On’s 16-year overnight success

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DAVID ALLEMANN: We took a conscious decision to embrace a lot of risk and say, “Hey, it sounds crazy, but crazy is good because the night is always darkest before dawn.” And you can imagine, if you build over 16 years from zero to almost a 4 billion U.S. dollar brand, you have to have a very, very strong execution engine or it will fall apart on that journey. So it’s really an opportunity to build a brand that doesn’t have to be the absolute biggest, but can be the most premium brand of the future.

BOB SAFIAN: That’s David Allemann, co-founder and co-CEO of On. On is the bellwether for a new generation of athletic footwear and apparel companies that are posing a significant challenge to the likes of Nike and Adidas. David explains how On is taking advantage of the increased visibility of sports in society, partnering with stars like Zendaya, Roger Federer, and others, and appealing to what he calls the movement class. Whether you’ve ever slipped on a pair of On Cloud shoes or not, David’s insights will inspire you to keep moving, personally and in your business. So let’s get to it. I’m Bob Safian, and this is Rapid Response. I’m here with David Allemann, the co-founder and co-CEO of On. David, great to sit down with you.

ALLEMANN: Thank you very much for having me, Bob.

Copy LinkHow On carved out a premium position

SAFIAN: On has been an amazing growth story, the lead player in a new generation of athletic footwear and apparel companies. Is that how you see On, as the next big global brand? You started with a unique sole design, which is also the way Nike started with its waffle shoes. What is your plan?

ALLEMANN: I think the plan is to be the most premium global sports brand, really based on innovation but also on design. In the end, it’s about making sure that people are excited about sports, that they love to go out. I was out running along the Hudson this morning, and it was so inspiring because there’s such a big group of runners out there. I think when you move, whether that’s running or something else, something happens to your mind as well, and that’s really important for us. Our mantra is “dream on,” and that encapsulates it.

SAFIAN: Sometimes I feel like when I go running here in New York, it’s a race even if there’s not a race on, because there are so many people out running.

ALLEMANN: It’s New York pace, right?

SAFIAN: Yeah.

ALLEMANN: You have to overtake each other.

SAFIAN: The legacy players in this space didn’t seem to see the competition rising that you’re part of. Nike’s struggling. Adidas seems to be finding its way a little bit. There are the strivers like New Balance and ASICS, and then there are newer players like you, like HOKA, even apparel brands like Tracksmith or Bandit. When you look at that competitive landscape, is there a specific spot that On holds? How do you think about where you fit in that ecosystem?

ALLEMANN: When we started in 2010, we saw an opportunity to really innovate with a radical new idea, which was CloudTech. It’s not just about having foam, a mattress underneath your foot, but really engineering the run and changing the feel of running.

So we always came from an innovation space, and I think that’s the unique approach that we keep to this day.

I think it also coincides with a radical shift, that sports used to be, probably when we started, still something that you did on the weekend. Now sports and sports lifestyle have moved to the center of society. Back in the day, you had what I would call the leisure class. It was very much about consumption. It was about owning things.

But that has changed over the last 15 years, hasn’t it? I think there’s a new movement class coming along. Sports has moved to the very center of society. It’s the last live moment. It’s what brings people together, and it’s a lot more about experience. It’s about vitality. It’s about longevity. Health is the new wealth. And I think whenever society changes, that creates a big opportunity for absolutely new brands that respond to that and become big.

SAFIAN: In the field you’re in, there are so many players. They get inspired by each other. They steal each other’s ideas. Does it drive you crazy that someone else is always trying to track what you were doing?

ALLEMANN: No, I think that’s exciting because then you always have to push yourself to create what’s next. If you think about the whole luxury space, the whole scarcity model, high-price model, has over the last two years probably lost tens of millions of consumers who are looking for something that’s more accessible, and that’s a huge opportunity for premium products as well.

SAFIAN: So it’s a premium product but not necessarily a luxury product.

ALLEMANN: Yes, because luxury is defined by limiting access, so scarcity, making it very exclusive. On is defined by innovation. We want to bring innovation to everyone to give you a better experience. Of course, there’s a certain price tag for innovation because we invest so much in creating what’s next. So that needs a premium brand that can invest in innovation.

SAFIAN: So you’re not a luxury brand in that sense, but you’re more of a premium brand than some of the legacy players.

ALLEMANN: Yes. If you think about other areas of business, there was a moment, very much defined by New York, when we learned that we could live in lofts and that kitchens moved to the very center of our homes. So home appliances became much more important.

You didn’t store your vacuum cleaner in the back of the closet anymore. You hung it on your wall. That created an opportunity for a brand to create something at the intersection of innovation, a jet engine in your vacuum cleaner, but also a unique aesthetic. I think it’s a great example of a brand that is based on innovation but reaches millions of consumers.

Copy LinkPartnering with Zendaya and Roger Federer

SAFIAN: You have these relationships with celebrities. You’re plugged in with Zendaya, who’s among this year’s hottest stars. Roger Federer is a co-entrepreneur at the company. How did those relationships start?

ALLEMANN: A lot of it has been serendipity. When Roger posted from Roland Garros on his Insta in an On shoe, we felt that was an invitation to a date. So we went on that date, and that’s how the relationship formed. Then a little bit later, you probably remember Zendaya had her Challengers movie.

SAFIAN: Yes.

ALLEMANN: And it was, of course, about tennis, and one of the characters was pretty much formed after Roger with his On shoes. She always had to tie up these On shoes because we had a special closing mechanism, and for her acting partner, she was always lacing the shoes. So that’s how she got to know On up close and personal.

And so that started to form this relationship. It’s been very organic.

SAFIAN: With Roger, I understand you went to him and sort of pitched him, even though you didn’t have money for him.

ALLEMANN: We felt he first pitched us by putting the—

SAFIAN: Ah, I see.

ALLEMANN: Putting On on his feet.

SAFIAN: And he’s Swiss, as you are.

ALLEMANN: And he’s Swiss, and Switzerland is a small place. So we had some common friends. We went to a restaurant in the inner city of Zurich. He came in with his baseball cap pulled deep over his face, and we hit it off and had a great evening. He was challenging us. He said, “Hey, you’ve been such an amazing innovation player in running, really radically changing the feel of running. Could you change the feel of tennis as well and bring innovation to a tennis shoe too?”

And that’s what we did. Three months later, we had him at our innovation space, which we called the On Labs in Zurich.

SAFIAN: It was a good move on his part, too, because instead of taking money, I understand he took equity, and that has worked out very well for him, given how the company has grown.

ALLEMANN: I think it worked well. We were a seven-year-old company back then. We felt doing the classical model of just giving money to athletes, a classical endorsement model, wasn’t our way of doing it. We always try to innovate on everything, not just on outsoles but also in how you do the marketing model. So we said, “Hey, instead of us giving you money, why don’t you give us money?” And that worked out very well for everyone.

Copy LinkWhy innovation and design scale together

SAFIAN: Your personal background is not shoe design. This is something you sort of came to. I don’t know whether it was serendipity for you, too.

ALLEMANN: My background has always been in business, but especially in business when it comes to creativity, design, and digital. It was a certain serendipity because a friend of Caspar and me, my co-founder, his friend Olivier, was a professional triathlete. At some point, Caspar called me and said, “Hey, remember Olivier? He had an idea for a shoe.” And we said, “Come on, that’s crazy.” But then we said, “Hey, let’s try that shoe.” It was on a rainy day in Zurich, somewhere up in the woods, and he came with a shoe that he had made by cutting up his garden hose at home and gluing those hose pieces underneath a shaved-off shoe just to prove the principle. We went on a run, and it felt amazing. We felt, “Wow, that’s really a different experience.”

SAFIAN: I spent a fair amount of time with the former CEO of Nike, Mark Parker, who started as a shoe designer. Obviously, you didn’t start as a shoe designer. It’s more brand design, really—

ALLEMANN: Yeah.

SAFIAN: That you’ve been focused on. Is there something different about being a business leader when you’re a designer? Do you look at the business in a different way?

ALLEMANN: Some of the biggest brands have been created at that intersection of innovation and design. If you think about big leaps in the past, for example, people started to travel at the end of the 19th century. That was this huge societal shift. Then some brands that had probably been making saddles for horses decided, “Hey, could we take our technology, leather, sometimes not even leather, and create luggage that is very sturdy, that doesn’t allow moisture to come in? And could we bring that to a new class?” I would call it the travel class. And that created some of the biggest brands that, to this day, exist as the leading luxury brands.

Similar things happened later on. For example, when digital devices grew up from being either in the basement or under your table and became portable, they became part of your identity because they’re portable and you’re sitting in the coffee shop with them or you’re holding them to your ear.

SAFIAN: Yes.

ALLEMANN: Then design became much more important. So it’s always that feeling for the consumer between the actual physical sensation and the emotional feeling. What does this look like? What does it say about me? Do I get excited to lace the shoes up and go for a run on the Hudson? It should be a great physical feel, but it should also be a great emotional feel. I think that created some of the biggest brands.

SAFIAN: David’s reminder of brands that redefined themselves in the face of change is instructive in our AI world: New capability and emotional impact should ideally reinforce each other. So what role do On’s physical stores play for David’s brand, and what prompted him to shake up the company’s leadership earlier this year and take over as co-CEO? We’ll talk about that and more after the break. Stay with us.

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Before the break, On’s David Allemann talked about the growing opportunity for new sports brands in today’s marketplace. Now he addresses the company’s recent leadership shakeup, the role of brick-and-mortar stores in a digital world, and a crazy new shoe inspired by a YouTube Halloween video. Plus, does sustainability in footwear and apparel really matter? Let’s hop back in.

Copy LinkInside On’s leadership model

Not everything about On’s rise has always gone exactly the way you would want it to. Since going public five years ago, revenue has steadily gone up, past $3 billion in 2025. But the stock price is down quite a bit from its peak. And back in May, you and your co-founder, Caspar, stepped into the co-CEO role, sort of shaking up On’s leadership. What prompted you to want to take more hands-on control?

ALLEMANN: When you look at On’s leadership model, we’ve always operated On very much as a partnership. It was several partners from the get-go. Olivier, Caspar, and I started the company as a partnership of three. Later on, we were joined by other leaders. At some point, we were a partnership of five. That was our secret weapon because it gave us incredible bandwidth to go after very different missions. Some of our partners were very much about operating the engine of the business, the supply chain, making sure that the machine is humming, and it gave us the opportunity to stay focused on building the next growth engine. So building the next shoe, building apparel, building retail, building a new sport, like with Roger in tennis. That’s very much what a founder-led organization should do: build the next thing.

In that transition that we had recently, that didn’t change. It shifted priorities a little bit. Operating the business and being very precise in the business has become a bigger share of our daily routine.

SAFIAN: Does it frustrate you that with all the success you’re having, the stock price has not necessarily reflected that or the trajectory of that?

ALLEMANN: I think it’s just been a reality that there’s been quite a bit of volatility in the market, and our way to navigate that is definitely not to resort to discounting, but to make sure that we bring the newest innovation into the sport.

SAFIAN: You’ve mentioned the word innovation several times, and I know that as businesses get bigger, it can often be harder to implement that innovation. That risk is harder for folks to take. I wondered whether that was part of the motivation, as a founder, for being in that co-CEO role to keep that moving along.

ALLEMANN: It definitely helps. It’s always been our role as founders to make sure that we’re not just thinking about the moment, but that we’re thinking about the next moment. Often people come to me and say, “Hey, it’s incredible how you just exploded.” And I say, “Yes, we’ve been a 16-year overnight success.” And that’s true not just for the overall business, but it’s often true for the next thing that you add. That’s often been four or five years in the making. For example, our retail business, our stores—

SAFIAN: Yes.

ALLEMANN: Is now growing very fast. But I actually came here to New York to open the first store on Lafayette Street during COVID in 2021. So that’s five years ago. And now you’re seeing it really expand, with the business growing to more than 80 stores open.

Copy LinkWhy On built retail stores

SAFIAN: I remember the folks at Warby Parker, when they first opened stores, it was much more of a branding priority for them than it was an actual sales priority. And they realized, “Actually, this is great business.” For you guys, did it start that way? Was it more like, “Oh, we’re going to brand ourselves like some other brands have these stores”? Or did you always think, “Oh, this is a financial lever too”?

ALLEMANN: For us, the primary reason to start stores has been two things. First of all, we wanted to plant the brand in the middle of society, and our city centers still are very much in the middle of society.

SAFIAN: In the middle of the pandemic, yeah.

ALLEMANN: It probably wasn’t so obvious in the middle of the pandemic, but we—

SAFIAN: But you got better rents then, I guess.

ALLEMANN: Oh yes, absolutely true. And we continue to believe that, after COVID, city centers are coming back. So we invested very much in, “Hey, this is our opportunity to go in.” And the second reason has been that we were very clear that we want to become a brand that is, as we call it, toe to head. So we started to invest in apparel.

It’s very hard to do apparel in a shoe wall in one of our partner stores, so I think you have to give it the full expression.

SAFIAN: Because you can control the environment much more.

ALLEMANN: Yes. We can control the expression, and especially for something like apparel, where you can’t just put the shoe on a wall as a freestanding object, but where you have to give it space. That’s a huge opportunity for retail as well.

SAFIAN: And does that then drive the retail sales of the apparel even not in your stores?

ALLEMANN: It does. Our retail stores lift all boats, so it just gives additional energy to a community in the city. We also do a lot of runs out of the store. And in that journey, we found out it’s a great business as well. But that was not the first thought. It’s the outcome of doing all the right things in how you go into retail.

Copy LinkHow On bets on radical product ideas

SAFIAN: There is this race in athletic footwear to use more technology. Brooks created a special shoe to help Josh Kerr break the record for the mile run. How do you think about tech at On? I saw a video of this LightSpray machine that you’re using for a particular shoe, which is pretty cool. I think I have a — here’s the shoe.

ALLEMANN: Yes. Often there are 200 pieces going into the upper of a shoe. So it’s a very classical manufacturing method, with 200 steps until you have a full shoe together. And we had a young designer who had seen a YouTube video of somebody with a hot glue gun spraying a Halloween net. That was his inspiration, and he said, “Hey, if somebody can spray a Halloween net, could I use a hot glue gun to spray a shoe as well?” And he did that, and we had a very scrappy first prototype of that. It reminded us of that shoe where Olivier had put the garden hose pieces. Back then, we took a conscious decision to embrace a lot of risk and say, “Hey, it sounds crazy, but crazy is good because the night is always the darkest before dawn.” So we said, “Hey, let’s put a few robotics engineers, material scientists, and sports scientists around that designer.” And so we had a small attack team of five people that then came up with LightSpray, which is a technology where you have a robotic arm, and that robotic arm sprays a small filament in polygonic shapes directly on an outsole. So it’s not stitched on; it just melts with the outsole. And it collapses this process of 200 steps into one. This is a shoe that is sprayed by a robotic arm in three minutes.

SAFIAN: When an idea like this comes to you, you must get lots of proposals for crazy new ideas. How do you decide what you’re going to invest in?

ALLEMANN: We have a whole pipeline process. So we probably have, at any given point, 50 to 100 ideas for what we could do. And then we have review meetings where we’re basically saying, “Hey, what is good to go?” We have stage gates and decide what goes down the innovation funnel.

That’s our standard procedure.

SAFIAN: You connected with this focused customer base of runners. And as you try to expand, you have to reach a broader community beyond that more elite community. How do you test how far you can go with the brand, and what the base is willing to let you do, while still maintaining your credibility with them? Because you don’t want them to move off to the next new hot shoe brand.

ALLEMANN: No, that’s absolutely true. And the athlete for us always comes first. We’re operating with the On Athletic Club, one of the largest athlete groups in the industry, with runners and sprinters. So we have a dedicated team. That’s our core. By the same token, our lens is not running, but movement. We feel movement is more important than ever because it’s not just about health and longevity and vitality, topics that are incredibly important, but it’s also about what happens to your mind. We feel when you’re going out, whether that’s running or training or whether it’s tennis or hiking or any other form of movement, something happens to your mind. You come back probably with either a new idea or a bit more optimistic. We started in running, but of course we’re expanding into all other sports of movement.

Copy LinkHow movement and sustainability shape the future

SAFIAN: I did want to ask you about sustainability in your brand. The Swiss have a very strong reputation for sustainability. Here in the U.S., it’s become a little bit of a dormant conversation. I know you have your CleanCloud shirts that are made from carbon emissions. I’m not sure how that works. But does being green matter today in the marketplace in how you sell, or is it a separate consideration?

ALLEMANN: It matters very much to us. I think Switzerland is a bit like the pinnacle of an outdoor theme park, and so we do most of our sports in nature. It’s something that we have to preserve. So on every dimension, what we can do to reduce the footprint of On toward the environment is super important. And take a LightSpray shoe: the shoe upper, because it’s not 200 steps going into it but one step, has a more than 75% lower CO2 footprint.

Or you mentioned CleanCloud. We’re actually sucking bad clouds from the air — industry emissions — and creating the base ingredients for foam again to create CleanCloud foam. So we do everything that innovation can do to lower the footprint.

SAFIAN: So you’ve been on this 16-year overnight success journey. What’s at stake for On right now?

ALLEMANN: The defining decade for On is ahead of us. We’ve planted so many seeds that are growing now, which is exciting. Our apparel is growing more than 50% year over year. Our digital channels are growing very fast. We are expanding globally, so we are relevant for communities across the globe. We’re still the fastest-growing brand in our industry among the scaled sports brands. We are also the most premium brand in terms of margins. So it’s really an opportunity to build a brand that doesn’t have to be the absolute biggest, but can be the most premium brand of the future.

SAFIAN: Well, David, I have to say this has been a great conversation. Thanks so much for joining me and doing it.

ALLEMANN: Thank you very much for having me.