The journey of the most expensive shoe brand.

The story of Nike.

Phil Knight’s marketing genius stemmed from the fact that he didn’t focus on just selling shoes; he always made it about something more.

In the '90s, Nike faced an obstacle: The company had garnered a reputation for using sweatshops and unfair labor practices. Customers began boycotting the brand and protesting outside of its stores, creating a widespread distaste for Nike that lasted nearly a decade.

Sales dropped so low that by 1998, Nike was forced to start laying off staff. Knight — who was CEO at the time — stepped in and made drastic changes to save the brand. He owned up to the company’s dismal reputation, raised the minimum wage it paid workers, improved oversight of labor practices, and made sure factories had clean air. Public perception began to turn around, and Nike found itself back on top.

From bringing his idea of a venture like this one to life to nurturing it into a blockbuster, Knight had come a long way.

But what were the roots of it? How did Phil Knight manage to rise to the occasion?

Knight’s career was as ordinary as it could be. No money, no goose to lay golden eggs and no direction. What transpired was a successful owner of the richest shoe company with a net worth of US$39.2 billion (26th richest, as of July 2020).

He ran track at the University of Oregon and graduated in 1959 with a degree in journalism. After serving in the army for a year, he went back to school to earn his MBA from Stanford’s Graduate School of Business. The idea for the athletic apparel giant came from the same track of Oregon. For an “average mid-distance runner”, as he calls himself, Knight watched as his coach at University of Oregon, Bill Bowerman, tinkered with athletes’ running shoes and the immediate impact it made on their performance. Combine that with a paper he wrote at Stanford on why shoes should be manufactured out of Japan (instead of Germany), where the labor was cheaper, and his crazy idea was born.

Knight first came up with the name Blue Ribbon Sports — the company that later became Nike — during his time at Stanford. He teamed up with his college track coach from Oregon, Bill Bowerman, and each put in $500 to get the company off the ground.

The company initially served as the U.S. distributor for running shoes made by the Japanese company Onitsuka Tiger (aka Asics) and would sell 1300 pairs of shoes in its first year. He convinced these Japanese businessmen to export their popular Tiger sneakers to the United States and grant him exclusivity in selling them. BRS' strategy was to import these sneakers and sell them at higher price points in the US, making a profit on the markup. After selling Tigers out of the trunk of his car, Knight saw the demand was there. So he ordered more sneakers from Japan until he had to hire additional people to keep up with the growing demand.

It wasn’t always a smooth ride. Knight’s shipments from Japan were rarely on time, and he frequently faced major financing problems. Despite Knight doubling his sales constantly, banks were reluctant to provide the loans needed, and two banks ultimately dropped him as a customer.

When trouble began with the Japanese company over their exclusivity agreement, Knight was forced to break from the factory. Blue Ribbon Sports was essentially starting over. Knight and his 45 employees at the time had to find new factories to produce their shoes, and even create a new name for the company. Nike's (BRS's) first retail store was opened on Pico Boulevard in Santa Monica, California in 1966. As Knight's company was facing a rebrand after splitting with its longtime partner Onitsuka, Nike almost had a different name.

Knight described the incident in his 2016 memoir, "Shoe Dog." The team had spent weeks pitching names and Knight’s preference were for a brand name his employees had told him was "unspeakably bad": Dimension Six.

“Knight went for Dimension Six; we thought perhaps for his love of the pop group The 5th Dimension,” said Geoff Hollister, the company’s third employee who managed one of their first stores.

According to Business Insider, "Johnson, who ran the company’s East Coast factory in Exeter, NH, would come up with another idea." Runners World contributor Matt McCue documented how Johnson read an in-flight magazine about great brand names, such as Kleenex and Xerox. "They had no more than two syllables and at least one exotic letter or sound in them with a Z, X or K," writes McCue, paraphrasing Johnson.

At 7 a.m. the next morning, Johnson woke up with the name 'Nike.' But it was only 4 a.m. in Portland, so Johnson waited three hours before calling Woodell.

'I’ve got it!' Johnson said to Woodell (another early employee), according to Strasser and Becklund.

'What?'

'Nike!'

'What?' Woodell asked. 'What’s a Nike?'

'It’s the Greek winged goddess of victory,' Johnson said."

But despite reaching a sort of consensus amongst existing staff members, Knight was not too enamored with the name.

“I guess we’ll go with the Nike thing for a while... I don’t like any of them, but I guess that’s the best of the bunch”, Knight told his staff before eventually signing off on the new brand name.

The rest, as they say, is history.

In his memoir, Knight describes Johnson as "Full-Time Employee Number One." The company's first salesman, Johnson also opened the first storefront in California and later manned operations on the East Coast. Johnson worked for Nike for a total of 18 years.

The company released the Nike Cortez (Moon shoes) in 1972 in tandem with the 1972 Olympics in Munich, and Knight ensured the shoes became a top choice of Olympic athletes. The Cortezes came in a variety of colors and debuted Nike’s now-ubiquitous “swoosh” logo, making them one of the first sneakers that appealed as much to fashion as to function.

According to The Vintage News, only 12 pairs were ever made and the pair sold at an auction was never actually worn.

The shoes were hand-made by Nike's co-founder Bowerwamn who, famously, used his wife's Belgian waffle iron as a mold for the rubber "waffle" soles of the shoes.

This, he believed, would produce a new sole for athletic footwear that would have enough grip but, most importantly, be lightweight.

After years of strong growth but with struggles to stay in the black, Knight and his team decided in December of 1980 to finally take Nike public. “We were concerned about losing control,” said Knight, who added that ultimately, it was one of the best things the company ever did.

Immediately, Knight’s ownership in shares made him worth $178 million.

Air Jordans hit stores for $65 a piece in March of 1985, and by May, the company had sold $70 million worth of Jordans, earning more than $100 million in revenue from the shoe by the end of the year.

But when Nike’s sales began collapsing in the mid-'80s, Knight knew the company needed to make a major shift in its thinking. It was then that he realized although Nike was marketing to top athletes, the majority of its customers were average citizens, most of whom didn’t even use the shoes for sports.

Knight altered Nike from a product-oriented company to a marketing-oriented one. He began appealing to the everyday customer, eventually turning around sales around. By the end of 1991, it had regained its footing, with sales totaling over $3 billion. “The most important thing we do is market the product,” Knight told the Harvard Business Review in 1992. “Marketing knits the whole organization together. The design elements and functional characteristics of the product itself are just part of the overall marketing process.”

Knight has handed the baton over to John Doanhoe, him being the CEO of Nike as of 2020.

“I’m excited about the future of Nike,” Knight said. “I think a great growth period lies ahead.”

He was a knight in its true sense afterall.