Speaker A
Nike is the world's largest sportswear brand. They earn around a thousand crore rupees every day.
The story of Phil Knight, a failed athlete who founded Nike by starting Blue Ribbon Sports and revolutionizing the sports shoe market.
Key Takeaways
- Failure in one area can lead to success in another with passion and perseverance.
- Understanding customer needs deeply helps in convincing and selling products effectively.
- Strong partnerships and innovation are critical to business growth.
- Facing and overcoming challenges is part of building a successful brand.
- Execution and persistence are key lessons from Phil Knight’s journey.
What the video covers
- Nike is the world's largest sportswear brand, earning around a thousand crore rupees daily.
- Phil Knight, born in 1938, was a fast runner but never reached elite athletic status.
- After completing his MBA, Phil decided to start a shoe business inspired by his college research.
- He partnered with Japanese company Onitsuka to import Tiger brand shoes to the USA under Blue Ribbon Sports.
- Phil faced early challenges including delayed shipments and difficulty convincing retailers to stock his shoes.
- Bill Bowerman, Phil's college coach and shoe innovator, became a 50% partner in Blue Ribbon Sports.
- Phil sold shoes directly from his car trunk at athletic competitions, quickly growing sales.
- Onitsuka tried to revoke Phil's distributorship, but after a confrontation in Japan, Phil regained rights for Western USA.
- Blue Ribbon expanded with new salespeople and faced pressure from Onitsuka to sell company shares.
- Nike was officially launched in 1971, later becoming a global brand through innovation, endorsements, and marketing.
Chapters
- 00:00Introduction to Nike and Phil Knight's early life
- 00:37Phil's athletic career and MBA completion
- 01:27Decision to start shoe business and initial research
- 02:05Meeting with Onitsuka and founding Blue Ribbon Sports
- 03:39Delays in shoe shipment and partnership with Bill Bowerman
- 05:12Exclusive distributorship and early sales struggles
- 06:20Selling shoes directly and business growth
- 07:29Conflict with Onitsuka and resolution in Japan
- 08:05Expansion of Blue Ribbon and challenges with Onitsuka
- 09:06Nike brand creation and rise to global success
Full Transcript — Download SRT & Markdown
Speaker A
World-class athletes like Ronaldo and Rafael Nadal use their products. Would you believe that the one who built Nike was a failed athlete himself and started his business from selling shoes in the trunk of his car?
Speaker A
This is the story of Nike's founder, Phil Knight. Phil Knight was born in 1938 in a small town named Portland, America.
Speaker A
Since childhood, he used to run very fast, and his ultimate dream in life was to be a great athlete.
Speaker A
In school and college, he worked hard on his running and won many races. Along with running, Phil continued his education, and in 1962, he completed his MBA. He still wanted to continue running, but one morning during his practice, he faced reality. After dedicating his entire youth
Speaker A
running, he had become one of the best athletes of his state, but he could not become a national and international level athlete.
Speaker A
Sadly, he was good, but not great. He was twenty-four years old, and now there was no scope to get better in athletics. Hence, that morning, Phil, with a heavy heart, accepted that this was the end of his athletic career.
Speaker A
He had failed in his dream of becoming an elite athlete, but still, he wanted to do something that would always keep him close to sports.
Speaker A
Phil was deeply connected to his running shoes like every runner. That's why he decided that he would do shoe business.
Speaker A
Then he remembered that during his MBA, he had studied for several weeks and wrote a detailed research paper on the business of running shoes.
Speaker A
In his research, he came to know that Japanese camera companies, due to their improved quality and low price, had disrupted the American camera market.
Speaker A
According to his research paper, Japanese shoes could disrupt the USA shoe market similarly and could overtake Adidas and Puma, the biggest companies of that time.
Speaker A
It was a big risk to start a business on the basis of his college project,
Speaker A
but Phil had no other option, and he decided that he would import Tiger brand shoes from Japan and sell them in the USA.
Speaker A
Tiger shoes were manufactured by a Japanese company named Onitsuka. So, Phil collected his entire savings and took a flight to Japan.
Speaker A
Finally, he reached Japan and took an appointment from Onitsuka's office. He was very nervous before the meeting.
Speaker A
A boy who was very shy and introverted by nature set out to partner with a big company. Moreover, Onitsuka's executive asked Phil for the company name at the very beginning of the meeting.
Speaker A
Don't know how, but Phil imagined the blue ribbons in his house. The same blue ribbon which he got for winning many races, and he said, "Blue Ribbon." He said he represented a company called Blue Ribbon Sports.
Speaker A
No such company existed back then. But Onitsuka's executives were happy with the name. The meeting progressed, and Phil repeated his college project line by line.
Speaker A
At the end, Onitsuka's employees were so impressed that they wanted his company Blue Ribbon to sell Tiger shoes in America.
Speaker A
It was a deal! Phil gave them his address and asked them to send some of Tiger's training shoe samples.
Speaker A
There was no limit to Phil's happiness. He transferred money to Onitsuka for the shoe samples and returned to America and waited for samples. Four months passed, and he didn't receive any shoes. In response to the letter, Onitsuka said
Speaker A
that the shoes would arrive soon. But this did not happen in reality. Phil had not given up hope, but he needed a job to survive until shoes arrived.
Speaker A
So, he took the job of an accountant in a short firm. It had been almost a year since the meeting with Onitsuka.
Speaker A
By then, Phil had almost lost hope when a notice came from the customs. There were 12 shoes from Japan. After collecting the shoes, Phil unboxed them and showed the shoes to his college coach Bill Bowerman
Speaker A
and told him about his business plan. Bowerman liked the shoes so much that the very next day he offered Phil to be a 50% partner.
Speaker A
Phil was quite surprised with this offer. Bill Bowerman, throughout his coaching career, was obsessed with one thing, and that was shoes.
Speaker A
He had been experimenting with shoes for years and had become an expert in shoe design.
Speaker A
His full focus was on making the shoes lighter. He would often take away shoes of his students without asking and would return after tearing the shoes, performing minor modifications for several days.
Speaker A
The athlete's performance would massively increase after his modifications. Bill Bowerman was also a genius coach and a natural leader.
Speaker A
He was a god-like figure for Phil and the rest of the runners. And today, the same god-like figure wanted to become Phil's business partner.
Speaker A
It was a no-brainer. They shook hands, and now both of them were fifty-fifty partners.
Speaker A
The same day, Phil wrote a letter to Onitsuka and asked for exclusive distributorship rights to sell the Tiger shoes in Western USA.
Speaker A
Also, he placed the first order of 300 shoes, at a cost of 1,000 dollars. This time, shoes came on time, and Blue Ribbon got exclusive distributorship rights for West USA.
Speaker A
This is what Phil was waiting for. He immediately quit his accounting job so that he could focus completely on business.
Speaker A
He stored the shoes in the basement of his parents' house. This was the office of Blue Ribbon now. It was time to sell shoes now.
Speaker A
Phil requested many sports shops to sell the Tiger shoes. Everyone refused to sell Tiger shoes in their shop.
Speaker A
Phil didn't have money to open his own shop. So, he came up with an idea. He'd fill the trunk of his car with shoes and started reaching wherever there was an athletic competition.
Speaker A
He spoke to coaches, athletes, and spectators and started presenting his shoes. Phil had tried sales jobs before but was not successful.
Speaker A
This time, the response of the customers shocked Phil. His shoes were selling like hotcakes.
Speaker A
He'd been an athlete himself and so understood athletes' problems very well. Hence, he was easily able to convince customers that Tiger's shoes were best for them.
Speaker A
In just two months, he sold the first shipment of 300 shoes and placed an order of 900 shoes this time.
Speaker A
But his total earning was just 2,000 dollars, and the total cost of the order was 3,000 dollars.
Speaker A
So, Phil asked for a thousand-dollar loan from the bank for the first time.
Speaker A
Looking at the strong business of Blue Ribbon, they approved the loan, and Phil finally had a career that he was enjoying deeply.
Speaker A
He had a trusted partner like Bill Bowerman and a product that was selling by itself.
Speaker A
In short, Phil was having a great time! But then, there comes a twist in the story.
Speaker A
A wrestling coach wrote a letter to Phil. He claimed that he had just returned from a meeting with Onitsuka in Japan and that Onitsuka had given him rights to be exclusive distributor for the whole of America. Coach orders Phil to immediately stop Tiger Shoes business.
Speaker A
Only two months had passed since Phil started business and was on the verge of closure.
Speaker A
He immediately wrote a letter to Onitsuka asking for clarification, but there was no response from them. So, Phil decided that he would go to Japan and confront Onitsuka.
Speaker A
During this meeting, Phil made it clear how he had been wronged. He presented his argument for strong sales and explained future plans. Next day, he directly met company owner Mr. Onitsuka.
Speaker A
He instantly trusted Phil. Mr. Onitsuka said that Phil's passion reminded him of his youth days,
Speaker A
and he gave Phil Western USA distributorship again. Phil was relieved, but the problems were far from over.
Speaker A
Blue Ribbon achieved 8,000 dollars in sales at completion of the first year of business. They hired a salesman named Jeff Johnson to expand in another city.
Speaker A
Jeff's specialty was that he had also been an athlete like Phil. He was extremely passionate about his work.
Speaker A
And that's why sales reached 16,000 dollars in the second year of business. That means it was going to be double, but surprisingly, this became a big problem for them.
Speaker A
Phil wanted to grow very fast. So, as soon as one shipment was sold out, he'd double or triple the order.
Speaker A
They had to reinvest their entire profit for payment.
Speaker A
Basically after one year's business Blue Ribbon had incurred a debt of thousands of dollars.
Speaker A
And cash flow was negative due to which the bank refused to give him further loan and suddenly there was no cash to run the business.
Speaker A
Phil had to arrange for the money somehow for Blue Ribbon's survival. Hence he took up the job of an accountant at PwC.
Speaker A
He started investing his entire salary in the business. On the other side, his partner Bill Bowerman was working to improve Tiger shoes.
Speaker A
Bowerman realized that Americans' body is longer and heavier in comparison to Japanese. That's why their shoes should also be different.
Speaker A
Bowerman tore Tiger shoes too and conducted many experiments. A turning point came when he combined the best features of different Tiger shoes and designed an ultimate distance training shoe for Americans.
Speaker A
And named the shoes Cortez. Onitzuka started manufacturing of Cortez shoes and the shoes became super successful as soon as they entered the American market.
Speaker A
Due to the Phil's management and Bowerman's shoe design, Tiger shoes was one of the top shoe brands in the entire America in the next 5 years.
Speaker A
Sales touched 1.3 million by 1971 and the business was doubling every year. With this, Phil quit his job and joined Blue Ribbon full time.
Speaker A
It was going absolutely perfect when a huge blow came from Japan. Seeing the success of Blue Ribbon, Onitsuka felt greedy.
Speaker A
They wanted to keep the entire income from Tiger shoes for themselves They gave an ultimatum to Phil that if he doesn't sell 51% of Blue Ribbon's stake to Onitsuka, they will give the distributorship of America to someone else.
Speaker A
Phil felt quite shocked and hurt! It was a big fraud. Onitsuka had crossed all limits by talking to them about buying Blue Ribbon.
Speaker A
And so, Phil took the biggest decision of his life. Phil gathered his team and told them that this was the moment which we all were waiting for. The time to sell someone else's brand was over.
Speaker A
Now is the time to create our own brand! With this he broke the partnership with Onitsuka and decided to manufacture shoes of his own brand.
Speaker A
The first step was to create a new logo. Phil wanted his brand's logo to awaken a sense of running, sense of motion and a sense of victory.
Speaker A
Plus the logo must fit the side of the shoe. He hired a graphic design student, to design the logo.
Speaker A
After a few days the student showed several designs. Employees selected a curved logo that looked like a thick check mark.
Speaker A
Phil thanked the graphic design student for the help and paid a fee of 35 dollars.
Speaker A
After the logo, the next step was to choose the brand name. Many names like Falcon and Dimension 6 were suggested.
Speaker A
But the first salesman of the company, Jeff Johnson told everyone that he saw a very good name in his dreams last night and the name was Nike.
Speaker A
In Greek the Goddess of Victory is called Nike. That's why the name was suitable and accepted.
Speaker A
After this Phil hired a third party manufacturer to make shoes. Nike sent them designs and shoe manufacturing started.
Speaker A
Finally Nike brand shoes were launched for whole world officially on 30May1971. But unlike today, no one knew Nike at that time.
Speaker A
Plus brands like Adidas, Puma and Tiger were big competitors for Nike which were capable of crushing a new brand.
Speaker A
That's why Phil used a strategy for marketing Nike which nobody used in 1970s. They saw that the runners liked to wear shoes of the same brand which the world's best athletes wore.
Speaker A
So, Nike got into a deal with best runner of that time Steve Prefontaine to promote it at 5000 dollars annually.
Speaker A
And Nike became one of the first brands that used athletics brand endorsements as a marketing strategy.
Speaker A
Phil's second strategy was to strategically select his sales team. Nike always choose to hire people for the sales team who were either athletes themselves or were very passionate about athletics.
Speaker A
This meant that the sales team could understand problems and needs of its customers who were mostly athletes.
Speaker A
which ultimately lead to improved quality of product design, sales and after sale service. Apart from these two strategies, Phil grew Nike using his experience, old customer base and taking advantage of Bowerman's shoe design.
Speaker A
As a result Nike became a team of 2700 employees by 1980. Had recorded sales of 270 million dollars and had become USA's largest athletics company by beating Adidas.
Speaker A
Phil finally felt that he had created the strongest athletics brand in USA. But then a company entered which shook up Nike was it was Reebok.
Speaker A
Nike's main focus was always to make it best for sports. Looks and style was never their focus.
Speaker A
But in 1980s a major change came through in fashion trend and athletic shoes taste.
Speaker A
People were not happy with just a strong and better performing shoe. They wanted shoe that had attractive looks and was stylish along with performance.
Speaker A
And Reebok gave the customers just that. Eventually customers started getting disconnected with Nike. The company suffered losses for the first time and had to lay off employees!
Speaker A
Reebok surpassed Nike in 1986 as the biggest athletics shoe company. Nike had to do something magical quickly to survive and grow.
Speaker A
And for this purpose Nike chose a magical basketball player. Michael Jordan. Michael Jordan was an emerging player then.
Speaker A
and Phil knew that he would be a great and legendary player in future. Nike signs Michael Jordan as brand ambassador.
Speaker A
Nike also launched basketball sneakers called Air Jordan named after Jordan. Earlier, basketball shoes were quite ordinary and boring before Air Jordan.
Speaker A
Air Jordan changed basketball shoes trend with its bold colors and stylish designs. Air Jordan became the historical shoe that brought sneaker culture in the whole world Also Michael Jordan was also in his phenomenal form then.
Speaker A
Michael promoted the shoes by wearing it during games. Along with this Nike also released shoe ads with Michael.
Speaker A
<i>Air Jordan, it's all in the imagination.</i> This led Air Jordan to emerge as powerful combination of performance and style.
Speaker A
Nike sold 100 million dollars' worth Air Jordans in the first year of launch. And finally overtook Reebok.
Speaker A
Nike never stopped after this success. In the 1990s they expanded globally. They started conquering countries one after the other.
Speaker A
Took entry in other sports wear other than shoes and today Nike is world's largest sports wear brand with valuation of around Rs 12 lakh crore.
Speaker A
Phil and Nike's journey is really phenomenal! The most important lesson of this journey is execution.
Speaker A
Phil said in his book Shoe dog, let everyone call your idea crazy. Just keep going. Don't stop.
Speaker A
Don't even thing about stopping until you get there. No matter what anyone says, if you are passionate about an idea then take calculated risks and execute it.
Speaker A
Nike's tagline also says the same thing. Just do it. If you liked this video then I recommend you to watch this video next.
Topics:Phil KnightNike historyBlue Ribbon Sportssportswear businessentrepreneurshipBill BowermanTiger shoesOnitsukaathlete turned businessmanNike brand launch
