How the Little Swiss Brand 'On' Broke Every Rule to Become the Fastest-Growing Sneaker Brand in the U.S. It all started in the mountains of Switzerland, with some cut-up garden hoses.

One day in 2005, Olivier Bernhard, a superstar athlete sponsored by Nike, got a call from a stranger asking for his shoes. "Do me a favor and send them to me," the man said. He was an engineer. "I'll put something on them, and you go run."

Bernhard, a duathlon world champion and six-time Ironman winner, is famous in Switzerland, where he grew up running in the mountains. He's also a performance junkie; he loves tinkering and pushing to find an edge. Intrigued by the call, he mailed off a pair of his Nikes. "I got my Swoosh shoes back with cut-up garden-hose pieces on the bottom," Bernhard says with his Swiss-German accent. "So on a February night — even in my little village, I didn't want anybody to see me in the shoes; they were really ugly. And I went for a run. I felt, Wow, this is so cool. It's playful; it's different. I came back, and before even showering, I had a list of 50 things I would adjust to make it a really comfortable performance running shoe."

Bernhard spent the next three years building on the engineer's work — cutting hoses and gluing them on shoes to invent a wildly springy sole that turned feet into pogo sticks and made people feel like they were running on clouds. By 2008, he was thinking about launching a shoe company and went to see his former agent, Caspar Coppetti, now at a global marketing company, for advice. "Don't do it," Coppetti said. "Just drop it. ASAP."

This seemed wise. The athletic shoe market is crowded, competitive, and defined by juggernauts. Nike was the leader back in 2008 (with more than $18 billion in annual sales), and it remains so today (with about $44 billion). Adidas is currently in second place, with about half of Nike's sales. Then there are Asics, Puma, Under Armour, plus running brands Brooks, Hoka, and more. It's nearly impossible for a startup to outspend, out-market, or out-innovate these titans. Why bother?

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Bernhard made his old agent try the shoes on anyway. "I hated running," Coppetti confesses. But he laced up. "After three steps I was, like, Holy crap. Here's a technology that you can feel. It's in a gigantic consumer market; it's a point of differentiation. If we don't do this, we're never going to have an opportunity like it again."

Coppetti called a former colleague, another huge outdoors guy, David Allemann, who by then was CMO at the prestigious furniture-design firm Vitra, and had him come over and try a pair. That didn't go quite as well. "On the first run, part of the sole fell off! And they looked like Frankensteins," Allemann says. But even so, he, like Coppetti, was blown away.

The three decided to go into business together and committed to a long haul: They each put in $150,000 and signed a contract that they would lose their shares in the company if they took another job in the next three years. Then they bought the original concept from the engineer who'd first pitched Bernhard, incorporated in January 2010, and agreed to call their company On because the shoes made people feel "switched on" — and also because they hadn't considered how hard it would be to find the brand if you googled "On" in English. (It's not a word in German.) "But hey, it still works," Coppetti says a bit sheepishly. "On our [most popular model], the left shoe has an "O' and the right one has an "N.' And we like to joke that if you put them on the wrong feet, it says "no.'"

In retrospect, "no" also sums up their pathway to success — by rejecting every conventional way of competing in a mobbed space. Instead of playing Nike's game against Nike, they came up with their own. And some 12 years later, their brand — in 60 countries and with more than 1,000 employees — is practically burning rubber as the fastest-growing athletic shoe company in the U.S., according to the market research firm NPD (at least among the top brands it analyzes). In 2019, On welcomed tennis megastar Roger Federer as a partner, went public in 2021 with an $11 billion valuation, and today is worn by everyone from Kate Middleton to The Rock.

"The interesting story about this brand is that they're not shoe people!" says NPD vice president and senior industry adviser Matt Powell with a laugh. "They didn't come at this in the traditional way. They just broke all the rules about how you're supposed to start a sneaker company."

On launched in Switzerland in a time before Instagram, Snapchat, and TikTok, when only 7% of purchases were made online. At that time, the playbook was — and often still is — to establish your brand in a focused market, or at least in your home country, before trying to expand. But right off the bat, On broke that rule: Within six months, it was in Germany and Norway and presenting itself as a global omnichannel company. "You can't think of a running shoe brand as local, just as you can't now think of an electric car company that way," Allemann reasons. "It was very clear to us: If we want to have a fighting chance, we have to build a global brand from the start."

Their excitement over the original invention set the course. "We were emboldened by the fact that we could enter the market with a very differentiated technology," says Coppetti. "So then we looked at every other function in the business, and we said, "OK, how can we do things differently?' "

Style was a good place to start. The going look for running shoes at the time evoked a tricked-out sports car with racing stripes and flame accents. Allemann wanted to stand out from the crowd with a minimalistic aesthetic and hired a designer who'd never worked in footwear. "All the experts we talked to said, "That won't work. You have to bring in the typical "running shoe bling" because it has to say, I'm a performance machine,' " he recalls. "So there was a long debate of: Should we take not one but two big leaps reinventing the technology and the design? And as outsiders, we decided to do both because it would not be our way if we would give in."

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Then there was advertising. The big competitors ran ads in running magazines, so On decided not to. Instead it looked at what drove the most sales — and the brand's data showed that its average customer recommended On shoes to three or four friends. "People who purchase the shoe are actually our biggest marketing investment," says Allemann. So On began pouring energy into expos and organizing its own events — not just 10K races, but unique happenings around Europe like "squad" races where people go in opposite directions, mountain runs, and major urban art jogs. Often these activities drew hundreds of people; all shoes were welcome, but On would invite people to demo theirs.

By 2013, On felt ready to make a run at Nike's homeland — America. Allemann hunted for U.S. talent on LinkedIn and ultimately found Britt Olsen, who was head of marketing for an outdoor gear brand called The Clymb, to direct On's stateside marketing. She thought it would be an easy job — until she discovered how unprepared On was for the challenge. "I showed up and realized that some Swiss guys dropped off a few laptops and a bag of shoes and wanted to start a brand in the U.S.," she says. "There was really a lot of pushback at first. I was meeting with retailers, who'd say, "This is too Euro; this isn't what customers are looking for.' And you kind of just leave feeling deflated, like, Oh, wow, is this actually gonna work?"

The founders faced the same problem. Coppetti and Bernhard showed up personally at JackRabbit in Manhattan, the leading running retailer in New York City, which at the time had four stores. "We go into the basement, where the buyer has her office. We put the shoes in front of her — we had brought her size. "Do you want to try them?' And she was, like, "No,' " says Coppetti. "Can you imagine, we fly all the way from Switzerland and this lady that, for us, was like the gatekeeper to the New York market didn't even try them. She just refused."

Today, Lee Silverman, founder of JackRabbit, explains that moment from his perspective. His buyer was one of the best in the business, and she knew that the top six brands in the country accounted for about 90% of JackRabbit's sales. Unknown names were most often a money loser. "I'm paying Manhattan retail per-square-foot floor rates," says Silverman, who sold JackRabbit in 2015. "By the time you put your "must-haves' in the already packed shoe storage closets, there's not a lot of room to experiment with new brands."

When Coppetti and Bernhard walked out of JackRabbit that day, they knew they had to go back to breaking rules. With Allemann, they came up with what they fondly dubbed the magic formula: They'd call up influential retailers and editors in important markets and say, "Hey, we happen to be in your city. Would you be up for a lunch run? And by the way, what's your shoe size?" That worked better. "I knew I was going to get three "nos' before a "yes,' so I coped by telling myself I'm just going to try to go from "no' to "no' faster," says Coppetti. Bernhard nods in agreement: "We did a lot of running with retailers. For two years, we were super fit."

Slowly, people started to take a chance on On. That includes JackRabbit (now part of Fleet Feet), which is now one of the brand's biggest retailers.

On had been happily tossing away conventions — and then it ran smack into "seasons."

The sporting goods industry, just like the fashion industry, introduces new inventory, such as new looks and models, every season, which means usually twice a year. Brands show their collections and retailers place orders about nine months ahead. But some of On's shoes kept selling out midseason. It would take at least four months to manufacture new inventory, at which point the season was over and the shoes were old. Then the unloved sneakers would go on sale, eroding their margins. The founders asked their factory partners how they could do it differently. The result was to ditch the whole entrenched model. Instead of seasons, On now designs timeless styles with a shelf life of 12 to 36 months, produced continuously throughout the year. Because the factories can stock the unchanging materials, production time is reduced to four weeks. On does still launch new styles, but it quickly determines which ones will sell — then invests in the stronger models and slows production on the weaker ones. "This has helped us react almost like fast-fashion companies," says Coppetti. "Now about 70% of our revenue is generated on these short lead times."

That wasn't their only manufacturing issue. One of their earliest factories went bankrupt, which almost turned On to Off and jolted the founders into restructuring the company. They began building what is now a team of 40 in Ho Chi Minh City to maintain factory relationships. They also looked at how to bring in supply chain expertise, develop new products, build a wholesale business, grow direct-to-consumer sales, sign athletes, enter new countries, and put on events — all at the same time. The obvious thing to do was to start hiring below themselves, but they worried that would cause bottlenecks at the C-suite.

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"We needed very independent explorers who could lead huge parts of the business and make most of the decisions on their own," says Allemann. So in 2013 they brought in Marc Maurer as COO and Martin Hoffman as CFO. The five partners now control more than 60% of the company's shares. And as On grew, they maintained that sensibility: The rest of their now 19 senior leaders weren't all named partners, but they were invited into a flat hierarchy where major company decisions are made as a group. "We've never really been into titles," says Britt Olsen, who became general manager of North America. "They just called me "Speaker of the House' from day one."

Starting in 2016, these group conversations helped On make a pivotal shift. "Our singular goal had been to build a performance innovation brand," says Allemann, but their newer members helped identify an even bigger opportunity. Consumers now wanted to wear the same things to work, the gym, and dinner — they were already sporting Ons casually — and after much debate, the company decided to go for that market by expanding into everyday shoes and apparel. That was smart, NPD's Powell says: "Fashion is where the money is in the sneaker business."

It also dovetailed with the company's biggest coup to date: Another famous Swiss athlete — tennis megastar Roger Federer — had been noticing Ons appear on his local streets. After his wife, Mirka, began wearing them, Federer got himself a pair and invited the founders to dinner.

When Federer called, he was in the kind of life transition only a pro athlete could relate to: His endorsement deal with Nike had ended, and he was noodling on the idea of developing his own signature line. When he tried Ons, he says, "it was clear right away that they were very comfortable." The On guys joined him at one of his favorite restaurants in the old part of Zurich. "We had a fun and long dinner," he recalls. "A few bottles of wine also." On the way out to the car, Federer and his agent looked at each other. They were impressed.

Coppetti chalks up the success to Bernhard. "Olivier speaks athlete," he says. "I don't know how it works, but pros have this special line of communication." It's true, Federer agrees. "Elite athletes do things a bit differently, and I do think that made it easy for Olivier and me to connect."

In 2019, Federer invested and came in as a partner (he prefers to keep the details private), and since then, he has spent long hours in the company lab designing a tennis collection called The Roger. "Olivier and I began [by] creating the Roger Pro. We had many different iterations of it, and when I came back with comments, I knew he understood exactly what I was referring to," says Federer. "It's the performance shoe I played in when I gave my comeback in Doha last year."

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With such a major athlete on board, On was no longer just an upstart shoe company making up its own rules. It was now playing in the same arena as its big competitors. Profitable since 2014 and growing at an average of 85% a year in net sales, the company went public in September 2021 in a very On way: The three founders ran from the tip of Manhattan to Wall Street to ring the opening bell of the New York Stock Exchange, while team members in Tokyo and Switzerland climbed mountains to celebrate. That day, the stock jumped more than 47%, valuing the company at about $11 billion.

On continues to sign athlete endorsements, but in its own quirky way. Chloe Abbott is a good example: She's a 23-year-old sprinter who, truth be told, was more interested in singing and acting than in pro running. When On's global sports marketing manager, Steve DeKoker, first reached out to her, she'd never even heard of the brand. But she was taken by On's willingness to support all her passions, not just her athletic ones. She signed a four-year deal, and On has done things like book her to sing at an industry dinner at the Olympic trials. "They're so down to partner with me," says Abbott. "If this company was not a thing, I promise you I would be busing tables trying to sing my little heart out. On showed me it's possible to have both."

These days, despite being a public company with high-profile athletes, On is hardly getting comfortable. Its most radical idea yet is in development now: You could call it Sneakers as a Service. "Honestly," Allemann says, "it's a big experiment."

The project is Cyclon, and it's been percolating for a while. On's most popular models are made with 44% recycled materials, but many of those shoes still end up in the landfill. So the team started tossing around the idea of a circular economy in which products are designed expressly not to be thrown out, but instead reused to make new ones. Cyclon was their solution. A 100% recyclable running shoe made of materials (like castor beans) that produce half the CO₂ of On's average models, it can be shredded into pellets and reconstructed into new shoes. To ensure that people turn them in, On is making Cyclon only available by subscription. (The fee is based roughly on the cost of running through two pairs a year.) So far 10,000 people have signed up without even testing the shoes. The company capped it there until it rolls them out this year. It's hardly lost on On that a subscription model can offer intriguing business advantages, like stronger relationships with customers, higher retention, lower acquisition costs, and data. But will it work? NPD's Powell is dubious. "People have tried to do subscriptions in athletic footwear, and they have fizzled out," he says. "It's hard to judge what a consumer wants next year or even next month — their brand preference and physical needs change."

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Still, he says, sustainability is important to Gen Z consumers, and brands that share their values will build stronger connections. Siblings Keri Straughn and Christian Fyfe, co-owners of Palmetto Running Company in South Carolina, have certainly seen that. "Environmental responsibility is a huge, huge thing for us as younger business owners," says Straughn. They feel aligned with On — not just over efforts like Cyclon, but because it is so ahead of the curve and in touch with the culture. "They listen to us because they understand that we are what connects them to their consumer," Fyfe says. "And I can't say that about every other brand."

Today, On's greatest challenge may be keeping its stride. In the first half of 2021, net sales were $345 million and gross margins reached 59%. To maintain the company's pace of growth, each cofounder interviews four or five potential new hires a week — out of the nearly 70,000 applications they received last year. What are they looking for in a winning candidate? An explorer mindset, the founders say. And a certain crazy energy.

"To this day we love tinkering," says Coppetti. They all spend time in the Zurich lab — and so does Federer — playing with its carpentry tools, 3-D printer, treadmills, and oxygen masks, which help them go from idea to working prototype in two or three hours. They can't say what they're cooking up, but they're clearly still thinking big and ready to smash more rules. "Running is gigantic, and it crosses over into walking and everyday shoes," Coppetti says. "If you look at what Lululemon has done with yoga, which is a very niche sport, we feel running gives us a very, very long runway."

Bernhard breaks into a grin. "Pun intended."