Philip H. Knight
Co-founder of Nike Inc.
Founded: 1972
“Play by the rules. But be fierce.”-Philip H. Knight
In 1993, the man whom Sporting News called “the most powerful person in sports” was not an athlete, manager, or team owner. He was Philip H. Knight, a dynamic rebel who for nearly 30 years shod the feet of sports legends and weekend warriors alike. In less than a decade, his marketing savvy and uncompromising competitiveness have transformed the athletic footwear industry and made Nike one of the world’s most successful and well-known brands.
Knight first came up with the plan for what would become the world’s No. 1 athletic shoe company while working on his master’s degree at Stanford University. Given the assignment to write a term paper on starting a small business in a field he knew well, the former Oregon track and field star naturally chose running. He outlined a plan to break Adidas’ stranglehold on the running shoe market by using cheap Japanese labor to produce cheaper, better quality shoes.
Shortly after graduating in 1962, Knight decided to put his plan into action. He flew to Japan to visit Onitsuka Tiger Co., a manufacturer of fake Adidas sold in Japan. Posing as the head of Blue Ribbon Sports, a company that only existed in his imagination, Knight told Tiger executives that his firm was the perfect choice to import their shoes into the United States. He convinced Tiger to send him some samples, promising to place an order after his “partners” had studied them.
Back in the United States, Knight borrowed money from his father to pay for the samples and sent several pairs to his former Oregon coach, Bill Bowerman, who quickly became his partner. With an investment of $500 each, Bowerman and Knight formally founded Blue Ribbon Sports and bought 200 pairs of Tigers, which Knight began selling from his car at high school track and field events in the Pacific Northwest.
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By the early 1970s, sales had reached $3 million, and Knight decided it was time for Blue Ribbon to break with Tiger and start designing his own shoes. In 1972, Blue Ribbon launched its Nike line, named after the Greek goddess of victory. The shoes, emblazoned with the swoosh logo, Knight paid $35 for the design to an art student in Portland.
Knight’s marketing strategy was simple. Instead of relying on advertising (which he admittedly hated), he had top athletes advertise for his shoes and then let his salespeople sell the product. His strategy and launch timing couldn’t have been better. That summer, the Olympic track and field trials were taking place in Eugene, Oregon, and none other than Bill Bowerman was the coach of the American Olympic team. Knight took full advantage of the opportunity by putting Nike shoes on the feet of several top finishers. When they made national television, so did the shoes they wore. One of the most notable runners to wear Nike shoes was American record holder Steve Prefontaine. Brash, anti-establishment, Prefontaine was the first of a team of brash athletes that Knight hired to advertise his shoes.
As Knight had planned, athlete support was instrumental in boosting Nike sales throughout the 1970s. For example, after tennis “bad boy” John McEnroe injured his ankle and started wearing three-quarter-length Nike shoes, sales of the shoe jumped from 10,000 pairs to over 1 million. And the sudden popularity of jogging, combined with Nike’s clever marketing, created a demand that hadn’t existed before. The old pair of boots were no longer fit for this run around the block; people wanted to wear what the best in the world wore, and that was Nike (as Blue Ribbon was renamed in 1978).
Nike found consistent success in the early 1980s, largely due to huge sales for its Air Jordan line. Commercials celebrating Michael Jordan’s pompous and brash antics have made the gaudy black and red sneakers a hot commodity, selling more than $100 million in the first year alone. By 1986, total sales had reached $1 billion and Nike had surpassed Adidas to become the world’s No. 1 footwear manufacturer. (Despite Michael Jordan’s retirement from professional basketball in 2003, Jordan Brand stronger than ever with $3.1 billion in revenue in 2019.)
Surprisingly, Knight only tripped once in his stellar career. In the late 1980s, Nike’s strategy of focusing on hardline, hardcore athletes ignored the growing market for aerobics shoes. When British shoe manufacturer Reebok introduced their leather shoes as a fashion statement for aerobic enthusiasts, they quickly overtook Nike to take first place.
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From 1986 to 1987, Nike’s sales fell 18 percent. Knight had to contend with the fact that while Nike technology appeals to sports pros, other consumers may prioritize looks over functionality. In response, Nike came up with the Nike Air, a multi-purpose shoe with an air cushion in the sole. The promotional video for the introduction of the new line featured The Beatles’ song “Revolution”. (The rights to which cost Nike $250,000.) The Nike Air may or may not have revolutionized footwear, but it certainly revitalized sales. Nike took back the lead from Reebok in 1990 and has remained so ever since.
But as Nike has grown into a huge multinational enterprise, it has become a magnet for controversy. In 1990, he was criticized by Jesse Jackson, who argued that although African Americans accounted for a large percentage of Nike’s sales, Nike had no black vice presidents or board members. Jackson launched a boycott that resulted in the appointment of Nike’s first black board member. That same year, stories of teenagers being killed for their Air Jordans sparked outrage at what Nike perceived as overzealous promotion of their shoes. More recently, Knight has been accused of exploiting factory workers in Asia, some of whom are paid less than $2 a day by subcontractors who make Nike. But despite this negative publicity, Nike’s sales remain strong.
Phil Knight, now 85, is considered one of the best marketers of the 20th and 21st centuries. Knight continues to hire the world’s greatest athletes to support his product, including Tiger Woods, Mike Trout, Kylian Mbappe, Russell Wilson and Russell Westbrook. Asked by a reporter how he achieved such great wealth and fame, in a veiled reference to a Reebok torpedo that made him rethink his marketing strategy, Knight replied, “How did John F. Kennedy become a war hero? They sank his boat.”
The only man
While Philip H. Knight was certainly the marketing genius behind Nike Inc.’s success, without Bill Bowerman, he would have nothing to sell. It was Bowerman’s design innovations that kept Nike at the forefront of athletic shoe technology. Bowerman was constantly fiddling with sneakers looking for ways to improve them. He cut them up, took a toe from one, sewed it to the heel of the other, and then attached both to the top with duct tape and rubber glue. His methods were admittedly unorthodox. This is how he came up with the famous Nike waffle sole. As Bowerman often recounts, “I was looking at my wife’s waffle iron and thought it looked like a pretty good traction device.” So he grabbed a bottle of liquid urethane, poured it over the iron, and the waffle sole was born.
Knight
The culture that Philip H. Knight nurtured at Nike Inc. in its early days, was not corporate at all. Leadership meetings were called “face-to-face meetings” because direct confrontations and shouting were encouraged. Tequila fountains water sales conferences. During a corporate golf tournament, a sales rep was handing out marijuana supplies from his golf cart. And when tattoos became fashionable, many Nike employees began to brand themselves with the famous Nike swoosh.
Some considered Knight’s encouragement of such antics to be childish. But it would turn out to be a brilliant motivational move. As one veteran Nike employee put it, “You know, it was a holy mission to hit the world. We were crusaders. We would die on the cross.”