Nike is one of the most valuable sports brands in the world. But it began with a business-school paper, $1,000 and a car full of imported shoes. In Part 7 of How Global Giants Began, we look at how a former runner and his coach built a company that changed sport and marketing.
A runner and his coach
Phil Knight ran middle distance at the University of Oregon, coached by Bill Bowerman. Bowerman was obsessed with making lighter, better running shoes for his athletes and often modified shoes himself.
At Stanford business school, Knight wrote a paper arguing that Japanese manufacturers could make quality running shoes at lower cost and challenge the German brands that dominated the market. After graduating, he travelled to Japan in 1962 and persuaded the Onitsuka company, maker of Tiger shoes, to let him distribute them in the western United States.
Blue Ribbon Sports
In 1964 Knight and Bowerman each put in $500 to form Blue Ribbon Sports. Knight sold shoes from the trunk of his car at track meets, while keeping a day job as an accountant. Bowerman tested and suggested improvements to the shoes, and Onitsuka adopted some of his ideas.
Early employees were passionate runners. The first full-time employee, Jeff Johnson, wrote letters to customers, kept records of their running and even opened the first retail store.
The waffle iron
Bowerman wanted a sole with better grip that would also be light. One morning in 1971, while looking at his wife's waffle iron, he had an idea. He poured liquid rubber into it to create a studded sole, reportedly ruining the waffle iron in the process. The "waffle" sole became one of Nike's early signature innovations.
A new name and a $35 logo
As tensions grew with Onitsuka, Blue Ribbon Sports prepared to launch its own brand. In 1971 Carolyn Davidson, a graphic design student at Portland State University, designed a logo for a fee commonly cited at $35. Knight was not thrilled at first, saying he hoped it would grow on him. It became the Swoosh, one of the most recognised logos in the world. Davidson was later given shares in the company.
The name came from Jeff Johnson, who said it came to him in a dream: Nike, the Greek goddess of victory.
Breaking away
In 1972 the relationship with Onitsuka ended in a legal dispute, and Nike-branded shoes made by other Japanese factories debuted at the US Olympic trials. Blue Ribbon Sports officially became Nike, Inc. in 1978, and the company went public in 1980.
Money was tight for years. Knight described constant cash shortages and banks refusing credit, a story he told in his memoir Shoe Dog (2016).
Marketing that changed sport
Nike built its brand by connecting with athletes. In 1984 it signed a young basketball rookie to a shoe deal that led to the Air Jordan line, which transformed sports marketing and the sneaker industry. In 1988 it launched the "Just Do It" advertising campaign, which became one of the most famous slogans in history.
Nike also pioneered a model of designing and marketing products while outsourcing manufacturing to contract factories, mainly in Asia. That model brought criticism in the 1990s over working conditions, and the company responded with new supplier codes and more transparency.
Business lessons from Nike
- Start with a real insight. Knight's paper spotted a market gap.
- Stay close to users. Runners designed, tested and sold the early shoes.
- Innovation can come from the kitchen. Curiosity and experiments matter more than labs at the start.
- Build your own brand. Depending on a single supplier was risky; owning the brand gave control.
- Sell emotion, not just products. Nike sold inspiration and achievement.
- Your supply chain is part of your reputation.
In Part 8, we visit a California garage and the two Steves who founded Apple.
How Global Giants Began: the full series
- Part 1: Coca-Cola
- Part 2: Toyota
- Part 3: LEGO
- Part 4: Samsung
- Part 5: IKEA
- Part 6: McDonald's
- Part 7: Nike (you are here)
- Part 8: Apple
- Part 9: Amazon
- Part 10: Google
Dates, prices and figures are commonly cited historical values and may vary slightly between sources. Company names and trademarks belong to their respective owners; HorizonDesk is not affiliated with any company mentioned.
