Phil Knight And The Billion Dollar Idea

The shoe dog

Phil Knight was a graduate of Stanford who had a passion for sports, shoes and a crazy idea. Being a distance runner back in university and inspired by the paper he wrote during his business class “Can Japanese sports shoes do to German shoes what Japanese camera did to German camera?”. Phil had an idea and a crazy one indeed, to import Japanese running shoes into the US. He wondered whether Japanese shoes could replace the dominant German shoe brands like Puma and Adidas which were extremely popular in America at the time. But he had only a little experience with Japanese shoes, and this lack of exposure to the shoes assured him the great opportunity it holds.

Phil knew in order to take advantage of it he has to establish contact with the Japanese company and negotiate to import their goods to America, both of which were actions he had no prior experience with. Being so obsessed with the idea of bringing Japanese shoes to America and being an avid traveler, he went ahead and just did it. In November 1962, he flew over to Japan as a tourist and started exploring shoe stores to find the best quality shoes. He found what he was seeking at the city of Kobe, in a shoe store belonged to Onitsuka Tiger. The shoes they made were of very high quality and he believed they have the best chance of getting a piece of the US market, so much that he was determined to import them back home.

Presenting himself as an American shoe distributor of a made-up company he arranged a meeting with the company’s founder, Kihachiro Onitsuka. And offered to become Onitsuka’s distributor in America, a proposal which to his surprise, the owner accepted. And thus with nothing more than his confidence, Phil became the exclusive distributor for Onitsuka Tiger in the US. In 1963 he received his first shipment of twelve pairs of Tiger shoes and he couldn’t peddle them to sports stores and ended up selling them out of the back of his car going to all the local track meetings.

His strategy was not showing any promise and it wasn’t scalable, so he sought the help of a person he knew who cared and know more about shoes than he did: his former coach at the University of Oregon Bill Bowerman. Bill was at the time one of the most famous coaches in America, who had trained multiple Olympic athletes. He was so impressed by the Tiger shoes so much that he asked Phil to let him partner up in this crazy venture and this gave way to an association of a lifetime.

Bill Bowerman — Nike’s Original Innovator

They shook hands on a 50–50 partnership. Thus, in January 1964 Phil and Bill incorporated Blue Ribbon Sports, each investing $500 into it. They spent all the money on their first order, amounted to 300 pairs of shoes at $3.33 a pair. The shipment came through in April 1964 and thanks to Bill’s connections, it was sold out by July. BRS sold $8,000 worth of shoes and made a $250 profit. By 1965 the revenue increased to $20,000 and pretty soon they opened their own first store in Santa Monica.

While Phil was handling the business side of the operation, the actual innovation came from Bill. He was the one who brought jogging culture to America. And the company started marketing the Tiger shoes for jogging. This gave them the edge over the other competitors. Bowman was all about innovation, he was the one who was tinkering with shoes cutting them open to see how they were made and trying to improve them by making changes of his own. He constantly sent notes to Japan requesting changes and was effectively designing Onitsuka’s shoes for them. And it was one of Bill’s designs that put BRS in the spotlight: the Cortez. It became one of the best-selling shoes in 1968, by taking advantage of the 1968 Olympics, held in Mexico. In 1969 BRS sold $300,000 worth of shoes. But they were faced with another big problem, the Cortez was so successful that they couldn’t keep up with the demand. Every new shipment they received got sold out faster but Onitsuka kept on sending shoes at the same slow speed.

Phil and Bill knew in order to expand they would have to evolve beyond being just a simple distributor. Then they realized they held all the cards all this time, the Cortez being Bowerman’s design as soon as their contract with Onitsuka expired, they were free to start making it for themselves. Luckily, for them, their contract ended in 1972, just before the Olympics in Munich. Phil has plenty of time to prepare for his big move. In 1971 he started working on the branding, his first employee suggested the name ‘Nike’, for the brand, after the Greek goddess of victory. Then he needed a logo, so he went to Portland State University, snatched the first graphic design student he can find and told her to make him a logo. For the impressive sum of $35, he got the iconic “Swoosh”, one which would later become the most recognizable brand logos in the world, and the most valuable, having a worth of $26 billion alone. With his branding now complete, Phil was ready for the Olympics. With the production under his control, Phil could finally spread his wings. And the rest was history. Nike became the world’s most popular and biggest sportswear company in America. They achieved this status on the back of creative marketing and branding strategy like the “Just do it” campaign and by signing rookie athletes who went on to become famous across the world.

Phil Knight was a man with an idea, an idea he held deep in his heart that no unexpected setbacks or problems could beat or weaken. His journey was full of perils and risks, but also full of hope and victories. He held strong to his dream in times of problems and found ways to rise above them with the help of other enthusiasts like him. He found a way to turn his vision of creating better shoes into a billion-dollar global corporation. Just like the slogan, he “just did it” because there was nothing he would have rather have done.

A writer set out to instill hopes and dreams into the souls of the reader, to invoke wonder and to leave the world a little better than I found it.