Thursday, April 10, 2008

"An idea is worth more than a factory"

"An idea is worth more than a factory."

-Mario Moretti Polegato, CEO of Geox at MIT Sloan on April 9th, 2008

Today, we were lucky enough to have Mario Moretti Polegato, another great speaker arranged by Ed Roberts.

Mr. Polegato is the founder of Geox, the Italian shoe company that is a hot topic in business circles as it prepares to take on the big boys in the shoe business.

His talk was an fascinating one as it illustrates how unique Geox is in the realm of European companies. Geox itself was born out of an innovation to create a breathable rubber sole. The technology combined a membrane that allows water vapor (i.e. sweat) out, but doesn't allow water from the outside in. This works because water droplets are 700 times the size of water vapor particles. If you have something in between those sizes, you have a breathable waterproof sole.

Polegato said Geox invests about 3% of turnover in R&D each year - a pretty high number for a apparral company given their revenue is around $1.2 billion. They hold 35 patents and believe their competitive advantage comes from a combination of the technology and the design assets they have access to being based very fortunately out of Milan, Italy. In addition, Geox invests heavily in human capital development and university relationships, two things you don't normally think of shoe companies as doing.

Polegato joked about great Italian "innovations" turning into amazing American businesses - pizza (he cited Pizza Hut as a generic example) and espresso (Starbucks) as examples. He said was glad to be the one to successfully commercialize an Italian innovation in this case.

He's a very witty and charismatic guy, even in his second language, with a strong commitment to innovation. I can see why his products have been so widely successful. I actually haven't tried Geox shoes out, but after meeting Mr. Polegato, I'd very much like to.

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