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  • How Phil Knight Built Nike

    updated 5 days, 20 hours ago 0 Member · 1 Post
  • Mateo

    Member
    January 25, 2023 at 5:34 pm

    It’s 1962 and Phil Knight was a fresh Stanford business graduate. Phil was a distance runner and had written a paper titled “Can Japanese sports shoes do to german sports shoes what Japanese cameras did to German cameras?” He’d seen German cameras be displaced by Japanese ones in the American market and he wondered if Japanese shoes could do the same to Puma and Adidas. He became obsessed with his idea and in 1962 flew over to Kobe, Japan. There he found Onitsuka Tiger shoes and arranged a meeting with the founder Kihachiro Onitsuka. He introduced himself as a shoe distributor and made up his company name on the spot: “Blue Ribbon Sports.” He offered to take Onitsuka Tiger to America and became the exclusive distributor. In 1963, he received 12 pairs and started selling them out of the trunk of his car at every running track he could drive to. ​ My sales strategy was simple and I thought rather brilliant. I drove all over the Pacific Northwest, to various track meets. Between races, I’d chat up the coaches, the runners, the fans and show them my wares. The response was always the same. I couldn’t write orders fast enough. ​ Phil reached out to his former coach Bill Bowerman (who was quite famous having trained 31 olympic athletes) who liked the Tiger shoes so much that he wanted to partner up. In 1964, they both invested $500 and incorporated as Blue Ribbon Sports. They subsequently spent that on shoes which allowed them to buy 300 pairs at $3.33 a pop. When they received the shipment in April, they were able to sell it in July (thanks to Bill’s connection and reputation). In their first year, they sold $8,000 worth of shoes and used that to hire their first employee, Jeff Johnson. He was an even better salesman than Phil selling over 3000 shoes which, according to Phil was a completely impossible feat. How you ask? Well, he did the same “cold outreach” as Phil by selling it at tracks. But he innovated with “content marketing and a CRM” essentially. Whenever someone bought, he’d write down important traits about them and kept in touch constantly (kinda like a mailing list before that was a thing). Also, when a customer would complain, he’d personally do everything he could to fix it. A true “customer-orientation” as it’s called in marketing science. A year later, they more than doubled their revenue, doing $20,000. In 1966, they opened their first store in Santa Monica. Phil was mainly handling the business side, while Bill handled innovation. Bill had written a book called Jogging that sold over a million copies. His company was the first marketed the Tiger shoes as jogging shoes. He’d also deconstruct the Tiger shoes to see how they were made, and what could be improved upon. Then he’d send his notes to Japan, requesting changes. In 1968, The Cortez became one of the best selling shoes. Largely because of Bill who’d been designing Tiger shoes for free essentially. In 1969, Blue Ribbon Sports sold $300,000 worth of shoes. (In large part because the Tiger shoes were worn at the Olympics.) But they had a luxury problem… They couldn’t keep up with demand. Each shipment sold out faster than the one before it. Good problem to have… except that Onitsuka Tiger refused to ship faster. They’d fulfill the Japanese market first and only then send whatever was left to the US. Phil and Bill wanted this bottleneck solved. And they were in a good position to do so. The Cortez was essentially Bowerman’s design and they had strong demand. Their contract would expire in 1972 (just before the Munich Olympics), which gave them about a year to prepare. Their first employee suggested the name Nike (the Greek Godess of victory) when they were discussing branding. Phil also needed a logo so he went to Portland State University where he met Carolyn Davidson. He paid her $35 for the swoosh logo. She charged him $2/hr for 17.5 hours. Let that be a lesson for you to not price based on time but to price based on value. And yes, it has a happy ending cuz in September 1983, nearly three years after the company went public, Knight invited Carolyn Davidson to a company lunch. There, he presented her with a diamond ring engraved with the Swoosh and an envelope filled with 500 shares of Nike stock (which have since split into 32,000 shares). Davidson said, “This was something rather special for Phil to do, because I originally billed him and he paid that invoice.” Phil was ready for the Olympics. He established a network of subcontractors in Japan, started importing the shoes, and blew up his revenue. By 1989, the were the largest sportswear company in The US. Partly because of the Just Do It campaign and their clever “influencer marketing” before that was even a thing. The signed Michael Jordan in 1984 as a rookie (he wanted to go with Adidas and didn’t even want to take the meeting but, as The Last Dance shows, his parents talked him in to going). It’s now a billion dollar revenue stream. They also signed Tiger Woods in 1996, and Lebron in 2003. If you enjoyed this, go read Shoe Dog, Phil Knight’s 2016 memoir. RJ Youngling out – by /hq/Younglingfeynman – –

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