Context

David Allemann is co-founder and co-CEO of On, the Swiss running shoe company that grew from a garden-hose prototype in 2010 to a nearly $4 billion brand challenging Nike and Adidas. He talks with Bob Safian about On's deliberate choice to compete on premium innovation rather than scale, the origin stories behind its partnerships with Roger Federer and Zendaya, and why he and co-founder Caspar stepped back into a hands-on co-CEO role earlier this year after operating for years as a distributed founding partnership. For PMs, this episode is a useful study in positioning a challenger brand deliberately (premium versus luxury versus mass), building a repeatable innovation pipeline, and knowing when founders need to re-enter day-to-day execution.

The Big Idea

On chose to compete on being the most premium, innovation-driven brand rather than the biggest one, and built both its products (the original cloud-tech sole, the robotic LightSpray shoe) and its athlete partnerships (Roger Federer, Zendaya) around that same principle: bring genuine innovation to as many people as possible rather than restricting access the way true luxury brands do.

Allemann distinguishes premium from luxury explicitly: luxury brands create value through scarcity and exclusivity, while On tries to create value by investing heavily in innovation and then making that innovation broadly accessible, at a price that reflects the R&D behind it rather than artificial scarcity.

Key Insights

1. Premium and luxury are different strategies, not different price points

On deliberately positions itself as a premium brand, not a luxury one, and Allemann is precise about the distinction: luxury brands derive value from limiting access and creating scarcity, while On's value comes from continuously investing in innovation and then making that innovation available to as many people as possible. He notes this distinction created a real opportunity, pointing out that the luxury sector's scarcity model has lost "tens of millions of consumers" over the past two years who are looking for something more accessible but still meaningfully better than a commodity product.

2. A prototype built from scrap materials proved the core idea before any real investment

On's original cloud-tech sole began when a friend of the founders, a professional triathlete, cut up pieces of a garden hose at home and glued them underneath a shaved-off shoe just to test whether the concept worked. The founders tried the crude prototype on a run and immediately felt the difference was real, which is what convinced them to invest in the idea, well before anything resembling a finished product existed. The lesson generalizes: a rough, nearly free prototype that lets you personally feel whether a core mechanic works can be worth more than early market research, because it answers the only question that actually matters before you spend real money.

3. Society shifting from a "leisure class" to a "movement class" created the opening for new brands

Allemann argues that when On started in 2010, sports were something people did on weekends, tied to a consumption-focused "leisure class" mindset. He believes that has shifted toward a "movement class," where sports and physical activity sit at the center of daily life and identity, driven by rising interest in health, vitality, and longevity. He frames this kind of large societal shift, citing luggage brands emerging alongside 19th-century travel and consumer electronics brands emerging as devices became portable and personal, as the pattern that consistently creates room for genuinely new brands to become large, rather than just incrementally better versions of existing ones.

4. Athlete partnerships grew from real product conviction, not paid endorsement deals

• What: On's relationships with Roger Federer and Zendaya both began organically. Federer posted about wearing On shoes on his own Instagram before any partnership existed, and Zendaya became familiar with the brand through her role in a tennis movie whose character's shoes were modeled on Federer's Ons.
• Why it matters: rather than a traditional endorsement deal where the company pays an athlete for exposure, Federer challenged On directly, at a dinner in Zurich, to bring the same radical innovation to tennis that it had brought to running, and then took equity in the company instead of a cash fee.
• Example: three months after that dinner, Federer visited On's innovation lab (OnLabs) in Zurich, and that direct product collaboration produced a genuine tennis shoe, an outcome Allemann contrasts with a classic celebrity endorsement that adds a name to a shoe without real product involvement.

5. A hot glue gun video from an employee, not a lab, produced On's most radical manufacturing shift

A young designer at On saw a YouTube video of someone using a hot glue gun to spray a Halloween net and wondered whether the same idea could be applied to spraying a shoe. That scrappy idea, once the company surrounded the designer with a small team of robotics engineers, material scientists, and sports scientists, became LightSpray, a robotic arm that sprays a polygonal filament directly onto a shoe's outsole, collapsing a roughly 200-step manufacturing process into a single three-minute step. On maintains a formal pipeline of 50 to 100 active ideas at any time with structured review meetings and stage gates, but this particular breakthrough originated from an individual employee's unrelated inspiration rather than a directed research effort, showing that a working innovation pipeline needs to leave room for ideas that don't originate from the pipeline itself.

Mental Models & Frameworks

Premium versus luxury as distinct value propositions

• Luxury: value comes from restricting access and creating scarcity; price signals exclusivity more than functional improvement.
• Premium: value comes from continuous, real investment in innovation that meaningfully improves the product, made available broadly rather than restricted; the higher price reflects the cost of that innovation, not artificial scarcity.

Allemann uses this distinction to explain why On's strategy (bring genuine cloud-tech and LightSpray innovation to as many runners as possible) is deliberately different from a luxury brand's strategy, and points to recent softening in luxury spending as evidence that premium, accessible innovation is capturing demand that pure scarcity-based luxury brands are losing.

The "16-year overnight success" pattern

Allemann repeatedly describes major visible wins, including On's retail expansion to more than 80 stores, as the product of four to five years of prior, mostly invisible groundwork rather than sudden breakthroughs. He cites opening the company's first New York store on Lafayette Street during COVID in 2021 as an example: what looks now like fast-growing retail momentum was actually a bet planted five years earlier during one of the worst possible moments to open physical retail. Use this model to recognize that what looks like a company's overnight success is almost always the visible payoff of a much longer, quieter investment that started when conditions looked unfavorable.

Trade-offs & Nuance

Retail stores as brand statement first, sales channel second

On's original motivation for opening physical stores was to "plant the brand in the middle of society" and to give its expanding apparel line, which is hard to represent well on a shoe wall inside a partner retailer, a fully controlled environment. Allemann is explicit that the stores becoming a strong, direct financial driver (lifting sales of apparel and building local running communities through store-organized runs) was a welcome outcome rather than the original plan. The trade-off worth noting: investing in a brand-building channel during an unfavorable moment (opening in New York during COVID, when rents were lower but retail felt existentially risky) can pay off years later in ways that were not the original financial justification.

Founders returning to daily operations after distributed leadership

On has operated since its founding as a partnership among multiple co-founders and leaders, at one point five people, deliberately splitting responsibility so some partners ran the operating engine of the business (supply chain, execution) while others, including Allemann, stayed focused on building new growth engines (new products, new sports categories, retail). Earlier this year, Allemann and co-founder Caspar shifted back into a more hands-on co-CEO role, which he frames not as abandoning the partnership model but as shifting the balance of their own time toward precise day-to-day operating discipline, motivated partly by stock price volatility despite revenue growth past $3 billion, and partly by a belief that founders specifically are positioned to keep pushing innovation as a company scales and risk-taking naturally gets harder.

Practical Application

Build a cheap, physical prototype before investing in market validation

Before committing real budget to a new product idea, build the roughest possible version that lets you or a trusted person directly experience whether the core mechanic works, the way On's founders tested garden-hose-sole shoes on an actual run. A felt, physical experience of whether an idea works is often more decisive and faster to obtain than formal research, and it's cheap enough to attempt before any real investment decision needs to be made.

Decide explicitly whether you're building premium or luxury positioning

When setting pricing and access strategy for a product, make an explicit choice between a luxury model (value from scarcity and exclusivity) and a premium model (value from real, ongoing investment in a better product, made broadly available). On's growth suggests there is currently significant demand shifting away from scarcity-based luxury toward accessible premium, so a mismatched positioning, charging premium prices while behaving like a mass brand, or restricting access while charging premium prices without a real innovation story to back it, is a mistake worth checking for directly.

Keep a structured innovation pipeline, but leave room for ideas that bypass it

On reviews 50 to 100 ideas at a time through formal stage gates, but its most transformative recent product, LightSpray, originated from an individual employee's unrelated inspiration (a Halloween decoration video) rather than the formal pipeline itself. When building an internal innovation process, make sure employees have a low-friction way to raise an idea that didn't originate inside the formal process, and be ready to temporarily pull specialists (as On did, assembling robotics engineers and material scientists around one designer) around a promising idea outside the normal review cadence.

Questions to Consider

• Is our pricing strategy actually built on ongoing investment in a better product (premium), or are we charging premium prices while relying on scarcity or brand perception alone (luxury) without the innovation to back it up?
• What is the cheapest, roughest prototype we could build right now to physically test whether our next product idea's core mechanic actually works, before committing to formal development?
• Do we have any structured way for an idea that didn't originate from our formal roadmap or innovation process, brought by an individual employee rather than a planned initiative, to reach the people who could actually build it?
• If we look at our most visible recent win, what quieter groundwork from three to five years ago actually made that possible, and are we currently planting an equivalent seed for five years from now?

Bottom Line

On's growth from a garden-hose prototype to a nearly four billion dollar brand rests on treating "premium" and "luxury" as genuinely different strategies, choosing broad access through real innovation over scarcity-driven exclusivity, and staying willing to let breakthrough ideas come from unexpected places, a triathlete's garage experiment, a designer's Halloween video, rather than only from a formal roadmap. The company's return to founder-led daily operations this year is itself an example of the same instinct: recognizing when a structure that worked for years needs deliberate adjustment rather than assuming past success will simply continue on its own.

Notable Quotes

"Luxury is defined by limiting access, so scarcity, making it very exclusive. On is defined by innovation, so we want to bring innovation to everyone to give you a better experience." (David Allemann)

"We've been a 16-year overnight success." (David Allemann)

"Crazy is good, because the night is always the darkest before dawn." (David Allemann)