How I Built This with Guy Raz - On athletic shoes: Olivier Bernhard and Caspar Coppetti

Episode Date: July 22, 2024

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.

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Airbnb.ca.ca. slash host. 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-r-z.com. 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.

Yes, we actually wrote it in our shareholders agreement and they 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. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

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. 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, Aridas, 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. 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 souls. 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 Bernhardt had been a professional triathlete, so he knew something about the mechanics of shoes. Casper Capetti and David Alamon spent a few years at an ad agency, so they knew about marketing and branding. 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. 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 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.

Were you good from the beginning? I mean, were you faster? than most other boys around you? I was, yeah, I was. I think I was pretty talented. I was always the smallest kid. I was light. I was skinny.

Spectators would always, you know, point to me and say, oh, look at that little kid, how fast he goes. And obviously, that gave me that extra boost, you know, to pass another two taller guys. And I guess eventually you would move on to triathlons. And that would become your focus, which we'll talk about. But when you were around 18, there's national service requirements in Switzerland. And I guess you had to do some kind of government service around that time for a year or so.

What did you do? Oh, just a clerk, you know, at the office. And even after that, the apprenticeship three years, I worked. And funny enough, it was for the tax offices. The tax office? Tax office. That sounds really exciting. But the funny thing is I didn't do it because of it.

of Texas 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 could travel by bike. So I could train at the same time I was working. Oh, wow. You know, usually these people would come up, you know, in nice 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 than 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 came by with the bike and it was fun. We always said you had this talent, right? Yeah, I mean, you actually went pro. Like, you became a professional triathlet 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 Iron Man. And just remind me the Iron Man, 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. It's a 12-mile bike ride, yeah, and a marathon at the end. 112 miles and a full marathon. Yeah. It's insane to me. It's totally insane. Guy, it's also insane when I look at the number now. You know, being 56, I think, wow, how could I have, you know, how can someone even do that? And I did it in not 100,8 hours, but very close to 8 hours.

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? It's obviously 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, 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. I think still now triathletes don't decide to become a professional athlete because there is high money involved. 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 mean, I know you were also born in, I believe in eastern Switzerland, and maybe not that far from where Olivier was born. 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. And I guess just like Olivia, 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? Yeah. At 14, I was already sponsored and I was traveling to races across Switzerland and some in Europe as well.

And, yeah, 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. But I guess when you reached, like, 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. 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. So, you know, it came natural. Maybe it helped that my dad was an entrepreneur. What did he do? Well, we had a family business, like a mid-sized enterprise, maybe 800 people or so. And we manufactured machinery for injection molding, plastic injection bolts.

Oh, wow. Airline parts, swatches, CD-ROMs, stuff like that. And that was his business he started? That his, my grandfather started it. What happened to the business? 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. So did your dad recover? Does he ever recover financially from that? No, he didn't.

Wow. That was pretty, yeah, it was definitely a tough times. You know, that 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. 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? I mean, definitely, I mean, before, you know, we were very comfortable. Definitely money became tighter. It definitely was tight during my studies. 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? 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, Iron Man, Switzerland,

or asked me to be their head of PR. And I had to learn. I didn't even know what Iron Man was. This is an Iron Man race in Switzerland. This is an Iron Man race in Switzerland here in Zwisland. Zurich. And that's how I met Olivia, 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, you know, 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. I'm a business major. But, yeah, this is probably a bit out of my league. And you were like, no, I think you can do it. And I remember somehow I said, yes.

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. And we had to get together the next day to continue our discussion. Olivier, what, I mean, you were, let's say, 28, right, 29 when you met Casper. Yeah. 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? 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 a site that goes different paths that approaches things in a totally different way. And sometimes, and of course when we went to companies that have been supporting me, baby, for five, ten 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. He's useless, no, he's not useless. He's the one guy I believe in, and I trust. We will, you know, he's my agent, so you have to deal with it. Wow. So, Olivia, 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. Exactly. These were the main two roles. Yeah, exactly. Yeah, only was a big deal at the time. So I was lucky. My job was pretty easy. I mean, the contracts kept, you know, coming.

all had to do was like typed them up and and get them signed and but at the time olivier would be on the on the Sunday like the sports center of Switzerland like he would be a regular guest there and and that was obviously attractive for for sponsors meantime olivier actually i have a bunch of questions for you but um at one point i mean during your career i think this happened in 1998 you win the 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 as it was like you basically were like I never used any banned substances it it was a probably a naturally occurring thing but you you actually appealed

this and won 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. Yeah. But I, you know, would try to work with the governments, associations that actually accused me of, you know, using substances. I was reaching out and said, I need you support because I only know that I haven't done anything wrong, but let us find out together what went wrong and where. Because you were basically saying If I am accused of being of doping, that's

That obviously is going to ruin my career and my reputation And it sounds like You really cared about those things No, absolutely. You want to fight against this Because from what I understand, the test was like The amount they found, the trace amount they found Your body was so marginal.

Your argument was, What you 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. Because of training and diet, that wasn't the outcome. I was trying to work with the 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. But you were cleared, which was probably an amazing feeling. Absolutely. Having been living under this cloud for almost a year. 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 still you know some media would still keep bashing me and hey that's life right there was a big learning i could have done without but i think still um it was it was it was great to go through that yeah wow that was 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 story about him being cleared into pretty much every newspaper we went on on swiss national tv So that was, I think, almost the foundation for this trust relationship that we developed over the years later.

Yeah. Yeah, I imagine. And then meantime, Casper, I mean, you were also pursuing your academic career and then the professional career, right? I mean, so there's like 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. 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. But 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. 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, that just happens. It's just nature.

So what was the, I mean, as you started to think about retiring, right? You know, I'm sure there was some minor injuries or maybe more than minor injuries. There's a lot of Achilles issues and planetaryitis. 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, okay, maybe that's the career I'll move into?

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 realized throughout my career that not everyone, you know, sees running at ease. 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, imagining before running a marathon, it was still playful, which sounds strange. But I think, even if it was a race, a triathlon, imagining before running a marathon, it was still playful. It sounds strange. But I 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 running and the ease for running, the liberation I feel and I go on. How can I infuse people with this sensation? 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 kind of sneaker. Is that right? Exactly. George calls me from Zurich and says, you know, I know you're one of the highly respected triathletes, a great endurance runner. And everyone tells me you have a great sensation because I ever heard. 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. He took your Nike and what did he do to it? 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. Wait, sorry, a garden hose. He took a garden hose and he stuck it to the bottom of the shoe? It's just pieces, just small pieces. So it was like springs, like garden hose springs in the bottom of the shoe kind of. 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 until the sun was down and nobody could see me. And I was lacing up this shoe one night and ran. And after 100, 200 meters, I said, Wow, this is really different. This is really different, and I liked it different.

It's not different in a disturbing way. Wow. It's really cool. And I came back, I lost maybe, you know, he had put on, I think, 13, 12 pieces of garden houses, and I lost at least half of them. And I didn't even realize that I lost them. They just, I got unglued as you were running. They're unglued, yeah.

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 a garden hose pieces stuck to the bottom of the shoe, 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? 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. Like a cat. The cat, yeah.

I was like, you know, smooth, running, soft. I felt like I don't want to stop this one. Yeah. 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 and what really made it the case for me, again, I have had my Achilles issues for maybe three, three and a half years at 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. Wow. So I was full of inspiration. and ideas and almost had a vision how to take it to market. 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. 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. Yeah. You wanted to pitch this to companies like Nike. I did. We did. We did. We did pitch it to pretty all the guys. pretty much all the companies.

We pitched it to Nike, Plum, Adidas, New Balance. What did it look like? What did that prototype that you were pitching looked like, look like? It looked like a very simple, clean shoe. With like garden hose springs on the bottom? Or did it look more like what an on shoe looks like today? No, not like an on shoe today. No, it was like we had engineered them,

so you actually could run 300, 500 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 Beaverton. 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 me, you know, three, five shoes. 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 are done with the testing. The numbers based the results. 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. thing 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're really going to reduce midsoles. Minimalism. More than minimalists. 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 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 bring this up in scales and everything, let's at least try ourselves. 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, exactly the wrong time, goes bankrupt. Stay with us. I'm Guy Raz, and you're listening to How I Built This. 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. and I remember vividly he said hey Casper I invented co-invented this running shoe and I really need your help bringing it to market be a great marketing guy

and I said Oli are you out of your mind you will not stand a chance you know this is a very crowded market don't 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 yeah and by the way just to be clear. You had a lot of standing to say that because you worked a young in Rubicam and you knew how challenging this market was going to be to get into and how the massive ad budgets that Nike's and the

Didas and Pumas of the world had. Like, it's a fool's errand, right, to try and enter a market like that. It was out of the question. This would never work. Yeah. Olivier and George show up and I remember they took

out this 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. Yeah. 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.

meantime olivier 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 Brunsweiler okay and so what are you and George

I mean no 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 just going to Asia and produce the shoe right 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 and South Korea. What did you call the shoes? Back then, we had a different logo and a different name. It was G&L for Glyde and Lock. Glyde and Lock, okay. Glyde and Lock.

Describing the technology, simply put it. And Casper, what can. convinced you to work on on the shoe idea with Olivia. I mean, you're, you're, or to at least help him out a little bit, just because he's a friend. Yeah, first, first because he was a friend. But then I was, as I said, I was intrigued. And I think the idea is 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. Yeah. Not like Olivia. 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. And then also I'm very tall. So 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 my body was fine.

And pretty much everybody that we gave to 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 Olli and George independently approached me and said, in their own words, hey, it's not working out between Olli and George. Casper can you get involved? And so I made a pretty bold move and said, yes, I'm going to get involved, but without you, George. Olivier, I know this is probably sensitive and it's all, you know, business is tricky and there's always personality clashes and it could be painful. But what was going on between you and George?

I think at the end it was very simple. It's just we had a different idea how to build the 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 like 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. So, Casper, you used to agree to kind of intervene. And you went to George.

said, I think it's better for you guys to separate. What was his reaction? George is a very generous person, and really what he wanted to do was to see this technology on runners' 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 Oli had developed. But it was still, from our perspective back then, it was still a huge risk. Because myself, our third co-founder, David, we had really high-paying jobs. You were, you mentioned David, this is David Alamon, who was a friend of you who 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. For Eames. 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? I wouldn't say comfortable. I 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. Yeah. Different in the U.S., right? In the U.S., there's more of a culture of fear. 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. a Freddie Swiss. Right. And have a lifelong. It just sounds miserable. I mean, God bless them, but it just sounds miserable. Keep going.

So, you know, we actually, you know, the plan B can be the interesting 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 of us took another job or, you know, 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.

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 out. This is all in. You're out, then you have to, you know, your shares go to the other founders that are staying. That's like Russian roulette right there. Or what's it called? Maybe not of it. It was a Mexican standoff.

I can't remember what it was one of those things. Yeah, but for me, I think it was a bit easier than for David and Casper. As an athlete, you know, I was used to put everything on one horse, and I thought this is actually great. Wow. I imagine one of the first things 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 that was not the name you were going to use.

You thought, were you thinking this is not quite right? No. We came up with about 800 names. You know, coming from advertising, we basically asked all our copyrighted friends to write them some ideas, and then Olivia had like paw and bear. And so we actually settled for a name, and the name was neon.

Neon, that's a good name. Neon. Yeah, we've, you know, it had like power. You know, it said new neon, the neon color was like in high fashion back then. 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 Lulu Lemon? And there's like 20 names before and you're like, oh my God, that was a dumb name, that's a dumb name, that's a dumb name, that's a dumb name. Thank God you pick Lulu Lemon. Neon's actually pretty good.

It's not bad. 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 what if neon goes out of fashion and you know isn't it too cold and and I had this other 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. On Films. On films. Yeah. Yeah, and we had for about half a year, we had search for a name to say it switches you on.

And the, 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. Okay, I'm going to get back to the name in a bit. But meantime, Casper, you had said to Ollie that you thought this was crazy to go to build a running, a 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? Yeah, we've been incorporating on January 6, 2010.

What flipped in your mind where you're like, yeah, okay, let's take on Nike and Adidas and Puma and, you know, A6? Yeah, we did go to an event before we actually... founded the company and just basically it was an Iron Man event here in Switzerland and just had about two or three hundred runners try the product and 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 it makes some people swear it's also good but you know you don't want to be caught in the middle it was polarizing It was polarizing.

It was totally polarizing, but it had a lot of energy. And literally, we went out and we went and met with run specialty retailers and went to events and sold out of the back of our cars. And we just got this tremendous response. We never had a moment where people were not interested in what we were doing. The phones never stopped ringing. I have to imagine that initially you're trying to conquer the Swiss market, which is a globally, a relatively small market, but that's what you're trying to do at the beginning. Dagu, that's not true, unfortunately.

You know, 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 we started out in six countries at once. Oh, you did. Okay. 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. young in Rubicam and David probably had a decent salary from Vitra and I know, Olivia, you were probably making very little money in the previous years because you were working on a shoe. So how did you guys have any financing to even do a

production run for prototypes? Yeah, so we each put $150,000 in and Ollie didn't have the cash, so we basically took his effort so far into the company and then valid that at $150. So that's how we started.

And, you know, something very fortunate happened. There's a large sporting good 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 days after we started the company with, I don't know, five, six samples, and we left the show with, or I would say, about half a million Swiss francs in orders.

Wow. These were, these are from small running shoe stores? From running shoe stores, from this potential distributors, and with those orders in hand, it was quite easy to raise our first investment run. Casper, I'm curious about sort of the design aesthetic of the brand that you, 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.

Yeah, look, coming out of Switzerland based on a patent innovation, the only viable strategy for us was to go premium. And that's also what we admire. So on that first mood board, there was an iPhone. There was an Eames chair. There was an Arcterick's jacket on there. Arcterick's jacket, Eam's chairs, like iPhones, yeah. Just very reductionist, great industrial design. And so we decided to put on a competition

and we asked two shoe designers to design something for us. And then there was actually a friend of mine, Tilo. He's now our creative director, design director. 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 Tilo came back with an on.

It was so distinct, probably too distinct. Like, that was almost a stigma in the early days. People were like, oh, we 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. 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 call it speedballed. A plate that is in between the soul and the...

Exactly. The element. It's a rigid plate, or it's a... A very rigid plate, yeah. Very rigid plate. It's, okay. 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. 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 call it 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.

I mean, one of the things that strikes me about, so, okay, Olivier, you're, if you're going to go to a race and you're going to 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 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. 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, you know, attack the German, Austrian and Swiss market. I think it was year one and two. Not very successful until I think it was Casper coming, you know, and saying, hey, all these retailers are actually, you know, they are runners, you know, at heart. So why, instead of trying to convince them what our tech does and, you know, with a PowerPoint presentation,

why don't we just bring shoes, we go run in their environment? Run with them. Yeah, run with them. Yeah. And that turned the thing around. I'm, our listeners can't see, but I'm holding up, you know, 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 souls are also weird. I mean, they just, 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? We're a little bit offended here. I mean that in the best way.

I mean, the best possible way. It's like a, you know, it's like a liquid death or a brand that just stands out, right? I mean. Think about how far we've come from the garden house, right? Right. you know, the whole is the function. That's the original patent where the element basically absorbs the shock and then collapses on the pressure.

It's indeed very fortunate that the shoes look so different and you can see the technology because what it does is 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 comfortable 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.

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 a, you know, you got the hype going, you know, strike why they're, 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, you know, $150 or $200.

That you would have to sell them for like $1,000 to make your money back. Almost, yeah. No, absolutely. I went to China and sitting with these engineers, you know, having, I mean, around the table, four or five engineers at least, you know, 150 years of experience. They said, it's impossible. I said, yeah, well, what do you mean? Impossible.

It needs to be possible to make these, right? You are 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 end price of the shoe. 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 occasions 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. If people are coming back, you know, after 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 the 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. 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 just collapsed. Was it that, was it that

stressful? Was it that tense? It was very stressful. Like, you need to know, all in I, we're eternal optimists. But, you know, we, you know, 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. And a year in, you're probably doing, what, a million dollars or less than a million in revenue? Yeah, we did a million in the first half year, which, you know, 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 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, you know, we went on an offside and about a half hour in, we get a phone call from our Chinese manufacturing partner and the factory went bankrupt. The factory went big. How many shoes did you order from them? The full production for the season. Like 20, 30,000 pairs? I think 30,000 pairs. Wow.

And the, you know, factory is bankrupt. There's police tape around. Nobody can get in. And this is a week before Chinese New Year's. We've been everything shuts down for about a month. And we were basic. 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. So when that factory went bankrupt, How did you rescue the shoes, right? I mean, presumably you paid for it or like, what did you do? To be honest, I think 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. Oh, you had like a local, like a, you had a local agent presumably in China and you were like, come on, you got to get these shoes to us.

Yeah, he wasn't going to get paid if those shoes were. make it out of the factory. And, you know, but, you know, the thing was, it wasn't shoes. It was uppers and bought the 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. Yeah. To stay longer. And, you know, the materials were dirty. It was a mess. But we were fine.

And 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 quick. And we also realized that we shouldn't ride the lows too low and the high is not too high. And rather than just having this yo-you effect, basically just kind of be on this steady incline.

And it's much better for our sanity. 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 ambition? That was your ambition? You did. But was that really your ambition? You thought, okay, we'll be a very small niche shoe brand for mainly for runners. Was that what you were thinking?

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. 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. When we come back in just a moment, On breaks into the U.S. market and then catches the eye of one very talented tennis player. You probably have heard of them. Stay with us. I'm Guy Raz, and you're listening to how I built this. Hey, Guy, Guy.

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 Hirshberg and Stonyfield 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.

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 hibt at ID.wondery.com. 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. Hey, welcome back to how I built this. I'm Guy Raz. So it's 2013 and on sneakers 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 U.S. 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 U.S. Obviously, Nike's there, Adidas is there, and presumably they weren't even paying attention to you. You were like a fly spec to them. They probably didn't even know who you were at that point. 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 try to play our own game. And we had a very different tech, much more premium than they are. And it served us extremely well. I think it's also a cultural thing that I recall 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 first?

Is it Adidas? Is it a new balance? I said, no, David, this is really an endurance sport. 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 or 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. When you entered the U.S. 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 it 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. Literally nobody can read the logo. So in the U.S., 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. Oh, you got, oh, so if people type in QC on Google.

Oh, yeah, yeah. I would say about a third of our traffic comes from QC, no, joking. Because people will type in, what are those QC shoes? Oh, absolutely. Absolutely, yeah. Yeah, we actually, we just started riding on running on all our running shoes in plain type, so people can actually know what the brand is. Wow.

And literally, if you type in QC shoes into Google, you get a thing that says QC shoes, did you mean on? Yeah, 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. I see, I trusted them.

You're thinking, I'm bringing the best guys, the heavy hitters into my business. And here they go, give me this name with a QC. One thing they should know. To this day, about once a week, we get an email of someone suggesting a better logo for our brand. 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 all that much in the end. 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 running. I have to assume that what was really going to be a tipping point was getting these shoes on athletes who would win races, right?

Like what was the first sort of big race? Who was the first athlete who won something wearing the shoe that got you attention? The very first one was actually 2013. It was Frederick von Leader, a Belgian triathlete, winning the World Championship. been Kona in Hawaii. The really, the OG, the main world championship, Iron Man in Hawaii, yeah. He won wearing a pair of ons. 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 going to fall apart. Again, we have been there and it's only year three, right? And I have seen shoes falling apart with our tech. The shoe hold and he crossed the line first. and I think that was a big step for our company and just prove that the concept can, you know, overtake running in any discipline.

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

because we had we did the 10 million but we had actually budgeted for 12 but along so short 2014 was the year that we actually then broke our first profit and we've been profitable ever since 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. We were going to be a running

company and actually it pissed us off. When somebody dared to wear our high tech product industry with jeans, it really bucked us. It's like buying a Porsche and going shopping. You actually really wanted

people just to buy them to run. Yes. You didn't think of it as a lifestyle brand at all. No. 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 for the beginning, because that's really where their growth could come from.

But at the time, 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 you guys, between 2012 and 2012, in 2019, you sold 4 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 nice. It's a nice business. 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 still. started to hang out with Roger Fetter. Yeah, that's probably a whole different story. This is an important turning point. Obviously, you are compatriots. He's probably the most famous Swiss in the world, Swissmen in the world. But he was just wearing ons because he liked them?

Yes, exactly. He wasn't a paid, like, endorseor or anything. No, no. No, no. We found out through pictures in. the press. You would see your shoes on Roger Federer. He was just wearing them. Yeah, which was, you know, I mean, which was like... Amazing. The coolest thing ever, right? And so, you know, Switzerland's a small place and through

some common equateances, 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 that's how it started. And about a year or so later, we get a phone call from his agent. And he said, hey, Roger wants to meet you guys. I mean, you know, you're talking about, 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? 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 pop up, right? And I just recall I looked

David and Casper and said, we don't have the funds. Let's not talk about this, right? You're thinking, you're thinking he's like, hey, maybe I'll be the brand ambassador or something. Right. Which could cost tens of millions of dollars. You know, I mean, I think we have to mention, I mean, Roger is the most sympathetic, nicest, curious.

I mean, everything you know about him, you know, if you meet him in person and you hang out, It's even more. I mean, 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 this down in a letter that we sent to Roger. 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?

And was he receptive right away? 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, you know, spend with us. No, no licensing fee, nothing. Basically, we're going to work together on product.

And, you know, if it works out, we're all going to be happy ever after. 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. Yeah. And, I mean, we could have not done a tennis shoe. Not invested marketing. You know, I mean, it was and still is built on trust. 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. It was risky on both sides. And I remember the moment when we shook hands,

I woke up the next morning and I was like, holy crap, what have we done? Like, we are on this nice track to becoming, you know, a leading running brand. But then with Roger coming aboard, it was clear we were going to be a sportswear 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, you know. And that's when I was like, did we just make a huge mistake? Yeah, for me it was only one day I was questioning.

And I think for David Kassman 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 Roger said, 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. I have to imagine that had a very rapid impact on your business. We cannot underestimate the impact yet on the business. If you look at, for example, Google search data, there was a time before Roger and a time after. And normally 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. Wow. So essentially, I mean, if I'm reading this right, that really is the beginning of the transformation from a running company to a sports company. Correct. That was the turning point. We just added now training as a category. Trail running, hiking shoes. Trail running, we do outdoor, exactly.

And then just like lifestyle shoes. Like, I think the ones I'm wearing are probably lifestyle shoes. Well, they used to be the model you're wearing is the one that Nicholas Peerick won when she won her silver medal. That's the one. Oh, my God. I think I'm going to go for a run after this and these. But, you know, today it's a lifestyle shoe. And, you know, I mean, we have given up the resistance against lifestyle.

I mean, if people are going to bear them, we at one point said, well, we might as well give them something that really works and that that, that, that, that, that, that, that, that, that, that, that, that, that, that, that, that, that, that, that, that, you had here, and I think you end the day at a valuation of six and a half billion dollars. I mean, this is a business that you had hoped to hit 10, 15 million, just a couple years, a few years before. Mm-hmm. I mean, was it? any part of you at that point, just like, 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. Yeah, the funny thing was we didn't even want to go public. You know, we had fought so hard for our independence.

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

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 the capital market. And that put us at ease because we want to keep our entrepreneurial freedom.

Yeah. 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 free funds are going to exit next day. You know, they're going to be out and gone. And Casper David looked at now. So I said, hey, this is only the starting line. It's not even, you know, before it was just a startup. It was just a warming up.

Now we are at the start line and now we can talk. Going public definitely has made as a more disciplined company. Yeah. 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. And not the sort of operational side of the business anymore. Exactly. And now here we are,

the three of us again, in a way, it feels like we're just getting started. Casper, I can't help but think about that conversation your dad had with you when you were 14. And he says, 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 an 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, I don't know, retire or do something else? Or do you think this, you're in there for life? 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 200,000, 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.

You're working on a carbon neutral shoe eventually. That is where you're heading, I think, right? Yeah, and we want to do it without compensation. We're not going to go out and buy some fake carbon credits. We want to do it through the product innovation. It's extremely hard. 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 talk about what do we want to do, it always brings us back. We want to continue to build on into what it could be. When you think about, you know, 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? I think luck does never come for free, right? there's always hard work to put you in the best position to receive, right? It's almost like an athlete's life, right? You're putting everything on the line just to make it 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 you have to take it. You have to deal with it. You have to work really hard to put yourself in a position

where luck can even happen. And it's almost like 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 where luck plays a factor. but if you're not working hard enough to manage the risks that you're taking by being in that position, luck cannot happen. That's Casper Capetti and Olivier Bernhard, co-founders, along with David Alamon, of On Running Shoes. 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. 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 gairozz.com. This episode was researched and produced by Catherine Seifer with music composed by Ramtin Arablewe. It was edited by Neva Grant and our engineers

were James Willits and Robert Rodriguez. Our production staff also includes J.C. Howard, Casey Herman, Sam Paulson, Carrie Thompson, Alex Chung, John Isabella, Chris Messini, Carla Estevez, and Elaine Coates. I'm Guy Raz, and you've been listening

to How I Built This.