How I Built a $7B Shoe Company by Putting Engineering First: The ON Running Revolution

How I Built a Revolutionary Shoe Company: The ON Running Success Story From $0 to $7B

Starting a revolutionary shoe company with garden hoses attached to running shoes might sound absurd, but that’s exactly how the journey to building a $7 billion enterprise began. From humble beginnings on a Swiss countryside farm to creating one of the fastest-growing athletic footwear brands globally, this remarkable story showcases how innovation, persistence, and strategic partnerships can transform an unconventional idea into a market-leading shoe company.

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The Early Years: From Professional Athletics to Entrepreneurship

Growing up near the poverty line on a family farm in Switzerland, far from urban centers and trendy shoe stores, shaped a unique perspective on perseverance and innovation. The 1980s brought an introduction to the emerging sport of triathlons, which combined three beloved activities – running, cycling, and swimming. While not excelling in any single discipline, the ability to endure their combined physical demands proved exceptional.

The path from passionate athlete to professional competitor was arduous. Each European race required winning prize money to fund travel to the next event. A breakthrough came at age 21 with a first-place finish in a marathon in Tucson, Arizona, earning $1,500 and a box of power bars. After repaying entrance fees, the $1,000 prize marked the beginning of a successful two-decade career culminating in two World Championships and six Iron Man titles.

The Birth of an Innovative Shoe Company

The transition from professional athletics to entrepreneurship wasn’t immediate. At the peak of an athletic career, earnings reached approximately $150,000 annually. By age 35, recognizing the approaching end of professional competition, thoughts turned to creating something revolutionary in the running shoe industry. Those long training sessions across diverse terrains sparked ideas about reimagining the running experience through innovative footwear design.

The pivotal moment arrived when an engineer presented a peculiar prototype – an old running shoe modified with rubber hose segments. Despite initial skepticism about running in such an unconventional design, testing revealed an unprecedented sensation. The rubber components provided unique cushioning for both vertical and horizontal movements, creating a revolutionary running experience that would become the foundation of a groundbreaking shoe company.

Building the Dream Team and Early Challenges

Understanding the complexities of building a successful shoe company required assembling the right team. The venture needed expertise in business, design, and marketing. This led to partnerships with two former McKinsey consultants, each investing equally in the startup to ensure aligned interests and fair representation in the company’s future.

The initial phase moved rapidly from concept to prototype in just six months. The first production order of 10,000 sneakers generated approximately $100,000 in revenue during the first year. However, early models faced challenges with squeaky soles and aesthetic appeal, leading to the development of the innovative Cloud Racer model.

Breaking Through: From Regional Player to Global Shoe Company

A turning point came at Europe’s largest sports gear exhibition in Munich. The Cloud Racer competed against over 300 products and unexpectedly won the prestigious Gold Award. This recognition transformed a planned expansion to three countries into immediate demand from 19 markets. An order for 2,000 pairs of Cloud Racers followed – before the shoes even existed.

The innovative shoe company faced significant cash flow challenges common in the footwear industry. Manufacturing required upfront payment, while revenue typically arrived 60-90 days after retail sales. This gap necessitated strategic financial planning and support from angel investors to sustain growth and meet increasing demand.

Revolutionary Marketing and Global Expansion

Traditional retail presentations proved ineffective until the adoption of an experiential marketing approach. Instead of conventional sales pitches, potential retailers were invited to test the shoes personally. This hands-on strategy led to organic conversations about the technology and significantly improved conversion rates, establishing the shoe company as an authentic innovator in the market.

The brand’s legitimacy in professional sports was cemented when their shoes carried an athlete to an Olympic silver medal in the triathlon at the Rio Olympics. This achievement demonstrated the shoe company’s capability to compete with established industry leaders while maintaining its commitment to innovation and performance.

Scaling Success: From Startup to Industry Leader

As the innovative shoe company expanded, careful attention was paid to maintaining control while accessing necessary resources for growth. The decision to go public in September 2021 raised $746 million, valuing the company at $7.3 billion. This strategic move provided capital for continued innovation while preserving founding principles through a dual-share structure.

The company now employs over a thousand people and sells products in more than 60 countries, with North America representing approximately 40% of its business. This growth stems from a philosophy of focused competition rather than direct confrontation with industry giants, prioritizing product excellence and organic market development.

The Future of Innovation in Athletic Footwear

The success story of this revolutionary shoe company demonstrates how innovative thinking, strategic partnerships, and patient growth can disrupt an established industry. From a simple idea involving garden hoses to a multi-billion-dollar enterprise, this journey proves that focusing on product excellence and authentic customer experiences can create extraordinary outcomes in the competitive athletic footwear market.

Today, the shoe company continues to innovate and expand its product line while maintaining its founding principles of performance, design, and customer experience. This commitment to excellence, combined with strategic growth initiatives, positions the company for continued success in the evolving athletic footwear industry.