Sometimes the simplest ideas work the best. When former winemaker Mario Polegato came up with the concept of a breathable sole whilst walking in the Nevada desert, he hardly imagined that within a decade he would become one of the biggest shoemakers in the world. Now, guided by a messianic vision of forever eradicating sweaty feet, GEOX is one of the most profitable fashion brands in Europe. Polegato currently finds himself ranked 350th on the Forbes Rich List, with a fortune estimated at $2.2 billion. During a whistle-stop tour of GEOX shop openings across the Middle East last month, he talked exclusively to Executive magazine in Beirut.
E The idea of having a breathable sole is actually pretty simple. Were you surprised that no one else had thought of it already?
Ideas start in different ways. Sometimes the very strong innovations begin at university or school and sometimes they come from a personal experience, like mine did. It depends.
When I first thought of the idea I didn’t think it would be a success. I just thought that I could use it for myself. I’m telling you this because there are many, many possibilities for new inventions every day, but sometimes we don’t pay attention to them. Maybe people invent something, and then lose the idea or don’t act on it.
E But you started out on your own?
I patented the idea, then I took it to the biggest shoe companies in the world, who turned it down. Then I decided I would do it myself as a business. Combining the two like this is not easy because there are many inventors out there who are not educated in business, and don’t have the ability or even the interest to commercialize the idea. It’s another world. Fortunately my family was able to help me with the first steps.
E So you made the jump from wine to shoes?
It’s incredible. Now I’m a graduate in about five different things, including agriculture, winemaking, law and administration.
E How did you deal with being initially rejected by the big shoemakers?
From my point of view, it was impossible not to understand this technology. It’s too simple. Everybody understands the concept of a breathable sole. Maybe I was lucky that the big companies didn’t want to take it.
My life has changed completely. Before, I had time to see my friends, ride horses, go skiing, go to the gym a few times a week. Now I travel the world with my two prototype soles – I call them my children – which I carry around in a plastic bag.
E GEOX is now the biggest shoe manufacturer in Italy and the third-biggest in the world, all within a very short period of time. Has this speed surprised you and can you continue to grow?
At the moment we’re working at full pace, this is our maximum capacity. But if we want, it is possible to grow even further. We want to take a look at every aspect of shoes, including production, profitability, research and technology, retail support and so on.
E Your breathable sole is patented, but are you worried about competitors?
The largest problem was in China. There are many entrepreneurs who run into trouble with Chinese fakes. It’s necessary to protect everything in China.
Eight years ago, I went there and asked the patent department in Beijing to recognize our patent. They got us a patent after five years. As soon as we received it, we came back to China and within two years we opened 140 points of sale across the country.
Within Europe, where GEOX is the number one brand in this business, no one copies us. But in case someone does try, we’re able to defend ourselves because we have the patents.
E When students are taught entrepreneurship, the problem of access to capital can be bewildering. Whenever we have a good idea that we really believe in, it’s access to funds that’s the biggest obstacle. What kind of advice can you give to young Lebanese entrepreneurs?
When I was beginning, I started slowly because I didn’t have any experience in business issues or running a factory. I went to see the local bank in Treviso, and talked to the manager. I convinced him to give me a very limited season credit – there are two seasons for shoes, summer and winter.
I fulfilled my obligations and the next season he agreed to renew the credit. This went on for three or four seasons, and my family didn’t put money into the operation.
Later, when GEOX was profitable, I didn’t use any of the company money for any personal use but instead reinvested it all. Gradually, as we did better and better and became known, banks from all around Europe came to offer us money.
Most recently, our listing on the stock exchange in Italy has been fantastic. With it, GEOX has international visibility. Now that we are a listed company, we are in a strong position to negotiate agreements with clients and buyers, and we’ve also been able to consolidate our position with managers because we offer them stock options on three levels – top manager, manager and technician. That makes them partners in the company, not employees. Lastly, of course, we offer shareholders the chance to invest in our capital.
E You’ve said that you emphasise four key points in your business model – managers, HR, technology and communication. Did you look to a specific company as a role model?
It’s more of an international and American model. There’s no particular name we looked at, but business is changing – in the EU, in China, in every part of the world. It’s turning into a single way of doing business. If you want to do business, you do it this way, wherever you are. Investing in technology, working closely with your managers, investing in HR and communication is more important than making the product itself. It’s a very US mentality.
E Looking ahead, you’re planning to get into clothing, and even suits. How far down that road are you?
We’ve done a prototype for a breathable suit – I’m actually wearing it right now. At the moment we only do casual jackets, but in the future we will move into this kind of formal wear.
E In five years’ time do you see GEOX in clothing just as much as shoes?
It’s possible to accelerate in this direction, as GEOX is now an international brand, has loyalty from the customer and has its own private distribution. That means it’s easy for us to distribute new products and potentially arrive at a 50-50 split between clothing and shoes.
E And in ten years time?
As you know, GEOX is now a listed company so I can’t make any predictions. But I can say I’m very optimistic for the future, and my vision is for GEOX to become the biggest shoemaker in the world.
