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U.S. Business Just Did It: Nike’s Phil Knight on the trailblazing emergence of a global mega-brand

Memoir

Just Did It: Nike's Phil Knight on the trailblazing emergence of a global mega-brand

Nike co-founder talks to Susan Krashinsky about the swoosh's birth, superstar endorsements and Air Jordan violence

He favoured "Dimension Six," but figured the consensus choice, "Nike," might grow on him. When he first saw the sketches that would become the famous swoosh, he thought they looked like "chubby check marks," and declared the final choice "would have to do."

Phil Knight wasn't exactly the most prescient guy in the room. But the co-founder of Nike Inc. still managed to build one of the biggest, most recognized brands in the world, worth billions.

In his new memoir, he tells the story of how it all started: with a flight to Japan, where he invented a company on the spot during a meeting to convince a manufacturer to let him sell its shoes stateside.

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Shoe Dog (industry lingo for a shoe salesman) chronicles the growth and then rancorous dissolution of that relationship, leading to the creation of a new company – and a new brand that would redefine the industry.

Mr. Knight sat down with The Globe during a recent visit to Toronto.

You end the book with Nike's initial public offering in 1980 – before Just Do It, before Michael Jordan or LeBron or Tiger Woods, before the sweatshop crisis. Why?

There's too much story to cover the whole thing. The early years, in retrospect, were the most fun, the most exciting. They had the people that I worked with side-by-side, and I thought the world should know a little bit about them. I liked ending it when we went public because once that event happened, there was nothing to stop us but ourselves. And before, there were so many obstacles we had to overcome.

You came up with what you call your "crazy idea" while still a student at Stanford. Why get into the shoe business?

I was a runner. As a 16-year-old [in 1954], I sat in the stands and watched Roger Bannister break the four-minute mile in Vancouver against John Landy. I was really invested in the sport, and had high hopes that I might make the Olympic team, which was never to be. But I didn't give up my love of the sport. To stay involved was a big appeal for getting into this business.

Your athletic mediocrity is actually what made your coach, and later Nike co-founder, Bill Bowerman decide to make you his guinea pig for the shoes he modified with his own designs. That cemented your relationship.

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No question. It's absolutely true. He's not going to ruin [Mr. Knight's high-school track teammate and future Olympian] Jim Grelle's feet!

He famously ruined his family's waffle iron creating a new sole, but dabbled in all kinds of inventions important to Nike.

It was critical, him and his mad science. When he retired, he'd coached more sub-four-minute milers than any coach in the world. So the weight of a shoe was life and death to him. Those early shoes were really ugly but they didn't weigh very much. [In the search for the lightest materials, Bowerman designs included codfish and kangaroo skin.]

On top of that, he was putting together different fluids to give to his athletes after long workouts – a mixture of tea and honey that tasted terrible but was supposed to replenish your fluids and electrolytes a lot faster than just water – really, that was Gatorade ahead of its time. He was a very innovative person. A mad scientist, but with a lot of practical ideas.

In recent years, shoe technology has gone crazy – it seems like every other day there's new wisdom on what's best for runners.

I call that progress. When I was running cross-country at the University of Oregon, you'd run through the streets and people would look at you like you were weird. All this shoe technology is a by-product of all the runners out there, millions now. Feet are like fingerprints. Everybody is different. What's a great shoe for me is not a great shoe for you. Getting the product for all these different feet that will enable the athlete to run farther, with less injury, to run comfortably, that's our business.

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Where does that cross into fad science? Has tech gone too far?

The fad isn't going to last if the product doesn't work. I don't worry about that. Our focus is doing stuff that works. If it becomes a fad, all the better.

Some people really go nuts for sneakers – collectors will go to the ends of the earth for a shoe.

God bless 'em. For them, the product is an object of art. That's what we try to create.

You write that if everyone could run a few miles every day, the world would be a better place.

I still feel that.

North America faces an obesity crisis. Your brand has been all about idolizing athleticism, and turning a motto, Just Do It, into a fashion statement. Could better branding convince people to exercise more?

I don't think it's a branding fix. We're fighting the Internet, the cellphone, video games, a lot of obstacles that are hard to overcome. I think reinforcing the benefits – that exercise is as important as eating and sleeping – when we get that message out better, it will help the problem.

The artist who designed the swoosh logo was paid just $35. That's a pretty good deal.

We got good value. She designed it in late '71, ' 72. We went public in 1980, and we called her up and asked her to come in. In a ceremony at Nike, we gave her 500 shares of stock. To this day she has not sold a single share, and it's worth a million dollars [if not more: stock splits over the years likely make the figure closer to $3.8-million]. So it came out to be a happy ending for all of us.

You hated advertising.

What I hated was traditional advertising, which really wasn't real. You saw celebrities endorsing products that you knew they weren't using. We wanted it to really mean something.

When you first signed Michael Jordan to a $500,000 endorsement deal, it was an astronomical figure. Not so much any more. Nike really was instrumental in creating the cult of the athlete. Why did that matter?

It's very important to us. Our job is to build the best product, shoes and clothes, for the best athletes. If the best athletes aren't wearing it, it's hard to make that statement. Jordan changed everything. The first Jordan shoe, the red and black, was very flashy, but he wore it to great success. And it was banned in the National Basketball Association, which was perfect: We ran an ad saying it was banned in the NBA, and every kid wanted to have it.

Michael Jordan himself is obviously a key part of that. Not only was he the best player probably who ever lived, but he was exciting. He could jump higher. He was big in the dramatic moments. It lifted all kinds of things – Nike's stock price for one thing, but it also lifted the entire endorsement business.

Everyone, now, tries to do that. The value of an endorsement has gone up a lot. The use of athletes in advertising has gone up. I laugh when I see LeBron James advertising Kia and saying, "I really do use it!" The belief that they really use this product becomes part of the whole thing.

In the nineties, there were instances of violence over Air Jordan sneakers. What was your reaction?

It still shocks me. Doesn't it you? My first thought is, how do you even know the guy is the right size? If he's not your size, are you going to go kill somebody else? It's just crazy. But there is something clearly going on, other than just the shoe. It's a reflection of [deeper] troubles.

You wrote that during the sweatshop crisis in the nineties, your response made things worse.

I was [like] a teenager. My initial response was [he bangs his fist on the table petulantly] 'It's not true, dammit, it's not true.' In retrospect, it was really an indictment of the shoe industry, of which we were one of the biggest players. Our factories were as good as anybody's in terms of pay and environment and everything else. But the industry could have been a lot better. We finally figured out that it was our job, as a leader in the industry, to do that. We went to work.

The crisis has abated to some extent – it goes up and down, has cycles by itself – but I really believe we're the gold standard of all shoe and apparel companies. We've come a long way. The rubber room was the most dangerous area of any sport shoemaker. The toxins that came out of there were dangerous. We figured out a way to get the toxins out of a water-based cement, and have shared that with the entire industry.

The 2013 collapse of the Rana Plaza building in Bangladesh brought the issue to the fore again. Is the apparel industry in general responding quickly enough to concerns about safety and treatment of workers in overseas factories?

The apparel industry, like any industry, has its good citizens and its bad citizens. There is still some bad behaviour out there.

You're stepping aside as chairman this year. What's the future of the company?

I think it's golden. There are plenty of feet we don't have shod yet and plenty of bodies that we don't have clothes on. I'm very confident about the future.

Are you still running?

Slowly. It's so slow now that it's called a walk. But I do. I walk virtually every day. I recommend it.

Susan Krashinsky reports on advertising and marketing for The Globe and Mail. This interview has been edited and condensed.


SOLE MEN TAKE THEIR FIRST STEPS

$6.95

That was the price of the first Japanese imports, Onitsuka Tigers, that Phil Knight sold in Oregon, often from the trunk of his Plymouth Valiant or at his parents' house, after starting Blue Ribbon Sports, the distribution company that led to Nike. The very first shoe ad Mr. Knight ever made was a homemade flyer with the headline "Best news in flats! Japan challenges European track shoe domination!" and copy that praised "low Japanese labor costs," enabling such a "low, low price."

Bad ads

For a company that would go on to be studied in marketing school, Blue Ribbon's early advertising was far from a master class. The Standard Insurance Company took out an ad in The Wall Street Journal featuring Blue Ribbon as an example of its "dynamic young clients." It featured Mr. Knight and his co-founder, the late Bill Bowerman, "staring at a shoe. Not as if we were shoe innovators; more as if we'd never seen a shoe before. We looked like morons. It was embarrassing," Mr. Knight writes. The ads they made themselves weren't much better. Some used an early employee as a model: "See Johnson rocking a blue tracksuit. See Johnson waving a javelin. When it came to advertising, our approach was primitive and slapdash."

History lesson

When it launched a new shoe based on Mr. Bowerman's designs for a longer-lasting sole for distance runners, Onitsuka decided to name it the Aztec, to build on the buzz of the 1968 Olympics in Mexico City. Adidas threatened a lawsuit: It already had a shoe in the works called the Azteca Gold.

"Who was that guy who kicked the shit out of the Aztecs?" Mr. Bowerman mused. The shoe became the Cortez instead.

Sage advice

In his 1967 book, Jogging, Mr. Bowerman wasn't exactly an ideal salesman for the company, writing that "probably the shoes you wear for gardening, or working around the house, will do just fine."

Susan Krashinsky

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