Nike, every mention

Nike (Audio) · Acquired Jul 25, 2023 · 100 mentions

• ▶ 32:23 David Rosenthal He was, as you say, Nike's corporate historian.
• ▶ 32:38 David Rosenthal He spent a few days helping me put our version, Acquired's version of the Nike story together.
• ▶ 32:59 Ben Gilbert I also want to thank Eric Sprunk, who is a 27 year Nike veteran.
• ▶ 35:36 David Rosenthal The legendary Jeff Johnson, who has a huge role in Nike, as we shall see.
• ▶ 36:32 David Rosenthal He eventually opens Nike's first retail store in LA.
• ▶ 42:25 Ben Gilbert Phil Knight to this point, which is hilarious given Nike today, doesn't believe in advertising, and so he's like,
• ▶ 42:47 David Rosenthal We are gonna come back to Carolyn Davidson and the, um, Nike Art Department in a minute here.
• ▶ 43:03 Ben Gilbert What else could anyone possibly design for Nike that would change Phil Knight's life?
• ▶ 43:43 Ben Gilbert So if you go to Blinkist.com slash Nike, or click the link in the show notes, you can get Blinks for the Nike books.
• ▶ 43:57 Ben Gilbert So expect more Nike books to be showing up as they're literally making these for the acquired audience.
• ▶ 44:03 Ben Gilbert And not only that, if you use the link, you'll get the whole Nike collection for free as these books get added.
• ▶ 44:10 Ben Gilbert And Blinkist has told us anyone who signs up through that link or uses the coupon code Nike
• ▶ 45:33 Ben Gilbert To join the twenty-seven million people who use Blinkist, go to Blinkist.com slash Nike, or click the link in the show notes to get access to what we use for research.
• ▶ 45:45 Ben Gilbert So, should we share the Carolyn Davidson thing now, or don't we need to evolve Nike a little bit more before it really comes into play?
• ▶ 51:25 Ben Gilbert This is Phil Knight, the founder of Nike.
• ▶ 52:10 Ben Gilbert I keep going back and forth when looking at Nike and say, did they benefit from this enormous wave that they were riding, or did they create a wave?
• ▶ 52:26 David Rosenthal He's asked literally this question, if Nike started the fitness revolution, and his answer is so typically Phil Knight.
• ▶ 56:45 Ben Gilbert Competitive thing I mentioned earlier where Nike is a competitive company.
• ▶ 56:50 Ben Gilbert Nike is a growth company.
• ▶ 56:51 Ben Gilbert And if you go to their investor relations page to this day, across the top in big bold letters, it says Nike Inc is a growth company.
• ▶ 57:01 Ben Gilbert They were born out of this is the only possible way to continue our existence is grow so we can pay off the bankers.
• ▶ 57:28 David Rosenthal Two, though, ironically, I actually, as crazy as this sounds, think it was a critical element of Nike
• ▶ 57:39 David Rosenthal Succeeding and becoming Nike.
• ▶ 58:17 David Rosenthal And Nike almost does.
• ▶ 58:48 David Rosenthal Nike isn't anywhere in the picture yet.
• ▶ 1:00:30 David Rosenthal So, he ultimately has to raise some money from the families of some of the employees at Blue Ribbon, most famously Bob Waddell, who would become Nike's first president other than Phil when Phil takes a sabbatical later in the eighties.
• ▶ 1:00:48 David Rosenthal He was also a Bowerman runner, had a terrible accident in college and was confined to a wheelchair for the rest of his life, becomes one of Nike's and Blue Ribbon's first employees,
• ▶ 1:00:59 David Rosenthal And then becomes a huge leader, builds so many things at the company, and becomes the first president other than Phil.
• ▶ 1:05:19 David Rosenthal Meets with one of the officers there who would go on to become an incredible personal relationship for Nike and for Phil, a guy named Tom Sumeragi.
• ▶ 1:05:30 David Rosenthal And he offers on the spot to finance all of Nike's inventory on the spot in a meeting in the branch office in Portland.
• ▶ 1:07:16 Ben Gilbert Yes, and before we get into exactly how this all plays out and effectively the real founding of Nike creating their own shoes and how that all goes down with this financing as a key part of it, this is a great time to tell you about our…
• ▶ 1:09:57 David Rosenthal And as an aside, while we're here talking about Nike's asset-backed financing strategy, what Crusoe is doing
• ▶ 1:10:06 David Rosenthal They finance the build out of these data centers, not through venture capital, but through similar structures as Nike, just from large endowments and foundations instead of Japanese trading companies.
• ▶ 1:16:47 Ben Gilbert Other records of how this all went down and people care a lot about this because obviously what we're getting here is the origin of the swoosh and of Nike.
• ▶ 1:18:05 Ben Gilbert The name Nike came after the design of the swoosh, which, by the way, also was not called a swoosh yet.
• ▶ 1:18:50 David Rosenthal Now, ultimately, they do give Carolyn stock in the company before the IPO, so she makes more than two dollars an hour.
• ▶ 1:19:09 Ben Gilbert When Nike went public, they did give her 500 shares.
• ▶ 1:20:06 David Rosenthal And so, back at Nike headquarters, they're all sitting around brainstorming, and this is where all the famous ideas that get thrown out.
• ▶ 1:20:29 David Rosenthal The company.
• ▶ 1:21:06 unnamed speaker Nike.
• ▶ 1:21:30 David Rosenthal This wasn't intended to be Nike.
• ▶ 1:22:13 David Rosenthal So it was a very inauspicious start to, uh, Nike and the swoosh here.
• ▶ 1:22:40 Ben Gilbert And this, to me, is a little bit of a thing in Nike's DNA where they are competitive all the way up to the line and then one toe over.
• ▶ 1:23:10 Ben Gilbert That kind of happens with Nike over and over and over again.
• ▶ 1:23:35 David Rosenthal There's no Nike.
• ▶ 1:27:55 Ben Gilbert And these are Nike franchises that stood the test of time.
• ▶ 1:28:34 David Rosenthal The winged goddess of victory, Nike.
• ▶ 1:28:44 Ben Gilbert So in 1971, they do create Nike Inc.
• ▶ 1:28:47 Ben Gilbert It is a wholly owned subsidiary of Blue Ribbon Sports, and it is responsible for manufacturing, well, or contracting with manufacturers to make this line of shoes, this Nike-designed line of shoes owned by Blue Ribbon Sports.
• ▶ 1:29:01 Ben Gilbert Of course, later on, these would flip, and Nike would become the parent company, but for now, it's a subsidiary of Blue Ribbon.
• ▶ 1:29:13 David Rosenthal And this is where yet another sporadic but incredible Bowerman stroke of genius comes to play for Blue Ribbon slash Nike.
• ▶ 1:32:03 David Rosenthal And it is in Nike's possession to this day.
• ▶ 1:32:09 David Rosenthal So, where of course this is leading is the waffle trainer, which is another one of Bowerman's genius inventions and becomes the first big hit shoe for the new Nike brand.
• ▶ 1:32:53 David Rosenthal This is incredible publicity for Nike.
• ▶ 1:33:31 Ben Gilbert Which turns into Nike's real business eventually.
• ▶ 1:33:43 David Rosenthal Blue Ribbon's first full year doing sales as Nike, purely on their own.
• ▶ 1:34:12 Ben Gilbert Nike is designing their own shoes and going direct to the manufacturer.
• ▶ 1:35:39 David Rosenthal So the convergence of things, all the butterfly wing flapping that had to happen for Nike to become Nike, right at this time, right as Nike is being born and Blue Ribbon is going out on their own, Bowerman gets a generational runner at…
• ▶ 1:36:40 David Rosenthal And he did this at Oregon, and then later as a professional, but still for Bowerman and his Olympic teams, in Nikes, right as Nike was starting.
• ▶ 1:37:01 Ben Gilbert Just like snatching the document out of the briefcase, whatever it takes to win, Phil Knight figures out a way to A, make sure that he's running in Nikes, and B, make sure that he doesn't need to worry about money by finding a clever way…
• ▶ 1:37:20 David Rosenthal And this is one of those things that the AAU and the amateur rules and all that, like, Nike was a thousand percent on the side of right here.
• ▶ 1:37:28 Ben Gilbert And Nike was on the side of the athlete, which is a thing that they've always been and is a huge part of their strategy.
• ▶ 1:38:05 David Rosenthal So what Phil does is he decides to employ Pri as a corporate employee of Nike as the National Director of Public Affairs for 5000 dollars a year.
• ▶ 1:38:33 David Rosenthal I'm gonna foreshadow just a little bit here of the later number three in the later Nike document of the 10 principles of Nike that we will talk about in a bit.
• ▶ 1:38:52 David Rosenthal That's exactly what Phil and Nike are doing here.
• ▶ 1:38:57 David Rosenthal So that's on the sort of proto-marketing front that this early Nike playbook is getting going.
• ▶ 1:39:23 David Rosenthal Yes, that's part one of just the brilliant kind of re-startup of the Nike startup playbook that Phil puts together here.
• ▶ 1:39:41 David Rosenthal So, the way retailing worked back then, and Nike had their own stores, always, but they also sold through retailers, of course.
• ▶ 1:39:50 David Rosenthal The retailers would place orders with Nike to buy the shoes, and then they would resell them at retail, and then they would pay after they got the inventory.
• ▶ 1:40:59 Ben Gilbert And this really starts Nike down a path of their distribution strategy being a wholesaler.
• ▶ 1:41:22 David Rosenthal The third piece then is sort of obvious and has happened all along, but now as Nike is making their own shoes,
• ▶ 1:41:32 David Rosenthal So again, Nike isn't making the shoes in their own factories.
• ▶ 1:42:08 Ben Gilbert But again, Nike, break the rules, fight the law, and here they are today, a huge and successful company.
• ▶ 1:42:43 David Rosenthal Once the currency floats, and the Japanese economy, of course, has come up hugely over these decades, now currency issues become a big problem for Nike in terms of importing from Japan, and the cost of labor is going up, so basically the…
• ▶ 1:43:16 David Rosenthal And this is where the Nike global production machine is born.
• ▶ 1:43:34 David Rosenthal When he's on the trip around the world in 1963 that he, like, peers into China from Hong Kong and is dreaming about two billion feet in China, uh, Nike would be one of the very first companies, and I think the first footwear company that…
• ▶ 1:43:55 David Rosenthal So, this, we would certainly be remiss in doing a Nike episode.
• ▶ 1:44:56 Ben Gilbert Nike fans looked at this as
• ▶ 1:44:59 Ben Gilbert The company really has a black mark on their otherwise great reputation.
• ▶ 1:45:03 Ben Gilbert But it kind of was the natural endpoint of an idea that had been in the company's DNA the whole time.
• ▶ 1:45:16 Ben Gilbert They should have realized this is where it could have gone if left unchecked.
• ▶ 1:45:20 Ben Gilbert So, to add insult to injury, Nike wildly mishandled this.
• ▶ 1:45:24 Ben Gilbert They tried to act like it wasn't their problem.
• ▶ 1:45:26 Ben Gilbert They literally said to the press, oh, we don't make shoes.
• ▶ 1:45:38 Ben Gilbert They did do a huge amount of work to clean up their act.
• ▶ 1:45:42 Ben Gilbert They created new standards for factory partners.
• ▶ 1:45:44 Ben Gilbert They published supplier lists.
• ▶ 1:45:46 Ben Gilbert They have third-party audits of factories.
• ▶ 1:45:48 Ben Gilbert They do huge investments in R&D and invented things like new types of glue that weren't
• ▶ 1:45:52 Ben Gilbert Toxic, which they then went on to share with their competitors.
• ▶ 1:46:45 Ben Gilbert And in the nineties, Nike chose to sit too far on maximizing the margin side of things, and they intentionally turned a blind eye to what was going on in the factories, and they were in the wrong, because it led to exploiting people.
• ▶ 1:46:57 David Rosenthal One of the things that Nike folks were really surprised by at the time when the controversy came up is they were like, all the other shoe companies do it this way, all the clothing companies do it this way, why are we being picked on?
• ▶ 1:47:10 Ben Gilbert Yeah, but Nike started it, and they're the biggest.
• ▶ 1:47:14 David Rosenthal People had come to love Nike so much, and the brand represented so much, that it was, like, a huge betrayal.
• ▶ 1:47:26 David Rosenthal It was like, oh, I thought you were better than that.
• ▶ 1:47:28 David Rosenthal You are about inspiring greatness, and this is not greatness.
• ▶ 1:47:35 David Rosenthal Yeah, this was part of Nike from the beginning, but because of everything else that made Nike successful, it's super ironic that they didn't hold themselves to the high standard that the whole company was all about, and then their…
• ▶ 1:47:53 Ben Gilbert Yeah, they sort of discovered they couldn't have their cake and eat it, too, of saying, we are the brand that inspires you.
• ▶ 1:47:58 Ben Gilbert Oh, but by the way, anytime there's an issue, oh, that's one of our suppliers' problems, we simply don't make shoes.
• ▶ 1:48:12 David Rosenthal In 1974, these pieces of the Nike startup playbook, the inventing sports marketing, basically, sponsoring quote-unquote pre for