Speaker 1: The shape of the on Athletic shoe is unique. It
Speaker 1: can't be mistaken for any other brand. This is a cloud.
Speaker 1: It's the key to unlocking your running potential and.
Speaker 2: If you look at it, it truly stands out.
Speaker 1: The structure of on C suite is just as distinctive.
Speaker 1: Starting at the top with a pair of CEOs.
Speaker 3: Well, we realized very early on is if you're adding
Speaker 3: different capabilities to each other and you do that as equals,
Speaker 3: then this leads to better outcomes.
Speaker 1: Mark Maurer joined on as Chief operating Officer in March
Speaker 1: twenty thirteen. Martin Hoffman arrived as CFO that July. In
Speaker 1: twenty twenty one, they jointly assumed the CEO role.
Speaker 4: We are a friend that needs to be excellent in
Speaker 4: designing product, in innovating product, but also in shipping millions
Speaker 4: of parcels from A to B in the most efficient way.
Speaker 4: So we need to have very different mindsets and very
Speaker 4: diverse people. Marcus different strengths. I have different strengths, and
Speaker 4: if you take us together, you.
Speaker 2: Just get more.
Speaker 1: Have you had have there been areas of the business
Speaker 1: where you've had disagreements as co CEOs? Have you always
Speaker 1: been of one mind or have you wanted to take
Speaker 1: things in different directions?
Speaker 3: Yeah, I mean absolutely. I think it's that's the strength
Speaker 3: that we're basically able to problem solve and also disagree
Speaker 3: on topics. I think what we have with each other
Speaker 3: is just a lot of trust.
Speaker 4: Sometimes we really argue in a meeting with a lot
Speaker 4: of other people present, so they actually see it's part
Speaker 4: of our culture. We're also spending a lot of time
Speaker 4: outside of work together and that that really helps to
Speaker 4: purely talk about the things that that matters. And in
Speaker 4: the end, we both want to do the same right.
Speaker 4: We want to build a company for the future, and
Speaker 4: so that goal is what unites us.
Speaker 1: Companies with co CEOs are rare, but configuration is even
Speaker 1: more unusual. Martin Hoffman also holds the CFO position. He
Speaker 1: says his two jobs complement each other.
Speaker 4: I actually feel the CFO makes you a better CEO,
Speaker 4: and the CEO makes you a better CFO. Understanding what
Speaker 4: you build as a CEO helps you to understand your numbers,
Speaker 4: and understanding the numbers helps you what are the right
Speaker 4: things to build.
Speaker 1: On's emphasis on mind share, as much as market share,
Speaker 1: has driven a decade of explosive growth. Hoffman has On's
Speaker 1: finances in focus, but he also sees himself as the
Speaker 1: steward of a story.
Speaker 2: In the end, there is.
Speaker 4: A strong psychology behind numbers, and you can make a
Speaker 4: lot happen with numbers and the way you communicate and
Speaker 4: you speak about numbers. So they can be very motivating,
Speaker 4: they can be demotivating. They can keep a lot of
Speaker 4: pressures away from the company, or they can put a
Speaker 4: lot of pressure.
Speaker 2: On the company.
Speaker 4: Actually within the company, we're not talking so much about financials.
Speaker 4: Talk to a highly creative people. They don't only hear
Speaker 4: you talk about the numbers all the time. They want
Speaker 4: to hear you talk about as a as a leader,
Speaker 4: as a human, as someone who also loves the products.
Speaker 4: And I also see this as my shop of giving
Speaker 4: a clear, consistent story to the outside world, but then
Speaker 4: at the same time having a story that is actually
Speaker 4: building our culture internally.
Speaker 1: On has come a long distance in a short time.
Speaker 1: It was launched in twenty ten by a trio of
Speaker 1: Swiss founders, including a former World Iron Man champion. A
Speaker 1: caught on quickly as a brand for serious runners. By
Speaker 1: twenty fourteen, the company had reached ten million dollars in
Speaker 1: revenue and began to sell in the United States. From
Speaker 1: there on, picked up the pace, developing new footwear lines
Speaker 1: and diversifying into apparel. Swiss tennis legend Roger Federer took notice.
Speaker 1: He became an investor and consultant, with his name on
Speaker 1: the company's first line of tennis shoes. The twenty twenty
Speaker 1: COVID pandemic sparked a boom in outdoor recreation, sending on
Speaker 1: sales soaring they set the stage for a listing on
Speaker 1: the New York Stock Exchange in September twenty twenty one.
Speaker 5: The athletic industry has always been one of the best
Speaker 5: industries within retail that only got better during COVID.
Speaker 6: The barrier to entry for newer brands and disruptor brands
Speaker 6: are lower than ever. What we're seeing from some of
Speaker 6: the newer players is just more innovation. I think that
Speaker 6: we're seeing it's a good time for some of these
Speaker 6: brands to grow.
Speaker 1: With just over a billion dollars in sales last year,
Speaker 1: On's a relatively small player in a crowded category. Still
Speaker 1: going public has made a difference.
Speaker 3: I think it made us a better company, so it
Speaker 3: challenged us, and you know, we decided to play in
Speaker 3: the Champions League. We decided we wanted that scrutiny. It
Speaker 3: brought huge opportunities obviously in terms of brand awareness as well.
Speaker 1: Wall Street is certainly aware on and investors seem to
Speaker 1: like what they see.
Speaker 4: We want to build a company that is here to
Speaker 4: stay this positive emotion of growing, but growing in a
Speaker 4: meaningful way, from social impact, sustainability, how your product's resonating
Speaker 4: with your customers. That's very important, and setting up that
Speaker 4: framework is basically a core.
Speaker 2: Of my work.
Speaker 1: It sounds like you have to take shareholder demands and
Speaker 1: sort of translate them into something that's going to be
Speaker 1: motivating for the people who work for you. Is that
Speaker 1: how it works?
Speaker 2: Yeah, definitely.
Speaker 3: The number is never the goal, and the growth should
Speaker 3: allow us to do that in a sustainable way.
Speaker 1: And so it can growth sometimes be too fast, yes.
Speaker 3: It can. Well for us, it's important that we're kind
Speaker 3: of bringing that exponential and huge growth of over sixty
Speaker 3: percent year of year slowly down into what we call
Speaker 3: a more durable growth going going forward over the next years.
Speaker 1: On is setting its pace for a marathon, not a sprint.
Speaker 1: It's confident in the strength of its technology, the cloud
Speaker 1: tech cushioning system, invented and patented by its founders. In
Speaker 1: many ways, On likes to identify as a tech company.
Speaker 4: We create products, we create a brand, but everything else
Speaker 4: that we do is actually technology and data. So from
Speaker 4: product development, supply chain, to customer interaction to our own
Speaker 4: eCOM environment, you really have the analytical depths and the
Speaker 4: complexity of a tech company, but at the same time
Speaker 4: you have the emotional highest of a consumer brant.
Speaker 2: And I actually think this is a really nice combination.
Speaker 1: Whatever else it is. On is a premium brand that's
Speaker 1: had an impact on its sales strategy. Direct to consumer
Speaker 1: channels have been bolstered by the opening of flagship stores
Speaker 1: around the world, and while wholesale revenue remains robust, the
Speaker 1: company is taking a selective approach to distribution. Have you
Speaker 1: had to say no to some pointner, how do you
Speaker 1: think about the wholesale Now.
Speaker 3: We're trying to allocate resources to where it has the
Speaker 3: biggest impact, and with that comes a lot of saying no.
Speaker 3: We're working with the partners that are reaching the communities
Speaker 3: that we want to reach, and so this has led
Speaker 3: to the distribution that we have, which very much started
Speaker 3: We front specialty accounts like fleet feed in the US,
Speaker 3: but then evolved into more channel sporting goods, but then
Speaker 3: also counts that or reaching an even younger audience like JD.
Speaker 2: Or foot locker.
Speaker 4: We're rooted in running, we are rooted in performance, and
Speaker 4: there's still a lot of room that for us to grow,
Speaker 4: a lot of market shed to gain. At the same time,
Speaker 4: it gives you, it gives you credibility, and then the
Speaker 4: shoes are also born in an everyday environment.
Speaker 1: As On moves beyond its performance running niche to become
Speaker 1: an everyday footwear choice. The company's betting that apparel will
Speaker 1: broaden its reach in similar fashion. Why did they move
Speaker 1: into apparel come.
Speaker 4: The mission is that that you move and you enjoy
Speaker 4: and move, and the parallel is an important part of that.
Speaker 2: It's growing. It's still relatively small.
Speaker 4: But we feel it will be an important part of
Speaker 4: the future business.
Speaker 2: Apparel.
Speaker 3: We want to grow it over proportionally. Percentage you know
Speaker 3: what it is in Percentage is actually not so important
Speaker 3: for us. For us, it's important that we're building it
Speaker 3: in a premium way and it's a multi year journey.
Speaker 1: Another area with upside for On is tennis.
Speaker 2: For US.
Speaker 3: Tennis has two elements, right. I think one is it's
Speaker 3: a huge opportunity from a brand awareness perspective beyond tennis,
Speaker 3: just how can we showcase ON as a sports for company.
Speaker 3: And then we feel there's an opportunity to make tennis
Speaker 3: more inclusive in many countries. It's still a very exclusive sport,
Speaker 3: so how can we bring it to the masses and
Speaker 3: how can the tennis look be transponded to an everyday look?
Speaker 3: And that's definitely a big opportunity.
Speaker 1: On has already established a strong presence globally and it
Speaker 1: has plans to enlarge that footprint.
Speaker 4: When you start a company in Switzerland, the first thing
Speaker 4: you need to do is really leaving the country. So
Speaker 4: we actually build a global company right from the beginning.
Speaker 4: We still have significant room to grow in parts of Europe.
Speaker 4: We are quite strong in Japan already, but just started
Speaker 4: in Latin America. Big market China of course a big
Speaker 4: focus for US and in the next years.
Speaker 6: China is a country that everyone wants to be in,
Speaker 6: but you have to do it right right, You actually
Speaker 6: have to put significant investment forth to actually get it right.
Speaker 6: If you kind of take a halfway strategy, you're not
Speaker 6: going to be successful there.
Speaker 5: Historically, but China has been both a great opportunity to
Speaker 5: drive revenues, but critically it's also been better margin. People
Speaker 5: will pay more for the same good abroad, and therefore
Speaker 5: China has been not just the avenue of growth, has
Speaker 5: been the best.
Speaker 2: Avenue of growth.
Speaker 5: The questions of whether that is tapering now are centered
Speaker 5: around whether that's structural or is it sickly?
Speaker 1: What does the path to success in China look like now?
Speaker 1: Is it sort of back to some situation like normal?
Speaker 1: How does it feel in China right now?
Speaker 3: In China, it feels like we're still a very small
Speaker 3: brand with a lot of potential. There's a lot of
Speaker 3: macroeconomic uncertainty. We feel we're still so small as a
Speaker 3: brand that the macroeconomic element is a bit less important
Speaker 3: because we have so.
Speaker 2: Much room to just grow market share.
Speaker 3: We're really at the point where I think we've proven
Speaker 3: product market fit and now it's about scaling it.
Speaker 4: Back in twenty nineteen, they were about fifteen people working
Speaker 4: in China.
Speaker 2: Today it's a team of one.
Speaker 4: Hundred and fifty. There is not really a wholesale partnership
Speaker 4: network in China, so it's all about building our own stores,
Speaker 4: our own monoparant destinations, and this will take time, but
Speaker 4: it's a great thing to have so we can really
Speaker 4: engineer to cross over the next.
Speaker 1: Years as CFO and co CEO with the Swiss Footwear
Speaker 1: and the Parrel company on Martin and Hoffman has the
Speaker 1: kind of job that keeps him on his choes. His
Speaker 1: professional path has taken some unconventional turns.
Speaker 4: I am an engineer from a background so called an engineering,
Speaker 4: computer science and business management, so not really a finance background.
Speaker 4: Then I ended up in consulting and I've worked with
Speaker 4: many amazing CFOs all around the world of bigger and
Speaker 4: smaller companies, and I think this ignited.
Speaker 2: My love for that shop and that role.
Speaker 4: And then I transitioned into a CFO role myself at
Speaker 4: a retail company here in Switzerland.
Speaker 2: That's where I connected with Mark.
Speaker 1: I asked him how he acquired CFO skills without formal
Speaker 1: training in finance and accounting.
Speaker 4: First, you need to have a love for mass and
Speaker 4: that's also the same in computer science, it's the same background.
Speaker 4: I think you need to lift the values off a CFO,
Speaker 4: which is which is very important, and I think I
Speaker 4: do this and try to be really a role model
Speaker 4: in this as well. And last, but not least, it's
Speaker 4: it's it's understanding the psychology of the numbers and this
Speaker 4: is something that I learned from working with so many
Speaker 4: different great CFOs all around the world.
Speaker 1: For Hoffman and co CEO Mark Maura, building on this
Speaker 1: business will be a mix of science and art. The
Speaker 1: two principles meet in On's growing portfolio of retail stores
Speaker 1: across the US, Europe and Asia.
Speaker 5: Stores are magical, so much of the storytelling sure is
Speaker 5: commercials or being targeted by your social media account, but
Speaker 5: the best way to tell that story is to show
Speaker 5: that product in environment that you control.
Speaker 6: Flagships have to be thought of not just as stores,
Speaker 6: but also as marketing vehicles. So you have to think
Speaker 6: about what it does in terms of new customer acquisition,
Speaker 6: what it does in terms of the halo that we
Speaker 6: often see when a flagship opens in a market, all
Speaker 6: of a sudden, the e commerce business gets a big left.
Speaker 1: On has opened stores in some of the world's trendiest
Speaker 1: shopping areas, Region Street in London, NoHo in New York,
Speaker 1: Tokyo's fashionable Harajuku district. Martin Hoffman showed me around the
Speaker 1: store located below On's global headquarters in Zeerich.
Speaker 2: What's super important for us that.
Speaker 4: The store really screams the premininess of the print, and
Speaker 4: so the stands for performance and design and this should
Speaker 4: be reflected in the in the store as well. And
Speaker 4: then we want to connect to the local communities as well,
Speaker 4: so many of our stores have a space in the
Speaker 4: area you can actually meet for a run.
Speaker 1: Each outlet also offers opportunities for consumers to learn about
Speaker 1: On's history and it's constantly evolving technology.
Speaker 4: In the traditional running shoel, you only have the material
Speaker 4: that you can play with. You can make the film software,
Speaker 4: you can make the film harder, and we come up
Speaker 4: with a technology where you also have an engineering part
Speaker 4: in it's a real technology part. The idea is always
Speaker 4: the same. So you have a soft landing and a
Speaker 4: firm push off. So the soft landing is generated by
Speaker 4: the elements collapsing when you land and then they become firm,
Speaker 4: and so you have this nice push off when you
Speaker 4: basically need the speed.
Speaker 1: Alongside technology that boosts performance, there's innovation that advances sustainability.
Speaker 1: Cyclon On's Circular Product subscription program centers on recyclable shoes
Speaker 1: and a parrel made from caster beans and caster oil.
Speaker 2: Out of the.
Speaker 4: Cast bean, we generate in oil, and out of the
Speaker 4: oil we basically generate palets, and from the palants we
Speaker 4: can make the outsol of the shoe, but we also
Speaker 4: make yarn for the upper so the whole shoe is
Speaker 4: basically the same material out of that bean. And the
Speaker 4: advantage is that this product can be fully recycled. And
Speaker 4: because we felt this is a product that you shouldn't own,
Speaker 4: you can only subscribe for it, so you can only
Speaker 4: rend it and only when you send your old product
Speaker 4: back you get a new product.
Speaker 1: This sounds like good business because you with a subscription model,
Speaker 1: you get loyalty from your customers. How do the financials
Speaker 1: work around that kind of product?
Speaker 4: So for us, the most important thing is that the
Speaker 4: product comes back, so that really the customer engages in
Speaker 4: that circularity, and of course it gives us a nice interaction.
Speaker 4: VI is the customer at that important moment of repurchasing
Speaker 4: and also offering more products.
Speaker 2: That we have in that in that program.
Speaker 4: At the moment, it's still a pilot phase, but we
Speaker 4: already have thirty thousand subscribers, so it's growing quickly.
Speaker 1: On's workforce is growing quickly as well. For Vmann, it's
Speaker 1: a challenge to scale up while preserving the culture. Over startup.
Speaker 4: We invest a lot in the offices that you feel home,
Speaker 4: that you can actually be at your best yourself and
Speaker 4: people work very differently, and we take a lot of
Speaker 4: input from the sports world, actually the athlete spirit right
Speaker 4: building a sports team that can perform at the best,
Speaker 4: but also talking a lot about the explorer spirit, how
Speaker 4: can we really tap into new things, continue being disruptive.
Speaker 1: And On has been spreading that spirit across the world.
Speaker 4: We have a big office in Portland, in Shanghai, in Berlin,
Speaker 4: South Paolo, Melbourne. We have eighty different nationalities head On.
Speaker 4: It's very important to have a diverse team because we
Speaker 4: have a very diverse landscape of customers and in order
Speaker 4: to understand that it's important to have all the different
Speaker 4: backgrounds mindsets here in the team as well.
Speaker 1: Do you find it difficult in some markets to find
Speaker 1: enough of the right people.
Speaker 2: We are very fortunate.
Speaker 4: We got forty thousand applications last year for four hundred hires,
Speaker 4: so he can be very selective and really build a
Speaker 4: high performing team.
Speaker 1: The Swiss footwear and apparel firm On began with an
Speaker 1: athlete's imagination. Retired world champion ironman Olivier Baiernhardt dreamed up
Speaker 1: the prototype for a revolutionary new running shoe. A decade later,
Speaker 1: another Swiss athletic champion entered On's orbit, Roger Federer, winner
Speaker 1: of twenty Grand Slam tennis titles. He joined the company
Speaker 1: as an investor and an entrepreneur, bringing much more than
Speaker 1: his name to the relationship.
Speaker 3: We're very lucky that that he loves to engage, especially
Speaker 3: on the product, and I think this is also where
Speaker 3: with his expertise and his cultural understanding of tennis, where
Speaker 3: he can add a lot of values. It's great to
Speaker 3: also have with him, you know, very strategic discussions around,
Speaker 3: for example, how do we want to shape tennis as
Speaker 3: part of On and Watch be our ole world strategy.
Speaker 1: Sports endorsements and celebrity partnerships can have a major impact
Speaker 1: on credibility and boost market share. They can also backfire disastrously,
Speaker 1: as with the ugly controversies that led added As to
Speaker 1: end its relationship with Kanye West.
Speaker 6: Tying yourself to a celebrity can certainly be a driver
Speaker 6: brand awareness, but it can also be a liability and
Speaker 6: you have to be really careful.
Speaker 5: You find the right person to wrap your brand at
Speaker 5: the right time, and there is nothing better. You find
Speaker 5: the right person to wrap your brand at the wrong
Speaker 5: time and you're in trouble. You find the wrong person
Speaker 5: at the wrong time and throw your hands up in
Speaker 5: the air.
Speaker 1: On leadership, Team takes the process of recruiting and working
Speaker 1: with its brand representatives very seriously.
Speaker 4: I think it's a lot about the conversations that you
Speaker 4: need to have before you actually engage with Roger was
Speaker 4: creats that all started. He was here in the lap
Speaker 4: and afterwards we went out for dinner, so we really
Speaker 4: had a lot of time to get to know each other.
Speaker 2: And similar to hiring a new team member.
Speaker 3: We can never rely from a profitability perspective or from
Speaker 3: a revenue perspective or growth perspective just on one athlete
Speaker 3: or area of business. Are trying to create the balanced
Speaker 3: portfolio that reaches into many different communities and that shows
Speaker 3: kind of who On is from all different aspects. So
Speaker 3: take Ben Shelton in tennis and Legoschriantek in tennis, very
Speaker 3: different characters, but ultimately both are very, very strongly aligned
Speaker 3: with who we are.
Speaker 1: Ben Shelton's run to the semi finals of the twenty
Speaker 1: twenty three US Open brought on priceless exposure. The upcoming
Speaker 1: Paris Olympics represent an even bigger opportunity.
Speaker 5: A very large luxury all the image is sponsoring. We
Speaker 5: are guaranteed this is going to be a beautiful Olympics
Speaker 5: that becomes a spectacle around luxury, around spending, and so
Speaker 5: it's going to be an interesting branding exercise that we're
Speaker 5: going to see in a very unique way.
Speaker 1: Switzerland's delegation well, once again we're on gear at the
Speaker 1: opening Serah and the company will put significant resources into
Speaker 1: every aspect. If it's Olympic participation.
Speaker 4: It's going to be an important Olympics for us because
Speaker 4: Parison's in the heart of Europe. It's in the heart
Speaker 4: of where we are, so we really want to be
Speaker 4: present in Paris. We want to talk to the community there,
Speaker 4: We want to show up with innovation, with sustainability.
Speaker 3: A lot of the product developments that we're doing and
Speaker 3: how we're empowering and enabling athletes to win is going
Speaker 3: to come together around Paris. So that's a very very
Speaker 3: important internal element and it significantly helped us to accelerate
Speaker 3: product innovation.
Speaker 2: This will be the.
Speaker 3: First Olympics where On truly is a global premium sportsware brand.
Speaker 1: And what kind of bump would you expect to see
Speaker 1: from the Olympics? Are you watching? Are you waiting for
Speaker 1: this to have a noticeable impact on the numbers?
Speaker 4: It's all about credibility, and so you see On. You
Speaker 4: see On competing at the highest level, really winning there,
Speaker 4: and this gives the prend credibility. I don't need the
Speaker 4: same shoe that the best runners in the WoT need,
Speaker 4: but I get really excited by being able to wear
Speaker 4: the same technology like the best runners.
Speaker 1: Over the last ten years, Martin Hoffman has helped guide
Speaker 1: On from a scrappy ten million dollar upstart to a
Speaker 1: billion dollar publicly listed power player. I want you to
Speaker 1: know what he sees coming in the next decade. What's
Speaker 1: the opportunity that excites you the most over the next
Speaker 1: five to ten years On.
Speaker 4: I think we have so many opportunities to grow, and
Speaker 4: it's so much fun to work in a growing environment,
Speaker 4: to work with emotional products, to work on a global scale.
Speaker 4: Mentioned going from running to tennis to outdoor into training,
Speaker 4: from shoes to apparel, and we can continue that dream
Speaker 4: in many different dimensions, and that's what we do.
Speaker 1: I like to think there are not challenges that keep
Speaker 1: you up at night, but are there things that over
Speaker 1: the next five to ten years you can see looming
Speaker 1: on the horizon that worry you about challenges that the
Speaker 1: business will face.
Speaker 4: For me, it's all about finding that right level of
Speaker 4: speed for the company to grow, because if you grow
Speaker 4: too fast, then maybe it's over soon. And I really
Speaker 4: want to maintain that positive positivity of growing but growing
Speaker 4: in a profitable way. So there are a lot of
Speaker 4: elements in there that are super important for me and
Speaker 4: where my focus is. And at the same time, I
Speaker 4: think I talk more about culture today than I talk
Speaker 4: about numbers. How can we maintain the entrepreneurs spirit, the
Speaker 4: athlete spirit.
Speaker 2: That we have in the company, even so we are
Speaker 2: growing and growing.
Speaker 1: If a friend called you tomorrow and said they've been
Speaker 1: promoted to CFO, maybe you have lots of friends who've
Speaker 1: been promoted to CFO. And this is not a fictitious question.
Speaker 1: What's the advice that you give somebody who's just been
Speaker 1: given this role, just given this responsibility how should they
Speaker 1: handle it?
Speaker 4: So you will find yourself many times spending hours and
Speaker 4: days and nights in diving into your extra sheets, into
Speaker 4: your PowerPoint presentations, and then just an hour before you
Speaker 4: present that whole THNK to someone, you figure out, while
Speaker 4: I was thinking, far too complex and no one will
Speaker 4: understand this, no one will be interested. So actually go back,
Speaker 4: you write everything down in just a page or a
Speaker 4: few words, and and I think that's in the ends
Speaker 4: essence what we do. We take some very high level
Speaker 4: of complexity. It makes it easily digestible for everyone. So
Speaker 4: I think that's one thing you will figure out. There's
Speaker 4: a lot of big numbers. So there are a lot
Speaker 4: of upsides and downsides, but luckily some of them upset
Speaker 4: each other. And beforeward looking so actually to the to
Speaker 4: the topic of the future CFO. We call it advanced navigator,
Speaker 4: so really looking forward, less backward.
Speaker 1: I'm Anna Edwards. This is blowing back. M