Latest / Building Brands with Fexingo: Identity, Reputation, and Long-Term Business Equity / How On Running Built a Brand on Swiss Engineering and Community
Transcript
- Lucas: There's a moment in brand-building that most people miss — it's not the splashy launch or the viral ad. It's the quiet decision about where you won't sell. Luna: Where you won't sell? Lucas: Yeah. Take On Running. When they started in 2010, they had this weird sole with these hollow pods — CloudTec. It looked like a slice of Swiss cheese. And every big retailer said, 'That's not a running shoe.' So instead of fighting for shelf space at Foot Locker, they went to specialty running stores. The kind where the owner actually jogs with customers on Saturday mornings. Luna: That's a bet. You're trading volume for credibility. Lucas: Exactly. And it worked. By 2019 they were in 8,000 specialty stores globally. Then the pandemic hit — and running exploded. On did forty-six point six percent revenue growth in 2025. That's off a base of over two billion Swiss francs. They IPO'd in 2024 at thirty-three dollars, and the stock is now around fifty-five. Luna: But the shoe is genuinely different. The CloudTec — that's not just marketing. I've run in them, and the landing is softer than anything from Nike or Adidas. Lucas: Right. The product is real. But so many brands have a real product and still fail. What On did was treat the running specialty store as a validation engine. Those store owners are trusted by serious runners. If the guy at the running shop says 'try these', you try them. Luna: So the distribution channel became part of the brand story. Lucas: Exactly. And that credibility trickled up. Once serious runners adopted On, the casual runners followed. Then the lifestyle market noticed. Today you see On shoes on people who never run — and that's the brand's biggest challenge and opportunity. Luna: How do you stay authentic when the non-runners start wearing your product? Lucas: That's the million-dollar question. On has two answers. First, they keep investing in performance. Their Cloudboom Echo 3 is a super-shoe that competes with the Alphafly. Second, they leaned into athlete storytelling. They signed Helen Obiri and Jakob Ingebrigtsen. Obiri won Boston in 2023 in On's prototype. That's not just marketing — that's proof. Luna: And Ingebrigtsen is polarizing. He's brash, he talks trash. That's a different energy for On, which started very Swiss — understated, technical. Lucas: Yeah, and I think that's intentional. The brand was getting a little polite. Ingebrigtsen brings edge. He's the guy who says 'I can break the world record' and then does it. On's CEO Marc Maurer said they want to be 'the most premium running brand in the world.' You can't be premium and invisible. Luna: There's also the community layer. They have the On Run Club app — it's not just a tracker, it's a social network for runners. They organize group runs in over 100 cities. That's a direct relationship with the customer, no retailer in between. Lucas: And it's not just app-based community. They have physical 'On Running Labs' — pop-up spaces in cities like Berlin, Tokyo, New York. You go there to try shoes, yes, but also to hear a talk from a sports scientist or meet a local running crew. It's retail as media. Luna: So the brand exists in three layers: the product innovation, the athlete validation, and the community infrastructure. And each layer reinforces the others. Lucas: That's the framework. And now they're expanding into apparel. That's a tough move — Nike and Lululemon dominate. But On's approach is characteristically deliberate. They started with outerwear — jackets and vests — using their own fabric called LightSpray. It's ultralight, and they spray it onto a mold. No seams. It looks like nothing else. Luna: I saw that on Helen Obiri at the Olympics. It's genuinely futuristic. But apparel has a different margin structure and a different fashion cycle. Are they ready? Lucas: I think so. They hired a creative director from Arc'teryx. And they're not trying to do everything — they're doing a tight collection. The risk is overextension, but so far On has shown remarkable discipline. They didn't even make a basketball shoe until 2025, and only after signing a few NBA players. Luna: There's also the Loewe collaboration. That's a luxury fashion house. On did a capsule with them — hiking boots and apparel — and it sold out instantly. That gives the brand cultural permission to be in fashion boutiques. Lucas: But here's the tension: Loewe is owned by LVMH. On is a Swiss public company. The collab is great for buzz, but it also pulls the brand toward luxury. If you're serious about being a running brand, do you want to be associated with a nine-hundred-dollar jacket? Luna: I think it's fine as long as the core product stays accessible. The On Cloud is still a hundred and forty dollars. The Loewe collab was a limited drop. It's a halo, not the main business. Lucas: Yeah, that's a good way to put it. And the main business is still growing fast. On's revenue in 2025 was about two point three billion Swiss francs. Net income margin around eleven percent. They're not yet at Nike scale, but they're the fastest-growing major athletic brand. Luna: And they did it without television advertising for the first decade. It was all word of mouth through runners. Lucas: That's the part I find most instructive. On didn't try to outspend Nike. They out-community-ed them. They built a brand where the customer is the marketer. When you see someone running in On, you think 'that person knows something I don't.' And that's the most powerful brand signal there is. Luna: It's also why the specialty store model matters. If you buy On at a running store, you're associating with a knowledgeable staff. The purchase itself is a credential. Lucas: Exactly. And that's where we come back to the decision not to sell everywhere. In 2015, when On was still small, they got an offer from a major sporting goods chain. Big volume, guaranteed shelf space. They turned it down because the chain didn't have the right environment — the shoes would be next to discount cleats. That takes conviction. Luna: That's a lot like how we approach these episodes, honestly. We deliberately don't run ads. No sponsor breaks, no promo segments. It's just the conversation. And that choice — to not interrupt — is part of why listeners tell us they actually focus. Lucas: Yeah, we've heard that a lot. If these conversations have moved your work forward in some small way, or helped you think differently about a brand, that's the goal. And if you want to support that ad-free principle, there's a simple way — buy me a coffee dot com slash fexingo. It's not a subscription, not a paywall. Just a way to keep this independent. Luna: And it genuinely matters. Every contribution helps us spend more time on research, on finding the right guests, on getting the details right. Lucas: So back to On — I think the next test is whether they can maintain that community ethos as they scale. They now have over three thousand employees. The founder, Olivier Bernhard, is still involved, but the day-to-day is run by professional managers. The risk is corporate drift. Luna: Do you think they'll stay independent? There have been acquisition rumors. Lucas: I think they have a real shot at staying independent if they keep growing at this rate. The brand equity is enormous. And the Swiss structure — they're a 'mixed company' with a dual-class share structure — gives the founders control. So they can prioritize long-term brand value over quarterly earnings. Luna: That's the luxury of being a brand that's built on engineering credibility. Your customers trust that you'll make the right call for the product, not for the stock price. Lucas: And that trust is the hardest thing to replicate. On took fifteen years to get here. They didn't hack growth. They built a system where every part — product, distribution, community, athlete partnerships — reinforces the same idea: this brand is for people who care about running. And that's a brand that lasts. Luna: I think the lesson for any brand builder is: find your CloudTec — the thing that makes you genuinely different — and then be ruthless about the places you show up. Because where you don't sell says as much as where you do. Lucas: That's a great closing thought. And with that, we'll see you next time.