The influence of the Nike swoosh extends significantly across the footwear industry. This undisputed titan in the field has established itself through prominent endorsements, stylish designs, and PR campaigns so effective that they’ve left a lasting mark on pop culture history. However, the brand associated with LeBron James, Tiger Woods, and Michael Jordan didn’t emerge out of thin air. To comprehend Nike means delving into a narrative that originated with a self-described average track runner post-college and a coach fixated on the relationship between speed and design.
How Was Nike Founded?
The Nike story starts with Blue Ribbon Sports in 1964. Back then, Phil Knight finished school at the University of Oregon and then went to Stanford for more education. These experiences were really important for what happened next.
While at the University of Oregon, Knight was on the track and field team, and he met the coach, Bill Bowerman. Bowerman was not just about being competitive; he was also really interested in making the runners’ shoes better. He liked trying out different shoe models and learned from a local shoe repair person.
According to Nike, Knight was the first student to try one of Bowerman’s shoes. Bowerman saw Knight as a safe person to test his shoes on, so he offered to fix up one of Knight’s shoes with his special design. Knight agreed, and supposedly, the shoes worked so well that his teammate Otis Davis took them and used them to win a gold medal in the 400-meter dash at the 1960 Olympics. Otis Davis still says today that Bowerman made the shoes for him.
After finishing at the University of Oregon, Knight went to Stanford for more school, where he wrote a paper suggesting that making running shoes in Japan, where labor was cheaper, could be a good idea.
Knight had the chance to try out this idea with a trip to Japan soon after he graduated in 1962. He made a deal with some Japanese businessmen to bring Japan’s popular Tiger shoes to the U.S.
Coach Bowerman, who always thought German shoes were the best but also believed they could be replicated or even made better, supported Knight’s plan. They went into a 50-50 business deal and created a new company called Blue Ribbon Sports, which started in Eugene, Oregon, on January 25, 1964.
History of Nike
After establishing Blue Ribbon Sports, Knight experimented with his imported shoes, initially selling them from his car upon returning to the States. It soon became evident that there was a demand for these more affordable yet high-quality alternatives to the dominant Adidas and Pumas in the market.
In 1965, the always-creative Bowerman proposed a novel shoe design to the Tiger shoe company, aiming to provide optimal support for runners. The design included a cushioned innersole, soft sponge rubber in the forefoot and top of the heel, hard sponge rubber in the middle of the heel, and a firm rubber outsole.
This design proved to be both a significant success and a source of tension between Blue Ribbon and its Japanese supplier. Named the Tiger Cortez, the shoe was released in 1967 and quickly gained popularity for its comfortable, durable, and stylish features.
However, around the time of its success, relations between Blue Ribbon and Tiger deteriorated. Knight alleges that the Japanese company was looking for a way out of its exclusivity deal with Blue Ribbon and tried to harm the company. Tiger claims to have discovered Blue Ribbon Sports selling their version of the Tiger Cortez under a new line of shoes called “Nike.”
Either way, the formal separation between the two occurred in 1971, marked by a lawsuit from Tiger. Eventually, a judge ruled that both companies could produce their versions of the model, making the Nike Cortez and the Tiger Corsair (now sold by Tiger’s modern version, Asics) the only sneakers to become best-selling models for two different shoe companies.
Rebranding
After parting ways with Tiger, Blue Ribbon Sports underwent a complete rebranding, adopting the name Nike. Phil Knight initially considered naming the company “Dimension 6,” but Jeff Johnson, fortunately, found inspiration for Nike after encountering the name of the Greek goddess of victory in a dream. However, before the new brand could take off, it needed its logo.
The team approached Carolyn Davis, a design student at the nearby Portland State University, for some sketches. Phil Knight reluctantly settled on a swoosh design, stating, “Well, I don’t love it, but maybe it will grow on me.” Davis charged $2 per hour and received a total of $35 for the logo. In 1983, Phil Knight, having warmed up to the logo, threw a party for Davidson and awarded her 500 shares of stock, estimated to be worth around $1 million today.
Waffle Trainer
After officially launching on May 30, 1971, Nike, Inc. carried forward the success of Blue Ribbon Sports, initially driven by the popularity of the Tiger Cortez and later propelled by Bowerman’s groundbreaking “Waffle” sole design. During breakfast, contemplating ways to enhance running shoe traction, Coach Bowerman drew inspiration from the grooves in his wife’s waffle and envisioned an inverted version. Seizing the idea, he poured melted urethane into his waffle iron, but a mishap occurred—the iron glued shut due to the lack of an anti-stick agent. Nonetheless, the concept persisted, and with the help of another waffle iron and, presumably, a good spray, he created his envisioned sole, giving rise to the iconic “Waffle Trainer.”
The Waffle Trainer marked a significant triumph for Nike, the first in a series of successes that contributed to the company’s robust and consistent growth during its early years. This growth peaked with its 1980 IPO, instantly turning Phil Knight into a millionaire with shares valued at $178 million.
Since then, Nike has continued to expand, fueled in part by a series of clever advertising campaigns, most notably the 1988 “Just Do It” campaign, reportedly inspired by the final words of American murderer Gary Gilmore before facing a firing squad, “Let’s do it.”
Celebrity Endorsements
Another key strength for the company has been its use of celebrity endorsements, and Nike struck gold by signing athletes like Tiger Woods, Kobe Bryant, and LeBron James early in their careers.
The most profitable endorsement deal in Nike’s history, both for the company and its sponsored athlete, has been with Michael Jordan. Recognizing his potential, Nike sought an endorsement from Jordan before he started his first professional season in 1984. Despite never having worn Nike shoes before and hoping for a deal with Adidas, Jordan ended up signing with Nike after they offered him $500,000 a year for five years, two die-cast Mercedes cars, and customized shoes to his liking.
This deal turned out to be a massive success for Nike, as Jordan quickly became a superstar. His shoe line, Air Jordans, hit the market and generated over $100 million in revenue by the end of 1985. Despite recent sales declines, Air Jordans remain a lucrative product for Nike, bringing in an impressive $2.8 billion in sales for 2018 alone. Jordan continues to earn approximately $100 million a year in Nike royalties.
Conclusion
Nike’s journey from its founding in 1964 to the present day is marked by significant milestones, including iconic product launches, athlete endorsements, and global expansion. Despite facing challenges, the brand has maintained its influence through strategic innovations and impactful marketing campaigns. Looking forward, Nike’s commitment to adaptability and innovation positions it for continued success in the dynamic sportswear industry.
