time for Swiss machine manufacturing. There was a global recession. And basically, what then happens, like, they ran out of liquidity. And we had to sell the business and the factory for nothing. They gave the business away. But before, they literally invested all our family fortune to keep it afloat.

• 15:18Guy Raz?

  So, did your dad recover? Does he ever recover financially from that?

• 15:22Speaker 01

  No, he didn't.

• 15:23Guy Raz?

  Wow.

• 15:24Speaker 01

  That was pretty, yeah, it was definitely tough times. There was definitely a moment, and I remember I was 14, when my dad and I went out for lunch one day. And he said, "Look, you'll have to make your own fortune. Go find your own luck." You know, that was a tough moment, probably for him as a dad. It was definitely tough for me. But it gave me a lot of drive to... And also, it was, in a way, liberating, because I was like the oldest son in the family. So, I was kind of set up to take over the business at some point. And that just felt weird to me, because I wanted to have my own thing and do my own thing and succeed on my own.

• 16:06Guy Raz?

  What an amazing experience to have with your dad. I mean, having seen this huge business, and then it just collapsed. You're 14. I mean, did it dramatically change your family's lifestyle?

• 16:23Speaker 01

  I mean, definitely. I mean, before, you know, we were very comfortable. Definitely, money became tighter. It definitely was tight during my studies.

• 16:32Guy Raz?

  Tell me how you... I believe you were 21 when you met Olivier. How did you meet him? Because he was, he's a few years older than you, about seven, eight years older than you. He was already an athlete when you met him. How did that happen?

• 16:48Speaker 01

  So I was a working student. I had to finance my studies myself. And so I worked as a journalist. And I covered sports events because that was my passion. And at one point, Ironman Switzerland asked me to be their head of PR. And I had to learn. I didn't even know what Ironman was.

• 17:07Guy Raz?

  This is an Ironman race in Switzerland?

• 17:09Speaker 01

  This is an Ironman race in Switzerland, here in Zurich. And that's how I met Olivier, because Olivier was the star at the race. And he would always win it. And so we obviously had to work together. Olivier asked me, hey, do you want to be my press agent? And I was like, sure, you know, because I mean, you know, there's a lot of synergy there. You win the race, I can help you with that. And I know all the media. And then a little later, he asked me, well, do you want to be my agent? And I'm like, well, I have no experience. I'm 21. Yes, I'm a business major. But yeah, this is probably a bit out of my league. And you were like, I think you can do it. And I remember somehow I said yes.

• 17:51Speaker 01

  And we drank a glass of wine together at the lake. And we literally, like, because none of us drank at the time. We both were too drunk to discuss any business matters. We had to get together the next day to continue our discussion.

• 18:08Guy Raz?

  Olivier, what, I mean, you were, let's say, 28, right? 29 when you met Casper.

• 18:15Speaker 02

  Yeah.

• 18:15Guy Raz?

  What motivated you to go to this 21-year-old kid and say, hey, be my agent? I mean, he had no experience. Why would you entrust a 21-year-old kid with your career?

• 18:28Speaker 02

  I think it's a red thread that goes through my life. I love, like, maybe like Casper, you know. I don't like to go the beaten path. And why should I go to an agent that knows everything? I want to know someone or have someone aside that goes different pathways, that approaches things in a totally different way. And sometimes, and of course, when we went, you know, to companies that have been supporting me, maybe for five, 10 years, and then this 21-year-old showed up. Often, I got a call afterwards and don't ever come again with this 21-year-old. Why? He's useless. No, he's not useless. He's the one guy I believe in and I trust. And we will, you know, he's my agent. So you have to deal with it.

• 19:10Guy Raz?

  Wow. So Olivier, you hire Casper, you put him on retainer. And his job was going to be to negotiate contracts and sponsorship deals on your behalf? That was going to be his primary job? And to get you press coverage?

• 19:25Speaker 02

  Exactly. These were the main two roles. Yeah, exactly.

• 19:28Speaker 01

  Yeah, Oli was a big deal at the time. So I was lucky. My job was pretty easy. I mean, the contracts kept coming and all I had to do was type them up and get them signed. But at the time, Olivier would be on the Sunday, like the Sports Center of Switzerland. He would be a regular guest there. And that was obviously attractive for sponsors.

• 19:50Guy Raz?

  Meantime, Olivier, actually, I have a bunch of questions for you. But at one point, I mean, during your career, I think this happened in 1998, you win the duathlon world championships. And then you get tested, as drug tested. And they find that there's a banned substance in your system, like a tiny amount. And you appealed this. This was like, you basically were like, I never used any banned substances. It was probably a naturally occurring thing. But you actually appealed this and won.

• 20:30Speaker 02

  Absolutely. It was probably my toughest moment in life, still now, being 56. But for sure, as an athlete, because as Casper knows, it always meant a lot to me to be a role model.

• 20:43Guy Raz?

  Yeah.

• 20:44Speaker 02

  But I would try to work with the governments, associations that actually accused me of using substances. I was reaching out and said, I need your support because I only know that I haven't done anything wrong. But let us find out together what went wrong and where.

• 21:03Guy Raz?

  Because you were basically saying, if I am accused of doping, that's...

• 21:09Guy Raz?

  That obviously is going to ruin my career and my reputation. And it sounds like you really cared about those things.

• 21:15Speaker 02

  No, absolutely.

• 21:16Guy Raz?

  And you want to fight against this because from what I understand, the test was like, the amount they found, the trace amount they found in your body was so marginal. Your argument was, which would be proven correct, was that it's a naturally occurring substance in your body and you just had a slightly elevated amount because of your training.

• 21:34Speaker 02

  Because of training and diet, that was the outcome. I was trying to work with a doping laboratory and at the end, I think it was 195 urine samples. And, you know, it was randomly taken. I mean, I did my training and then, you know, the guy just says, pee now.

• 21:52Guy Raz?

  But you were cleared, which was probably an amazing feeling.

• 21:55Speaker 02

  Absolutely.

• 21:55Guy Raz?

  Having been, living under this cloud for almost a year.

• 21:59Speaker 02

  Hmm. It's, it's, it's still a tough time to look back, you know, I'm over it now, but I don't think it was so much liberating or such a happy day, even if I was, you know, even if I was given the freedom to race again. But the day when I was like freed from, you know, being accused, you know, I was bashed for many weeks and months. And also when I was trying to, to resolve it or actually prove it, it's still, you know, some media would still keep bashing me and hey, that's life, right? It was a big learning I could have done without, but I think still it was, it was, it was great to go through that.

• 22:39Guy Raz?

  Yeah, wow.

• 22:41Speaker 01

  That was actually the first assignment for me as this press agent, like basically, how do we make sure that like this makes the front page? And we managed to, to get the, the story about him being cleared into pretty much every newspaper. We went on, on Swiss national TV. So that, that was, I think, the, almost the foundation for, for this trust relationship that, that we developed over, over the years later.

• 23:08Guy Raz?

  Yeah, yeah, I imagine. And, and then meantime, Casper, I mean, you were also pursuing your, your academic career and then, then the professional career, right? I mean, so there's like, There's your lives kind of go off eventually into separate tracks, right? Because Olivier, you continue to compete and Casper, you're working towards a PhD in economics. And I think you also started working at a consultancy at McKinsey and then eventually at the ad agency Young and Rubicam in Zurich.

• 23:38Speaker 01

  Yes, that was a lot of fun. You know, these were the days when we would say, well, advertising is the most fun you can have with your clothes on.

• 23:47Speaker 01

  But it was it was great for me because working in a creative environment, I was the head of strategy there. And it was a fascinating time because it was the time when digital emerged and all the disciplines started coming together. But it was also a great apprenticeship into how creative thinking works and how design works.

• 24:08Guy Raz?

  Meantime, Olivier, as your career starts to wind down, because at a certain point your body just cannot, like as we age, you just cannot compete at a certain level, right? I mean, it's that just happens, it's just nature. So what was the, I mean, as you started to think about retiring, right?

• 24:29Guy Raz?

  You know, I'm sure there was some minor injuries or maybe more than minor injuries. There's a lot of Achilles issues and plantar fasciitis. I mean, you go through a lot, you put a lot of strain on your body. When you started to think about retiring, you're married, you've got a family now. What were you trying to figure out what to do? I mean, you were coaching athletes. Did you think, OK, maybe that's the career I'll move into?

• 24:52Speaker 02

  Many things. I mean, I had my coaching, but I always knew that that's not going to last longer than 10 years. I mean, again, I need change and I and I realized throughout my career that not everyone, you know, sees running as a D. You know, a lot of people struggle with running. For me, it was like a game every time I put, even if it was a, you know, a race, a triathlon, managing before running a marathon, it was still playful. It sounds strange, but I found out only later in my career, maybe when I was close to 30, that a lot of people struggle with running. And I wanted to find ways, how can I infuse and, you know, get my passion, I have for

• 25:36Speaker 02

  running and the ease for running, the liberation I feel when I go on. How can I infuse people with this sensation?

• 25:44Guy Raz?

  And now, I think, comes kind of a pivotal part of the story because at this point, Olivier, you're living in a small town in Switzerland and this guy you know, this is another runner and an engineer, I think his name is George, he calls you up out of the blue and he says, he has an idea of like a new, a new kind of sneaker, is that right?

• 26:09Speaker 02

  Exactly. George calls me from Zurich and says, you know, I know you're one of the, I respect the triathletes, a great endurance runner, and everyone tells me you have a great sensation because I have a running technology, or he called it a running system, he called it back then, can you do me a favor and test it? Just send me one of your Nikes and I want to put something on it and let me know how much you like it.

• 26:34Guy Raz?

  What, he took your Nike and what did he do to it?

• 26:37Speaker 02

  It was a Nike structure, you know, itself, probably as you know, back then, these were monsters in itself already. And then he put on garden hoses, right? Pieces of garden hose.

• 26:47Guy Raz?

  Wait, sorry, a garden hose?

• 26:49Speaker 02

  Yep.

• 26:50Guy Raz?

  Like, he took a garden hose and he stuck it to the bottom of the shoe?

• 26:53Speaker 02

  Just pieces, just small pieces.

• 26:55Guy Raz?

  So it was like, like springs, like garden hose springs in the bottom of the shoe, kind of?

• 27:01Speaker 02

  Exactly. I looked at the shoe and said, no way, I'm not going to run with this monster. It looks ugly, it looks, you know, it's high like hell. And I waited till the sun was down and nobody could see me and I was lacing up the shoe one night and ran. And after 100, 200 meters, I said, wow, this is, this is really different, this is really different and I liked it different. It's not different in a disturbing way.

• 27:28Guy Raz?

  Wow.

• 27:29Speaker 02

  It's really cool. And I came back, I lost maybe, you know, he had put on, I think, 13, 12 pieces of garden hoses and I lost at least half of them. And I didn't even realize that I lost them.

• 27:41Guy Raz?

  They just, they just got unglued as you were running?

• 27:43Speaker 02

  Yeah, unglued, yeah.

• 27:45Guy Raz?

  All right, I want to just pause because obviously this is going to be a huge part of the story, right? But for you, running on, these are sort of garden hoses, pieces stuck to the bottom of the shoe, what did it, what kind of sensation did it give you? Like, the landing was softer, the gate was more spring-like as your foot left the ground? Like, what do you remember?

• 28:11Speaker 02

  It was totally fascinating sliding into that landing and not feeling the impact, how soft it felt. You know, I initially I came back to my wife and said, I felt like a cat.

• 28:26Guy Raz?

  Like a cat?

• 28:27Speaker 02

  The cat, yeah, I was like, you know, smooth, running, soft. I felt like I don't want to stop this run.

• 28:34Guy Raz?

  Yeah.

• 28:35Speaker 02

  Again, I came back and before even taking a shower, I was filling two papers of ideas, you know, how I would actually adjust the shoe, what's needed, what's good, what's not, and how we could actually, you know, create designer running shoes. And by the way, what happened then, what really made it made it the case for me? Again, I have had my Achilles issues for maybe three, three and a half years to the end of my career. And I've seen so many doctors and specialists and nothing really helped. And within six weeks, walking and running in the garden hose shoes since today, the Achilles issues never came back.

• 29:13Guy Raz?

  Wow.

• 29:14Speaker 02

  So I was full of inspiration and ideas and almost had a vision, how to take it to market.

• 29:19Guy Raz?

  Like, I mean, immediately or like within days or what? You thought, I want to make a shoe. I think I want to build a shoe.

• 29:28Speaker 02

  No, the idea was really to modify things and to bring it to a level that then we would go out and sell it to the big guys.

• 29:37Guy Raz?

  Yeah. You want to pitch this to companies like Nike?

• 29:41Speaker 02

  I did, and we did, we did. We did pitch it to pretty all, pretty much all the companies. We pitched it to Nike, Puma, Adidas, New Balance.

• 29:51Guy Raz?

  What did it, what did it look like? What did that prototype that you were pitching look like? Look like?

• 29:57Speaker 02

  It looked like a very simple, clean shoe.

• 30:00Guy Raz?

  With, with, with like garden hose springs on the bottom? Or did it look more like what an on shoe looks like today?

• 30:07Speaker 02

  No, not like an on shoe today. No, it was like we had engineered them so you actually could run three hundred, five hundred Ks with them. And hey, I don't want to talk badly about other companies, but I have been an athlete for the company, right? In Portland, at Everton, but they didn't want to, they didn't, I was an athlete, right? Running for their company, becoming world champion. They didn't even want to look at the technology, not even at the drawing. And again, all of them, all of them beside Puma said, no, thank you. And Puma actually invited us to their headquarters. And they, you know, to me, the CEO back then said, when we sent the shoes, he said, yeah, we sent, you know, three, five shoes.

• 30:53Speaker 02

  We're going to take it to the lab. And by the way, he initially said, you can have, you know, the numbers once we're done with the testing.

• 30:59Guy Raz?

  The numbers based to the, the, the results.

• 31:02Speaker 02

  Yeah, just the outcome, you know, what exactly, is there any difference or not? Or is it any good? What do they see? And then a very, you know, nice talk with him. And he said, look, I really think there's something to the technology, but Puma is not going the, today you would call it the maximism, you know, in shoes, we're going the other way. We really going to reduce midsoles.

• 31:23Guy Raz?

  Minimalist.

• 31:24Speaker 02

  More than minimalist. And walking out, I remember that he offered me to give the results, right, the numbers, but he wouldn't share it to me. So he only smiled and said, you have to find that yourself. And this was, this was really the moment in the car, driving back from Germany, when George and I said, let's do something with it. Even if we don't have a clue how to build a running shoe out of Switzerland, even if we have no clue how to actually, you know, bring this up in scales and everything, let's at least try ourselves.

• 32:01Guy Raz?

  When we come back in just a moment, how a pair of Garden Hose sneakers becomes an emerging brand with a name, a following, and a manufacturer. A manufacturer that at exactly the wrong time goes bankrupt. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 32:24Guy Raz?

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• 33:06Guy Raz?

  The agents bring speed and scale, and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off, that's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 33:51Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new expert-created business guide in your hands today. It's called Aligning for the Agentic Era: How AI is Changing Everyday Work. And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 34:36Guy Raz?

  If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built.

• 35:03Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2008 and Olivier and his design partner, George, have developed a new space-age looking sneaker, which they think could revolutionize running. But nobody is giving them the time of day. So Olivier decides to call up Casper, his old friend and former agent, for help.

• 35:26Speaker 01

  And I remember vividly, he said, "Hey, Casper, I invented this running shoe and I really need your help bringing it to market. You're a great marketing guy." And I said, "Oli, are you out of your mind? You will not stand a chance. This is a very crowded market. Don't risk the hard-earned money." I mean, I knew how much he had made in his career. I was like, "Well, yeah, you're not that comfortable. Don't do it."

• 35:53Guy Raz?

  Yeah. And by the way, just to be clear, you had a lot of standing to say that because you worked at Young and Rubicam and you knew how challenging this market was going to be to get into and how the massive ad budgets that Nikes and Adidas and Pumas of the world had. Like, it's a fool's errand, right, to try and enter a market like that?

• 36:15Speaker 01

  It was out of the question. This would never work.

• 36:18Guy Raz?

  Yeah.

• 36:19Speaker 01

  Olivier and George show up. And I remember, they took out this prototype shoe. And I was like, "Well, it's kind of interesting because you can clearly see the technology." At the time, no running shoes had any visible technology. And then I put them on and it was something that I had never felt before.

• 36:40Guy Raz?

  Yeah.

• 36:40Speaker 01

  It felt like walking on clouds. And I was intrigued. But then, you know, just because you like running in a prototype doesn't necessarily mean you should make a company out of it.

• 36:53Guy Raz?

  Meantime, Olivier...

• 36:55Guy Raz?

  You are determined to try and do this. So tell me what you and George and but what's George's last name, by the way?

• 37:03Speaker 02

  Bronzweiler.

• 37:04Guy Raz?

  Okay, and so what are you and George? I mean, none of the big shoe companies want to do this. So what in meantime, you guys said, we're going to do this anyway. So what did you? What was the next step?

• 37:16Speaker 02

  Just going to Asia and produce the shoe.

• 37:18Guy Raz?

  Right.

• 37:18Speaker 02

  We said we have to take some money, some funds. And it was really about designing, creating the shoe. And then obviously, once the shoe were produced, we produced the first batch. I think it was like 10,000 or 8,000 shoes we produced in Busan in South Korea.

• 37:35Guy Raz?

  What did you call the shoes?

• 37:37Speaker 02

  Back then, we had a different logo and a different name. It was G and L for Glide and Lock.

• 37:44Guy Raz?

  Glide and Lock, okay.

• 37:45Speaker 02

  Glide and Lock, describing the technology simply put.

• 37:49Guy Raz?

  And Casper, what convinced you to work on this shoe idea with Olivier? I mean, you're to at least help him out a little bit just because he's a friend?

• 37:59Speaker 01

  Yeah, first, first because he was a friend. But then I was, as I said, I was intrigued. And I think the idea just just kept coming. And then I got a pair. And so I took the pair on a run and running for me was always painful.

• 38:15Guy Raz?

  Yeah.

• 38:16Speaker 01

  Not like Olivier, I was not into running. I hated it. I was into the fun sports, extreme sports. I was a snowboarder. I was a mountain biker.

• 38:24Guy Raz?

  Yeah.

• 38:25Speaker 01

  And then also, I'm very tall. So I have a I always had an IT band issue. So I took this prototype on a two hour run. And it was fun. And the pain never came. I had to stop because I just couldn't run anymore. I was tired, but not my body was fine. And pretty much everybody that we gave the product to or the prototypes in early days that had injuries came back with like, wow, I don't feel the pain. And there was this moment where both Ollie and George independently approached me and said, in their own words, hey, it's not working out between Ollie and George. Casper, can you get involved?

• 39:08Speaker 01

  And so I made a pretty bold move and said, yes, I'm going to get involved, but without you, George.

• 39:17Guy Raz?

  Olivier, I know this is probably sensitive and it's all, you know, business is tricky and there's always. Personality clashes and it can be painful. But what was going on between you and George?

• 39:30Speaker 02

  I think at the end it was very simple. It's just we had a different idea how to build a business. You know, he was super busy building his businesses, having his companies already, very successful companies here in Switzerland. And it was all on me, right? Because I was his only employee. I was the athlete to go test the shoes. I was, again, I was the marketing guy. I was the sales guy. I was the accounting guy. I was doing pretty much everything. And I liked the challenge, but at some point I just said, hey, this is, again, it's not leveled, it's not fair, and it's not going anywhere.

• 40:07Guy Raz?

  So Casper, you used to agree to kind of intervene. And you went to George and said, I think it's better for you guys to separate. What was his reaction?

• 40:20Speaker 01

  George is a very generous person. And really what he wanted to do was to see this technology on runner's feet. So what we did is we agreed on a licensing agreement. But we also put a clause in there, luckily, that we could terminate the license agreement and purchase the patents outright. Looking back, it was a very easy and cost-effective way of starting a running shoe company because we didn't have to put all the money down to develop the technology. We could build on what was already there, what George and all he had developed.

• 41:02Speaker 01

  But it was still, from our perspective back then, it was still a huge risk because myself, our third co-founder, David, you know, we had really high-paying jobs.

• 41:15Guy Raz?

  You were, you mentioned David. This is David Alaman, who was a friend of yours, you brought him in. He was the head of marketing at Vitra, which is an amazing furniture designer. I think they have the license for like Eames.

• 41:27Speaker 01

  For Eames.

• 41:28Guy Raz?

  You brought him in. Casper, you said something. I know that you always intended to be an entrepreneur, but you had a really great job at Young and Rubicam. Did you, like, at what point were you comfortable quitting that job and pursuing this full-time?

• 41:46Speaker 01

  I wouldn't say comfortable. I was, it felt like jumping off a cliff. We really felt the risk was real and you know, in Switzerland, failure is not as accepted. You know, once you fail, it can remain a stigma for life.

• 42:00Guy Raz?

  Yeah. Different in the US, right? In the US, there's more of a culture of failure.

• 42:04Speaker 01

  Very, very different cultures, very different cultures. And also, you know, back then, like entrepreneurship wasn't a thing in Switzerland. Like, everybody wanted to go and work for UBS or Credit Suisse.

• 42:16Guy Raz?

  Right.

• 42:17Speaker 01

  And have a lifelong, have a lifelong.

• 42:18Guy Raz?

  It just sounds miserable. I mean, God bless them, but it just sounds miserable. Keep going.

• 42:23Speaker 01

  So, you know, the, you know, we actually, you know, the plan B can be a dangerous thing. And we actually brought in our shareholders agreement and it lived there all the way through the IPO. We put down this thing when if someone, someone of us took another job or even like a side hustle or any income from any other source.

• 42:40Guy Raz?

  Yeah.

• 42:41Speaker 01

  We would have to give back our shares. We wanted to be fully committed. Our thing was, if we're gonna fail, we're not gonna fail for lack of effort. We're gonna put it all on the line and see how far we get.

• 42:54Guy Raz?

  So the three of you decide to start this company, but you say, here's the agreement. If one of us has another job or like you've got, you're, you're out. This is all in.

• 43:04Speaker 01

  You're out and you have to, you know, your shares go to the other founders that are staying.

• 43:09Guy Raz?

  That's, that's like Russian roulette right there.

• 43:13Guy Raz?

  Or what's it called? Maybe that was the Mexican standoff. I can't remember what it was. It's one of those things.

• 43:18Speaker 02

  Yeah, but for me, I think it was a bit easier than for David and Casper. I, as an athlete, you know, I was used to put everything on one horse and I thought, this is actually great.

• 43:28Guy Raz?

  Wow. I imagine one of the first things you, you guys wanted to do, Casper, and maybe I'm wrong, is think about the branding of this thing, right? Because you have this shoe, these prototypes, you've got the licensing for the technology. The shoe is called GNL and, and that was not the name you were gonna use. You thought, were you thinking, this is not quite right?

• 43:50Speaker 01

  No.

• 43:53Speaker 01

  We came up with about eight hundred names. You know, coming from advertising, we basically asked all our copywriter friends to write them some ideas. And then Olivier had like Paw and Bear. And so we actually settled for a name and the name was Neon.

• 44:10Guy Raz?

  Neon, that's a good name. Neon.

• 44:12Speaker 01

  Yeah, we had like power, it said, it said new Neon. The neon color was like in high fashion back then.

• 44:21Guy Raz?

  I really, it's funny because I ask founders about the potential names for business all the time. You know, how'd you come up with Lululemon? And there's like twenty names before and you're like, oh, my God, that was a dumb name. That's a dumb name. That's a dumb name. Thank God you picked Lululemon. Neon's actually pretty good. It's not bad.

• 44:36Speaker 01

  Yeah, so for about a month or two, we were Neon. We even had a logo. And then David got cold feet and he was like, well, what if Neon goes out of fashion? And, you know, isn't it too cold? And I had this other name in mind that had come to me one morning out on a run where I came back. And in my street, there was a car parked from a production company, TV production company called ON Films.

• 45:05Guy Raz?

  ON Films, O-N Films, yeah.

• 45:08Speaker 01

  Yeah, and we had, we had for about half a year, we had searched for a name to say it switches you on. And duh, there it was in front of me, ON. It was like, well, that's pretty simple, maybe too simple. And that's how we became ON.

• 45:24Guy Raz?

  Okay, I'll get back to the name in a bit. But meantime, Casper, you had said to Ollie

• 45:34Guy Raz?

  that you thought this was crazy to go to build a running shoe company. And now you've not just left your company, but you're pursuing this idea. Why did you think, because this is like 2010, I think, right, at this point?

• 45:50Speaker 01

  That's, yeah, we incorporated on January 6, 2010.

• 45:54Guy Raz?

  What flipped in your mind where you were like, yeah, okay, let's take on Nike and Adidas and Puma and, you know, ASICS?

• 46:02Speaker 01

  Yeah, we did go to an event before we actually founded the company. And just basically, it was an Ironman event here in Switzerland. And just had about two, three hundred runners try the product.

• 46:18Speaker 01

  Nobody came back indifferent. People loved it or hated it, but it moved people. And that's really what you want. You want to have something that's differentiated and that that makes some people sing. And if you make some people swear, that's also good. But you know, you don't want to be caught in the middle.

• 46:36Guy Raz?

  It was polarizing. It was polarizing.

• 46:38Speaker 01

  It was totally polarizing, but it had a lot of energy. And literally, we went out and and we we went and met with Run Specialty retailers and went to events and sold out of the back of our cars. And and and we just got this tremendous response. Like, we never had a moment where people were not interested in what we were doing. The phones never stopped ringing.

• 47:01Guy Raz?

  I have to imagine that initially, you're you're trying to conquer the Swiss market, which is a, you know, globally, a relatively small market. But that's what you're trying to do at the beginning.

• 47:11Speaker 01

  Leguira, that's not that's not true, unfortunately. You know, you have to you have to understand, like, we come from the smallest country. So we knew on day one that we couldn't be just a Swiss company. So so we started out in six countries at once.

• 47:26Guy Raz?

  Oh, you did, OK. So how did you guys finance a production run? I mean, you know, George was the money guy, but now it's the three of you. You probably had a, you know, a good salary, a young in Rubicam. And and David probably had a decent salary from Vitra. And I know, Olivier, you were probably making very little money in the previous years because you were working on this shoe. So how did you guys have any financing to even do a a production run for prototypes?

• 47:53Speaker 01

  Yeah, so we each put the hundred fifty thousand in. And only didn't have the cash. So we basically took his effort so far into the company and then and and valued that at one hundred fifty. So so that's how we started. And, you know, something very fortunate happened.

• 48:12Speaker 01

  There's a large sporting goods show in Europe called ISPO and every year they give out an award. So we applied and we ended up winning the thing. And the first prize is you get the booth and you get a huge PR out of this event. And so we went to the show in January, literally like a couple of days after we started the company with, I don't know, five, six samples. And we left the show with over, I would say about half a million Swiss francs in orders.

• 48:45Guy Raz?

  Wow. From, these were, these are from small running shoe stores?

• 48:49Speaker 01

  From running shoe stores, from this potential distributors. And with those orders in hand, it was, it was quite easy to, to, to raise our first investment run.

• 49:00Guy Raz?

  Kasper, I'm, I'm curious about sort of the design aesthetic of the brand that you got. I read some more that you guys put together like a mood board of different images and different, even different brands that you were inspired by. Tell me a little bit about that process, about sitting around and saying, this is what we want this to be.

• 49:20Speaker 01

  Yeah, look, coming out of Switzerland based on a pattern innovation, the only viable strategy for us was to go premium, right? And, and you know, that's also what we admire. So on that first mood board, there was, there was an iPhone.

• 49:36Guy Raz?

  Yeah.

• 49:37Speaker 01

  There was a Neem's chair. There was an Arc'teryx jacket on there.

• 49:42Guy Raz?

  Arc'teryx jacket, Neem's chairs, like iPhones, yeah.

• 49:45Speaker 01

  Just very reductionist, great industrial design. And so we, we decided to put on a competition and we asked two shoe designers to, to design something for us. And then there was actually a friend of, of mine, Thilo, he's now our creative director, design director for, for many years. But we let them into the competition. And so the other two shoe designers, they came back with just a running shoe, just another, you know, like kind of plain vanilla. And Thilo came back with, with an on. It was so distinct, probably too distinct, like, like.

• 50:26Speaker 01

  That was almost a stigma in the early days. People were like, oh, I love your tech, but they don't look like running shoes. That's what the runner said. And then all the architects, fashion people, they're like, well, these shoes look amazing, but I would never run in them.

• 50:40Speaker 02

  I mean, one thing, maybe going a little deeper into, you know, these elements, one thing we have not mentioned yet, we were probably the first brand using plate, a plate in the shoe, we called it speedboard.

• 50:52Guy Raz?

  A plate that is in between the sole and the...

• 50:55Speaker 02

  Exactly, the element.

• 50:56Guy Raz?

  It's a rigid plate or it's a...

• 50:59Speaker 02

  A very rigid plate, yeah.

• 51:00Guy Raz?

  Very rigid plate, it's okay.

• 51:02Speaker 02

  You know, it's like sandwich. You know, if you have a soft surface, you should have, the next level should be hard to push off, then you have something soft in between, then hard again, soft. And so, looking at tarmac, what most people run on, then you need something soft. That would be our cloud tech, right? Our rubber elements. And then, to really make this work, you needed the speedboard. We called speedboard, it's this plate. And then we found soon enough that this plate actually makes a huge difference in performance of the tech and the feel.

• 51:36Guy Raz?

  I mean, one of the things that strikes me about, so, okay, Olivier, if you're gonna go to a race and you're gonna talk to other athletes, you're coming in with immense credibility and standing because you walked the walk, you ran the ran, right? So, it's not like some marketing guys coming to a race and going, hey, try our shoes. It's literally, it's Olivier doing it, which is a huge advantage. But at the same time, I have to imagine that it's not that easy to get runners to just try a pair of shoes because what if they get injured in those shoes? Like, that could really screw them up. So, how, I mean, what was it that enabled you guys to even just get runners to try them? I mean, I guess part of it was because they looked so weird, right? They were so unusual.

• 52:20Speaker 02

  Maybe that really intrigued a few runners, but it wasn't so much that the runners wouldn't believe and trust us, it was more the retailers. The retailers were the big hurdle. And Casper and I, we attacked the German, Austrian and Swiss market. I think it was year one and two, not very successful until I think it was Casper coming and saying, hey, all these retailers are actually, they are runners at heart. So why, instead of trying to convince them what our tech does and with a PowerPoint presentation, why don't we just bring shoes, we go run in their environment?

• 52:58Guy Raz?

  Run with them.

• 52:59Speaker 02

  Yeah, run with them.

• 53:00Guy Raz?

  Yeah.

• 53:00Speaker 02

  And that turned the thing around.

• 53:02Guy Raz?

  Our listeners can't see, but I'm holding up one of your models that I have. And I'm wondering, obviously, there's a function here, right? Like, this is functional here. But the design, the holes in the soles are also weird. I mean, I remember the first time I saw them, I was like, those are weird shoes. You have to stop and look at them. And I wonder if that was part of the design element, or were you just thinking, we got to make a functional shoe, this is going to be the best shoe that we think we can make. But did you also think, and let's make it look kind of weird so it stands out?

• 53:40Speaker 01

  We're a little bit offended here.

• 53:44Guy Raz?

  I mean that in the best way. I mean, the best possible way. It's like a liquid death or a brand that just stands out, right?

• 53:53Speaker 01

  Think about how far we've come from the garden hose, right?

• 53:58Speaker 01

  The hole is the function. That's the original patent where the element basically absorbs the shock and then collapses under pressure. It's indeed very fortunate that the shoes look so different and you can see the technology. Because what it does is like, you'll see it on someone's feet, you'll be like, what are these? And the person will say, well, these are the most comfy shoes I've ever worn. So it's contagious and then once you have them it's addictive. You cannot go back and do your regular running shoes. So it was the perfect formula for becoming a viral brand.

• 54:40Guy Raz?

  You know, one of the things that I'm curious about, because I know you win this award, right, at this trade show, this best new product. And from what I gather, at that point, people are telling you, you better get this on the market quick because you got the hype going, the strike while the iron is hot. When you went to China initially to get the shoes manufactured, from what I've read, you were told by people that your design drawings and your schemes were impossible to make these affordable. You could not mass produce these in a way that would enable you to sell them for $150 or $200, that you would have to sell them for like $1,000 to make your money back.

• 55:24Speaker 02

  Almost, yeah. No, absolutely. I went to China and sitting with these engineers, you know, having, I mean, around the table, four, five engineers at least, you know, 150 years of experience, they said, it's impossible. I said, yeah, what do you mean impossible? It needs to be possible to make these, right? You're the experts and then tell me what's not possible. They said, look, I mean, as you said, you know, maybe there's a way we can do it. And it's going to be very difficult. The tooling is going to be very costly, which is going to have an effect on the enterprise of the shoe.

• 56:04Speaker 02

  But again, I think, you know why I'm saying this? It was the first experience where I was, I mean, I was told many times before in different locations that things are not possible. But I think it's so deeply ingrained nowadays in the company that we only approach things that are impossible.

• 56:22Guy Raz?

  Yeah.

• 56:23Speaker 02

  If people are coming back, you know, after an initial idea or vision and people come back and say, oh, yeah, we can do it. I said, then we don't do it. Leave that to Nike, to Adidas, they can do it. Let's focus on impossible. As long as we stay with the impossible, we're not going to copy anything. We're going to be super special. We're going to be unique and we have to innovate to get there.

• 56:44Guy Raz?

  Casper, I read something that you said about the company early on. And I just think it's such a great insight into a business. And you basically said something to the effect of, when we started this company, it felt like the world ended at least once a week. That it just collapsed. Was it that stressful? Was it that tense?

• 57:06Speaker 01

  It was very stressful. You need to know, only and I, we're eternal optimists. But for a while, we did definitely run on fear. Basically, we had this one moment in January 2011. It was the first time, this is a year into the company.

• 57:28Guy Raz?

  And a year in, you're probably doing, what, a million dollars or less than a million in revenue?

• 57:33Speaker 01

  Yeah, we did a million in the first half year, which was obviously great. But it was the first time we were able to take a little breather. And we had a full day off-site that we granted ourselves to talk about the future. Because that's one of the things, as a startup, you're always torn between, am I working on the present, just basically boxing up shoes and sending them out, or sending invoices or what have you? Or am I planning the future? So we went on an off-site. And about a half hour in, we get a phone call from our Chinese manufacturing partner. And the factory went bankrupt.

• 58:10Guy Raz?

  The factory went bankrupt. How many shoes did you order from them?

• 58:14Speaker 01

  The full production for the season.

• 58:17Guy Raz?

  Like 20, 30,000 pairs?

• 58:19Speaker 01

  I think 30,000 pairs.

• 58:20Guy Raz?

  Wow.

• 58:21Speaker 01

  And the factory's bankrupt, there's police tape around, nobody can get in. And this is a week before Chinese New Year's, when everything shuts down for about a month. And we were basically, at that point, we were bankrupt. We were done. Because if that product didn't make it out of the factory and into our warehouse and to our retail partners, we couldn't pay the bills.

• 58:44Guy Raz?

  So when that factory went bankrupt, how did you rescue the shoes? I mean, presumably you paid for it. What did you do?

• 58:54Speaker 01

  To be honest, I think...

• 58:57Speaker 02

  Casper, David and I, till today, we have no clue how the shoes made it out of the factory, honestly. There must have been some money involved, but it wasn't ours.

• 59:07Guy Raz?

  Oh, you had you had like a local, like a, you had a local agent presumably in China, and you were like, come on, you gotta get these shoes to us.

• 59:14Speaker 01

  Yeah, he wasn't gonna get paid if those shoes wouldn't make it out of the factory. And you know, but you know, the thing was, it wasn't shoes, it was uppers and bottom units, but they were not assembled yet. So we had to find and train a factory in no time during Chinese New Year. So I think we paid the factory workers about triple overtime to stay longer. And, you know, the materials were dirty. It was, it was a mess, but we were fine. We were like, well, you know, we survived that moment. And then there were other moments. And we realized that the world doesn't end so quickly. And we also realized that we shouldn't ride the lows too low and the highs not too high. And rather than just

• 59:55Speaker 01

  having this yo-yo effect, basically just kind of be on this, on this steady incline. And it's, it's much better for our sanity.

• 1:00:04Guy Raz?

  From what I understand, Casper, I've seen you say, our intention, our goal was to build this into a $10 million company. That was your, that was your ambition?

• 1:00:13Speaker 02

  We succeeded.

• 1:00:15Guy Raz?

  You did. But was that really your ambition? Like, you thought, okay, we'll be, we'll be a very small niche shoe brand for mainly for runners? Was that what you were thinking?

• 1:00:25Speaker 01

  You know, this may sound naive, but we literally had no idea of the scale of this industry. We never did a business plan. We never did like a proper market sizing. All we knew was this is a big market. And literally, you know, coming out of Switzerland, like, we had very few role models. And we felt like, yeah, you know, maybe we'll make it, you know, I wouldn't say 10, but I would say probably 20 million was like, the end state. Yeah. So in a way, you know, we failed. We went much further, much faster. We didn't stop there.

• 1:00:59Guy Raz?

  When we come back in just a moment, On breaks into the US market and then catches the eye of one very talented tennis player. You probably have heard of him. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 1:01:21Speaker 03

  Hey guys, Danny Snyder here, up in Spokane, Washington. Now, I have listened to every single episode of How I Built This, and several of them many times, but the one I keep coming back to as a personal favorite is Gary Hirschberg and Stony Field yogurt. There are just so many times throughout his journey that you think to yourself, "A reasonable person would have given up then, and definitely then, and no doubt then." But he persevered, he pushed through it, and in the end, he triumphed. And as me and my wife have started our own business, something like that is just so inspirational to help you get through those early bumps and bruises. Thanks so much.

• 1:01:59Guy Raz?

  If you want to share your favorite episode of How I Built This, record a short voice memo on your phone telling us your name, where you're from, what your favorite episode is, and why, a lot like the voice memo you just heard. And email it to us at [email protected], and we'll share your favorites right here in the ad breaks in future episodes. And thanks so much, we love you guys, you're the best. And now, back to the show.

• 1:02:37Guy Raz?

  Hey, welcome back to How I Built This, I'm Guy Raz. So it's 2013, and OnSneakers are becoming popular among runners in Europe. But Europe is just one market. So to really break through, the founders have to establish the brand in the US. And you guys went to the belly of the beast. You opened an office in Portland, which is, I think a lot of people know this, it's the center of the shoe world in the US, obviously Nike's there, Adidas is there. And presumably, they weren't even paying attention to you, you were like a fly speck to them, they probably didn't even know who you were at that point.

• 1:03:14Speaker 01

  No, that's true. And you know, and this is such a big space, and we knew we could be successful without... Competing with them, you know, and frankly, you know, if you look at the Under Armour story, to try to compete directly with Nike is suicide. So we always tried to play our own game and we had very different tech, very, you know, much more premium than they are. And it served us extremely well.

• 1:03:40Speaker 02

  Yeah, I think it's also a cultural thing that I recall, you know, walking out the lawyer's office when we signed the contract in January 2010, David was walking out saying, so who are we going to attack, you know, first? Is it Adidas? Is it New Balance? I said, no, David, this is really, this is an endurance sport. Let's line up with the guys, watch them, observe them, learn from them, you know, it's going to take years till we figure out how to run the marathon properly of the 10K. And then at some point, maybe, you know, maybe we can, you know, have them in sight, close to the finish line. And now, not saying we're getting any closer, but no, it's fun. It's fun times. I think we're getting taken more serious nowadays.

• 1:04:23Guy Raz?

  When you entered the US market, from what I understand, you had some challenges with your name. I mean, the name was great, but then all of a sudden you realize that on, like for a Google search, you type in on and you're not necessarily going to hit running shoes. I mean, now you do, but then you wouldn't. And also, the stylized way that the logo looked, a lot of Americans thought it was like QC or...

• 1:04:47Speaker 01

  Literally, nobody can read the logo. So in the US, a lot of people say on clouds because on is too short of a brand. We actually, you know, buy the QC keyword on Google.

• 1:04:59Guy Raz?

  Oh, you got, oh, so if people type in QC on Google?

• 1:05:02Speaker 01

  Oh, yeah, yeah. I would say about a third of our traffic comes from QC, you know, joking.

• 1:05:06Guy Raz?

  Because people are typing, what are those QC shoes?

• 1:05:09Speaker 01

  Oh, absolutely.

• 1:05:09Speaker 02

  Absolutely, yeah.

• 1:05:11Speaker 01

  Yeah, we actually, we just, we just started writing on running on all our running shoes in plain type so people can actually know what the brand is.

• 1:05:21Guy Raz?

  Wow, and literally if you type in QC shoes into Google, you get a thing that says QC shoes, did you mean On?

• 1:05:28Speaker 02

  Yeah, exactly. But you know, having these two great experts next to me, you know, coming from advertising, you know, ending up like with QC and nobody can read On and all these things. Yeah. See, I trusted them, but.

• 1:05:42Guy Raz?

  You're thinking, I'm bringing the best guys, the heavy hitters into my business. And here they go, give this name with a QC.

• 1:05:49Speaker 02

  One thing this you know.

• 1:05:50Speaker 01

  To this, to this day, we about once a week, we get an email of someone suggesting a better logo for our brand.

• 1:05:59Guy Raz?

  But it is amazing that if you can, I mean, if you can build a product that is differentiated and is unusual and then performs, like the things that you think really matter, like the name and the logo, don't actually matter that all that much in the end.

• 1:06:16Speaker 02

  Probably, again, I think, you know, we're so convinced it's all about the tech. And again, at the end, they'll find out it's On, On Running.

• 1:06:26Guy Raz?

  I have to assume that what was really gonna tip, you know, be a tipping point was getting these shoes on athletes who are, would win races, right? Like, what was the first sort of big race? Or who was the first athlete who won something wearing the shoe that got you attention?

• 1:06:46Speaker 02

  The very first one was actually 2013. It was Frithik van Leeuwen, a Belgian triathlete, winning the world championship in Kona in Hawaii.

• 1:06:56Guy Raz?

  The, really, the OG, the main world championship, Ironman in Hawaii, yeah. He won wearing a pair of Ons.

• 1:07:03Speaker 02

  He was not only wearing a pair of Ons, he was running in a prototype. And I was praying, you know, and sweating like hell that the shoe is not gonna fall apart.

• 1:07:12Guy Raz?

  Yeah.

• 1:07:12Speaker 02

  Again, we have been there and it's only year three, right? And I have seen shoes falling apart with our tech. The shoe holds and he crossed the line first. And I think that was a big step for our company and just proved that the concept can, you know, overtake running in any discipline.

• 1:07:32Guy Raz?

  So basically, I guess around by 2013, you do become a $10 million company, at least in terms of sales. Your, your sales are $10 million. And were you, presumably you weren't yet profitable, or were you?

• 1:07:48Speaker 01

  2013 was our toughest year because we had, we did, we did the 10 million, but we had actually budgeted for 12. But long story short, 2014 was the year that we actually then broke our first profit and we've been profitable ever since.

• 1:08:03Guy Raz?

  It's amazing. Took you four years. At the time, did you guys primarily see yourself as a running triathlete company, like a company, a brand for, mainly for runners? Or did you see a future where you were going to be for different kinds of people?

• 1:08:24Speaker 01

  We were, we were going to be a running company and actually it pissed us off. But when somebody dared to wear our high-tech product industry with jeans, it really bugged us. You know, it's like buying a Porsche and going shopping.

• 1:08:39Guy Raz?

  You, you actually really wanted people just to buy them to run?

• 1:08:43Speaker 01

  Yes.

• 1:08:44Guy Raz?

  You didn't think of it as a lifestyle brand at all?

• 1:08:46Speaker 01

  No.

• 1:08:47Guy Raz?

  Not the first four years, yeah. Wow. I mean, of course, now today you would, again, if this was the business school case study, you would have said, of course, we thought of ourselves as a lifestyle brand from the beginning, but because that's where the, that's really where the, you know, their growth could come from. But, but at the time, it was, it was really a running company. So you thought that probably by 2015, 2016, you were thinking, we've built a pretty successful niche in the running market. I mean, I think, I think you guys, between 2012 and 2019, you sold four million pairs of shoes around the world, which is pretty great. I mean, that's a, you know, you're not going to own the running market at that point, but it's, it's, it's nice. It's a nice business.

• 1:09:28Speaker 01

  Yeah, we went from being like the number 15 running brand in the world to being number six or number five. And, you know, now we're four or three. And we could have just settled for that. But then in 2017, we started to hang out with, with Roger Federer. Yeah, that's probably a whole different story.

• 1:09:54Guy Raz?

  This is an important, this is an important turning point. Obviously, you are, you are compatriots. He's probably the most famous Swiss in, you know, in the world, Swissman in the world. So he would, but he was just wearing ons because he liked them or?

• 1:10:08Speaker 01

  Yes, exactly.

• 1:10:10Guy Raz?

  He wasn't a paid like endorser or anything?

• 1:10:12Speaker 01

  No, no.

• 1:10:13Speaker 02

  No, no.

• 1:10:13Speaker 01

  But we, we found out through pictures in, in the press.

• 1:10:17Guy Raz?

  You would see that your shoes on Roger Federer, he was just wearing them.

• 1:10:20Speaker 01

  Yeah, which was, you know, I mean, which was like.

• 1:10:22Guy Raz?

  Amazing.

• 1:10:23Speaker 01

  The coolest thing ever, right? And so, you know, Switzerland's a small place and through some common acquaintances, we reached out and said, hey, Roger, you know, we really appreciate you wearing our shoes. Can we send you a package with some of our latest shoes? So, you know, you don't have to buy them and, and, and that's how, how it started. And about a year or so later, um, we get a phone call from his agent and he said, hey, Roger wants to meet you guys.

• 1:10:49Guy Raz?

  I mean, you know, you're talking about, uh, you know, a Michael Jordan level athlete, right? I mean, Roger Federer, one of the greatest tennis players ever. What did you guys talk about?

• 1:11:00Speaker 02

  I recall for the first time he said, hey, I find you really cool and, you know, it's a Swiss brand and maybe there's a way, you know, we can actually partner up, right? And I, I reached, as we call, I looked at David and Casper and said, we don't have the funds, don't, let's not talk about this, right?

• 1:11:18Guy Raz?

  You're thinking, you're thinking he's like, hey, maybe I'll be the, the brand ambassador or something, right?

• 1:11:24Speaker 02

  Ambassador, right, yeah.

• 1:11:25Guy Raz?

  But which would, I mean, which could cost tens of millions of dollars.

• 1:11:29Speaker 01

  You know, I mean, I think we have to, to mention, I mean, Roger is the most sympathetic, nicest, curious, and he's an, he, everything you know about him, you know, if you meet him in person and you hang out, it's, it's, it's even more. I mean, it's, it's, it's very, very authentic. So we could tell he was interested in working with us, but we were not in a position to do business with him because at the time we were about 160 million in revenues. But that got us to an idea and we were like, well, and actually wrote, wrote, wrote this down in a letter that we sent to Roger.

• 1:12:08Speaker 01

  The first question was, when are you going to stop being a corporate slave and start being an entrepreneur? And then the second sentence ran something like, we cannot afford to pay you, but you could pay us. And it just led into this idea, hey, why don't you become a partner, an investor in the business?

• 1:12:29Guy Raz?

  And was he receptive right away?

• 1:12:31Speaker 01

  He was. It was a bit harder to convince the team around him. So basically, we wrote everything down on one page, literally our agreement fit on one page. And it had none of the usual clauses, like no minimum days that he has to spend with us, no licensing fee, nothing. Basically, we're going to work together on product, and if it works out, we're all going to be happy ever after.

• 1:13:02Guy Raz?

  So you were just saying, I mean, because he could have just said, all right, fine, here's your money, and then you would have never heard from him again.

• 1:13:07Speaker 01

  Yeah, and I mean, we could have not done a tennis shoe and not invested marketing. It was and still is built on trust.

• 1:13:16Guy Raz?

  Wow. I mean, it's really interesting because so many things going on. Now you're making a transition away from just being a running shoe, right? Now you're designing a shoe for a tennis player. A tennis shoe is very different. But then the other thing is, for Roger Federer to do this is actually kind of risky because normally he's just being paid to endorse a product, whether the company does well or not.

• 1:13:40Speaker 01

  It was risky on both sides. And I remember the moment when we shook hands. I woke up the next morning, I was like, holy crap, what have we done? We are on this nice track to becoming a leading running brand. But then with Roger coming aboard, it was clear we were going to be a sports wear brand. We were going to compete in the big leagues. And we were going to again be the small guys going after the very big fish versus we could have been like the mid-sized fish in a pond of other running shoe brands.

• 1:14:14Speaker 01

  And and that's when I was like, did we just make a huge mistake?

• 1:14:18Speaker 02

  Yeah, just for me, it was only one day I was questioning and I think for David Casper and I, we always experienced, we probably experienced similar things that next morning. But already in the afternoon, they said, let's create the best tennis shoe ever. And Ross Roger said, I'm I'm totally in, let's do that. Let's create a tennis shoe that brings me back on the court that, you know, lets me play on the highest level. But it can look a little like a running shoe, I'm totally fine.

• 1:14:48Guy Raz?

  I have to imagine that had a very rapid impact on your business.

• 1:14:54Speaker 01

  We cannot underestimate the impact you had on the business. If you look at, for example, Google search data, there was a time before Roger and a time after. And you know, normally when when when something great happens, we win a race or we have some good press, you see a spike, but it goes back down. When Roger came on board and we announced it in New York, search traffic doubled and stayed there.

• 1:15:18Guy Raz?

  Wow. So essentially, it's, I mean, if I'm if I'm reading this right, that really is the beginning of the transformation from a running company to a sports company.

• 1:15:31Speaker 01

  Correct. That was the turning point. We just added now training as a category.

• 1:15:36Guy Raz?

  Trail running, hiking shoes.

• 1:15:40Speaker 01

  Trail running, we do outdoor, exactly.

• 1:15:42Guy Raz?

  And then just like lifestyle shoes, like I think the ones I'm wearing are probably lifestyle shoes.

• 1:15:46Speaker 01

  Well, there used to be, the model you're wearing is the one that Nicholas Peering won when she won her silver medal, that's that's the one.

• 1:15:52Guy Raz?

  Oh, my God, I think I'm gonna go for a run after this in these.

• 1:15:56Speaker 01

  But, you know, today it's a lifestyle shoe and and, you know, I mean, we have given up the resistance against lifestyle, you know, if people are gonna wear them. We at one point said, well, we might as well give them something that really works and that that that that that looks good.

• 1:16:11Guy Raz?

  You went public in 2021. You had your IPO. And I think you end the day at a valuation of $6.5 billion. I mean, this is a business that you had hoped to hit 10, 15 million just a couple years, a few years before.

• 1:16:29Speaker 01

  Mm hmm.

• 1:16:30Guy Raz?

  I mean, was any part of you at that point just like, how did, how did we get here? So fast. It seems, I mean, I know that it's a long journey, but it's just 11 years after you guys launched.

• 1:16:43Speaker 01

  Yeah, the funny thing was, we didn't even want to go public. You know, we had fought so hard for our independence. And, and, you know, as an entrepreneur, we never did this for the money. We never did this to, you know, we wanted to build something that lasts and we wanted to, to have our freedom, right?

• 1:17:02Guy Raz?

  Yeah.

• 1:17:03Speaker 01

  And then, you know, doing an IPO, I mean, we knew at some point, because as, as we mentioned earlier, I mean, it takes a lot of capital to build a brand in the sporting goods space. We had so many investors on board, you know, we were already three founders to start with. We, we had given stock to a lot of employees. At some point, those people needed, you know, a way to, to make good for, for all the effort they had put in, right?

• 1:17:29Guy Raz?

  Sure.

• 1:17:30Speaker 01

  But then, as we started looking into this, we learned that in the US, we could actually get a dual class share structure where we would retain control of the company. Today, we have about 60% of the votes, but still have access to, to the capital market. And that put us at ease because we wanted to keep our entrepreneurial freedom.

• 1:17:56Guy Raz?

  Yeah.

• 1:17:57Speaker 02

  We have only started, you know, we have been, especially in the small country of Switzerland, when we came back from the IPO, press, you know, said, oh yeah, the three founders are going to exit next day, you know, they're going to be out and gone.

• 1:18:08Speaker 01

  Right.

• 1:18:09Speaker 02

  And Casper David looked it out and said, hey, this is only the starting line. It's not even, you know, before it was just a startup, but it was just a warming up. Now we are at the start line and now we can talk.

• 1:18:22Speaker 01

  Going public definitely has made us a more disciplined company.

• 1:18:26Guy Raz?

  Yeah.

• 1:18:27Speaker 01

  But that was something that we were already before because once you start being successful, your entrepreneurial mind goes from like 100% offense to, you know, 80% offense, 20% defense because you don't want to fumble the opportunity that you have. And we all decided the three of us would head up product and innovation.

• 1:18:51Guy Raz?

  And not the sort of operational side of the business anymore.

• 1:18:55Speaker 01

  Exactly. And now here we are, the three of us again. In a way, it feels like we're just getting started.

• 1:19:02Guy Raz?

  Kasper, I can't help but think about that conversation your dad had with you when you were 14. And he says,

• 1:19:11Guy Raz?

  we're broke. You're going to have to make it on your own. It's just kind of remarkable because you guys did. I mean, you built not just a brand, you built one of the biggest now iconic Swiss brand. And you're coming from a country with Rolex and, you know, chocolate, but other brands too. But I mean, big, well-known brands, right, are coming out of Switzerland. You built one and you guys have, of course, this is never a comfortable conversation, but you've all made a lot of money. What do you think this continues, at least for you guys? I mean, at some point, do you have a sense of when you'll kind of step away and,

• 1:19:57Guy Raz?

  I don't know, retire or do something else? Or do you think you're in there for life?

• 1:20:03Speaker 01

  Well, I'm 48. You know, I'm not about to retire. I think, and I can speak for all three founders, you know, we always wanted to build something that lasts. And, you know, we now have 2,000, soon 3,000 employees. If you add manufacturing and logistics, it's probably another 80,000 or so. So, you know, there's a lot of responsibility. We also feel a huge responsibility towards the environment.

• 1:20:32Guy Raz?

  You're working on a carbon neutral shoe eventually. That is where you're heading, I think, right?

• 1:20:37Speaker 01

  Yeah. And, you know, and we want to do it. Without compensation, you know, we're not going to go out and buy some fake carbon credits, you know, we want to do it through the product innovation and it's extremely hard and you know, and both Oli and I, we're immensely motivated by that and a lot of our innovation work goes into that as well. And whenever we, we talk about what do we want to do, it always brings us back. We want to continue to, to build on into what it could be.

• 1:21:05Guy Raz?

  When you think about, you know, this, this journey you took, jumping into the shoe business and then what it became, how much do you think had to do with the work you guys put in and your intelligence and skill and how much do you attribute to luck?

• 1:21:21Speaker 02

  I think luck does never come for free, right? There's always hard work to put you in the best position to, to receive, right? It's almost like an athlete's life, right? You're putting everything on the line just to make it to the Olympics and then you make it to the finals and then it's only up to you, right? You have to perform, the coach is not going to help you, the shoe is not going to help you at the end of the day, you just, you have to make all the decisions. And also, you know, if you fail, then it's, you have to take it, you have to deal with it.

• 1:21:49Speaker 01

  You have to work really hard to put yourself in a position where luck can even happen. And, and in, it's, it's almost like, like when you're, when you're falling in love, you have to be vulnerable and put yourself in a position where you can be hurt and that takes risk. Looking back, you'll be like, well, these guys did everything right, you know, the way they launched this technology is amazing, but it could have also gone the other way. And I think that's, that's where luck plays a factor, but if you're not working hard enough to manage the risks that, that you're taking by being in that position, luck cannot happen.

• 1:22:30Guy Raz?

  That's Casper Coppetti and Olivier Bernhard, co-founders, along with David Alaman, of On Running Shoes.

• 1:22:38Guy Raz?

  By the way, the company is about to unveil a secret new shoe technology just in time for the Summer Olympics, so if you watch the track and field races, you might see the characteristic On logo on some fast running feet.

• 1:22:54Guy Raz?

  Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's totally free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyraz.com. This episode was researched and produced by Catherine Seifer, with music composed by Ramtin Arablouei. It was edited by Neva Grant, and her engineers were James Willetts and Robert Rodriguez. Our production staff also includes J.C. Howard, Casey Herman, Sam Paulson, Kerry Thompson, Alex Chung, John Isabella, Chris Messina, Carla Estvez, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.