Introduction

When a retired Swiss athlete met an engineer with a crazy idea about cushioning, few could have predicted they would build a billion-dollar sneaker empire. Yet in just over a decade, that’s exactly what happened.

The story of On Running isn’t just about shoes—it’s about innovation, perfect timing, and breaking the rules of an industry dominated by giants.

Table of Contents

1. The Unconventional Beginning
2. Innovation That Made Waves
3. From Swiss Alps to Global Markets
4. The Roger Factor
5. IPO and Beyond
6. Sustainability Commitment
7. Marketing Magic
8. Challenges and Competitors
9. Lessons for Entrepreneurs
10. The Future of On

The Unconventional Beginning

Most success stories have humble beginnings. On’s origin is downright weird.

Picture this: It’s 2010. Olivier Bernhard, a former professional athlete with multiple Ironman championships under his belt, is cutting up a garden hose in his garage. Why? He’s trying to solve a problem that plagued his running career—the jarring impact of each stride.

Together with friends David Allemann and Caspar Coppetti, Bernhard was about to challenge the status quo in athletic footwear. They weren’t shoe designers or fashion experts. They were problem-solvers who saw an opportunity to reimagine running.

“We weren’t trying to make another shoe,” Bernhard once said. “We were trying to create a completely different running sensation.”

That sensation would come from their breakthrough technology: CloudTec®. After countless prototypes and tests, they developed hollow tubes that collapse when your foot strikes the ground, then lock for a solid push-off. It looks strange. It feels different. But it works.

Innovation That Made Waves

The key innovation behind On’s meteoric rise wasn’t just technological—it was conceptual. While giants like Nike and Adidas were fighting the minimalist running battle (remember those weird toe shoes?), On charted a third path.

Traditional Running Shoes	Minimalist Shoes	On Shoes
Maximum cushioning	Barefoot feel	Cushioned landing, firm takeoff
Heavy materials	Ultra-lightweight	Lightweight with strategic support
Guided motion control	No support	“Natural” guidance
Focus on stability	Focus on ground feel	Focus on running dynamics

This sweet spot between cushioning and natural movement became On’s signature advantage. The “clouds” underneath their shoes weren’t just a gimmick—they represented a fundamentally different approach to running mechanics.

Swiss engineering played a crucial role too. Their team applied precision manufacturing techniques more common in watches than in footwear. Each component was tested rigorously, with early prototypes going through over 300 redesigns before the first commercial release.

By 2011, On won the ISPO BrandNew Award, one of the most prestigious prizes for sporting goods innovation. The industry was starting to take notice.

From Swiss Alps to Global Markets

Expanding beyond Switzerland wasn’t easy. The athletic footwear market is notoriously competitive, with established players commanding fierce brand loyalty.

On’s strategy? Start with serious runners.

They placed their shoes in specialty running stores, where experienced staff could explain the unique technology. This targeted approach built credibility among running communities. Athletes became evangelists, spreading the word about these strange-looking shoes that somehow made running feel better.

The numbers tell the story. In just three years, On went from zero to being sold in over 55 countries. According to company data, they experienced 200% year-over-year growth in their early expansion period.

Their global headquarters remained in Switzerland—a deliberate choice that emphasized their commitment to quality and innovation. Unlike many startups that rush to outsource, On maintained close control over design and development.

The Roger Factor

In 2019, a seismic shift occurred. Tennis legend Roger Federer not only became a fan of On shoes—he became an investor and active participant in product development.

For a relatively young company, securing a partnership with one of the world’s most recognized athletes was transformative. The “Roger” tennis shoe line that followed introduced On to audiences far beyond the running community.

“I’ve been a fan of On and its products for some time,” Federer stated when the partnership was announced. “But it’s the people behind the brand that make it so special.”

This wasn’t just celebrity endorsement. Federer’s involvement brought design influence, global marketing power, and validation of On’s Swiss heritage. It also marked the company’s expansion beyond pure performance into the lifestyle segment.

The timing couldn’t have been better. As athleisure continued its dominance in fashion, On positioned itself at the intersection of performance technology and everyday style.

IPO and Beyond

On September 15, 2021, On went public on the New York Stock Exchange under the ticker symbol “ONON.” The IPO raised approximately $746 million, valuing the company at over $7.3 billion.

This successful public offering came after a remarkable pandemic performance. While many retailers struggled, On saw sales increase by 59% in 2020, reaching $463 million. The company’s direct-to-consumer channel grew by 200% during this period, according to their IPO filing.

What makes this growth more impressive is the premium price point. On shoes typically retail between $130-170, positioning them above many competitors. Yet customers willingly pay this premium, believing in the value proposition of their unique running experience.

The company has used its capital influx to invest in three key areas:

• Expanded production capacity
• Enhanced sustainability initiatives
• Deeper digital integration

Since going public, On has continued to expand its product range beyond running into trail, tennis, and lifestyle categories. They’ve also opened flagship stores in major cities worldwide, creating immersive brand experiences.

Sustainability Commitment

From early days, On recognized that environmental responsibility would be crucial to long-term success. Their sustainability efforts have evolved from simple material choices to comprehensive programs:

✅ Cyclon subscription service: The world’s first shoe recycling subscription ✅ CleanCloud™: Using carbon emissions to create shoe foam ✅ Reduced packaging waste ✅ Transparent supply chain reporting ✅ Worker welfare standards across manufacturing partners

Their Cyclon program deserves special mention. Subscribers receive shoes made from castor beans that, when worn out, can be returned for complete recycling. This closed-loop system addresses the massive waste problem in footwear, where millions of shoes end up in landfills annually.

According to On’s 2022 sustainability report, they reduced carbon emissions per product by 27% between 2019 and 2022. Their goal is to eliminate virgin petroleum from their supply chain by 2024.

Marketing Magic

On’s marketing approach breaks conventional wisdom. They rarely use splashy celebrity campaigns (Federer being the exception). Instead, they focus on organic community building and technical storytelling.

Their social media presence emphasizes the science behind their products. Detailed explainers about CloudTec® and Helion™ superfoam educate consumers rather than just entertain them. This approach converts casual interest into informed purchases.

Events have been another cornerstone of their strategy. The “On Track Nights” series brings professional and amateur runners together, creating authentic connections to the brand. These gatherings foster community while providing valuable product feedback.

Their visual identity remains consistently minimalist and distinctly Swiss. Clean lines, simple color palettes, and attention to detail distinguish their marketing from the loud, aggressive approach of many competitors.

Challenges and Competitors

No success story is without obstacles. On faces significant challenges as it continues to grow:

1. Scaling Production: Maintaining quality while meeting demand has been a persistent challenge. Supply chain disruptions in 2021-2022 highlighted this vulnerability.
2. Competition from Giants: Both Nike and Adidas have introduced their own versions of cloud-like cushioning technology, directly targeting On’s signature innovation.
3. Price Sensitivity: Economic pressures may test consumers’ willingness to pay premium prices for running shoes.
4. Innovation Pressure: Having built their brand on technology, On must continue to innovate to maintain their differentiation.

Recent market research shows On capturing approximately 10% of the premium running shoe market in North America, with particularly strong performance in urban centers and with seasoned runners.

Lessons for Entrepreneurs

As a startup founder turned investor, I see several key lessons in On’s journey:

1. Solve Real Problems: On began with addressing a specific pain point—the harsh impact of running—rather than just making another shoe.
2. Timing Matters: Their emergence coincided perfectly with the running boom and the rise of athleisure.
3. Strategic Distribution: By starting with specialty retailers and running communities, they built credibility before pursuing mass market.
4. Hold Your Vision: Despite pressure to conform to industry norms, they maintained their distinct approach to running technology.
5. Heritage as Advantage: Rather than hiding their Swiss roots, they amplified them, making their European engineering a key selling point.
6. Sustainability From Day One: Environmental commitment wasn’t an afterthought but built into their business model.

On’s success demonstrates that even in mature markets dominated by established players, there’s always room for meaningful innovation and fresh thinking.

The Future of On

Where does On go from here? Their recent moves suggest several directions:

First, they’re expanding their lifestyle offerings. The success of their casual sneakers indicates potential beyond performance wear.

Second, international expansion continues, with particular focus on the vast Asian market.

Third, technological innovation remains central, with recent patents suggesting advancements in personalization and smart features.

Finally, their sustainability initiatives point toward a future where circular economy principles become standard in the industry.

With revenue growth continuing to outpace competitors and brand awareness still growing, On’s running story is far from over.

TL;DR

On Running transformed from a Swiss startup with an unusual cushioning concept into a global footwear phenomenon worth billions in just over a decade. Their success came from pioneering CloudTec® technology that created a distinctive running experience, strategic market entry through specialty retailers, and perfect timing with the running boom.

Roger Federer’s 2019 investment accelerated their expansion beyond performance into lifestyle markets. Their 2021 IPO valued the company at over $7 billion, fueling further growth. On continues to focus on innovation, sustainability, and community-building while maintaining their Swiss heritage. Despite challenges from bigger competitors, they’ve carved out a significant share of the premium market by solving real problems for runners and building a distinctive brand identity.

Q&A

Q: What makes On’s technology different from other running shoes?
A: On’s CloudTec® system features hollow tubes (clouds) that collapse individually upon impact, providing cushioning during landing but firming up for a solid push-off. This creates a unique running sensation that combines soft landing with explosive takeoff, unlike traditional cushioning systems that remain consistently soft throughout.

Q: How did On break into such a competitive market?
A: On used a targeted approach, first establishing credibility with serious runners through specialty running stores. They built a community of enthusiasts who spread the word, winning industry awards for innovation, and expanding gradually into broader markets before making the leap into lifestyle categories.

Q: What role did Roger Federer play in On’s success?
A: Beyond celebrity endorsement, Federer became an actual investor and product developer in 2019. His involvement brought global visibility, design input for the Roger tennis line, validation of On’s Swiss heritage, and accelerated their expansion into lifestyle products beyond running.

Q: How sustainable are On’s products?
A: On has made significant sustainability commitments, including their Cyclon subscription service (the first fully recyclable running shoe program), CleanCloud™ technology that uses carbon emissions to create shoe foam, and a pledge to eliminate virgin petroleum from their supply chain by 2024. Their sustainability reports show a 27% reduction in carbon emissions per product between 2019-2022.

Q: What challenges does On face moving forward?
A: Key challenges include scaling production while maintaining quality, defending against major competitors introducing similar technologies, potential consumer price sensitivity in economic downturns, and the ongoing pressure to innovate to justify their premium positioning.

Are You Ready to Run a Successful Startup? Quiz

1. Do you believe in solving specific problems rather than making incremental improvements to existing products?
   • Yes (2 points)
   • No (0 points)
2. Are you willing to focus on a niche market before pursuing mass adoption?
   • Yes (2 points)
   • No (0 points)
3. Would you prioritize building community over traditional advertising?
   • Yes (1 point)
   • No (0 points)
4. Do you see sustainability as a core business strategy rather than a marketing tactic?
   • Yes (2 points)
   • No (0 points)
5. Would you maintain your company’s original vision even when faced with industry pressure to conform?
   • Yes (2 points)
   • No (0 points)
6. Are you prepared to invest heavily in R&D even after achieving initial success?
   • Yes (1 point)
   • No (0 points)

Score Interpretation:

• 9-10 points: You have the entrepreneurial mindset that could lead to disruptive innovation like On Running. You value solving problems, building community, and maintaining vision through challenges.
• 6-8 points: You show potential for entrepreneurial success but might need to strengthen your commitment to long-term vision and sustainable practices.
• 3-5 points: You have some entrepreneurial qualities but might benefit from developing greater resilience and focus on innovation.
• 0-2 points: You might want to reconsider your approach to entrepreneurship. The mindset that drives successful startups like On requires commitment to innovation, community, and sustainability.