Philip H. Knight
Co-founder of Nike Inc.
“Play by the rules. But be fierce“-Philip H. Knight
In 1993, the man The Sporting News voted “the most powerful person in sports” wasn’t an athlete, a manager or a team owner. He was Philip H. Knight, the dynamic iconoclast who, for nearly 30 years, has stepped into the shoes of sports legends and “weekend warriors.” In less than a decade, his marketing acumen and uncompromising competitiveness had transformed the athletic footwear industry and made Nike one of the most successful and recognized brands in the world.
Knight first came up with the plan for what would become the world’s number one athletic shoe company while working on his master’s degree at Stanford University. Tasked with writing a dissertation on starting a small business in a field he knew well, the former University of Oregon track star naturally chose running. He outlined a plan to break Adidas’s stranglehold on the running shoe market by using cheap Japanese labor to make cheaper, higher quality running shoes.
Shortly after graduating in 1962, Knight decided to put his plan into action. He flew to Japan to visit Onitsuka Tiger Co., maker of a knockoff Adidas sold in Japan. Introducing himself as the boss of Blue Ribbon Sports, a company that existed only in his mind, Knight told Tiger executives that his company was the ideal choice to import their shoes to the United States. He convinced Tiger to send him samples, promising to place an order after his “partners” reviewed them.
Back in the United States, Knight borrowed money from his father to pay for the samples, and he sent a few pairs to his former coach at the University of Oregon, Bill Bowerman, who quickly became his partner. Investing $500 each, Bowerman and Knight officially formed Blue Ribbon Sports and purchased 200 pairs of Tigers, which Knight began selling from his car at high school track meets across the Pacific Northwest.
By the early 1970s, sales reached $3 million, and Knight decided it was time for Blue Ribbon to break away from Tiger and start designing its own shoes. In 1972, Blue Ribbon launched its Nike line, named after the Greek goddess of victory. Adorned with a “swoosh” logo Knight paid a Portland State art student $35 to design, the shoes featured a unique “waffle sole,” created by Bowerman, that provided better traction with less weight .
Knight’s marketing strategy was simple. Rather than relying on advertising (which he admittedly hated), he asked top athletes to endorse his shoes, then let his sales force sell the product. Its strategy and launch timing couldn’t have been better. That summer, the Olympic Track and Field Trials were held in Eugene, Oregon, with none other than Bill Bowerman as coach of the U.S. Olympic team. Knight took full advantage of the opportunity, putting Nikes on the feet of many of the best. When they made national television, so did the shoes they wore. One of the most visible runners to wear Nikes was American record holder Steve Prefontaine. The arrogant, anti-establishment type, Préfontaine became the first of a team of forward-thinking athletes that Knight recruited to fill his shoes.
As Knight predicted, athlete support played a major role in increasing Nike sales throughout the 1970s. For example, after tennis “bad boy” John McEnroe injured his ankle and began wearing Nike three-quarter length shoes, sales of this style increased from 10,000 pairs to more than a million. And the sudden popularity of jogging, combined with Nike’s clever marketing, created demand where there was none before. Any old pair of shoes wouldn’t do for jogging around the block anymore; people wanted to wear what the best in the world wore, and that was Nike (as Blue Ribbon was renamed in 1978).
Nike enjoyed continued success throughout the early 1980s, primarily due to the huge sales of its Air Jordan line. Advertisements glorifying Michael Jordan’s high-flying, dunk antics made the garish black and red sneakers a hot item, selling for more than $100 million in the first year alone. By 1986, total sales reached $1 billion and Nike overtook Adidas to become the world’s largest shoe manufacturer. (Despite Michael Jordan’s retirement from professional basketball in 2003, the Jordan Brand is stronger than ever, raking in $3.1 billion in revenue in 2019.)
Surprisingly, Knight only stumbled once during his stellar career. In the late 1980s, Nike’s strategy of focusing on hardcore athletes ignored the growing market for aerobics shoes. When British shoe maker Reebok introduced its leather shoes as a fashion item for the hip aerobics workout crowd, it quickly overtook Nike for first place.
Between 1986 and 1987, Nike sales fell 18%. Knight was forced to face the facts: although Nike technology appealed to sports professionals, other consumers might value appearance over function. In response, Nike created Nike Air, a versatile shoe with an air cushion in the sole. The ad produced to unveil the new line featured the song “Revolution” by the Beatles. (The rights to which cost Nike $250,000.) Nike Air may or may not have been a revolution in footwear, but it certainly boosted sales. Nike took over Reebok in 1990 and has remained there ever since.
But as Nike has grown into a huge multinational corporation, it has become a magnet for controversy. In 1990, the company was criticized by Jesse Jackson, who claimed that while African Americans made up a large percentage of Nike’s sales, Nike did not have a black vice president or board member. Jackson launched a boycott that led to the appointment of Nike’s first black board member. That same year, stories of teenagers being killed over their Air Jordans sparked outrage over what was seen as Nike’s overzealous promotion of its shoes. More recently, Knight has been accused of exploiting factory workers in Asia, some of whom are paid less than $2 a day by the subcontractors that make Nikes. But despite this negative publicity, Nike’s sales remained strong.
Phil Knight, now 85, is now considered one of the marketing masters of the 20th and 21st centuries. Knight continues to recruit the world’s greatest athletes to support his product, including Tiger Woods, Mike Trout, Kylian Mbappe, Russell Wilson and Russell Westbrook. When asked by a reporter how he gained such wealth and fame, in a veiled reference to the Reebok torpedo that forced him to rethink his marketing strategy, Knight replied: “How did John Kennedy become a war hero? They sank his boat.
While Philip H. Knight is certainly the marketing genius behind the success of Nike Inc., he wouldn’t have had much to market without Bill Bowerman. It was Bowerman’s design innovations that kept Nike at the forefront of athletic shoe technology. Bowerman was constantly playing with his running shoes, looking for ways to improve them. He would slice them, take a toe from one, sew it to the heel of the other, then attach both to a shank with duct tape and rubber cement. His methods were certainly not orthodox. Just like how he came up with Nike’s famous “waffle sole”. As Bowerman often recounts, “I was looking at my wife’s waffle iron and thinking it looked like a really good traction device. » So he grabbed a bottle of liquid urethane, poured it onto the iron and the waffle sole was born.
The culture that Philip H. Knight fostered at Nike Inc. in its early days was anything but corporate. Executive conferences were referred to as “butt meetings” because direct confrontations and shouting were encouraged. Tequila fountains irrigated sales conferences. At a corporate golf tournament, a sales representative handed out marijuana paraphernalia from his golf cart. And when tattoos became fashionable, many Nike employees got branded with the famous Nike “swoosh”.
Some considered Knight’s encouragement of such antics to be mere childishness. But it would prove to be a stroke of motivational genius. As one veteran Nike employee put it: “It was a sacred mission, you know, to ‘swoosh’ the world.” We were Knight’s Crusaders. We would have died on the cross.