Apply

Call Us Today (800) 735-6107

Just Did It

When you imagine the early stages of starting a business, what do you picture? Is it designing merchandise in your garage? Making phone calls from your basement? How about selling shoes out of your trunk?

That’s how former University of Oregon athlete and co-founder of Nike, Phil Knight, got his start.

Origins in Oregon

The multibillion-dollar corporation got its first spark from the desire of Oregon track coach Bill Bowerman. He wanted to create a lighter and more durable track shoe for his athletes. Bowerman shared his idea with some of his runners and even attempted to make the shoe himself. Although it is often debated who this shoe was originally crafted for, former track standout and Olympic gold medalist, Otis Davis, claims he was the first one to don the prototypes.

“I don’t care what all the billionaires say,” said Davis, “Bill Bowerman made the first pair of shoes for me.”

He also noted that he didn’t like the shoes at all and watched Bowerman make them using a waffle iron.

The Waffle Iron

Yes, Bowerman’s ah-hah moment came while making waffles in the kitchen with his wife. The idea was that using a waffle-like design on the bottom of these running shoes would help the athletes grip the track better and enhance their overall performance.

These shoes would later go on to be patented as the “Nike Waffle Trainers,” in 1974, roughly 10 years after the sacrifice of Mrs. Bowerman’s waffle iron.

Blue Ribbon Sports   

After graduating, Phil Knight enlisted and briefly served in the U.S. Army before attending Stanford University’s Graduate School of Business. It was during his time here that he was challenged by his professor to go all in on their class assignment: invent a new business. He wrote a paper for the class questioning if Japanese shoe manufacturers were on the brink of a breakthrough and came to the realization that his life goal was to create a shoe dealing business.

After graduating, Knight traveled the world. During this time, Knight discovered Tiger-brand running shoes, manufactured by the Japanese shoe company Onitsuka Co. Knight was immediately interested in the shoe’s impressive quality and inexpensive price. He returned home with a distribution agreement between him and Onitsuka and would go on to sell these shoes as Blue Ribbon Sports.

Back Where It Started

Knight joined forces with his old track coach Bill Bowerman while working for a Portland-based accounting firm. They began selling the Tiger-brand shoes out of the trunk of Knight’s car in 1964 and sold over a thousand shoes in their first year of operation. Things would move quickly from there as the following year saw them hire their first full-time employee and two years later they would open their first retail store. By the turn of the decade, BRS was nearing the end of its partnership with Onitsuka Tiger, and in 1971, they rebranded and began preparing their launch.

The Swoosh Is Born

While his business grew, Knight taught an accounting class at Portland State University to make ends meet. During this time, he enlisted the work of one of his students, Carolyn Davidson. Davidson was a graphic design major, and presented Knight with five design ideas upon his request. Knight suggested that the design should somehow portray motion, and with deadlines looming, he settled for a variation of the now iconic rounded checkmark. The company became Nike soon after.

Nike adopted their name from the Greek Goddess of victory and released their first shoe in 1972, the Nike Cortez. From there, Nike began to revolutionize sportswear as the world knew it.

As their brand gained notoriety among athletes across various sports, they signed their first endorsement contract with Romanian Tennis player, Ilie Nastase. The idea of paying an athlete to wear their brand was one Knight felt very strongly about, but among the hundreds more they’d go on to offer, one in particular raised the standard for the rest of the industry.

 

Air Jordan

Michael Jordan was the most talked about college basketball player in years, appearing on the wish list of every sportswear executive in the country. Things weren’t exactly looking optimistic for Nike in the running for MJ though. Converse was boasting a lineup of all star basketball players, and Adidas was the brand he dreamed of wearing his entire life. He claimed he just couldn’t see himself in Nike’s.

Jordan nearly had to be dragged into his meeting with Nike, but what they did with their opportunity was unheard of at the time. Not only did they offer Michael a contract worth an unprecedented $500,000 a year for five years, they also were very interested in what he was looking for in a shoe. They had a shoe designer in the meeting, they listened to Jordan’s input, even Phil Knight himself made an appearance in the room.

After Nike’s valiant effort, Jordan still wanted to sign with Adidas if they could come even remotely close to the number Nike offered. The German shoe juggernaut was going through a lot at the time though and never made him a priority. Adidas was dealing with the death of their company’s founder and an inner conflict about who should be calling the shots now emerged, leading them to miss the opportunity Nike was so determined to capitalize on.

After considering all options once more, MJ decided to choose Nike. In Michael Jordan’s rookie season (1994-1995), Nike went on to sell $100 million worth of his new signature shoe, and had every young baller trying to be “like Mike.” For some perspective on the long-term success of this deal, Air Jordan sold $2.5 billion worth of shoes in 2012. Knight and the rest of the Nike family have continuously showed the willingness to take risks, but the intense courting of Michael Jordan may prove as one of their most lucrative ones to date.

Giving Back

As Nike grew, Knight nobly paid dues to the people who helped form the brand. Carolyn Davidson, who designed the swoosh, was paid for her design appropriately in 1971 and Knight realistically owed her nothing. As Nike’s success continued, the company went public in the early 1980’s. Knight invited Davidson to a company lunch where he presented her a diamond ring engraved with the logo she was once paid $35 for. She also received 500 shares in Nike stock. She acknowledged that this was “rather special” for Knight to do for her since she “already billed him.”

Phil Knight has since become one of the most successful business minds in American history and a well-noted philanthropist. He’s donated hundreds of millions to the schools that gave him his start, remaining heavily involved in the University of Oregon, and Stanford University.

Knight donated $105 million to Stanford’s Graduate School of Business, and nearly $1 billion to the University of Oregon for new facilities, renovations, equipment, and more.

Nike’s humble beginnings make for an inspiring story to aspiring entrepreneurs across the world. From a college kid influenced and challenged by the people around him, to one of the most iconic names in business, Phil Knight has become a precedent in American business.

Knight saw a need for something and devoted his life to providing it, a formula that many entrepreneurial success stories can be traced back to. Today, Nike is worth an estimated $15.9 billion, with over one thousand retail stores worldwide. Nike has come a long way from the waffle iron, evolving into one of the world’s leading clothing brands as well. From socks to headbands, sweatshirts to compressions pants, Nike has a huge selection of merchandise and an enormous following of loyal customers.

The success of Knight and Nike is an example of a small business owner’s dedication and drive to fulfill his vision. Since the time of Nike’s creation, things have been made a bit easier for small business owners, with resources like online business loans now available to small companies and their owners.

From selling a thousand shoes a year out of the trunk of Knight’s green Plymouth Valiant, to a thousand pairs a minute in retail stores around the world, Nike is one of the most influential brands in the world, quite the feat for a college athlete and his coach. The success of Knight and Nike is an example of a small business owner’s dedication and drive to fulfill his vision. Since the time of Nike’s creation, things have been made a bit easier for small business owners. Online business loans make finding funding quick and easy,  and companies are beginning to really capitalize on these resources.

 

Share this post


Fast Capital 360