SIF07: Moretti Polegato and why "ideas are worth more than a factory"

(Running notes from the Swiss Innovation Forum 2007 in Basel)

Mario Moretti Polegato is the CEO of Geox, maker of the breathable rubber shoesole. Yes, a shoe sole with holes that allow it to "breath". An idea that just 12 years ago was dismissed by most in the industry as ridiculous, but around which Moretti Polegato (picture) has built a company that sold las year 16 millions of pairs of shoes and is on its way to produce 21 million pairs this year (which makes it, with revenues a market cap of of 4 billion euros, the biggest Italian shoemaker).

He tells of his epiphany, attending a wine convention in Reno, Nevada (where he was representing his family's prosecco production) and going for a walk in the desert. "I wore sneakers, and my feet were sweating, so I cut two holes on the sides of the sole to ventilate it". He researched the problem and discovered a membrane that's waterproof and breathable at the same time -- it has millions of small "canals", or micro-pores, smaller than drops of water, so that water can not get through but vapor can (see image below left). He built it into a rubber sole. Patented it. Offered it to several companies, "but nobody was interested". So he decided to go solo in 1995. Got a loan from a local bank. Picked Geox as brand ("geo" in Greek means Earth; "x" is a sort of tech symbol). Hired the first of today's 3500 employees. "And we still have a big market to capture, since 90% of people use rubber-bottom shoes that don't breathe".

Moretti is low-key in his speech, straightforward, no flowering, just the business of solving a problem and making money doing so: "The traditional rubber-bottom shoes create hygiene problems -- smelly feet, that is, and uncomfort". And "90% of people use rubber-bottom shoes that don't breathe, so there is still a big market to capture for us". What about luxury shoes? "It's unconceivable to me to spend 500 euros for a pair of shoes and still have smelly feet -- so everybody will use our technology someday".

Geox invests 3% of revenues in R&D. They've been developing breathable apparel as well as leather soles, and next year they will go into sport footwear. He stresses over and over the importance of patenting his idea. "Innovation is the combination of three factors: creativity, patent, and scientific research".

He tells about his no-nonsense approach to marketing: Geox uses images of the breathable sole (science) and of the shoes (Italian design), rather than use stars as testimonials.

"There is an innovator inside each of us. The best entrepreneur is the one who foresees the market". And to those who keep saying things like "Ideas are worth a dime a million", Moretti Polegato has a direct answer: "It's time to invest in ideas. An idea is worth more than a factory".