Dream On: How to Be a Creative Entrepreneur | David Allemann

0:06Welcome to the Talks at Google Podcast, where great minds meet. I'm Emma, bringing you this episode with David Aleman, co-founder of the sportswear brand On. Talks at Google brings the world's most influential thinkers, creators, makers, and doers all to one place. You can watch every episode at youtube.com slash Talks at Google. David joins Google to talk about On, one of the fastest growing global sports brands. He discusses his career journey, the story of Ann's IPO, and how they were able to become a prominent name in the saturated market of athletic shoes. David's background is at the intersection of business and creativity.

0:49He's worked at McKinsey & Company, an advertising agency, Young & Rubicam, and previously served as the CMO of the design brand Vitra. He also founded one of Switzerland's first digital agencies in 1996. Here is David Allemann, how to be a creative entrepreneur.

1:13So David, you founded the Swiss sports brand ON in 2010, together with your two friends, Kasper and Olivier. You co-lead the company with a special focus on product marketing and the direct-to-consumer business of ON. And you're the co-chairman of ON, that's your official role. And you and your wife, Inja, are parents to two young daughters. And you love spending time in nature, I heard. And as it should be for a Swiss, you love skiing, hiking, biking and running. Obviously, you have to. And kite surfing. So I think it's a really nice start. So for those of you who are not so familiar with ON, just some facts before we then get started with questions and learn more from you, David, about your journey on creative entrepreneurship.

2:05On was founded in 2010, right? You have a presence in over 60 countries. You employ more than 1 ,700 people, which I think is really breathtaking. So amazing. You sold over... Tiny compared to Google. That's a small team. Yeah, I mean, I agree. It's always a matter of perspective, but I'm really, really impressed. And also you've sold over 17 million products already. The IPO in 2021 had a valuation of$7.3 billion and you're considered one of the fastest growing global shoe brands. So I think that's not a matter of perspective. I think that's really, really good. So, but now over to you. Let's warm us up a bit, not like in a sports context, but with words.

2:56So I asked you two words and you choose one of them. You choose, right? Don't explain. It's just about the choice. Okay, I try. I try. So I have to make up my mind, right? So the first one is Nike or Adidas? On, of course. Okay. Okay. You're excused with that one. Marathon or 5K? 5K. Good. I like that. City run or out in nature? Out in nature. Okay. I heard that in the CV. Kipchoge or Kiptum? on atlantic club you have one more choker okay but startup or scale up startup yeah podcast or book book i'm a visual person yeah love it then planning or serendipity um planning probably okay but i hear a bit of okay um empowerment or clarity i think empowerment through clarity and now all the chokers are gone right so you have to work from home or hybrid work hybrid work okay so we're through yeah you were three chokers that was fun but let's go back to the start of on running when you you and your friends sat together was there some kind of special moment like the ignition of on what do you remember some first conversation that you had with your co-leads when it all started?

4:26You know, it was a very short conversation because Olivier called Casper and myself and said, hey, I have this amazing shoe and you have to come and run in it. And so that was the first conversation. So we actually met up here in Zurich, somewhere close to the zoo for those who know that running route. And we went on a run and Oli kind of pulled out of his bag this dripping wet shoe because it was raining and I think you saw it somewhere on the slides here um it really looked like a Frankenstein and um and and and we said he's he's crazy now he's kind of squandered his his hard-earned athlete money because he's a duathlon world champion six-time Ironman winner now he's gonna squander that on a shoe and uh And then we took it for a run.

5:17And for us, it was this one moment where we felt, wow, that's a different experience. So some of you might have remembered when you had your first carving ski or your first full suspension bike, which was always this unique feel. And so we felt we had that. And that was the first encounter where we came together around all. Really nice. I mean, the shoe market is not like a market that just develops, right? It's a very saturated market. And you described this first moment when there was a lot of, you were really convinced about this shoe, right? But what made you and your co-founders so confident that this is worth it, right?

6:07This will be successful and that you can really break through such a saturated market? i think we had to build that i mean oliv was super confident but um but casper and i we had to build that confidence because of course it's crazy to start a running shoe brand out of um small switzerland and uh but when we always went back to that first moment and um so we uh we dabbled a little bit with the idea and then we said hey let's go let's go on a hike together and this hike happened in the Engadin Valley. We saw some pictures of the beautiful nature up there. And we started really in the dark valley.

6:50And sometimes in Switzerland, it's a little bit small villages in dark valleys. And so you don't get so much perspective. And then you hike up the mountain. And when we hiked up that mountain, we saw more of the horizon and of the scenery. and that also lifted our spirit and probably also our review at the world. And at some point we felt, hey, we have a fantastic technology, we have a fantastic idea and we're coming out of one of the most, one of the safest places, the most secure countries. If you don't have the ability to risk something, who can? And it was almost this push that we gave ourselves hey because of that we have to do it what can go wrong and so that was really the decision where we um where we said hey let's do that and what's the idea from the beginning on like to reach that size was it about this kind of goal to be really one of the main shoe brands in an intentionally naive way it was so uh so we said hey you can't think a shoe brand small can't be kind of a local Swiss shoe brand, similar like you can't think car brands small.

8:11And so we had to conceptually think it big, but it was not very concrete. But it was very clear from the start that we wanted to build a global brand from the start. Because also we can probably talk about that. Switzerland is an eight, nine million people country. So that's the greater New York area. So that's a great launchpad if you want to get a test market, but it's probably not going to bring you to a global shoe brand. Yeah, yeah, really nice. I wanted you to ask about what was your first elevator pitch, but then you were describing on how you hiked up the mountain. So maybe elevator is not the right word for that.

8:51But how did you convince others about this? Because, I mean, it sounded a bit like really ambitious, right? It's interesting that you mentioned that. We asked ourselves that question as well at the very beginning. And our elevator pitch or our hiking pitch was a T-shirt. So when we were just a few weeks into the journey, we were invited to the ISPO fair, which is the biggest sports fair in Europe, in Munich. And they had given us, because we had sent them some of our first monsters, and they had given us their major newcomer award. And so we went there and there were big billboards hanging there with our shoe on there.

9:33And we had printed T-shirts that said, don't ask me about the shoe. And we wore these T-shirts at the little booth that we had somewhere in a corner. And of course, a lot of people approached us and said, why shouldn't I ask about the shoe? And then we told them, hey, we can't convince you. You can only be convinced if you step into them and do the same thing that we did on that rainy morning somewhere up here in Zurich. And so that was our elevator pitch. Oh, I love it. That's a great story. Hey, we wanted to talk about creative entrepreneurship. Now we've gone a bit to your career and on, but maybe let's dive a bit deeper into that.

10:15What does it exactly mean to you, this creative entrepreneurship? What does it mean to me? So obviously you can start a business and be an entrepreneur. Or you can start something where you feel you want to do something completely new. So you create really something new. And I think that asking these bold questions of, hey, could we radically reinvent a running shoe because we bring engineering instead of just material science to a shoe? Could we change the way people look at the running shoe because we radically reduce the design and simplify it? Could you change how people shop in a store for a running shoe or gear?

11:08I think these kind of questions, these what-if questions, ultimately lead to creative entrepreneurship. Wow. So it's really very closely connected to this big mission and dream of God. Yes. So how do you think outside of the box? And I think that's very much what from the beginning on this hike brought us together as co-founders, this out of the box thinking. And we try to continue to drive that out of the box thinking very much in our culture as well. We call it the explorer spirit. Nice. You haven't used the word innovation until now, but is it something that just is the effect of everything you describe now here?

11:57Or does it have a specific role, like how you approach innovation in this creative entrepreneurship? I mean, is an innovation company at heart. And I think all the questions we're asking, the what if questions, ultimately are pointed at innovation. Whether that's in product, in digital innovation, in how we lead the organization, how we bring our team together in spaces and so on. everything is geared at that how we build stores that's actually the upcoming Paris store that hasn't even product in there so everything kind of is driven out of this explorer spirit or innovation spirit you could call it really nice and you mentioned collaboration somehow and you decided to have co-CEO so two equal CEOs leading the company I found that really interesting I I tend to see it a bit more often, but you were really early on to my perception with that.

13:02What was the thinking behind it and why does it obviously pay off for you? Well, it's even more complicated because it's two co-CEOs, it's three co-founders. So I think what it tells you that On Waymarch was built from the beginning as a partnership. So three co-founders, our partners, and then Mark and Martin joined us as co-CEOs very early into the game. And now it's a team of 15 people in the management team that very much operates as a partnership. And we always felt if you build a global company from the beginning that is in 13 different locations that has to build product, that has to develop markets, that has to develop channels, retail, and so on.

13:55So you have so many missions. You have to operate as a partnership. A command and control model feels very, very outdated in an environment like that. Really interesting. And it works very well for you. Also, when you showed the picture of the shop, I've visited your office and you really also put a lot of effort in where you work, right? And to really create an office space that also enables collaboration and this partnership approach. Would you agree to that? Yes. So we feel that physical spaces, and you of course know that perfectly at Google, can be culture carriers as well because we're growing so fast that probably how we bring the right partners, new partners to on and how we continue to build on the right cultural DNA.

14:57That is probably some of the most important thing that we can do. Yeah, nice. If we go to the topic of entrepreneurship, right, and we talk about partnership, but one part is taking decisions, right? So what would you have like a top three decisions you've taken for ON that really shaped the company and the success of the company that we've been seeing? Their ranking? Well, number one has to be being an innovation company and believing in innovation, how we can innovate on product. We now on footwear or we're doing also apparel, always kind of product first. We feel if product works, then a lot of the rest falls into place.

15:45And then the second thing is how we build a community and a movement of millions. So people, so that not we have to speak about us and the shoe and the brand. And we also don't leave it to that T-shirt, but that we leave it to a movement of millions who tell their running body or their family about the experience that they had when they stepped first into the shoe. And so On has very much grown as a grassroots movement driven by the law for product, how it scaled. And then, of course, athletes joined us. And, of course, Roger says hello. so I apologize that he didn't find a parking spot out there.

16:34But so, and many other athletes and the on-athletics club and so it has been these partnerships in the wider sense and the community that has been carrying on. And it was a third point as well. I thought, I was thinking, was it now two or three positions? I think it was two and the third point is probably already you talked about is that partnership and that culture at On, that the people that we're bringing to On is the most important thing in the long run. Yeah. I'd love to come back to the culture piece, but first I have to ask one more question about Roger. We saw him, you mentioned him. Is there, like, how did that, how did you find your way together?

17:19How did you, how did you establish this partnership? Yeah, that, it feels like a long time ago, but actually it was only in 2019. and Roger started posting on his Insta channel from Paris at the Open. He started posting in Onchoose. And so everyone, of course, noticed. And as many of you who are here in the audience today physically know Switzerland and Zurich is a very small place. And so, of course, you have common friends. They said, hey, you should go for a dinner date. And so we actually met for a dinner date here at the restaurant in Zurich. And so it was the founders, Mark Martin, Roger brought his friend.

18:16And then he came in with his baseball cap deeply. But you also know in Zurich, kind of people leave Roger alone. So it's very much kind of this, hey, give him some space. And then we had just an amazing dinner. And it felt like instant connection because we had so many topics to talk about, about shoe innovation, about sports, but also about he's very into design, into cultural relevance, sneakers. So it was connection on so many levels what interests us as well. And he challenged us. He said, hey, could you bring your cloud tech engineering to the tennis shoe? And we said, we'll try. Come visit us in three months.

19:06And then he came to the lab and I think you saw a picture here. And we had created a tennis shoe with hidden cloud tech in it. And then we challenged him and said, hey, because he asked, hey, can I get involved? And we challenged him and said, hey, we're not kind of a classical brand that does highly paid endorsements with star athletes. But instead of us giving money to you, why don't you give your money to us and invest in the company? And that's how Roger became a co-entrepreneur. Fantastic. Thanks so much for sharing this very special story with us. We talked about culture. I wanted to come back to that.

19:49I mean, you've grown that the growth that we've seen over the past year is just breathtaking. And you still have a high growth ambition, right? You want to show like 100 % growth until 2026, which would lead to 3.5 billion sales. That's soon, right? That's soon, right? That's soon. but with that pace of growth right how do you get the balance right between going after these opportunities and keeping on the ground and how does that affect culture how do you make sure you evolve or make sure you you you keep also to a certain extent the right culture that's a super important question right so so that's a question that we asked ourselves as well and and what we wanted to do we wanted to maintain this core startup culture and if i'm if i'm saying core startup culture it's it's quite unique in a startup that you have to insanely build product and the future and at the same time you have to execute right because if you don't have a great product you're really relevant from the start and if you don't execute you're also not going to get very long.

21:05And so it's kind of these two things that have to come together and you can never kind of already be corporate or just be kind of tinkering. You always have these two DNA pieces. And so what we did, and that is also possible because of our partnership, we have the co-COs together with the management team, pretty much running the company and running the operations. And at the same time, we as co-founders, together with our whole product and innovation organization and teams, we very much focus on product, the next sport, the next digital innovation, the next horizon. So what probably is only going to be visible in three, four, five years from now.

21:52And so that's a little bit the yin and yang of that. And we're very, very respectful to each other because we know how hard it is to execute. And people who execute know how hard it is to dream. And if you're respectful in that and have both elements in our culture, I think as long this is the case, we can maintain that startup culture. Yeah, that sounds very inspiring. and when we did the word pairs we had remote work or hybrid work I was thinking about because in in the growth journey of on I mean COVID was really in a very special moment I would say what what were the learnings or how how did it influence the way you also shaped the culture or kept the growth going I have to tell you it was a very special moment for us especially when we came back after COVID because we were always paranoid that our culture breaks.

22:52So kind of typically you say, hey, great culture, but once we're going to hit 150 people, the Dunbar number, then it's going to break, right? And it didn't, fortunately, because we always hired in a spirit of mindset before skill set. And so we felt, hey, you always see, you sometimes see companies where you then have in bold colored leather on the wall at the entrance excellence or something like that. And you know that it's not that it's not going to happen. and so how can you instead of writing that on on the wall how can you hire the people that already embody what you want to build as a culture inside inside the company inside your team and so it was amazing for us to see how then the generation that we hired hired the next generation in that spirit, very much driven by our culture.

23:52And the ultimate test came when we came back after COVID. Because here in Zurich, in many of our other certain locations around the world, we had an office that was too small, 200 people cramped into that space. Then everyone closed their laptops, went somewhere. And then we came back to the opening of OnLabs. that some of us are going to visit later today. And there were 800 people because 600 people had joined during COVID. And so we knew we know, we still probably know most of the 200 people, but we won't know 600 other people. And it was amazing coming back because it felt like on. And so it proved to us that continuing to build that culture, storytelling about the behaviors that we expect from the explorer spirit, from the athlete spirit, from the survivor spirit, the things that are important to us really worked and became generational.

24:52And so we're incredibly proud of the team and how our team is continuing that culture. Yeah, I think you should. It's really, really a great story. There was one thing about the mission that you also formulated that I think is connected to also the behavior you described. And the mission says it's about to ignite the human spirit through movement. And I think that's, I mean, that's not like a very common mission. So I would be super interested to learn more about that and the thoughts around it. Yes. I mean, look, what happens when you do sports? Of course, something happens to your body. But I think and we felt that what happens to your mind when you're doing sports is probably even the bigger thing that's happening.

25:44I mean, even if you go out on a rainy day for a run or you kind of hike somewhere up a mountain in bad weather, you never come back and you regret it because it was not a good experience. but you come back and somehow you feel a little bit uplifted, a little bit more optimistic. Sometimes you had a small idea. Sometimes you probably even had a big idea. And so something definitely happens to your spirit. And that's what our ultimate goal is, to lift the spirit. We encapsulate that in the very short form, which is called Dream On, so that you use movement to really make sure that you always kind of push forward and that you don't accept the status quo.

26:35Yeah. And that's also the basis on how you engage with your audience, right? To build really communities. This community building with the audience or the users, the consumers is a core part. I was also interested what role digital plays in that engagement with the local communities. I think you can't overestimate how important digital was for us from the very start. So also partly based on our backgrounds, we wanted to be a very much digital native company from the very beginning. And if you grow so fast, it's almost impossible to do that. if you think back 30 years, how do you build a company so fast in 60 different countries at once without digital empowerment?

27:28And so it was so important for us to have these teams, wherever they are, whatever they do, all the time connected. But then, of course, it was incredibly important for us to share that evangelism that actually our community did for us. through digital channels as well. So for us, digital is very much a core of how we lead the organization, how the organization comes together and how we connect to our community. Yeah. And it sounds a bit like we can all say yes right now, but if we think back, it was not that obvious that you could do something like that on such a scale, right? I mean, when we started to think about starting on um that was 2009 that was when uh when the app stores were launched and uh let me express it like that app stores were launched and um so that was still quite a different time right yeah yeah for sure i think we we should keep reminding ourselves about it because we take it for very much granted right now i feel so it wasn't always like that uh one topic that i'm sure your community will also have certain demands um on product is definitely sustainability i think it's top of mind for for all of us and isbo the the fair you you mentioned before in munich um they also recognized your um uh your product or your program subscription service it is actually which is called cyclone where you don't own the shoe but you like regularly receive a shoe um how much of Cyclone is this great story, this like concept of that you don't own a shoe and that you get it back?

29:12And or how much is it a game changer really for the industry? I think it's really, really interesting to hear more of that from you. You know, Cyclone is a creative entrepreneurship experiment at scale. So our most demanding community when it comes to sustainability is our own team. So the average age at on is 31. We have 74 different nationalities. We have an incredible diversity in the team, which we feel is kind of the breeding ground of an innovation organization as well. and everyone has been asking pretty much from the start, hey, how do we run to a circular future? And that was at the moment when still kind of production was flying apart.

30:09And so first we had to fix production because we had to learn how to do shoes. We never did shoes before on, so we had to learn that. but then it was a rapid development that first of all we said hey we only limit the whole development around materials that are recycled and actually we're very happy that by next year we're going to be throughout our whole product range so at scale 100 % recycled polyesters and 100 % recycled polyamides so it's a lot of recycled materials in our products but then we realized and then we even took it to the next level and said hey could you do bio-based material so could you do a shoe out of beans and that's what cyclone is and then we were sitting around the table and said hey it's fantastic that we have now this shoe made out of beans but if we kind of now give that to consumers and then they at the end they throw the beans in the bin.

31:12That's not exactly what's helpful, but shouldn't it come back to us? So because we can shred it and then create next products out of it. And then we probably looked a little bit at the digital world and said, hey, there are some subscription businesses out there that work. Couldn't we do a subscription businesses, especially for a shoe that is an actual running shoe, not just a sneaker? So you want to have replenishment because you use it up so that you can ping us after six months and then you get your new shoe in a box, you put your old shoe in a box and it comes back to us. And we're still experimenting with that.

31:49So now we have thousands of people who do that. We probably have to add additional models, how we bring shoes back to us, also apparel pieces. Now we start to shred cyclone shoes and then create apparel pieces out of it. So we're running towards the circular future. Yeah, really fascinating. We are a bit out of time for our discussion, but we'll have some time for questions. But before we go there, my last question to you would be, thinking about 2026, you know, soon, but what would be the headline you want to read about in 2026? I think I would love if somebody at your dinner table at home is headlining, hey, I started to run again.

32:41Or is headlining, hey, I started to hike. Because that would fulfill our mission to ignite the human spirit through movement. That sounds fantastic. Very good. So let's see what the audience online and here in the room thinks we should still discuss about. So we have some Dory questions. So questions from our tool that people were submitting. And I will start with the one question from Ash. I'll read it for you. It says, Nike typically looks to inspire customers by seeing themselves in the top tier athletes. But except for Roger Federer, I don't believe you go for this kind of strategy. What have you learned works for making on-joos desirable for customers?

33:30You've shortly touched upon it, but maybe you want to elaborate a bit more on it. No, we're probably also, when it comes to athletes, we're very much doing that from a partnership approach. So we had a lot of athletes calling us and saying, hey, Tegla Lohrup, the former world champion in marathon running, calling us in the first weeks of existence and saying, hey, I just did a peace run from Berlin to Rome. We didn't understand her name exactly, but we found, hey, peace run from Berlin to Rome, somebody important probably going to the Pope. And she said, hey, I never had back pain. And so it's the best shoe.

34:09And so a lot of athletes came to us. And so now that's the case with Ben Shelton, who just won in Tokyo. So that's been super exciting for us in tennis. Iga Shviatek, so the number one in tennis, in women's tennis. But then also with our own athletics club. So we're a brand that founded the own team. So we have an athletics club of exciting talents in Boulder. They live together, they train together. And now actually the ones in Boulder, we also have it in Engadin, all of them go to the Olympics. And so we're very much kind of building the athlete community in a partnership spirit as well. Nice, really good.

34:57We have a second question that is more about the hiring and employee and culture piece. It's from David. what kind of qualities did you look for when selecting the first employees for a new company were you seeking entrepreneurial people with similar qualities to you or something different and has this hiring profile changed over time as the company grows larger so david we um we we said at the very beginning when we were three people hey we're going to interview every person that comes to on all of us together to make sure that that person has the right spirit, which of course broke after seven people because that became unsustainable.