INTRO: Nike is the largest sports company in the
world by far.
In fact, they’re so dominant that they’re 5 times larger than the second-largest sports
brand in the world, Adidas, coming in at $262 billion.
This means that Nike is larger than even Toyota and Coca-Cola.
While the magnitude of their success is super impressive, it’s not too crazy when you
consider that Nike’s shoes and clothing are basically ubiquitous.
But despite the ubiquitous nature of Nike, most people have no clue who’s behind the
company.
This is actually quite ironic given that Phil Knight’s tenure at Nike is longer than the
entire existence of Apple and Microsoft.
On top of this, Phil is the 19th richest person in the world with a net worth of $62 billion.
So, here’s the story of the mystery man behind Nike.
PHIL KNIGHT: Taking a look back, Phil Knight was born on
February 24, 1938, in Portland, Oregon.
Phil’s father, Bill, was originally a lawyer by trade, but he had since opted to run his
own newspaper publishing business called the Oregon Journal.
Bill was quite a strict man who cared a lot about hard work and discipline.
He didn’t like the idea of handouts and thought that everyone needs to learn to fend
for themselves.
This was made quite clear when he refused to give Phil a summer job at the Oregan Journal.
Since he couldn’t get a job at his father’s company, Phil decided to apply for a job at
Oregonian, who was his father’s biggest rival.
At Oregonian, Phil worked the morning shift where he tabulated sports scores.
The job wasn’t too bad, but the same could not be said about the commute.
Phil had to run the full seven miles each way to get to work and back.
Fortunately, though, Phil wasn’t just a great runner but he was a world-class runner.
His personal best at the mile was just 4 minutes and 13 seconds.
Moving into college, Phil would attend the University of Oregon in Eugene where he was
a star athlete.
In 1957, 58, and 59, Phil would win varsity letters for his track performance, and he
would get the opportunity to be trained by the legendary Bill Bowerman.
Throughout his career, Bill would train 31 Olympic athletes, 22 NCAA champions, and 16
sub-4-minute milers, so clearly Bowerman knew what he was doing.
Similar to Phil’s father, Bowerman pushed Phil to always challenge the limits and never
settle for average.
Though it was easy for Phil to apply these principles to running, it wasn’t so easy
with academics.
It’s not that Phil was a bad student or anything; he was just confused as to what
he wanted to do.
He had been majoring in Journalism probably inspired by his father, but he was having
second doubts about whether that’s what he really wanted to do.
So, after graduation in 1959, Phil went ahead and joined the army.
He completed a year of service before he decided that he wanted to return to school enrolling
in Stanford’s MBA program.
While completing his MBA, Phil would write a paper called “Can Japanese Sports Shoes
Do to German Sports Shoes What Japanese Cameras Did to German Cameras?”.
And this would become the blueprint for Nike.
BLUE RIBBON SPORTS: Phil didn’t just jump fully into selling
shoes after college though.
Instead, Phil opted to take the CPA exam and join a local accounting firm in Portland.
In the background though, Phil was hard at work testing out different designs and securing
contractors.
In November of 1962, Phil traveled to Japan where he discovered something called the Tiger-brand
shoe manufactured by Onitsuka.
Phil was thoroughly impressed by the high quality and low cost of the shoes and would
form a licensing deal with the company.
After he returned to the US, Phil would reach out to his former coach, Bill Bowerman, to
get his opinion on the shoe.
And to Phil’s surprise, Bill not only loved the shoes, but he was willing to join the
business as a partner.
Phil of course took Bill up on that offer and the duo started Blue Ribbon Sports in
January of 1964.
Neither Phil nor Bill had any high-level business connections or enough money to market their
product.
So, they decided to market their shoes the old-fashioned way.
The duo started off by attending every track meet in the area and attempting to sell their
shoes to the athletes.
This was moderately successful and they were able to sell 1,300 pairs by the end of the
first year grossing a total of $8,000 worth of sales.
In their second year of business, the duo onboarded a full-time employee who helped
them attend more track meets and over double sales to $20,000.
And this gave them the confidence to open up a physical location in Santa Monica, California.
By 1967, sales were doing so well that Phil would open another store on the east coast
in Wellesley, Massachusetts.
About 2 years into running both stores, Phil would finally quit his accounting job and
go all-in on the business.
This seemed like a great decision for 2 years, but in 1971, the company would run into a
massive roadblock.
They had a dispute with their manufacturer Onitsuka and two would choose to go separate
ways.
Given that Blue Ribbon Sports no longer had the rights to sell Onitsuka’s shoes, Phil
and Bill were forced to create their own shoes and that brings us to Nike.
NIKE: Given Phil’s experience as an athlete himself,
he decided to design the shoes based on what he would want as a runner.
He also consulted with other runners such as long-distance runner Steve Prefontaine
to get feedback on the shows and improve the design.
Most news sources report that it was Phil who designed the company’s first shoes,
but an Olympic athlete named Otis Davis actually suggests that it was actually Bill.
Otis was one of the first people to try the new shoes and he says that he physically witnessed
Bill make the shoes with a waffle iron.
In terms of his experience with the shoes, Otis says that he didn’t particularly like
how they felt on his feet as the shoes had no support and were too tight.
So, clearly, Bill and Phil had some work to do, but they would figure it out over the
next few years.
In terms of branding for the shoe, the duo didn’t want to use the Blue Ribbon Sports
brand as it wasn’t that catchy or memorable.
When they were brainstorming new branding ideas, an employee named Jeff Johnson would
suggest the name Nike which is the name of the Greek winged goddess of victory.
Around the same time, Phil reached out to a graphic design student named Carolyn Davidson,
and he paid her $35 to create a logo for the new brand.
Carolyn came up with a couple of logo designs, but Phil wasn’t a fan of any of them.
Carolyn offered to modify the designs and come up with some new designs as well, but
Phil didn’t want to delay the manufacturing process any further.
So, he simply settled with the swoosh logo stating that maybe it’ll grow on him.
Ironically, the swoosh logo has turned into one of the most iconic and recognizable logos
in the world.
Anyway, Nike’s first track shoe, the Cortez, made its debut at the 1972 Olympic trials,
and it didn’t take long for the shoe to spread like wildfire.
MEGA CORPORATION: Runners around the world wanted to try out
this new shoe put out by Bill Bowerman, and once they tried it, they got addicted.
Within just 8 years, Nike went from launching their first shoe to controlling 50% of the
athletic shoe market.
Nike became such a large part of Blue Ribbon Sports that Phil decided to rename the company
itself Nike in 1978.
And in 1980, Phil would take the company public.
Bill slowly cashed out throughout the 1980s and started to step away from the business
as he was getting quite old.
But Phil was just getting started and his next order of business was securing endorsements.
One of Nike’s first endorsement deals was with the tennis superstar John McEnroe.
John had recently hurt his ankle and was taking some time off.
But when he finally returned, he was wearing Nike shoes which exploded the popularity of
Nike amongst the Tennis world.
Up until then, Nike shoes were mainly purchased by runners, but after this positive experience
with John, Phil realized that he could use other sports stars to break into those sports
as well.
This of course leads us to the partnerships with Michael Jordan, Andre Agassi, Charles
Barkley, and Tiger Woods.
In the 1990s, Nike expanded into hockey, golf, and soccer, and by the end of the decade,
they would achieve over $10 billion in annual sales.
Unfortunately, Bill passed away at the end of 1999 right before the turn of the century,
but there’s no doubt that he lived a pretty solid life stretching 88 years.
Anyway, Nike was also making several acquisitions to aid in their growth.
For example, in 1988, they bought Cole Haan which they eventually sell in 2012.
Similarly, they bought Bauer in 1994 and sold it in 2008.
But by far their most famous acquisition didn’t come till 2003 when they purchased Converse.
Anyway, moving into the new century, Nike has placed a strong emphasis on sports technology.
They started selling heart rate monitors, high altitude wrist compasses, and they partnered
with companies like Apple.
All of this has secured Nike’s position as the dominant sports player in the new tech-filled
world, but the same cannot be said about Phil Knight.
PHIL KNIGHT TODAY: There’s no question that Phil is quite a
private man who avoids the spotlight as much as possible.
I’m sure his value for privacy plays a large role in this, but I think there are also some
other factors driving him away from the public’s view starting with nepotism.
Unlike Phil’s father who refused to give Phil a job at his own company, Phil goes out
of his way to help his children through their careers.
Take his son Travis for example.
After an unsuccessful attempt at becoming a rapper, Travis decided to become an animator.
In 1998, Phil would buy 15% of an animation studio named Vinton Studios, and Travis would
get a job there shortly after as an animator.
A few years later, Phil would buy the entire studio, rename it Laika, and appoint Travis
to the new board.
On top of this, Phil would invest $180 million into the company to help them produce their
first stop motion film called Coraline, and after the launch of the film, Travis would
become CEO and president of the new company.
I don’t know about you, but it looks to me like Phil used his influence and money
to transition Travis from being a failed rapper to being the CEO of an animation studio.
Now, of course, Phil didn’t break any laws or do anything illegal, but this isn’t a
particularly good look.
Aside from nepotism, Phil doesn’t have the best of records when it comes to human rights.
Since the 1990s, Nike has been pummeled with human rights concerns and poor treatment of
employees.
There are reports suggesting that Nike workers in Vietnam were earning just 61 to 89 cents
per hour in 2016, and the use of corporal punishment is allegedly common in their factories.
Here in the US, many activists are complaining that Amazon doesn’t pay enough, and let’s
not forget, Amazon has a minimum wage of $15 per hour for all US employees.
Yet, Jeff Bezos is one of the most hated billionaires out there.
Compared to Jeff Bezos, Phil Knight’s popularity doesn’t even make it onto the charts.
Imagine if Phil was as popular as Jeff; he’d be torched alive by the media for paying employees
less than a dollar per hour.
And I think we’d agree that it’s better to not be known at all than to have a negative
public perception like Jeff Bezos.
Aside from paying low wages and nepotism, Phil is also notorious for extreme lobbying
efforts.
Over the years, Phil has spent millions of dollars on political donations to Republican
candidates in Oregon.
Similarly, he was the single largest donor for the campaign against Oregon Ballot Measures
66 and 67.
This legislation was supposed to increase income tax on corporations and high-income
individuals.
Now, I’m not saying that Phil should pay more taxes or that he’s wrong for supporting
the Republican party.
The fundamental problem isn’t the policies that he’s supporting.
The fundamental problem is that he’s using his money to influence the government, and
I think both sides can agree that this is wrong.
Considering all this, maybe Phil’s relatively small public image isn’t due to his modesty
or privacy, but because he doesn’t want to attract attention towards his frowned-upon
activities.
But that’s just speculation.
Why do you guys think Phil is so private?
Comment that down below.
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