How Hoka Went From $1M to $1B in the last 10 years

‘Shoes for clowns’ is how many people describe Hoka on Reddit/running posts. How do you scale an ‘ugly’ shoe?

How did this ugly shoe get sold to Deckers for a reported $1.1M in 2012?

This is how Hoka went from $1M to $1B in the last 10 years.

You see, your uncle runs in a pair of Hoka’s and you see a man who’s never run in his life has a pair of Hokas. Hoka has earned its place at the table with the big boys like Nike, Adidas and Salomon.

The brand itself was born out of an intense passion for trail running by Nicolas Mermoud and Jean-Luc Diard in 2009. The two founders are previous employees of Salomon. They have a background in engineering and biomechanics and decided they wanted to create a cushioned shoe that protects trail runners’ feet on longer runs.

Initially they decided to go to a trade show and show their prototype. They met the co-founder of Boulder Running Company and 1993 world marathon champion Mark Plaatjes. They presented Mark with their prototype, which was called Hoka.

Mark went for a test run and was completely blown away by the product.

He ordered 770 pairs on the spot, to sell at his retail store in Boulder.

Nicolas and Jean-Luc only made prototypes at that point but the demand from Mark convinced them that they were onto something.

The first lesson that we can learn is to focus on creating an amazing product. If the product wasn’t good enough, Mark wouldn’t have been excited about it and wouldn’t have made an order. Mark was an instant fan of the shoes and he was confident that he could sell them to other runners.

Creating a killer product is a huge struggle as most companies today are mainly focused on creating an average product for everybody for less so they can maximize profits.

Companies that will win long term are companies that are customer focused, companies that are building brands. When we see a brand that cares, it’s refreshing.

Hoka decided that “ugly” shoes were part of the strategy. Per Deckers CEO Dave Powers said in 2022: “I don’t mind the ugly moniker… it basically says you’re different. You’re owning something distinct.”

In branding there is a lot of talk about being different, about creating distinct brand elements. But to be different takes a lot of courage as most brands and most brand owners want to fit in. They will look at what other competitors are doing and say “We need to do something similar”.

To be different takes authenticity because you have to own it. You have to stand up for that.

The goal was to solve a really niche problem: trail running shoes for long runs that are very cushioned. Then take this problem and create a distinctive design/product that people notice. But the main goal always was to solve a real problem and communicate it in the right way.

The second strategy was to dive into what we call today influencer marketing. Hoka poached ultra-runner Karl Meltzer from La Sportiva and inked an exclusive deal where Karl would only run and compete in Hoka gear.

Back then Karl (I had to Google him) was the David Beckham of ultra running. He won multiple 100-milers. This obviously was a big deal for Hoka as it helped them establish trust through the trail running community.

Establishing trust must be a top priority for companies that want to build sustainable brands that grow from word of mouth.

What I find interesting is that Hoka went against what the trend has been in the past decade: creating a minimalistic design. You look at brands like Lululemon that dominate the market with a minimalistic approach or you look at Abercrombie that has no logos, no bold color combinations. Hoka did the opposite, they designed their shoes with bright colours and a big logo slapped on each side of the shoe.

Here’s what is interesting, they know that they are not taking on Abercrombie and Lululemon, they’re taking on an industry with as many brands at the starting line as any other.

Nike, Adidas, Salomon, Under Armour, New Balance, On Cloud, Asics, Reebok, Puma, Converse, Vans and many, many, more. The industry is CROWDED.

But taking on Nike or Adidas wouldn’t be a smart strategy as those brands have tons of cash to burn to increase advertising spend or reduce prices until you go out of business.

They focused on being them and they focused on building a cult following, which is very hard to do. How do you build a cult?

To build a cult following your brand needs to stand for something that represents something beyond the product and the brand needs to exist outside the norms of culture to appeal to those who are feeling alienated by the current norms.

These types of groups are a huge opportunity for brands that look to build a cult following because they are feeling left out. These consumers feel different from everyone else, they don’t fit in and there’s no product that understands them. When consumers don’t feel seen by the Nike and Adidas of the world, Hoka fills the gap.

Think of Liquid Death — a company that sells water that has a cult following. There is a stigma in our society that if you go out and don’t drink there is something wrong with you. What, are you going to be drinking from a plastic Tesco water bottle in a bar? No. Whether you like it or not, there’s a social pressure that comes with being in that situation.

Liquid Death saw there was a market (people) that don’t drink, they understood what they go through, and saw that no brand understood them. They made drinking water look cool!

Then we look at Hoka’s product: vibrant colors, huge logo on the side, and now Hoka is a fashion statement, it’s a conversation starter, a feel good shoe literally and figuratively.

Consumers don’t just love Hokas for how they look, they love them for what it does for them, it makes them feel like they aren’t just another cog in the wheel. It makes them feel different and say without saying: “look, I’m not into mass market stuff” — I’m unique. Trail runners make a statement with their Hokas saying — “look, I’m a trail runner and I run long distances”.

Yesterday I was in the gym and saw four people wearing Hokas and thought to myself why on earth are you wearing Hoka’s to the gym? For me Hokas are for trail running not gym workouts. But then I remembered it’s a statement, it’s a fashion statement.

But in order for them to create that statement they needed to enter the fashion world. So they partnered with Free People, the speciality lifestyle brand which is the destination for bohemian fashion and Bodega, the popular streetwear brand.

Both Free People and Bodega are known for their early adopter trends and style choices. They’re the GO-TO sources for when it comes to being in the know in fashion.

Being associated with both brands is genius for Hoka. It has helped them shed their previous notoriety for being exclusively for ultra runners.

But how did they achieve all this success in the fashion industry? It all comes back to psychology. We live in a world where individuality and empowerment is growing dramatically. Hoka’s unique shoes stand out like a walking rainbow hit on all of the biggest desires for consumers interested in expressing their individuality and showing how unique they are.

So after all this where does Hoka stand? Well, we can see in searches of Hoka compared to Asics and Oncloud over the years, Hoka is outpacing both.

But what about Nike? Well as you can see below, Nike is well above everybody else and Hoka has a lot of miles to go.

Revenue in 2023 crossed $1.4B and Hoka has seen 50+% growth every year since 2020. Just for perspective on how far off they are from Nike, Nike does 12x Hoka’s yearly revenue each month.

But Hoka still has strong ties with the ultra running community and triathletes as they recently renewed their contract for another 5 years with UTMB and they are still sponsoring Ironman. Just last week I ran Hackney Half and they had a huge presence at the event and it just made me think that they are on a journey to grow dramatically.

If you think about lifestyle shoe brands which will sell at around £140 price tag and last for a year, running shoes are only good for around 500 km. A typical ultra runner will run 70+ km per week so a typical runner doesn’t buy one pair of running shoes per year but maybe 7 to 8 pairs of shoes every year.

But who is Hoka’s biggest competitor? In an interview with the CEO of Hoka’s parent company he said much of their internal drive comes from the idea of overtaking Nike in the space of footwear. I’m eager to see how the industry shapes up 5–10 years from now.

I think that looking at and obsessing over your competitor is a bad strategy, because you are not focused on something that is bigger than yourself, you are focused on numbers and taking on a huge company like Nike. Yes, you might overtake them in the next 5–10 years but what do you stand for?

Hoka is constantly pursuing new audiences, they didn’t stop with trail runners but they keep on bringing new audiences like road runners and appealing to women specifically.

Wendy Yang, who took over as Hoka brand president in 2015, made a concerted effort to draw in women:

“We have very conscientiously focused on women over the last five years, in a sector that was predominantly very white and very male, shifting the fanbase from 60% male to 50%+ female and into a far more racially diverse space.” — Wendy Yang, 2018, Forbes

Yang’s approach has been to broaden the appeal of Hoka to all runners, whether your style is elite performance or casual running. Some of her campaigns include sponsoring Julie Moss, a 61-year-old triathlete, and Latoya Shauntay Snell, an ultramarathon runner and self-proclaimed “Running Fat Chef,” a ‘fit, fat, athlete’.

With their growth they’ve maintained their brand DNA and their aesthetics. With all their new lines they still keep the large Hoka logo on the side and even in 2023 when they started focusing on walkers instead of runners they still kept their DNA — thick sole and wheel-inspired shape.

But recently I have noticed their move towards a more minimalist design. So when expanding I think it’s important to keep your company’s DNA and communicate what you stand for.

The biggest lesson for me is that Hoka is Hoka and they are not trying to be anything else rather than Hoka. In marketing so many times we get excited by seeing what Nike does and we say we want to do that — but the problem with this strategy is that Nike does Nike. Hoka does Hoka.

If Adidas tried to do what Nike does it wouldn’t work because it’s not authentic to them. The goal is to find your own voice and keep on doing that.

Hoka’s path to the summit of the shoe category isn’t just luck or coincidence. It’s a result of a brand’s ability to see a gap in the market, address a niche problem, create a killer product and maintain their identity despite scaling the brand. In a market that is so saturated with established brands, HOKA’s rise can be a masterclass for brands seeking to carve out a distinctive identity and loyal cult following.

If you are interested in building your brand, let’s have a chat, you can get in touch with me here.

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