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Was 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.
Welcome to How I Built This a show about innovators entrepreneurs, idealists and the stories behind the movements they built.
I'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.
Sometime 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 Ahn.
It's a story we told on the show back in 2024.
And 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.
But 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 Diard 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 would shape the way he thought about building things and leading people.
And that person was the namesake of the company, George Salomon.
The 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.
And 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.
Why 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 are 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 then, I think in 1986, you are put in charge of product for this new product which is going to be skis.
Yeah.
Which 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.
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.
The big argument that I had at that time was to say, this is what is going to happen.
So if we don't get into it, we're going to be left aside.
It's hard to imagine that 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 seems totally obvious.
Many of the brands at the beginning were 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.
Got it.
Okay, 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.
Yes.
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 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.
So 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...
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.
So 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 do what I love.
And get paid.
And get paid and with a bunch of super nice, fun colleagues who become friends.
That's the first one.
And the second one is that, as soon as we sat down after the test, we were talking about, about the feel, we're 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 how did?
By the way, how did that first those first few skis do?
Were they a hit?
Oh yeah,
Yeah.
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 site.
That's the power of innovation.
And it's the power of young bloods.
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 that 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.
I 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 mountain 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.
Jean-Luc, you would spend 27 years at Salomon, ultimately, and you became the CEO in 1998.
When 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 and winter sports company.
I mean, running shoes and apparel, Arc'teryx 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?
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.
Wow.
Yeah.
So completely different company.
Very different.
I mean, just an explosion in growth.
Yeah.
Yeah.
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 was 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 things.
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.
What are some examples that you were seeing?
Take tailor-made golf clubs.
Just to take an example, the first tailor-made 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.
Wider, yeah.
And what did that mean?
What did wider skis mean for you?
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 care really well.
So that's one example.
Bike wheels became much bigger.
Mountain bike wheels.
Thicker. the profile of the ribs.
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 oversize and lighter...
All 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.
Yeah, go ahead.
Everything was 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.
OK, I want to turn to you now Nico, because I think you were.
You're going to run this ultra marathon, this ultra trail du Mont Blanc.
OK, so you do this.
This is 2007.
Yes, it's one hundred and one miles around Mont Blanc.
First of all, were you I mean, we've already we've only talked about skiing and winter sports.
Had you I'm assuming you got into running at some point in your life.
And, 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.
You 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?
Yes, and poles and jackets and whatever.
And effectively, the first thing that you are depleted from is water and food.
And 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.
You were in the lead.
Yes, I was in the lead.
I just took off.
And then the Saturday at like 4 pm, it was over, because I ended up doing 22 hours and coming in third.
22 hours, coming in third.
That's... Yes.
And these are in one pair of shoes the whole time, right?
Or do you switch shoes?
Yeah, 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...
I ran down the way I would normally ski or drive, but 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.
You cannot create the speed.
You cannot lift up your feet.
So your brain is telling your legs to move, but they cannot move.
My legs are telling my brain to stop whispering the other way around.
Because when you're going downhill, you're using more of your... You're braking.
Right.
And so you're putting more strain on your quads, I think, than when you're going up.
Up 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, it's.
I mean, I can picture it so many times because as a kid you know 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, it's 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 run down, what do you do?
You 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 we stick 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.
Dead leaves.
There was one.
Dead leaves.
You were running.
Yes.
So you had cushioning.
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.
So 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.
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.
So on the one side, you have the excitement of starting a new adventure.
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.
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 guys had a great track record.
Most people around us would say, 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.
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?
Yes.
And was it a small office with labs and tables and cutting equipment to cut?
Exactly.
So small office space, small tools, small things to do things, knowing that in footwear The innovators are also the suppliers.
They 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 out there.
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 hokas 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.
Hey, 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 Annecy, 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 trap their equipment when they get to the top and they will fly down the mountains.
So it was pushing the envelope to the extreme of a new sport, which would be gymnastics downhill running.
And 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.
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 Hoka is flying.
One one is like the element, the dirt.
Flying, soaring, there's many ways to say it in Mara.
Hoka one one.
Most people saw it as Hoka one one.
Yes, because it's the feeling that we wanted to describe.
Everything was based, once again, on the notion of flow and flying.
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.
Sky to sea.
Sky to sea.
Right.
Because at that time you would think, given your backgrounds, you know 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 is this kind of mood board you're kind of working, working through.
But let's talk about the design.
Tell me about this idea of mid souls.
Right.
Because I think midsole and it's literally the middle of the sole there hadn't really been much thought put into midsole innovation at the time.
The midsole, 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?
Exactly.
Something soft, glidy, 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, like the bottom of a rocking chair.
Because any kind of movement needs to be fluid.
Whatever the way, wherever you are, let's say going up, flat down, etc.
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.
It 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.
Essentially, just these were really innovative shoes because they were like boats.
They were like two little boats on your feet.
Exactly.
That was a whole thing.
I mean, but the perception that you had like this was important.
And globally speaking, once again, every development mindset was –
How do we make the thing that requires the least energy for the maximum amount of efficiency?
So that's one thing that was 100% clear since the beginning.
It had to be rocker.
So you knew that it had to be a rocker.
So now, but the challenge was, in order to do that, you needed a lot more foam.
And that was going to add more weight.
How much of a challenge was it to develop this technology?
Well, if you want suspension and you're going to use like a midsole that's like two to three times the size of a regular midsole and to have like a great cushioning, you need to go with foams which are much softer than what was the industry standard.
And we went like pretty much twice softer than what was the tradition in the industry.
Softer.
So less stiff.
Much softer.
But softer also means less dense.
So much lighter.
Okay.
So the challenge into getting that was to find the partners that would dare making that.
Because it had never been made.
It had never been made.
Why not?
Because it was not practical?
It wasn't seen as – It was not industry standard, because all the shoes were low profile and, in order to give you the resistance also in a low profile, you had to have a given stiffness.
So it was a stiffer foam.
Nobody was making it softer.
But the technology was, I mean, it was possible to make it.
Absolutely.
It was possible, but it had not been done.
So you still had to find the partners, the supplier partners, that would make it.
Because everyone was concerned that it could not work because it would destroy itself too easily, or it would.
I mean you weren't sure it was going to work.
Yes, we were not sure.
Of course, we were not sure.
But we were not sure it was going to be stable.
But we did like so much to make it stable.
We...
We put the foot like really down inside the midsole.
We went very wide.
So we did anything we could to make sure it's stable.
And I want to clarify this point because, of course, this is an audio program mainly.
When normal shoes that you run in, Your foot is on top of the cushioning.
This was different because the cushioning actually surrounded your foot.
You were actually inside.
The cushioning is still below you, but you wanted to make a bucket seat that would surround you.
How long did it take for them to figure out how to make this foam, how to make what you needed?
The foam existed already.
They just put in a much bigger mold, something much softer, about 30%, 35% softer.
And how long did it take?
It didn't take much more.
I mean, it took for us three months, let's say, to have something that was like tangible.
So you're working with – so there are factories in China that are making this.
But you have to convince them.
Was it – I mean –
Why was it hard?
Because we were not existing.
We were like a micro customer with no background nothing, asking for very innovative, complicated things that had never been done.
And we didn't have orders to place immediately.
But you wanted a prototype.
You needed a prototype.
And usually these places need an order in order to do a prototype.
They work with you when you have already a business case that is established.
We didn't have that, so it was all based on relationship in saying, please, let's make a try.
The head of R&D, he worked some amazing magic to do the CAD design, to go convince the factories.
He had worked with them for many years.
They had a very special relationship, and they tried.
So when you got those first prototypes, what did you do?
I'm assuming you ran in them.
You wanted to run in them.
We got them in February 2009 in Annecy.
We went on a trail that we knew, and it was like spectacular, like immediately.
The first prototypes?
The first half hour.
The first 15 minutes the three of us ran down and walked back up and ran down again and we were like basically screaming.
It was so easy.
The point where you have to start braking and use your quads, like we described earlier, was at a higher speed.
And it was like the very, very first day, this sensation of flying, this sensation of letting go just moving your arms and not worry about the terrain, like on a mountain bike.
The next thing we did like probably 20 or 30 minutes later is because we of course had like competitor shoes in our current footwear.
We got some timing.
We started timing ourselves.
And we were like 10 seconds off of a minute.
And just to be clear, these prototypes had tread on the bottom as well?
No tread.
But it's okay because it was dry.
It was dry.
It wasn't wet.
It wasn't really okay.
And because it was so soft and it's always been the case with the hockey shoes because it was so soft, the foam conforms itself to the obstacles.
This is in, I think, February of 2009.
We get these first.
May of that year, you once again run the Mont Blanc race.
This is, I think, the second, third time you're going to run the race?
So in May, we had like with these prototypes, I did a race close to my parents' house in Cantal.
And I raced in it.
I raced in them.
And this is the Chamonix Marathon.
And then there was this one.
And then by the end of June, I raced the Chamonix Marathon with the second round of prototypes.
I think I came in fifth.
So let's just talk about this.
So now you are going to use your own shoes for marathons.
And were both of these, were they road marathons or were they trail marathons?
No, it's a trail marathon with 2,200 meters of elevation up and 1,600 meters down.
And that was hysterical because everybody had, of course, the regular footwear from that time.
And so I start the race and there's a leading pack with a lot of serious runners and they all have their very minimal footwear and I'm here with my gigantic clown shoes.
I mean, some of the people knew me so they were not making fun of me, but they were like that is so weird and that is so strange.
And then, yeah, I came.
It's the only time I've done this race, and I came in fifth.
Yeah, I mean, it's so, so yeah, just on this point, I mean, you are, this is 2009.
You are in shoes that are completely different.
Nobody would be running a race in a shoe with a giant sole that's shaped like a rocker.
And anyone else who would be running would be willing to run in them.
Would be too embarrassed to wear them, besides probably me.
They're embarrassed because they look like clown shoes.
People thought they were so weird.
And they were orange and blue that day.
Okay.
So when you ran these races I mean, we talked about the race that Jean-Luc saw you in in 2007 and your legs collapsed
What's your experience now?
Is it different?
Yes.
I mean, I started the last part of the race after a very strong downhill, much more fresh.
Yes.
And caught a lot of people in the last third of the race.
You were like 20th mid-race?
Yeah, probably.
And you ended the race number four?
Five.
Five.
Yeah.
I mean, what about your body, your joints, your knees, your quads?
Was there a marked difference in how you felt?
Yes.
Yes.
I mean both in the last third of the race and in the recovery, because I could race one week later and win something called Montagnard.
Yeah, it was the first ever victory in Rocas.
I would have never thought I could go back and do another.
I think it was 3000 meters of elevation, like seven days later.
Okay, so you have something.
I mean, at this point, I'm assuming you're starting to put in orders for your first shoe.
But before we get there… No, we don't have orders at that stage.
We are just testing prototypes.
Okay.
And the plan was initially to launch at the end of 2010.
Now, let's just talk about this for a moment.
At this point, are you thinking this is really going to be a brand, a product for a small segment of people?
Or were you thinking big like this can be?
No, you were already thinking big.
Yeah.
Based on our experience.
We thought once people experienced that they would never be able to go back.
So how did you, I mean, this could have just been a novelty kind of thing.
How did you convince the first retailer to take a chance on these shoes?
Testing.
Everything you bring new and different and innovative always has to go through people doing the experience by themselves.
Because the first thing is always, no, no, no, no, this is stupid, until you try.
So trying, trying, trying, make people try.
When we come back in just a moment.
The founders start facing new problems supply chain competition, cash flow and they realize that outside investment won't really help them.
They actually need something bigger.
Stay with us.
I'm guy ross and you're listening to how i built this.
You Hey, welcome back to How I Built This.
I'm Guy Raz.
So it's around 2009, 2010 and Nico and Jean-Luc are starting to take hokas to trade shows, where they're doing everything they can to get runners to try them.
We drop rocks on the ground so that to save people, just run on those rocks.
Now get back to your shoe and run on those rocks again.
And then now go there and come back.
I think ultimately, let's say, the cushioning made it appealing to a wider group of people, just generally speaking.
What we use to present always the thing is the way you proceed as a consumer to picking the product.
So at distance, you see something special.
Then you take it in hand and you want the second wow effect.
Second wow effect being it's light.
I was expecting something heavy.
It's super light.
Then you get into the next wow, which is I put it on and it feels immediately, let's say, protective.
And then I start to run and it feels very easy and protective and stable.
So that's the thing that we wanted to do all the time.
I mean before you released the shoes for commercial purposes, I read that lots of people were saying to you this is just not going to work.
But you were hearing this repeatedly, again and again, from a lot of people, which sounds like it could be validation that your idea was not working.
I would say 98% of the people were saying this.
They said this is not going to work.
But the biggest challenge was actually for our salespeople, because our salespeople being pushed back and pushed back and pushed back and pushed back.
And we had agents, we had people that, for them, they had to make a living out of it.
So that was very, very tough for them to keep them motivated.
But what was extremely important and happened is to get a couple of the athletes to try the shoes.
Because when you have something weird which feels weird and looks weird, If you don't want it to be perceived as a gimmick, you need performance in racing validation, like almost immediately.
And we had one guy in France, Ludovic Pommier, and Karl Melzer in the US, who also did the same experience and adopted the shoes like almost immediately, like on the very first day.
Carl Meltzer was – I think he was sponsored by another shoe brand and he dropped that brand to run – because he had tried them in his – he was living in the US.
He tried them in neighborhood runs.
And then other people in the US, and notably with the Hard Rock, for example.
It was phenomenal because –
That woman, Diane Finkel, bought the shoes.
And after something like 15 miles or something like that, or 20 miles, maybe she took the lead of the race.
So she took the lead ahead of all the males.
And she stayed in the lead until mile 90, I think.
And she finished second.
So that had never been done before.
And we had people in Italy and...
So it was a word of mouth.
It was runners.
So the word of mouth started to spread, and those people we didn't know about.
We learned about it, but we had no idea who was using the shoes.
Okay.
So 2010, I mean, you're getting all of these runners using the shoes.
You're getting all this validation from the runners from this community.
Sounds from the outside like things are going great.
What are the challenges you're facing here?
The first big one was the industrial challenge.
We were given only some windows of production.
So people saying I have capacity that week to make your shows because they wouldn't give us, let's say, a classical plan.
So we had to do with that and then ship those goods, let's say, to wherever it needed to be shipped, at costs that were then incredibly expensive.
Then there was the cash flow part, because as soon as we started to move a little bit ahead, so you sold something, then you had a little bit of cash.
Then the next order was like twice bigger than the first one.
So then your cash flow went like this
And the banks would not follow because they said, that's too risky.
I mean, it's growing too big, too fast.
And if you need 100, you have to put 100 and guarantee also 100.
Those were the dynamics.
So we were kind of confident that we had something special.
But to make it happen truly.
We were not.
Let's say, it was not an easy sell and it was really a very complicated supply chain aspect.
How were you dealing with the cash situation?
How did you, I mean, did you, you have to pay for these orders.
Now you're talking about hundreds, thousands of shoes.
How are you going to pay for that?
Our money.
Yeah.
Our money.
Yeah.
Yeah.
This is what kills a lot of businesses.
When you're growing too fast, you can't keep up and you basically can't finance it and it collapses.
Was 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.
Knowing that in France, it's not as easy as it is in the U.S.
In Switzerland.
But the thing is that we discussed up front was if we just have additional money, it's not going to bring much more because the challenge we face from a supply chain standpoint is not going to help.
And the second thing is that 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 requires manpower.
And that's not what you get from any investor.
So just to clarify, the supply chain challenge is that To get on these production lines was very hard, because they're already making shoes for other companies, right?
And so to get in there with your tiny little brand, that's a challenge.
To finance it is a challenge.
But then to get people to be aware of it is another challenge, because you have your company of five, seven people.
Yes, and also like in the summer of 2010, a very early summer, like around this month of July, after we had delivered like about 3000 pairs of shoes, we knew that we needed to accelerate because there was nervousness, because some shoes were getting shipped, especially by a couple of our accounts.
They were getting orders from competitors.
What do you mean?
Yes.
Your competitors were buying your shoes.
Yes.
So you started to get intel that the big players were taking your shoes to take them apart, basically.
Can you patent?
I mean, you can patent the design.
We did.
Patents are always a matter of who has the biggest amount of money.
Right, to fight the lawsuit.
And meanwhile, there's another really important factor you have to consider, right?
Because, in order to build a successful running shoe brand, you have to be in the US, because this is where the money is and where the customers are right.
And I mean at this point.
This is like 2012, I think.
Only a few specialty running stores are selling your shoes in the US.
And so I guess this is when you start looking for partners, strategic partners, like somebody who could really help you grow in the US right,
And I read that somehow you got put in touch with a team at Decker's, the company that still owns Teva's and Ugg's right.
Yes, we got the introduction from this amazing client and then I went there and then they wanted to meet Jean-Luc and we went back there together like a month and a half later.
The point about why it's important to have a strategic partner when you want to be fast is that now we're looking at it with a totally different eye.
Okay now, maybe one day there's going to be customer service, there's going to be financial backup, there's going to be legal protection.
That changed the deal immediately.
Any French...
VC or would not have brought that to the table.
I mean, I also have done acquisitions and things like that.
And the worst thing also that you which made a difference between Decker's and other potential brands was that We were not competing with any other brand within the portfolio.
The portfolio was pretty wide, but there was no running brand.
And you had a very deep very, very deep motivation from Anil Martinez, the CEO, to be successful in the running world.
So when you have the top guy that is deeply motivated into it, you know you have more chances.
Okay.
So it was clear to you that Decker should be your partner.
But now how was it going to work?
I mean, was it an acquisition?
No.
It was a minority investment.
Okay.
With the cash we needed to go through the next step and then another step.
And it started then in 2012 with a 20% investment.
It was a step-by-step, you know, investments over time.
But the idea was if this all worked out, eventually this will be a portfolio brand within Decker's.
Yes, exactly.
And it looked like they would be at that time very quickly.
It looked like they would be the right company to run the business.
They were able to get you into REI.
They were able to get you into… Not immediately to such channels.
The big priority was run specialty because that's something that they knew would build the image.
But putting us on the map really quickly in the U.S. because we knew that time was the essence.
So we had to charge quickly before anyone would come.
You know it's interesting because the first time I can remember really being conscious of hokas, I saw them on my mom.
Like I saw them because they were so comfortable and you know, and you saw them on people who were a little older.
Was that something you noticed also in the U.S.?
?
What worked pretty well quickly from, let's say, from a demographic standpoint, was that there were a lot of people that wanted to be active and that were facing chronical pain, whatever it was.
I mean, the joints, knees, back, et cetera, but they wanted to be active.
And that solved many of their issues.
What we tried also, as we saw that the complementary thing was notably to have all those top athletes on the road, typically that were still using I mean lower profile shoes and so on, to say look, use whatever you want on your race day.
But as you need to train a lot, just you can train more, you can train with less damage, et cetera, with those products.
You've gone, I mean, think about it, in 2012, 3 million in sales to over 2 billion in sales.
I mean, it's pretty amazing.
I know you thought of this as a brand that would appeal beyond just runners and specialists.
That would be a mass consumer brand.
Was this, I mean, could you have imagined that, that?
When we discussed with Decker's group, we had, let's say, we laid down various plans.
The vision that we had was to become a 500 million company.
I don't think we imagined that it could accelerate as quickly as it did.
But once again, this happened really because Decker set up the organization around it.
It's also interesting that a shoe that probably initially was dismissed as a trend.
Oh, this is a trend, this ultra-cushioning.
I remember hearing that, this rocker system.
Yeah. has proven resilient.
That is not a trend.
Absolutely.
And yes because, beyond the success of Hoka and the revenues generated, the concept and the technology, not exactly to the same level, is gigantic.
Yeah.
When you think about the journey you took and where you ended up.
I mean you know It could have died right.
How much of where you got to with this do you attribute to the work you put in, the hard work, the grind, and how much do you think had to do with luck and timing and just the opportunities that were out there in the world?
I think we gave... the right ingredients, and that's what certainly we are proud of.
It remains, that's why it's hard to say like 20% is due to that and 80% to this or whatever.
The vision was right, so that's one thing that we can be proud of.
You know, you are only as good as the sum of the elements.
And yeah, we can be proud of what Dickers has been able to do with it.
And now when we look back, as Jean-Luc said, I think it's also beyond the running shoes.
These new technologies created appetite for the sport of running.
So the trail running is booming.
It's amazing.
It's a very fast-growing sport today.
But people are not afraid like before to run downhill.
They don't crash their legs the way I was crashing mine like 19 years, 15, 16 years ago.
It's also because it's now as fun and pleasant as maybe biking or skiing, or And it's also a huge part of it it's the technology.
And the other thing that our story is extremely similar to what has happened in the bike industry.
The bike industry traditionally was like Tour de France, road racing bikes oriented.
And then mountain bike, let's say, came doing fancy things, et cetera, and starting to put the industry upside down.
And those mountain bike companies ultimately were like the rebels.
And that's what...
You always have to have in industries, I mean, to change things.
And then what you have to keep and which is always the challenge how do you keep the challenger spirit moving it?
How do you keep that and you don't stay on your laurels and you keep on pushing and innovating?
And you need to keep that mindset all the time to move it.
That's Jean-Luc Diard and Nicolas Mermoux, co-founders of Hoka.
Both of them, by the way, have stayed involved with the brand.
And as athletes, neither of them show signs of slowing down.
Jean-Luc's Instagram shows him running up and down trails all over the world.
And Nico has recently competed in ultra marathons in France, Switzerland and Thailand.
And I'll see you next time.
This episode was produced and researched by Ramel Wood with music composed by Ramteen Arablui.
It was edited by Neva Grant.
Our engineers were Patrick Murray and Kwesi Lee.
Our production staff also includes Casey Herman, Chris Messini, John Isabella, Sam Paulson, Alex Chung, Carrie Thompson, Catherine Seifer, Noor Gill, and Elaine Coates.
I'm Guy Raz, and you've been listening to How I Built This.
