Phil Knight’s story starts from a hobby and a ‘crazy idea’ to one of the biggest companies in the world. With a net worth of US $21.6 billion, he is also one of the world’s self-made billionaires.
Phil Knight was born in Oregon in 1938 to a modest middle class family. His father was a lawyer turned newspaper publisher and encouraged hard work from a young age. When he refused to give his son a summer job at the paper, Knight junior responded by getting a job with the competitor where he worked the night shift organising the sports scores and would run home the full seven miles each morning.
Knight earned a journalism degree from the University of Oregon and contributed to the sports pages of local publications. Knight was a keen runner under coach Bill Bowerman and earned numerous varsity letters for his track performance. Years later, together with Bowerman and a current scholar Geoff Hollister, Knight founded an American running team called Athletics West.
After graduating, Knight became enlisted in the army serving one year on active duty and seven years in the army reserve.
A thirst for knowledge took him back to school where he enrolled in the Stanford Graduate School of Business. He maintained a stellar track record and became interested in the design of sports shoes particularly in the Japanese market - he even wrote his term paper on the subject. On completion of his masters degree in 1962, Knight travelled the world stopping in Kobe, Japan where he had been impressed with the simplistic low-cost styles of their running shoe. Knight was so impressed with the quality of the Tiger brand compared to American designs, he persisted for a meeting with the Tiger-brand manufacturer. By the end of the meeting, Knight had secured the Tiger distribution rights for the Western United States.
It would take more than a year for the first Tiger samples to be shipped to America so during that time he took work as an accountant for a large corporation. Self-doubt and the dissuasion of others made him almost pull the plug on his idea on more than one occasion. During an early morning run, "As I began to clip off one brisk six-minute mile after another … maybe, I thought, just maybe, I need to take one more look at my Crazy Idea," he writes in his memoir, Shoe Dog. "Maybe my Crazy Idea just might … work? Maybe. No, no, I thought, running faster, faster … It will work. By God I'll make it work. No maybes about it."
Knight concluded that the conventional career path was not for him. Rather than work for a large corporation, he needed to build his own.
When Knight finally received the first shoe samples, he mailed two pairs to his former track coach hoping to gain a sale and influential indorsement. Bowerman not only agreed to purchase the shoes but to become a partner. The deal was sealed with a handshake and US $500 each and along with the help of Hollister, Blue Ribbon Sports was born.
Knights first sales were made from the boot of his Plymouth Valiant, grossing US $8,000 in the first year. The unique, modern design and the trios connections to high profile runners gained them a competitive edge and put them on the right track to displace rival brand Adidas.
"In the early days, anybody with a glue pot and a pair of scissors could get into the shoe business," Knight told Geraldine Willigan in a Harvard Business Review interview. "So, the way to stay ahead was through product innovation. We were also good at keeping our manufacturing costs down. The big, established players like Puma and Adidas were still manufacturing in high-wage European companies. But we knew that wages were lower in Asia."
Outsourcing the manufacturing to Asia has gained much controversy for the now Nike brand with activist protesting their involvement with child labour. Knight denied these claims at the time but had to face accusations around low wages and child labour at a later date. Nike increased wages and the minimum wage to work in factories, but the Nike brand had been tarnished.
Knight insisted in the Sports Illustrated article that "we're not gouging anybody. … A country like Indonesia is converting from farm labor to semiskilled-an industrial transition that has occurred throughout history. There's no question in my mind that we're giving these people hope."
Knight changed the name to Nike in the early seventies after the Greek goddess of victory. During this time, the iconic Nike swoosh was commissioned for a reportedly mere $35 which at first Knight said “I don’t love it but it will grow on me.” The Nike symbol is arguably one of the most recognised branding icons in the world.
Trying to stay a step ahead from their rivals, Nike make the first sneaker with a waffle grip, literally cooking them in a waffle iron and they feature at the Olympic trials in 1972. It is the first time that a Nike shoe crosses the finish line (seventh place).
In 1980, Nike surpasses Adidas in marketshare in the US but they are faced with a new competitor. Negligence to the emerging aerobics trend saw and upstart company called Reebok corner this demanding market. This began the longstanding rivalry between Nike and Reebok for market dominance.
In 1984, Nike makes its most affirming move yet by signing the rookie NBA star Michael Jordan, releasing the Air Jordan the following year. This line of shoe will become one of the most iconic and financially successful sneaker lines ever. Jordan signed a five-year contract for US $500,000 a year, an unheard number at the time. By the end of 1985, the Jordans earned more than US $100 million in revenue.
With continuous accusations of child labour and poor performance shoes, the Nike brand had come under scrutiny. Knight altered Nike from a product oriented company and focused the on the power of advertising. Despite the price tag, Knight targeted his marketing to appeal to the everyday customer, eventually recovering the sales. “The most important thing we do is market the product, “Knight told the Harvard Business Review in 1992. By the end of 1991, the sales had totaled over US $3 billion.
Knights legacy cannot be overstated. He successfully built a company from the ground up and maintained its success through determination and innovative advertising. Knight and Bowerman and Hollister harnessed the power of a vison, redemption and the transformative power of sports to create a brand and culture that changed everything.
Nike slogans-"Bo Knows," "It's Gotta Be the Shoes," and especially "Just Do It" are some of the most recognisable marketing campaigns in history. The brand controls 62percent of athletic footwear brand share in the US and its annual revenue tops US$30 billion.
Phil Knight officially retired in June 2016, 52 years after founding the company. Knight and his family still own 26 percent of the company’s shares.
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