HOKA: Jean-Luc Diard and Nicolas Mermoud. The “Clown Shoe” That Became a $2B Bonanza

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1:17Was there any possibility that you could have raised money? Was there a culture of being able to raise money from venture or investors in France at the time? There were people that were knocking at the door to say, I'm happy to invest into it. But the thing is that if we just have additional money, it's not going to bring much more. We need to have people try the products. Everything in marketing, there is only one thing in marketing that we have to do, that you have to go to a multitude of places and make people try. And that's not what you get from any investor.

2:03Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

2:15I'm Guy Raz and on the show today, how a crushing end to a race in the French Alps led to the launch of Hoka, a pillowy sneaker that now does over$2 billion in sales each year.

2:34Sometime around the 2010s, sneakers started to change. They got bigger and they started to look almost like inflatable rafts with these thick, pillowy soles. Now, this was not intended to be about fashion, although thick-soled sneakers did become a fashion accessory. But originally, it was all about comfort and performance. And that change was ignited by two companies, both founded in Europe about a year apart. Both brands were started by elite runners, and both of them believed that more protection, more cushioning, could actually improve your running. One of those brands was On. It's a story we told on this show back in 2024.

3:18And the other brand was Hoka, the subject of today's episode. When Hoka's shoes first appeared in late 2009, they looked, well, just weird. The midsoles were unusually thick. The sole curved like the bottom of a rocking chair. And at first glance, they kind of resembled clown shoes. In fact, that's what some professional runners called them in the beginning. But that look wasn't an accident. The founders didn't think of a running shoe as a piece of apparel. They thought of it like a machine, every single part doing a specific job, and every detail meticulously engineered. And it took time for people to get it.

4:02But once they did, the brand exploded. In 2012, Hoka was doing less than$3 million in sales a year. Today, it generates more than$2 billion. At the center of the story are two men who grew up not too far from each other in the French Alps, Jean-Luc Dillard and Nicolas Mermoux. In 1980, when he was just 23 years old, Jean-Luc joined a legendary French company called Salomon back when it was known primarily for ski bindings. And there, early in his career, he encountered someone who had shaped the way he thought about building things and leading people. And that person was the namesake of the company, George Salomon.

4:47The special thing with this person, who was an amazing entrepreneur, was that he was very close to everyone. So he would come to the office in the evening where I was and say, so what are you working on and what have you learned, et cetera. And then one day it was at the French National Championships of skiing. He was there and he caught me at the end of the race. You were racing? Yeah, I was racing. You were on the team? I was in the team of students but not into the – But you were in this race. Yeah, I was in that race. And he said to me, why don't you race with our ski boots? And I need to understand why.

5:30Why don't you come with me into the car and we'll go down to the ski boot division and you'll explain why. I was freaking out. But obviously that was an amazing sign of how much he wanted to learn what could be improved. And those are the things that stay into your mind. I mean the CEO, owner, let's say, of that company come to an intern, bring him to the ski boot division and say we're going to talk about those things. So this would begin a long career at Salomon, 1980 as an intern. You would eventually – we're going to get to it. You'd eventually become the CEO, president CEO. And I think in 1986, you are put in charge of product for this new product, which is going to be skis.

6:17Which is going to really blow the whole – I mean transform this brand. It's going to make it into a brand that is like Burton. I mean it was going to become a huge brand. Yes. Yeah. Because the ski is the king product. So – and then there was the big aspect that I was anticipating, the fact that skis and bindings would become one unit and not being completely separate elements. It used to be that you bought the skis, you bought the bindings, you would connect them. Right. Now you just buy everything altogether. So the big argument that I had at that time was to say this is what is going to happen.

6:56So if we don't get into it, we're going to be left aside. It's hard to imagine that it was not that long ago. And we're talking about, you know, 30, 40 years ago that you would still buy them separately, these components. And Salomon was a bindings brand. And then they were sort of – they weren't sure if they should get into skis. But it just seems like an obvious – today, you know, in hindsight, it seems totally obvious. Many of the brands at the beginning were like very, very specialized. You could say the same in the bike industry or things like that. And so you were an alpine ski binding company, an alpine ski boot company or an alpine ski company.

7:38Got it. OK, I want to turn to you now, Nico, because I think you were 20 years old when you first met Jean-Luc. You were still at university. Yes. And I guess you were at a ski race. You were racing. And from what I understand, you met Jean-Luc because he was there recruiting people to work on this new ski that Salomon was developing. Is that right? Yes. You have to understand at that time, the aura around Salomon was unbelievable. George Salomon was the ultimate, I mean, beyond. Legend. Beyond the sports. And he was like this amazing person, was a genius. So it was like a dream company, especially for someone who loves skiing.

8:25So I talked to Jean-Luc and I said, I'd like to come join you when I'm done studying. And he said, well, I mean, just finish your studies and we can talk again in two years and a half. And finally, Nico, you graduate and you join Salomon. Tell me about, so you contact Jean-Luc and you say, OK, I'm done, I'm ready. Yeah, but the most funny part is it was my first day at the office, you know. So we met on the parking lot. And then we drive to a glacier in Courmayeur, like in the Mont Blanc Chamonix Valley. And we test different prototypes. We compare them. This is your first day. That was my first day.

9:10So two takes from that day. the first one of course is that's what I want to do all my life I want to wake up and go go do what I love and get paid and with a bunch of super nice fun colleagues who become friends that's the first one the second one is that as soon as we sat down after the test we were talking about the feel we were talking about the sensations the emotion we'd had in between the snow, our feet, our brain. Everybody equal, everybody trying to solve a problem with no sense of hierarchy. This has never changed. And by the way, how did those first few skis do? Were they a hit? Oh, yeah.

10:01Yeah. It was a big, big hit. Just to put it in perspective, I mean, it took us six years to be number one in terms of global sales, global revenues on the ski side. That's the power of innovation. And it's the power of young blood, but then being always extremely critical toward what you do. That's the constant process, but never being satisfied. I think it's very French. It's very mountain people, authenticity, you know, not to get impressed, not to get overconfident. And we have sometimes this reputation in France to be a bit critical and to be unsatisfied. It's not always pleasant when you go to a restaurant or you get in a taxi in Paris.

10:49I love the French, but there is a malaise sometimes that you experience with the French. Yes, but when it comes to innovation, especially if you mix it with our background as Mountaine people, Salomon embraced it and decided to jump to the next level. But you can miss opportunities. You can miss when you're too focused on your own success and what you're doing and you want to follow your path. And it's always important to listen to the consumers and to look very closely at what the competitors are doing. Yeah. Wow. Jean-Luc, you would spend 27 years at Salomon ultimately and you became the CEO in 1998.

11:29When you became CEO of this group, because you saw Salomon go from a bindings company to a bindings and boots company to a binding boots and ski company, then eventually summer winter sports company. I mean running shoes and apparel, Arcterics apparel and even cycling and all these things. Can you give me a sense of from the time you joined Salomon in 1980, 81 to the time you left, which we'll get to, what was the revenue from the beginning and then what was it at the end? It was not even – it was below$100 million. It was, I think, in the$70 to$80 million when I joined. And then when I left, the group was about$1.2 million.

12:13Wow. Yeah. So a completely different company. Very different. I mean, just an explosion in growth. All right. I want to jump to 2007 because this was going to be your last year at Salomon. From what I understand, you go to – in 2007, you were at the Outdoor Retailer Trade Show. This is in Europe or in the U.S.? U.S., yes. Okay. And already at that point, there were trends happening in all across sports. I guess just kind of oversized, larger things, right? Yes. Larger and lighter. It's one of those things that every time you get out at a trade show and you have things that all of a sudden jump a little bit more in your face.

12:58Yeah. What are some examples that you were seeing? Take TaylorMade golf clubs. Just to take an example, the first TaylorMade golf club heads, they were 200cc. And then gradually they moved to 300, then to 350. The golf heads were just getting bigger and bigger. Bigger and bigger. And as they grew bigger, the paradox was that they grew lighter at the same time. And they gave not only more performance, but they gave also more tolerance. It made it easier to hit the ball farther. Exactly. Farther or straighter. So all those things led to better performance. In skis, the same way. Skis had become wider.

13:35Wider. And what did that mean? What did wider skis mean? You get a combination of stability on the one side, which is kind of the way you feel relaxed if you want. But at the same time, combined with other parameters, it's still enabled to curve really well. So that's one example. Bike wheels became much bigger. Mountain bike wheels. Thicker. The profile of the rims. If you are a biker, I mean, you became much more aerodynamic. And we can name a lot of things like that where we saw that oversized and lighter enabled to change paradoxes, to change paradigms. And you brought performance more, let's say, to the bigger, to a bigger group.

14:21All of these things are kind of swirling around. Like if I'm looking at the movie about your life, you're walking down the street and all these bubbles are just like the larger size. And me – yeah, go ahead. Everything that's also a little bit at that time, the design, like the style, the impact on the eye generates questions and interest whether it's negative or positive. Look at those big tires. Look at those fat skis. Look at those big golf clubs. Exactly. Yeah. Yeah. Okay, I want to turn to you now, Nico, because I think you're going to run this ultra marathon, this ultra trail du Mont Blanc.

15:02Okay, so you do this. This is 2007. Yes. It's 101 miles around Mont Blanc. First of all, were you – I mean, we've only talked about skiing and winter sports. Had you – I'm assuming you got into running at some point in your life. very surprisingly, even though I ski raced for many years, I became more of an athlete and an elite athlete in endurance sports. And then it went to adventure racing, and then it went to trail running. You would do it in like one to two days. So you got into this in your 30s almost, into trail running. Trail running, I started my first serious trail race. I was 40. 40, wow.

15:41You do this insane ultra marathon, which I guess today 6 ,000 people start. You're going to run around Mont Blanc. And Jean-Luc, you're going to be part of his crew. Oh, yeah. Yeah. And the crew meant like handing him water or snacks while he was running past you? And poles and jackets and whatever. And effectively, the first thing that you are depleted from is water and food. and the first, by the very first moment already, I mean, he started like crazy, way ahead of the pack. That was a huge surprise. You were an amateur, but you were in the lead, I read, for the first 15 hours of this race.

16:23You were in the lead. Yes, I was in the lead. I just took off and then the Saturday at like 4 p.m. it was over because I ended up doing 22 hours and coming in third. 22 hours coming in third. Yes. And this is in one pair of shoes the whole time, right? Or do you switch shoes? I didn't switch. And how did you, I mean, this is 101 miles. You're pounding. You're constantly pounding your joints, your body. I mean, you must have been just spent, wiped. Well, I fell apart. That's why I didn't win. Because I tried to do everything. I was getting chased by 2 ,500 people. I could see the headlamps, and I ran down the way I would normally ski or drive.

17:08But I had no technology. I had like a very thin – so my body fell apart. Were you in excruciating pain the last – I couldn't. I lost one hour in the last 30K. How? One hour. What was happening? Because my quads shut down. So you were like jelly. Your legs were – You cannot create the speed. You cannot lift up your feet. So your brain is saying, your brain is telling your legs to move, but they cannot move. My legs are telling my brain to stop with pain. It's the other way around. Because when you're going downhill, you're using more of your... You're breaking. Right. And so you're putting more strain on your quads, I think, than when you're going up.

17:52Up is more calves. I guess it depends on how you run. Yeah. Your quads, your knees, I mean, take a lot. Your knees, right, when you're going down. Your back takes a lot. Yeah. I mean, I can picture it so many times because as a kid, you love running down grass hills or even when I hike now, I'm always very careful when I'm going downhill because I don't want to fall. I don't want to slip. And so really, the conclusion you come to is that the downhill side, this is a technology problem. This can actually be solved. To your point, Guy, as a kid, every time you see a little rundown, what do you do?

18:30You run. You run and typically you have your arms wide open and you laugh and you fall sometimes, but you have fun. There are days you fly. It doesn't matter which – that's why you have this expression like which sticks with runners, with bikers, with skiers, with anyone. Today I was flying. So how do you get back to that? Right. And I think one of the things you began to sort of – to kind of document, right, is that a runner's performance changes depending on the surface that they're running on during a race, right? Like not all trails feel the same under your feet, right? Yes. There was one in the fall with a lot of dead leaves.

19:09Dead leaves, yeah. There was one – Dead leaves. You were running – Yes. So you had cushioning from the week. There was one very important one in 2000 during an adventure race in Sicily on lava. So it was soft. There was one a couple of times like gliding on snow. And you see the big difference that there is between when you are in those situations compared to when you are in other situations where you are just pounding hard. It's a legend that we were serious, enthusiastic runners before hockey. We were lazy because it was so hard and one step at a time compared to anything else we would do. Okay.

19:48So you guys start to have this conversation. And what, I mean, what do you remember? You said to Jean-Luc or you said to Nico or said, well, why don't we develop, why don't we try to build a shoe that solves this problem? Do you remember how you came to this? We had this desire to do something together. We had like a field which seemed fantastic, which is footwear because it's a huge market. nothing really had been done for so long. So what was the next step? Then in order to make things happen, we started to create a design center, let's say a development center with people coming that had some know-how.

20:38And so we had different people, let's say, on the topic at the beginning before we start tuning the things. Okay. And was any part of you, Jean-Luc, nervous? I mean, you had – because when you're the CEO of a big company, you've got all kinds of resources at your disposal and you've got all kinds of people and staff and a huge organization. what what what were the challenges you were facing personally to do this because you would have to put in money and your reputation and all of a sudden you know it's you're going to be calling and picking up the phones and you know it's a different it's it's so tell me a little bit about what what that was like for you yeah so on the one side you have the excitement of starting a new adventure.

21:27Right. Clearly. The second thing is that you know that those adventurers have 80 % plus chances of failure. So you just take that into account. And then the other thing is to fix boundaries when it comes to the investments that you are going to do. So here you need to be very clear with your family about how much you are going to put into it. You guys were going to put your money. Yeah. You were not going to go raise money. That's one thing. And obviously not everyone was believing that the two of us could do something together. Who was – I mean I would believe it. You were the head of – you guys had a great track record.

22:07Most people around us would say, hmm, are you sure it can work? But that's fine. That's the usual thing that you face. So this is why in order to make something, you have to have, let's say, first a great team around you. Yeah. So that was the first thing to say, who are the people that can bring that to life? But that group, which cost a lot of money every day, just you had to pay salaries and you had to pay rent and you had to pay all of that. So you rented space in INC? And was this like, was it a small office with like labs, like tables and cutting equipment to cut? Exactly. So small office space, small tools, small things, I mean, to do things, knowing that in footwear, the innovators are also the suppliers.

23:03They are the people who are providing you with the foam formulations, with the different materials, etc. So what we had, we had connections with a lot of people outside. So those people would give us, let's say, like the first step of credibility to get it going. even if they had eyes like this when we showed where we wanted to go. But at least they said, OK, we'll give it a try. When we come back in just a moment, Nico takes an early version of Hoka's to a trail race, and even he has to admit they kind of look like clown shoes. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

24:02Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2008, and Jean-Luc and Nico have set up a design studio in Honesty in the French Alps to develop a new kind of running shoe. But this very first version isn't really a sneaker. It's more like a piece of foam that you'd strap to the bottom of your shoes for downhill running. We were like, maybe people will go to the mountains and they will drive up or they will ride the gondola up and they will just strap their equipment when they get to the town and they will fly down the mountains. So it was pushing the envelope to the extreme of a new sport, which would be downhill running.

24:43And that's when there were this idea of straps. but A, the straps wouldn't work because your foot would... So you never made a prototype? We made one. No, we made prototypes, but it didn't work much. Okay. Do you have a name for the shoe from the beginning, or would that come later? So the name Hoka, most important thing is we wanted to portray flying. I had been to New Zealand a few times. Hoka is a, I think it's a Maori word, right? What does it mean? So, hoca is flying. Oneone is like the element, the dirt. Flying, soaring, there's many ways to say it in Mara. Hoka oneone. Most people saw it as hoca one one.

25:24Yes, because it's the feeling that we wanted to describe. Right. Everything was based, once again, on the notion of flow and flying. Okay. Everything. And that was linked to the fact that what we had stated was a name that would have four letters, two syllables. Hoka, yeah. And the best, let's say, places where we had enjoyed the most adventure racing were on the islands. And so we wanted to take that positioning of being associated to the islands. We found that there was no brands associated with it, that it was completely different types of positioning, and that you had everything, sea to summit, let's say, with every kind of terrain.

26:08Sky to sea. Sky to sea. Great. Because at that time, you would think, given your backgrounds, trail running, you might think of like Boulder, Colorado, right? You might think of like that. But you wanted to get away from that. You wanted to be more people to think of an island, which is interesting. So clearly, there's this kind of mood board you're kind of working through. But let's talk about the design. Tell me about this idea of mid-soles, right? Because I think mid-sole, and it's literally the middle of the sole, there hadn't really been much thought put into mid-sole innovation at the time.

26:45The mid-sole, and it's much more true now than it was like 20 years ago, it's the engine and the body of the footwear. And your foot sits inside the car, which is a midsole, and there is a tire underneath which creates a connection and the grip and the connection with the ground. And there is like a seat and a seat belt, which is the upper. But we were looking at it like it's a ski or it's a wheel. It's the interface. I mean, the way we described it is that it's the interface between you and the ground. How do you develop that interface? How do you develop the snow or the lava ash or the leaves?

27:30Something soft, gliding, bouncy, you know? Yeah, because we wanted to improve on that. But as I said, it was, you wanted to make something that had an appeal, let's say, in a much broader way. So downhill running was like a point of entry. But from the bigger perspective, it was always to say, where does that lead to? Because you don't do shoes just for downhill running in 100-mile races. That would be like 1 ,000 people doing it. So the starting point is you build rocker. Rocker. So it's a shape like a rocker. It's like a rocker, like the bottom of a rocking chair. Because any kind of movement needs to be fluid.

28:16Whatever the way, wherever you are, let's say going up, flat down, et cetera. That when you would land on your heel and it would just propel you up like a rocking chair. So was there anything out there on the market like a rocking chair at the time? Yeah. I mean, in some ways, partly the shape, the MBT at the time. MBT, I remember, yes. It was a very small brand that was for walking, right? It's a very different principle, but it had this in the sense that it was built on the principle of instability. The instability principle was here to help you, let's say, find your stability by putting your body in the right position.