Nike The Complete History and Strategy

Nike

Nik e-Probably the most symbolic and most productive brand in modern times. In any day, Suss is decorating more people than any other shoe company.

If you have read or watched a shoe dog, you may think that you know its history. But let's just say that Shoe Dog ended in 1980 and broadcast ... it's a fun fiction. It turned out that the actual story (as usual) is full of more dramas, twists, and business lessons than these plays.

We have long wanted to take Nike, but this episode was finally realized by LPS voting. Now, wear your vibes, airmax, dunk, Jordan (or monarch, no criticism), go out for lon g-distance runs and walking! ‍

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About Mark Andrisen, Rex Friedman and Ben Thompson
Talk Now (Taylor version)

Correction and follo w-up:

Phil Night was a businessman, not a journalist in Oregon. There was a mistake in the book I used for the survey, so if you make a mistake here, you won't panic!
Caroline Davidson gave 500 shares in 1983, not IPO. In other words, the shares have been divided six times instead of seven times from that time to the present.
Americans (including the United States) have mistaken the pronunciation of "Onitsuka". Here is the actual pronunciation.
Michael Jordan had a royalties not only from basketball shoes but also from all the Nike Airline shoes.
The principle of Uber's "toe standing" is not "Stepping a toe over the line". Rather, the idea is that employees should not be afraid of "stepping on the toes of others" in the organization.

We have finally done it. After 5 years and over 100 episodes, we decided to formally organize the answers to questions that the buyers are most frequently asked: "What is the best acquisition ever? This is: Top 10 of the acquisitions. Please listen to the full text of the episode (including the notable mentions) or the blog post below.

Note: Absolute dollar return to the buyer was estimated and ranked. Although it was possible to use the ROI magnification and annual return, it was determined that the final scale of the success was an absolute dollar amount to increase the value of the parent company. After all, you can't eat IRR! For more information about our methodology, see the last note at the end of this article. Also, see all the above episodes for the editorial and discussion of our brand acquisition!

10. Marvel

Market price: $ 4. 2 billion, 2009

Current contribution to market capitalization: $ 20 billion, $ 5 billion

Absolute dollar return: $ 16. 3 billion

At the time of 2009, Marvel Studios were just established, most of the rights were filmed, and Marvel was just an old IP comic company with only geeks. Since then, Marvel Cinematic Universe has been in total of $ 22. 5 billion (including the largest movie in history), an average of $ 2. 2 billion (about 220 billion yen). Disney has earned about $ 2 with a park and goods revenue for the $ 1 (see Disney Plus Episode). Therefore, it is estimated that Marvel has created about $ 675 a year, that is, almost 10 % of the income of the entire company. It's not bad for a nerd comic franchise ...

Dress Season 1, Episode 26 LP show 1/5/2016 July 24, 2023

9. Google Maps (Where2, Keyhole, ZipDash)

Total purchase: $ 70 million (estimated), 2004

Contribution to the current market capitalization (estimated): $ 16. 9 billion

Absolute revenue: $ 16. 8 billion

Morgan Stanley estimates that Google Map has earned $ 2. 95 in 2019. This is smaller than Google's total revenue of $ 160 billion or more, but in our calculations, the market capitalization is equivalent to $ 160 billion. Ironically, most of the use of the map (and probably revenue) came from Mobile, which developed from the smaller three acquisitions. Small but powerful!

Google Map Season 5, Episode 3 LP show 8/28/2019 July 24, 2023

8. ESPN

Acquired total: $ 188 million (from ABC), 1984

Current market capitalization contribution: $ 31. 2 billion

Absolute revenue: $ 31 billion

The ABC acquisition in 1984 by ESPN was a heavyweight champion, and is still G. O. A. T. without complaining of media acquisition. Sales in 2018 were estimated to be $ 10. 3 billion, and the value of ESPN was 15 % worse for ABC / Disney every year for 35 years. ESPN is responsible for one of the most great business model innovations in the history of ritual charges, and proves Albert Einstein's famous words that compound interest is the eighth mystery in the world. I am.

ESPN Season 4 Episode 1 LP show 1/28/2019 July 24, 2023

7. PayPal

Total acquisition: $ 1. 5 billion (2002)

Value realized by spi n-off: $ 47. 1 billion

Absolute revenue: $ 45. 6 billion

Who thought that it would be so advantageous to promote the payment of Benie Baby Trade? EBAY, the only acquisition in our lists that can accurately measure value, became an independent listed company in July 2015. What is the value at that time? It is 31 times the amount paid by EBAY in 2002.

PayPal Season 1, Episode 11 LP show 5/8/2016 July 24, 2023

6. Booking.com

Total purchase: $ 135 million (2005)

Current market capitalization contribution: $ 49. 9 billion

Dolla r-building absolute return: $ 49. 8 billion

Do you remember the priced line negotiators? He got a voice trading in one case. If this stock was held by Holdings, the market may have been ranked higher (after this acquisition, the price line was changed to the company name!). Due to the influence of Cobid 19~At the time we analyzed, there was no 20 % decline due to COVID-19 concerns. In addition, as a contribution from Booking. com, the company took a conservative approach to use only $ 10, 800B of annual sales (huge amount) from the company's "service income" segment.

Booking. com (along with JetSetter and Room 77 CEO, Drew Patterson) Season 1, episode 41 LP show 6/25/2017 July 24, 2023

5. NeXT

Total acquisition: $ 429 million in 1997

Estimated contributing to the current market capitalization: $ 63 billion

Absolute revenue: $ 62. 6 billion

What is the value of Steve Jobs? It proves that he should not have it! The Next Step Operating System supports all the modern operating systems of Apple today. Literally, the dollar of Apple's annual revenue is all due to Next step, because Steve has wiped it cleanly when returning the product. Apple's current $ 1. 4 trillion market is necessary, but not enough.

Next Season 1 Episode 23 LP show 10/23/2016 July 24, 2023

4. Android

Total purchase: $50 million (2005

Estimated market cap contribution today: $72 billion

Absolute dollar return: $72 billion

Speaking of OS acquisitions, the next acquisition was also great, but Android wins on a net basis. Google's estimated annual revenue contribution from its lightweight robot operating system was $12. 5 billion, based on revenue from the Google Play Store (Google's 30% cut is worth about $770) plus the traffic acquisition costs that Google will save by having default search on Android ($4. 8 billion). Android also wins the award for the largest ROI multiple: & amp; gt; 1400x. Yes, you can't eat the IRR, but that's only a dream for VCS schemes.

Android Season 1, Episode 20 LP show 9/16/2016 July 24, 2023

3. YouTube

Market Cap: $1. 65 billion (2006

Estimated Market Cap Contribution Today: $86. 2 billion

Absolute Dollar Return: $84. 5 billion

Honestly, in the first episode covering YouTube, we said: With Google only recently reporting YouTube revenue for the first time ($15 billion - almost 10% of Google's revenue!), it's clear that this acquisition was a juggernaut.

That said, as the second largest search engine in the world (second only to its parent company!), YouTube's revenue is $15 billion, but a lot of that revenue (maybe 50% or more) goes to creators, and YouTube's hosting and bandwidth costs are large. But we'll leave the discussion of the profitability of this segment to the podcast.

YouTube Season 1, Episode 7 LP show 2/3/2016 July 24, 2023

2. DoubleClick

Total acquisition value: $3. 1 billion (2007

Current estimated market cap contribution: $126. 4 billion

Absolute revenue: $123. 3 billion

At number 2, we have a dark horse! The only acquisition on this list that has not been the subject of an acquisition (it will return soon), this acquisition was much more significant than many realize. DoubleClick and related products, which effectively expanded Google's advertising from a mere ownership stake to the entire Internet, generated more than $20 billion in revenue for Google last year. Given what we now know about the nature of competition in Internet advertising services, it is unlikely that governments or antitrust authorities would ever again allow a deal like the one at number 1 on this list.

1. Instagram

Market value: $1 billion (2012

Current estimated market cap: $153 billion

Absolute dollar return: $ 152 billion

C. O. Speaking of the situation of T., ESPN is M & Amp; amp? A's Lebron, and Instagram is his MJ'S. ESPN/ Lebron is not offended, but as Facebook acquired Instagram in 2012, there is probably no other dominant acquisition in M & Amp; A games. According to Bloomberg, Facebook's annual sales are currently $ 20 billion ($ 0).~In just eight years ago, it was $ 0), Instagram took the crown of acquisition. Unlike YouTube, Facebook has almost all of that $ 20 billion! Considering the situation at the time of the acquisition ("lack of" and the poor public records on the acquisition, even if the ratio of MJ is expanded too much, the acquisition of Instagram is the acquisition of Instagram. It was equivalent to Jordan's sixth round for Facebook. Whether this acquisition was ultimately good or bad for the whole world, it is certain that Instagram will be the highest in history as the highest acquisition ever.

Instagram Season 1, Episode 2 LP show 31/10/2015 July 24, 2023 Introducing the top 10 data that was acquired in detail.

Methods and precautions

In order to count on our list, the acquisition needs to acquire at least a majority of shares in the target company (otherwise it is just an investment). For this reason, the investment of Nisspers in Tencent and SoftBank / Yahoo's Alibaba are excluded.
Not only hig h-tech companies, but also all past acquisition cases, we may have overlooked sectors that we do not know very well. If you have any cases that you think you have overlooked, please let us know on Slack or send an email to Purchasedfm@gmail. com.
We used the profit ratio to calculate the current value of the acquired company by multiplying the current estimated income from the market capitalization of the parent company to the stock price of the parent company. I know that this analysis is defective (at least for mature companies, the cash flow / profit ratio is better), but considering that most of the business reports of most companies are uncertain. This was the only way to apply a consistent simple approach to any deal.
All basic assumptions are based on public financial information unless otherwise refused. The prerequisite not disclosed by the parent company is linked to the source.
This ranking is a point in history of March 2, 2020, and may, of course, may be changed in the future due to future and past acquisition results and fluctuations in stock prices.
I did not enter the top 10, but there are five good works. To hear the episode, adjust the channel to the full episode!

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Transcript: (Demanded: Unintended confusion, incorrect and/ or interesting transcription errors may be included)

Ben: Listeners, I want you to know, David and I emailed before this conversation. Will we change this? Are you playing with this? Is it necessary to reorganize this section? He gave me a message to do so. Please pay tribute to David Rosenthal's bad joke.

Welcome to the ACQUIRED Season 13, Episode 1. This podcast talks about hig h-tech companies and the story and playbook behind it. I'm Ben Gilbert.

David: David Rosenthal.

Ben: We are the host. Business has an old question. Which is more important, good product or excellent marketing? Today, we literally introduce the perfect case study in Nike in Nike.

Is groundbreaking innovation leading this business? Or are their core competitors in deep ads and sponsor contracts with athletes and teams? To understand this, of course, you need to see Nike's 6 0-year history.

David: And shoe dog is a very good company.

Ben: That's amazing. You have to start from the beginning. Technically, why can you become a shoe company with more than $ 50 billion sales, even though you haven't made any shoes? As you may know about Nike in the movie "Air" and "Shoe Dog", how is such an old story linked to a huge strategy change in Nike right now? Is not told.

Thank you, LPS, for voting for this episode. David and I had been putting this episode off for 2-3 years. We put this episode up for a vote and the majority of you chose this as the next episode. If you want to vote for future episodes and earn an LP, go to acquired. fm/lp.

If you want updates every time so you don't miss a new episode, subscribe to croquired. fm/email. In this email, we'll send you little easter eggs and hints that tease the next episode. Here's acquired. fm/email. Don't miss a new episode.

Finally, be sure to check out ACQ2, our second show, available on any podcast player, where we interview people who are starting companies today. This show is not investment advice. David and I may have investments in the companies we discuss and this show is for informational and entertainment purposes only. David Rosenthal, what's that stack of books on your desk?

David: Oh my goodness. I think Amazon owes LPS a thank you for acquiring them. My six-foot desk is covered with Nike books. It's so much fun to read them all.

Ben: I thought Shoe Dog was the only thing you had. I didn't think you and I had more than 10 books combined.

David: There's so many. I've read thousands of pages. There are three books, all essentially telling more or less the same story. I bring this up because it's really important what those three books are.

The first one is, of course, Shoe Dog. The second book is a book called Just Do It, written by journalist Donald Katz. Ben, do you know Donald Katz?

David: Don wrote that book, and then I think he wrote one or two others, and then he moved on. He found Audible.

David: Isn't that crazy?

Ben: It's cool that it was founded by a journalist.

David: Yeah, that's just wild. He wrote a regular third-person journalist taking on Nike. The third book is called "Swoosh," which I don't think a lot of people have read, but it's like "The Taste of Luxury." I think some really big names in the footwear industry have read this book.

It was written by J. B. Strasser and his sister, Laurley Beckland. J. B. Strasser is Julie Strasser, the wife of Rob Strasser. Rob is a legendary first marketing officer of Rob Strasser and Nike, played by Jason Baitman, as you can see from the movie "Air".

Although it is not mentioned in the movie, Rob has a big quarrel with Phil Knight immediately after signing Jordan, leaving the company with Jordan's designer Peter Moore, and just a few years later in Adidas as Adidas CEO. I joined the company.

Ben: It's an incredible betrayal.

David: It's like Judah. It is a modest expression of the century that he was Nike and Persona no n-Grata. This book was written by his wife in real time. can't believe it.

Ben: Strasser, his contribution, will be explained later, but he will be the second person after Phil Knight, who founded Nike.

David: Starting from the history of Shoe Dog, the origin of the Blue Ribbon Sports, in fact, in July 1948, just before Shoe Dog began, Bill Bowman became a land coach at the University of Oregon. The building was not only a c o-founder of Nike with Phil Night, but also a legendary person. He described him, as a descendant of Oregon Trail's survivors. The coward, who did not start in the week of death in the trail, was one of his favorite words.

The father of the building was Governor Oregon. The building fought as a major in World War II. At the end of the war, he had negotiated the withdrawal of the German battalion. He is that kind of person. He lived on the summit in the mountains of Oregon.

The postponer coming to his house continued to hit his mailbox with a truck. He exploded the mailbox with explosives to blast the truck on the next opportunity and literally blasted the truck.

Ben: I'm not making such a thing anymore.

David: That's not the case. The building, who returned after the war, first coached in high school, and then became the head coach of Oregon University. He got his career and personality. He is probably the most successful land coach in American history. It was written by J. B. Strasser and his sister, Rory Beckland. J. B. Strasser is Julie Strasser, the wife of Rob Strasser. Rob is a legendary first marketing officer of Rob Strasser and Nike, played by Jason Baitman, as you can see from the movie "Air".

Ben: It's an incredible betrayal.

David: It's like Judah. It is a modest expression of the century that he was Nike and Persona no n-Grata. This book was written by his wife in real time. can't believe it.

Ben: Strasser, his contribution, will be explained later, but he will be the second person after Phil Knight, who founded Nike.

The postponer coming to his house continued to hit his mailbox with a truck. He exploded the mailbox with explosives to blast the truck on the next opportunity and literally blasted the truck.

Ben: I'm not making such a thing anymore.

David: That's not the case. The building returned after the war, coached in high school, and then became a head coach at the University of Oregon. He got his career and personality. He is probably the most successful land coach in American history. It was written by J. B. Strasser and his sister, Laurley Beckland. J. B. Strasser is Julie Strasser, the wife of Rob Strasser. Rob is a legendary first marketing officer of Rob Strasser and Nike, played by Jason Baitman, as you can see from the movie "Air".

Ben: It's an incredible betrayal.

David: It's like Judah. It is a modest expression of the century that he was Nike and Persona no n-Grata. This book was written by his wife in real time. can't believe it.

Ben: Strasser, his contribution, will be explained later, but he will be the second person after Phil Knight, who founded Nike.

The postponer coming to his house continued to hit his mailbox with a truck. He exploded the mailbox with explosives to blast the truck on the next opportunity and literally blasted the truck.

Ben: I'm not making such a thing anymore.

I think the building is ahead of the first fou r-minute range in the United States. He will lead several Olympic teams. He certainly turned Oregon University into the most prestigious truck program in the United States. For Oregon in the 1940s and 1950s, he is a pretty crazy national celebrity.

A few years after Bauweman became a coach, he hired a very talented middl e-range runner, Phil Knight, from Portland for the first time. Phil Night also has interesting roots from Oregon. He is the son of Bill Knight, known as OB of Oregon University. He is a former Portland lawyer and the editor of Oregon Journal. Phil has succeeded his father. Run for Oregon's journalism world, and for Bowman. I think Phil is okay as a runner.

Ben is interesting. Phil Knight describes his climax as "so good runner." Because he is running with the world's best university runners coached by Bill Bowman. I feel like he was a person who had few words and had little encouragement other than running fast. Isn't there a Phil Night? He runs per mile in 4 minutes and 13 seconds and is convinced that he is okay.

David: That's right. If it was another school, I think Phil was a star player. This is not a shoe dog, but in the last few weeks, Phil's personality has come to be read very much. I think he went to Oregon because he could not be a star there. I think he is the most introverted CEO we have been interviewed since the acquisition. Rockefeller was quite introverted, but it looks like Elon Mask compared to Phil Night.

Ben: That's right. And many of the CEOs appearing in these acquisition episodes have a deep private, but most of them don't want to take a spotlight. When they take a spotlight, you can see that the switch is turned on. They are bright, shining and love to move the room. It's completely different from Phil Night.

David: It's completely different. I was very lucky. I am really grateful to Phil Night in my life. I went to a business school at Stanford University. At the night management center he brought, I was one of the first graduates.

Ben: Did he gave a graduation speech?

David: That's right. It was wonderful. It was the first shoe dog project he worked on. A book came out a few years later. It was a very wonderful content. Looking at Nike's founder and CEO, I remember what I thought. He was very nervous in front of Stanford University, the warmest and most acceptable audience.

Knight runs from Oregon. It's important to say about Bowman. He was certainly a different man from anyone else. But what you might think, he wasn't a militarist. He was a really innovative person. He was the first person to be a track and field coach, probably as a university coach of any sport, and was the first person who really emphasized runner rest.

Some of the famous Nike stories were technology and shoes. Bowman actually learned to make shoes on his own, and used sneakers, usually remodeled or made adidas sneakers, and used the benefits of gaining players as guinea pigs. He pursued it, and his shoes were part of it.

Ben: The technology that Bauman was experimenting was crazy. He broke his shoes and remade it with snake leather, deer leather, and fish leather. It's stupid and crazy. His guinea pigs were Phil Knight, and Phil was not at the top, so he could afford him to be an experimental table. It was very fortunate that he was not the fastest runner of the Oregon team for Phil Night and his future.

David: That's right. Here is everything here. After graduating from Stanford University, he will immediately go to Stanford GSB business school. He graduated from GSB in 1962. This is also crazy. Nike feels like a very modern company. That's an old story.

In the last work of Phil Stanford, he attended the only "entrepreneur spirit course" on GSB at the time. Today, there are 100 kinds of entrepreneurship courses. The course is a famous professor, Frank Shalemberger, who has achieved great achievements in Nike, which teaches the Blue Ribbon Sports. He wrote the business plan of Blue Ribbon Sports almost on a course for the final papers of Knight. David: That's right. It was wonderful. It was the first shoe dog project he worked on. A book came out a few years later. It was a very wonderful content. Looking at Nike's founder and CEO, I remember what I thought. He was very nervous in front of Stanford University, the warmest and most acceptable audience.

Ben: The technology that Bauman was experimenting was crazy. He broke his shoes and remade it with snakes, deer leather, and fish leather. It's stupid and crazy. His guinea pigs were Phil Knight, and Phil was not at the top, so he could afford him to be an experimental table. It was very fortunate that he was not the fastest runner of the Oregon team for Phil Night and his future.

In the last work of Phil Stanford, he attended the only "entrepreneur spirit course" on GSB at the time. Today, there are 100 kinds of entrepreneurship courses. The course is a famous professor, Frank Shalemberger, who has achieved great achievements in Nike, which teaches the Blue Ribbon Sports. He wrote the business plan of Blue Ribbon Sports almost on a course for the final papers of Knight. David: That's right. It was wonderful. It was the first shoe dog project he worked on. A book came out a few years later. It was a very wonderful content. Looking at Nike's founder and CEO, I remember what I thought. He was very nervous in front of Stanford University, the warmest and most acceptable audience.

His thesis is that he knows how to grow up with his father. In fact, I think he probably spent college, and then GSB, summers in the Oregon Journal newsroom. He knows from the photo department that professional, high-end cameras were traditionally the domain of Germans. Leica was the most famous camera brand. In the 50s and 60s, the Japanese started to enter this market. Nikon was a big entrant from Japan.

David: Exactly. They made great cameras and sold them at prices that vastly undercut Leica. He also knew the sporting goods market from his time in Oregon, and was a test pilot for Bill's Shoes in particular. In fact, the dynamics are exactly the same in the sporting goods market. There are two companies that dominate the sporting goods market, both German. One is, of course, Adidas.

Ben: That's what the Germans call the "Ah-Dee-Dahs."

David: Yes, they're coming in here soon. The other is Puma. There were American sports shoe companies like Converse. But at that time Converse was still stuck in the canvas shoe era, and it was already like ancient history. If you know Chuck Taylor, you know the All Star, the famous Seminole Converse shoes. Ben, when do you think Chuck Taylor played basketball?

Ben: Yeah. If I remember the NBA episode, the NBA was really booming after the war, so I guess it was in the 50s. I think he was an NBA player in the early 50s.

David: Yeah, you might think so. At the same time, in the period we're talking about now. Chuck Taylor was a professional basketball player in the 1920s. That's when the technology for the Chuck Taylor All Star was born. Canvas shoes.

At this point, the market was moving to shoes with leather uppers, and Adidas was the leading manufacturer with that technology. In any case, basketball shoes were not yet a market. It would be much later, as we'll see later.

The market was shoes. It was a decent market, but it wasn't a market for cameras. This paper by Phil Knight was met with neither warnings nor praise from his colleagues or professors because, although it was a good idea to apply Japan's low-end disruption to the sportswear and footwear market, it was not a great market. The existing market was shoes.

Ben: Yeah, well, let's think about how you define market size. There aren't that many athletes at any point in history, so that's not interesting.

David: Before we go back to Phil Knight and Dodge Dog, maybe I should touch on the history of Adidas. Adidas was founded by Adolf Dassler, ADI for short, Adidas, so it's called A-Di-Dass.

David: Right. After World War I, Germany was totally devastated, but before World War II, they became a pretty well-known elite shoe supplier, and a supplier to the Olympic athletes of the time. In fact, the irony is that in the 1936 Olympics, Jesse Owens literally beat Hitler in Berlin, Germany, and won wearing Adidas shoes.

Ben: Actually, Adi Dassler took a big risk and gave Jesse Owens a pair of Adidas shoes the night before the race to someone who could get him to wear them. Jesse Owens was like, oh my, this is really awesome. Would it be a problem for Adidas if it was revealed that an American had won wearing German shoes?

David: Interesting. I didn't know that story because Adi's brother Rudy worked with him in the business, as did Adi's wife and son. But after World War II, the two brothers had a big split.

Rudy faded out and started another shoe company. It's never revealed what the fight was about. One rumor is that Rudy went into the Nazi army and Adi didn't. That might have something to do with it. Anyway, it's crazy. Rudy starts a rival company called Puma after the war.

Ben: It's crazy as hell.

David: Adidas and Puma are two brothers. They're the Dassler brothers. It's crazy.

Ben: So, let's go back to Phil Knight.

In 1963, after graduating, Phil decided to go on a trip. He wanted to go on a trip around the world before he really got going. I convince a friend from my GSB days to go with me. They go to Hawaii, which is famous, first, and my friend meets a girl there.

Ben: Why would I leave Hawaii?

David: Oh, a smart man. Phil will go to Japan. He is still thinking about that idea. When I was in Japan, he went to a racetrack in Tokyo and began to observe what shoes running around the racetrack was wearing. And it is judged that the shoes of the Tiger brand are the best. Find a company that makes a tiger. It turns out that a company called Onitsuka is making it.

Phil, an introverted and crazy thing, took a train from Tokyo, knocked on an ontsuka Corporation door, greeted him, and asked if they could import their shoes. I went to consult if I could import Onitsuka Corporation shoes. There is too much to see the 2 3-yea r-old Phil Night's heart.

Ben: That's the flip of Phil's personality, and he has a suffering soul. He is introverted, but very active. In one corner of his heart, can a friend stay in Hawaii? Phil, but I am craving something. You need to go to find out where you are, what you need to do, how to change the world, and how to create something. I think there is an engine different from other people.

David: I think David Senra says that the CEO and founder of the company we are interviewing are modern Genghis Khan. Phil has not been introduced as Genghis Khan, but is still Genghis Khan. At the bottom of an introverted personality is the same motivation as John Rockefeller, Elon Musk, and Mark Zuckerberg.

Ben: That tremendous competitiveness is the founding element of the Nike Culture that has penetrated to this day. In Nike, he plays to win. Everyone goes to work in Nike, and I don't think they wear anything from competitors. No, I want to wear this. I don't do anything to play for other teams.

Wake up every day, come to work, and kick up your rival ass. Sometimes it leads rivals to a suspicious place. But Nike is one of the most competitive cultures in the world. David: Oh, a smart man. Phil will go to Japan. He is still thinking about that idea. When I was in Japan, he went to a racetrack in Tokyo and began to observe what shoes running around the racetrack was wearing. And it is judged that the shoes of the Tiger brand are the best. Find a company that makes a tiger. It turns out that a company called Onitsuka is making it.

Wake up every day, come to work, and kick up your rival ass. Sometimes it leads rivals to a suspicious place. But Nike is one of the most competitive cultures in the world. David: Oh, a smart man. Phil will go to Japan. He is still thinking about that idea. When I was in Japan, he went to a racetrack in Tokyo and began to observe what shoes running around the racetrack was wearing. And it is judged that the shoes of the Tiger brand are the best. Find a company that makes a tiger. It turns out that a company called Onitsuka is making it.

Wake up every day, come to work, and kick up your rival ass. Sometimes it leads rivals to a suspicious place. But Nike is one of the most competitive cultures in the world.

David: It's interesting. You mention Nike as a philosophy of establishment, but Nike will not be here for a while. I suddenly noticed that Phil was on the train heading to Kobe. His plan is to appear in front of the door. He is an American businessman, a distributor, and wants to sell shoes in the United States.

However, he has no company and does not have the name of the company, so he has to think in a hurry and think about his name. There are various inconsistent stories about the origin of the name. Phil says that the name Blue Ribbon Sports is derived from what he recalls his childhood, who became a high school child in junior high school. The Blue Ribbon, who was removed from the baseball team, was encouraged by his mother, and acquired at the athletics tournament, said he had determined his personality.

Ben: That's a really cool story.

David is a very good story. That's the origin of the name. It's a story that appears in other books, but the Phil was a pubst blue ribbon or PVR beer, or more, or more Suntory Blue Ribbon Whiskey, a Japanese brand whiskey. Looking at the sign or something, I got the name Blue Ribbon.

Ben: Like any story, we don't know.

David: That's right. In any case, Phil will perform a firs t-generation performance in this meeting, whether he has been driven by his efforts to succeed. He says he is a businessman from the United States. I entered a business school at Stanford University. He has a company called Blue Ribbon Sports and says he wants to introduce his shoes.

By the way, he wrote an article by a legendary Bill Bowman. He says he is conducting market research. He believes that US shoes tracking and the current shoe market can be $ 1 billion. He has no data supporting it.

Ben: He is conducting a lot of market research.

David: We conducted many market research, but were completely wrong in both directions. The actual US running shoes market is unlikely to be $ 1 billion. Talking about running was not what athletes did. David: It's interesting. You mention Nike as a philosophy of establishment, but Nike will not be here for a while. I suddenly noticed that Phil was on the train heading to Kobe. His plan is to appear in front of the door. He is an American businessman, a distributor, and wants to sell shoes in the United States.

Ben: That's a really cool story.

Ben: Like any story, we don't know.

Ben: He is conducting a lot of market research.

David: We conducted many market research, but were completely wrong in both directions. The actual US running shoes market is unlikely to be $ 1 billion. Talking about running was not what athletes did. David: It's interesting. You mention Nike as a philosophy of establishment, but Nike will not be here for a while. I suddenly noticed that Phil was on the train heading to Kobe. His plan is to appear in front of the door. He is an American businessman, a distributor, and wants to sell shoes in the United States.

Ben: That's a really cool story.

Ben: Like any story, we don't know.

Ben: He is conducting a lot of market research.

Ben That's right. The current trends and fitness trends have not yet begun. David, it's a sensory thing, but probably 100 million orbital shoes in the United States. Athletic shoes brands are $ 2 billion in total, including all the sports throughout the United States and all ages.

David: That's right. The actual situation at that point is completely wrong. The vice versa is also completely wrong. Thanks to Blue Ribbon and Nike.

Ben: That's right. They are gaining big skills and growing. Today's American brand sneakers market is $ 130 billion. Of course, not all of them are trucks or running shoes, but running shoes occupy large parts. By the way, this number of $ 130 billion is larger than other things than other things.

David Wao. I don't think everyone should play video games, but everyone should wear shoes. The night will leave this meeting, the first generation performance. He promises from Onitsuka that if he calls $ 50, he will send his shoes to his parents' home in Portland, Oregon.

The first thing Knight does is to contact his father. I'm not sure, but I returned to Portland with a telegram or something, and asked the Japanese Onitsuka Corporation to pay $ 50 as a sample purchase cost. I think he came back a few months later.

Ben: Certainly, your shoes have already arrived.

David: Of course, shoes should have arrived. He hurried home and said he said he, mothers, oh, dad. Did your shoes arrive? Dad, what shoes? Shoes have not arrived. Shoes will not arrive for another year. There is a small prophecy about what the business with Onitsuka is for a young blue ribbon sport.

Ben: This is to get a sample to see if you can sell $ 50 shoes for more than a year.

David: Fill is frustrated that he has to start over, and returns home. I get the job of an accountant. He graduated from a business school and is studying to qualify as a certified public accountant under the Certified Public Accountant Examination. That's right. The current trends and fitness trends have not yet begun. David, it's a sensory thing, but probably 100 million orbital shoes in the United States. Athletic shoes brands are $ 2 billion in total, including all the sports throughout the United States and all ages.

David: That's right. The actual situation at that point is completely wrong. The vice versa is also completely wrong. Thanks to Blue Ribbon and Nike.

Ben: Certainly, your shoes have already arrived.

Ben: This is to get a sample to see if you can sell $ 50 shoes for more than a year.

David: Phil is frustrated that he has to start over his life and returns home. I get the job of an accountant. He graduated from a business school and is studying to qualify as a certified public accountant under the Certified Public Accountant Examination. Ben That's right. The current trends and fitness trends have not yet begun. David, it's a sensory thing, but probably 100 million orbital shoes in the United States. Athletic shoes brands are $ 2 billion in total, including all the sports throughout the United States and all ages.

David: That's right. The actual situation at that point is completely wrong. The vice versa is also completely wrong. Thanks to Blue Ribbon and Nike.

The first thing Knight does is to contact his father. I'm not sure, but I returned to Portland by telegram or something, and asked Japanese Onitsuka Corporation to pay $ 50 as a sample purchase cost. I think he came back a few months later.

Ben: Certainly, your shoes have already arrived.

Ben: This is to get a sample to see if you can sell $ 50 shoes for more than a year.

At the end of 1963, it was Christmas, but Phil wrote a letter to Shoe Dog and sent a sample. Phil holds it. wonderful. It was in his memory. This may not be as good as Adidas, but it's good enough.

Ben: That's right.

David: Phil is back and writes Onitsuka. He said he wanted to be a US distributor for shoes and field shoes. Onitsuka is OK, great. Become a distributor in the western United States. There are already people on the east coast, but please be in charge of 13 West Coast. Phil is wonderful.

He starts the company after accounting work. He goes to work. He hired one of his twin younger sisters, but I think he was probably a high school student.

Ben: At this point, the simplicity is oozing out of the Phil. I'm doing business. Of course, you can earn enough to stop your business and hire people.

David seems to be. He doesn't have enough money to open a retail store, nor has it just wholesale to other retailers. His genius business plan-I don't know if this was part of Stanford's dissertation, but-I drove a car to attend a meeting held around Oregon and the west coast. It's about selling shoes.

Ben: That's amazing. He legally conducted a leather shoe project that nobody would want to do, and overcome the difficulties to put his business on track, and created his own distribution route.

David: Yes: That's right. Speaking of its own, he has another really great idea, goes to Eugene while traveling by car and meets Oregon's old coach, Bowman. If he could run his runner in a tigers, it would be a great marketing for me.

He's not always satisfied with Adidas, we will have a better relationship, he will be able to experiment with these shoes, and I can sell it cheaply. At this point, even the legendary Bill Bowman and Oregon University bought all shoes. No one gave them shoes. It was an important item of their budget. And at the end of 1963, I think it was Christmas, but Phil wrote a letter to Shoe Dog and sent a sample. Phil holds it. wonderful. It was in his memory. This may not be as good as Adidas, but it's good enough.

Ben: That's right.

He starts the company after accounting work. He goes to work. He hired one of his twin younger sisters, but I think he was probably a high school student.

Ben: At this point, the simplicity is oozing out of the Phil. I'm doing business. Of course, you can earn enough to stop your business and hire people.

Ben: That's amazing. He legally conducted a leather shoe project that nobody would want to do, and overcome the difficulties to put his business on track, and created his own distribution route.

He's not always satisfied with Adidas, we will have a better relationship, he will be able to experiment with these shoes, and I can sell it cheaply. At this point, even the legendary Bill Bowman and Oregon University bought all shoes. No one gave them shoes. It was an important item of their budget. At the end of 1963, it was Christmas, but Phil wrote a letter to Shoe Dog and sent a sample. Phil holds it. wonderful. It was in his memory. This may not be as good as Adidas, but it's good enough.

Ben: That's right.

He starts the company after accounting work. He goes to work. He hired one of his twin younger sisters, but I think he was probably a high school student.

Ben: At this point, the simplicity is oozing out of the Phil. I'm doing business. Of course, you can earn enough to stop your business and hire people.

Ben: That's amazing. He legally conducted a leather shoe project that nobody would want to do, and overcome the difficulties to put his business on track, and created his own distribution route.

Ben: That's crazy. Let's take a moment to acknowledge that the company that would eventually become Nike started out as (a) not Nike-like, (b) without the Swoosh, and (c) not making any products. It was literally just importing other people's products and reselling them. The plan was to build a big business off the back end of not actually making anything.

David: That's not exactly what GSB and other business schools would define as a recipe for success.

Ben: Maybe that was more shocking at the time. In today's hyper-globalized world, you need the internet and companies with massive resources that can scale instantly.

And venture capital.

Ben: Exactly, venture capital can accelerate a company's growth if something works. I think the idea that your core competency is distributing someone's products within the geography where you have customer relationships is a really good plan, and it's a lot harder to build something like that from scratch, but it's a lot more reach.

David: That's a great point. Turns out Onitsuka had already explored the US market, whether or not you agree with Phil's opinion that it was far from their thin market size. They wanted to get into the market, but they didn't think they could do it on their own. In fact, they were looking for someone like Phil.

Phil goes to see Bowerman. To Phil's surprise, Bowerman is not a mild and fuzzy guy. Bowerman showed no signs of encouraging Phil, either when Phil ran for him or after. "I don't just want to get the shoes cheap, I want you to be in the deal. I want to be a partner in this company." Phil hits him.

Ben: A real partner is 50/50. It's not like you're going to be a consultant or anything, you just want me to give you a percentage. Okay, great co-founder. That's how it goes.

David: What kind of deal do you think Phil is looking at? I think Bowerman initially said 50/50, but then he goes to sleep, comes back with his lawyer and says let's make it 51/49. 51 for you, I want 49.

On the one hand, it's super exploitative of an aging athlete who looks up to Bowerman as a father figure. This was a time when VCs didn't exist yet, but they were getting 50%, 60%, 70% of companies. On the other hand, for Phil, it's a definite yes.

Ben: That's right. Oh, it's only half of the company, it's amazing.

David: If Phil did not do this, he would get 100 % of Phil Night's Blue Ribbon Sports. But he will do this transaction and get 51 % of Bill Bowman's Blue Ribbon Sports.

Ben: That's right. I was thinking about it. After reading the shoe dog, I felt like it was um-that I just read it for the second time-Boweman ran for me, who was not particularly close to me. It's a bit weird to feel like trading. I always wonder, why was he willing to do so?

As part of his research, he met a former Nike historian named Scott Reams. After working in the marketing department, he has been working in Nike for more than 20 years and became a company historian. He has a spectacular post to Linkedin, a truly incredible article that focuses on the history of the company.

He shows this opinion. According to him, Bill Bowmann directly interacts with many shoes manufacturers, including Adi Dasler, more than 15 years ago, based on the letter in the archive of the University of Oregon and Nike. He was trying to buy shoes for runners directly to avoid displaying retail stores. He revealed that he had an idea to make better running shoes.

It is important to remember that these were written in a letter addressed to Adi Dasler many years ago, but the reply he received was an introduction to Adidas's shoes in the United States. , His design proposal was ignored. Bowman sat there and decided. Oh, I'm going to import foreign shoes, I'm trading, and I got on it.

David: It seems that Onitsuka was ready to compete with the young Phil Night. That was Bowman. Ben, this is amazing. I would like to keep it in the second half of the episode. Scott Reams is a legendary player. As you say, he was a Nike company historian. He worked very closely with Phil in writing Shoe Dog.

Ben: Did you read his post? I sent it to you as Linkedin. Did you look through it all?

David: Not only that, I sent a message to him on Linkedin. I talked to Scott for hours.

David: He helped us to summarize the story of us, the acewyard version of the Nike. We must thank him greatly. I was trying to surprise you. I'm very happy.

Ben: That's the best. It's really cool. Should I say it? Listeners, we talked to almost 12 people to prepare this episode. I would like to thank Eric Springk, a 2 7-year veteran in Nike. David, you know he talked to him, but he was a COO until a few years ago. It was very good to hear him and Scott's perspective. Please let me know if you have any other nuggets.

David: There are things that I want to take a Scott, but that's a little earlier.

Ben: Like. Then, Bowman.

They invested $ 500, respectively, as the first funds to ship Onitsuka's Tigers stocks in large quantities. Phil is acting as he intends. He runs a car to participate in the tournament held at Pacific Northwest, and sells Tigers from the car bed.

In Shoe Dog, Phil says that when he was in Hawaii with his friend, he earned money by selling an encyclopedia one by one. He did not sell at all. He is the most introverted man in the world and cannot be a salesman. But for some reason, when he sells shoes, when he executes a crazy idea, he literally attends a meeting and persuades children and his parents to buy shoes from the back seats of the car.

Ben: If you believe something, it's normal to sell.

David: Really. Basically, you sell out immediately and make all the benefits to the next inventory order from Onitsuka. Sales in 1964 were $ 8, 000. It doubled in 1965. They are 16. 00 $. Ben, what you want to say is that there is a problem here.

Ben: One of them is that it doesn't make much money. It's not a big gross rate business. It costs money to import shoes from Japan. How much price can be raised to sell the shoes? If the profit of one pair is $ 2-3, if the money to buy the stock is only the benefits of the shoes sold in the previous order, you will have to sell a lot of shoes. Where does the money to buy inventory come out to double in a year? Ben: It's the best. It's really cool. Should I say it? Listeners, we talked to almost 12 people to prepare this episode. I would like to thank Eric Springk, a 2 7-year veteran in Nike. David, you know he talked to him, but he was a COO until a few years ago. It was very good to hear him and Scott's perspective. Please let me know if you have any other nuggets.

David: There are things that I want to take a Scott, but that's a little earlier.

Ben: Like. Then, Bowman.

Ben: If you believe something, it's normal to sell.

Ben: One of them is that it doesn't make much money. It's not a big gross rate business. It costs money to import shoes from Japan. How much price can be raised to sell the shoes? If the profit of one pair is $ 2-3, if the money to buy the stock is only the benefits of the shoes sold in the previous order, you will have to sell a lot of shoes. Where does the money to buy inventory come out to double in a year? Ben: That's the best. It's really cool. Should I say it? Listeners, we talked to almost 12 people to prepare this episode. I would like to thank Eric Springk, a 2 7-year veteran in Nike. David, you know he talked to him, but he was a COO until a few years ago. It was very good to hear him and Scott's perspective. Please let me know if you have any other nuggets.

David: There are things that I want to take a Scott, but that's a little earlier.

Ben: Like. Then, Bowman.

Ben: If you believe something, it's normal to sell.

David: This is not a solvable problem. It's a circular problem. There's nothing you can do about it. Phil sells Tigers for $6. 95 a pair. It costs him and Bowerman about $3. 50 to get a pair each. What's the $3. 50 left?

And then Phil hires the legendary Jeff Johnson as his first full-time employee. When Jeff and the other salespeople join, he pays them about $175 in commission.

Ben: So half of your gross profit goes to selling and marketing.

David: Exactly. Your profit per pair is about $1. 75 to $2. How do you grow your inventory at $3 or $50 a pair when your profit per pair is $2? Math is not pencil.

As an aside, Jeff Johnson is a legendary player. He also sells out of the back of his car. He wrote in California. He met Knight at Stanford. Jeff was doing track at Stanford and met Knight while he was at GSB.

Johnson sells out of the back of his car. He promotes the brand. He designs shoes. He eventually opens Nike's first retail store in LA. He sets up manufacturing. He travels up and down the country. Basically everything you'd want in a company's first employee. You never know at a startup that you'd meet Jeff Johnson.

Ben: He had an incredible passion for running, and basically nobody was doing it at the time. There's a great quote from Shoedog. It's Phil Knight's voice. "In 1965, running wasn't even a sport, it wasn't popular, and going out for a three-mile run was something weirdos did, probably to burn off some manic energy. Running for pleasure, running for exercise, running for endorphins, running to live better and longer - it was unheard of. They would yell, throw beer or soda at runners' heads. Johnson had multiple sodas thrown at his head while he was running.

DAVID: Re-reading Shoe Dog was one of the moments that helped me internalize this running. These days I go running about three times a week.

BEN: Yeah, it's just become a normal part of life.

David I see people running every time I go out on the road, unless it's a remote place in the world. It's crazy for car drivers to throw beer and soda cans into runners.

Ben: Oh, it's really crazy.

David: Let's go back to funding. As you can imagine, there is only fund procurement for companies that have operational restrictions such as Blue Ribbon Sports. The only way to get a loan in Portland, Oregon at the time was to go to the Oregon regional bank. In fact, I think there were laws in the United States that could not trade corporate banks across the state. There were only a few banks that could be used by night.

By the way, if you withdraw money from a bank, it's not an equity. As the venture capitalist says, we do not say that we will buy a part of your business, assess at this price and provide you. This is just a loan, and you need to pay interest rates at some point.

David: Yes. At that time, Portland was a very small town on the west coast of the United States, so the bankers who made a loan did not want a major risk. They would hate taking risks.

Phil Knight said, "I expected $ 16, 000 when I was in my second year. According to bankers, it was a trend to be very concerned. Is it worrisome that sales will increase by 100 %? Your growth rate He said he was too fast to his capital and was dangerous to grow out of the balance sheet. " Here is a completely opposite approach of Phil Night. Life is growth, business is a growth. Grow or die. The bankers say we don't think so.

There are some important points here. In recent years, emerging companies are called startup percentage points. What he says here is the technical definition of Equity.

David: Book value of stocks.

Ben: Yes. The one that subtracts the total debt from the total assets is the capital. In many cases, if there are few liabilities or liabilities on books, it can be distorted. The assets you have are your capital. David I see people running every time I go on the road, unless it's a remote place in the world. It's crazy for car drivers to throw beer and soda cans into runners.

Ben: Oh, it's really crazy.

David: Yes. At that time, Portland was a very small town on the west coast of the United States, so the bankers who made a loan did not want a major risk. They would hate taking risks.

There are some important points here. In recent years, emerging companies are called startup percentage points. What he says here is the technical definition of Equity.

David: Book value of stocks.

Ben: Yes. The one that subtracts the total debt from the total assets is the capital. In many cases, if there are few liabilities or liabilities on books, it can be distorted. The assets you have are your capital. David I see people running every time I go out on the road, unless it's a remote place in the world. It's crazy for car drivers to throw beer and soda cans into runners.

Ben: Oh, it's really crazy.

David: Yes. At that time, Portland was a very small town on the west coast of the United States, so the bankers who made a loan did not want a major risk. They would hate taking risks.

There are some important points here. In recent years, emerging companies are called startup percentage points. What he says here is the technical definition of Equity.

David: Book value of stocks.

What the banker tells Phil Knight is basically lending only the amount you already have. This is useless. Basically caching.

In other words, the money I have is invested in other things such as stocks. He just lends enough money to make the next order, but there is no new capital. There is no evaluation after money. Basically, you can rent this dollar and return it to me.

David: Yes, it's basically a factor. It's s o-called today.

David: As you can imagine, Oregon has a fight with various banks and is very often introduced in Shoe Dog. Nights judge that they cannot justify their salaries because their growth is limited by banks. He returned to the accountant every day. Joined the Portland branch of Price Water House. I had done so for several years. It takes a long time to grow this.

Eventually, the blue ribbon became bigger enough, and he had to spend his time as a ful l-time accountant. Instead, he gets a job to teach accounting at Portland State University, where he meets two women.

Ben: Both will change his life.

David Penny Parks, who was the first class student on the podium, found that he had a great possibility as an accountant. She think she was a Blue Ribbon Sport student, but she soon became his wife, Penny Night.

Another woman she met is a beautiful college student named Calorin Davidson, not an accountant. Phil hears that one day she is talking about art lessons with her friends in the corridor. He stops her and says, "I have a company and need par t-time art and design work for pamphlets and sponsorship.

Phil Knight is a strange story considering the current Nike, but doesn't believe in advertising. He's like giving others the advice of making pamphlets or something. What the banker tells Phil Knight is basically lending only the amount of money you already have. This is useless. Basically caching.

David: Yes, it's basically a factor. It's s o-called today.

Ben: Both will change his life.

Phil Knight is a strange story considering the current Nike, but doesn't believe in advertising. He's like giving others the advice of making pamphlets or something. What the banker tells Phil Knight is basically lending only the amount you already have. This is useless. Basically caching.

David: Yes, it's basically a factor. It's s o-called today.

Ben: Both will change his life.

Phil Knight is a strange story considering the current Nike, but doesn't believe in advertising. He's like giving others the advice of making pamphlets or something.

DAVID: Hire a Portland State University student part-time for $2 an hour to make an ad. He's like, "Sure. Stick a pin in it." More on Carolyn Davidson and Nike's art department later.

First, let's talk about one of Acteed's favorite companies, Ben, who is a new sponsor this season.

Hi, Ben. Can you think of another life-changing design from Phil Knight for Nike? It's a great story, and I think there's more to it than you've heard before. Which sponsor are you talking about? They're a company called Blinkist, and they do something special at Acquisition. Blinkist, as you may know, takes a book and condenses it down to the most important points.

DAVID: This is really useful for research.

BEN: Yes, you can read and listen to summaries. It's great for people who want to read more books but don't have the time to go through all of their dream libraries. We talked to the great folks at Blinkist about how we could do research a posteriori, and they had a great idea, and we ran with it.

blinkist. com/nike You can go to or click the link in the show notes to flashback to the Nike books we used to research this episode. Many of them will custom make it for you in real time, so expect to see more Nike books like this one literally made for the viewers they acquire.

And that's not all. With the link, you can get the entire Nike collection for free every time these books are added. Blinkist says that anyone who signs up through this link or uses Nike's coupon code will get an additional 50% off premium subscriptions to all 6, 500 titles in their library.

For those of you who lead companies and organizations, as I'm sure many founders and executives have heard, Blinkist allows your company to become a Blinkist client for businesses. This gives you access to condensed books as well as courses and coaching pathways such as Simon Sinek's leadership, mindfulness, communication, and history. Great for teaching new skills or for in-house learning and development departments.

BLINKIST was just acquired by the friends of the program, GO1, and the founder and leader team are many years of listeners. David and I are GO1 and BLINKIST investors.

I will introduce GO1 in detail in the latter half of this season, but I know that it is a wonderful on e-stop shop where you can get all the content required for your company and employees, from personnel coaching to certain skill development classes. I am.

They have obtained this content from the world's best places to produce this content. I'm not doing things that I have never heard of. They probably have great content and are just looking for something that you can easily subscribe to.

Returning to BLINKIST, to participate in Blinkist, which is used by 27 million people, access Blinkist. com/Nike or click on the link in the program notebook and use it for research. Please access what you are.

David: Very cool.

Ben: Do you need to share OK, David, Caroline Davidson now, or do you need to evolve a little more before you actually play?

David: That's right. In any case, sales of Onitsuka and Blue Ribbon Sports are growing. They continue to earn enough and time to cover the inventory and order from Tiger and Onitsuka.

In 1966, the profit of $ $ $ 00. In 1967, he made a profit of $ $ $ 00. 00. Even from a very low base, it turned out that if it doubled every year for 20 years, it will be a great company.

In 1967, remember that Bowman was involved in his name. The connection between him and the company was great in all of this. But, as you mentioned earlier, is Ben, his true motive, wants to access E & EAMP? A. He wanted to be able to make shoes.

Before the 1968 Mexico Olympics in Mexico in 1967, he came up with a completely new shoe idea. His idea is to use a nylo n-like material instead of using leather for the upper of this shoe?

On the other hand, I don't think anyone likes sweating on his feet. On the other hand, if your feet sweat a lot while running on leather shoes, it becomes heavy and heavy. Maybe this will be easier to wear shoes later. Bowman is particular about the weight reduction of shoes.

Onitsuka accepts it very much. They want to repair the shoes that are wonderful, this is their favorite, their favorite shoes. Supply nylon and make shoes. Bowman and Phil were together. This is wonderful. We design and have a unique model designed by Bowman.

Ben: You should be a little nervous.

David: Who are these shoes? Ben: That's right. That is what the court decides.

Did Blue Ribbon Design own a design and hire a manufacturing outsourcing? Or do we make a small proposal for you and don't have BRS?

David seems to be. The relationship here is a little complicated. We are no longer just a distributor in the United States in Tigers. Bowman and Phil want to call these shoes "Tigers". They really want to borrow the Adidas script and call the shoes as Aztec before the Mexican Olympics. Adidas has done so for years. Adidas has always announced a new shoe model before the Olympics in the world every four years.

Of course, Adidas is already punching them. They have released shoes with brand names called "Aztec Gold". I don't know if it's a blue ribbon or if Onitsuka judged that Aztec was too close.

Bowman was at a loss for other shoe names. What was the name of the Spanish who kicked off the Aztecans? Knight said, oh, it was Cortes. So the Blue Ribbon / Chip Cortes was born. Nylon Over Nylon, named in the edge, is a huge invention and a huge hit.

Ben: Someone must be wearing Nike Cortets now. The definition of running shoes has changed dramatically. Exciting is that if you look down on Nike Cortets or google the photos, it's basically the same as what they released. However, at the time Nike was released, it was not a swish but a design of Onitsuka Now ASICS.

David: Yes. Spoiler alert: Tiger eventually became Asics. And in 1967, Bowerman made another monumental contribution. His contributions were sporadic when they happened, but they were big.

He wrote a book. I feel like some marketing firm these days advises startups, oh, that's how you build a market, write a book, start a movement, evangelize. Bowerman does it because that's what he wants to do.

He went on a trip a few years ago to visit another international coach in New Zealand. He discovered the concept of jogging. I don't know if the word jogging even existed in America at that time. The idea of running for fun and fitness, not to win, was totally foreign.

Ben: So I'm going to read you a paragraph from Shoe Dog. This is Phil Knight. "He said that he was writing a book, among other things. Athletes, he said. Phil Knight, founder of Nike.

David: Yes. Phil Knight runs. This is crazy. Bowerman wrote a book called Jogging: A Fitness Program for All Ages. It came out in 1967.

Life magazine was a big magazine in the US at the time. They came to Oregon and did a profile on him and introduced the jogging clubs he started to get Eugene residents of all ages into running and fitness. This book and article, more than anything, started the fitness movement in America.

Ben: Oh, it's the craziest thing. When you look back at Nike, you ask, did they ride this big wave or did they start it? I think they did both.

David: Yeah. Knight made a great quote about that later in life. He literally asked the question of whether Nike started a fitness revolution and the answer was very Phil Knight: We were at least there.

Ben: Like. David, there is a little interesting trivia. I'm a millennial generation and I wasn't there, but when I thought about the birth of a jogging movement, I imagined Forest Gump. He runs around the United States and many people are running with him. At that time, the aesthetics for me was when jogging was really popular. He was wearing Nike Cortets. It's perfect.

David: Great.

Ben: At that time, when Blue Ribbon began a fairly ful l-fledged distribution on the west coast, they actually built up brands and gained the trust of customers and coaches. Not only did Bauweman wrote, evangeled, and had ideas, they were able to really put their shoes on their feet.

David: Retarding than athletes.

Ben: Yes, more important is to change the definition of athletes.

In 1970, Onitsuka renewed its sales contract with Blue Ribbon for three years and continued until 1973. In that case, Phil went to an Oregon banker and said, "Hey, Cortetz sells a big gym, is this a new one? We are a company with a sales of $ 500, 000. The manufacturer is a thre e-year iron wall insurance. I have a contract.

Ben: Of course, we can find value in the contract, even if our brands, teams, teams, and all other intangible assets. We will not be treated as if it were valuable in books. Because we can invest in our business and permanent foundations.

David: He has demanded $ 1 million or $ 2 million as stockpiling funds. He has never demanded more than $ 1 million.

Ben: He is presenting an alarm.

David: He passes the alarm system. $ 1 million, $ 2 million. Walking through Sandhill can collect $ 1 million or $ 2 million for children on the road.

Ben: Is it $ 8 million after inflation adjustment?

David: That's right.

Ben: But passing children can walk at Stanford University and collect $ 8 million today.

David: That's right. Speaking of an AI company. Bankers are not literally meaningful, literally, but are trying to get rid of him soon. No, no, it's over.

Ben: I was fascinated by this concept. It seems that there is no idea of business value, and literally, companies can only see them with liabilities from assets.

In other words, if you want to grow a company and grow as soon as possible, you can only take out liabilities that match the company's assets. This is because the ratio of liabilities for assets was literally 100.

Phil Night did it to keep 90 % ratio at all 100 % or so. He saw how much asset they had, and said they should have the same debt so that they could grow as fast as possible. It will be such a chai r-picking game, but in a very difficult time, it must grow at a very high speed. Because, unload this stock from the ship, sell it as soon as possible, repay it to the bank, make sure that interest does not accumulate, do not go to many transactions, and do the same thing again. To be able to ask for another loan.

Literally, it is necessary to grow as the only way to keep lighting the light. It is not just a virtue growth. It is necessary to grow. As I mentioned earlier, Nike is a competitive company, but in addition, Nike is a growing company. If you look at the previous IR page, it is said that Nike is a growing company with a large bold at the top. The only possibility we continue to exist is to grow so that we can repay the bank.

David: Here are two things. It's very sad. Thankfully, the business world has evolved since then. It is selfish to blame the startups, VC, tech, and other ridiculous idiots, but this is a much better option than the previous method. (2) Ironically, it's a really weird story, but I think this was an important factor for Nike succeeded and becoming a Nike. That's because if it's too easy, other competitors will flood, or Onitsuka and other companies will do it themselves. David: That's right. Speaking of an AI company. Bankers are not literally meaningful, literally, but are trying to get rid of him soon. No, no, it's over.

Ben: I was fascinated by this concept. It seems that there is no idea of business value, and literally, companies can only see them with liabilities from assets.

David: Here are two things. It's very sad. Thankfully, the business world has evolved since then. It is selfish to blame the startups, VC, tech, and other ridiculous idiots, but this is a much better option than the previous method. (2) Ironically, it's a really weird story, but I think this was an important factor for Nike succeeded and becoming a Nike. That's because if it's too easy, other competitors will flood, or Onitsuka and other companies will do it themselves. David: That's right. Speaking of an AI company. Bankers are not literally meaningful, literally, but are trying to get rid of him soon. No, no, it's over.

Ben: I was fascinated by this concept. It seems that there is no idea of business value, and literally, companies can only see them with liabilities from assets.

David: Here are two things. It's very sad. Thankfully, the business world has evolved since then. It is selfish to blame the startups, VC, tech, and other ridiculous idiots, but this is a much better option than the previous method. (2) Ironically, it's a really weird story, but I think this was an important factor for Nike succeeded and becoming a Nike. Because if it is too easy, other competitors will flood, or Onitsuka and other companies will do it themselves.

Ben: That's right. It depends on the route, as many of the stories we talk about. What they built up are those with a disadvantageous system.

David: Yes. There is a big survival bias here, but the journey that they had to experience to survive is incredible.

Ben: Many other companies have always maximized available credits and liabilities, and have gone bankrupt with 100 % of the ratio of assets to assets.

David: And it was crushed. Nike was about to do so. When the bank was kicked out, Phil had to do something to raise funds. The only thing he thinks is to make small shares like IPOs in the region. Do you remember Ben & Jerry's is the first time?

Ben: Listing directly?

Ben & Jelly's shares in Vermont sold to neighbors. Phil wants to do it. That's so terrible. He is trying to change the company's name.

Ben That's good.

David: Nike is not yet anywhere. By changing the company name to Sports Tech, the idea is to make people feel like a hig h-tech company and become interested in investment.

Ben: I heard the story of people who are raising business funds in the form of equity. Regardless of the current sales and assets, it will provide capital in consideration of future potential growth. In return, they are the ratio of upside investment and the stock investment in today's emerging companies. This is all happening in hig h-tech companies in Northern California, as in the episode of Sequoia's Don Valentine. That's an era.

David: That's right. We are now in that era. Don is trying to launch Sequoia. Many things are happening around Stanford. Of course, the Oregon Phil is also listening to this. However, by the time the venture capital pioneer was involved in sports tech, it was "no".

Ben: I couldn't understand whether he changed to Sports Tech Co., Ltd. and then returned to Blue Ribbon Sports. I want to know if I have literally changed the company name on the documents. Ben: That's right. It depends on the route, as many of the stories we talk about. What they built up are those with a disadvantageous system.

David: Yes. There is a big survival bias here, but the journey that they had to experience to survive is incredible.

Ben: Many other companies have always maximized available credits and liabilities, and have gone bankrupt with 100 % of the ratio of assets to assets.

Ben: Listing directly?

Ben & Jelly's shares in Vermont sold to neighbors. Phil wants to do it. That's so terrible. He is trying to change the company's name.

Ben That's good.

David: Nike is not yet anywhere. By changing the company name to Sports Tech, the idea is to make people feel like a hig h-tech company and become interested in investment.

Ben: I couldn't understand whether he changed to Sports Tech Co., Ltd. and then returned to Blue Ribbon Sports. I want to know if I have literally changed the company name on the documents. Ben: That's right. It depends on the route, as many of the stories we talk about. What they built up are those with a disadvantageous system.

David: Yes. There is a big survival bias here, but the journey that they had to experience to survive is incredible.

Ben: Many other companies have always maximized available credits and liabilities, and have gone bankrupt with 100 % of the ratio of assets to assets.

David: And it was crushed. Nike was about to do so. When he was kicked out by the bank, Phil had to do something to raise funds. The only thing he thinks is to make small shares like IPOs in the region. Do you remember Ben & Jerry's is the first time?

Ben: Listing directly?

Ben & Jelly's shares in Vermont sold to neighbors. Phil wants to do it. That's so terrible. He is trying to change the company's name.

Ben That's good.

David: Nike is not yet anywhere. By changing the company name to Sports Tech, the idea is to make people feel like a hig h-tech company and become interested in investment.

Ben: I couldn't understand whether he changed to Sports Tech Co., Ltd. and then returned to Blue Ribbon Sports. I want to know if I have literally changed the company name on the documents.

David: That's a good question for Scott Reams. You'd have to ask him. It's that bad. The offer flops. Nobody's interested. Not the proto VCs, not the local entrepreneurs in Portland. Everyone's like, oh, this is a terrible company.

Ben: Phil Knight also ruins it. He was super humble before he learned his lesson later, like, I'm not very good at running. You can't sell stock in a company like that.

David: Right. He ends up raising money from the families of Blue Ribbon employees, most notably Bob Woodell, who would become the first CEO of Nike other than Phil when Phil took up the sword in the late '80s. Bob has an amazing story. He was also a Bowerman runner, and he had a terrible accident in college that put him in a wheelchair for the rest of his life.

He became one of the first employees of Nike and Blue Ribbon, and then he became a huge leader. He created a lot in the company and became the first CEO other than Phil. He didn't come from a wealthy family, and his family lends Blue Ribbon $3, 000 or $5, 000, which is a huge amount of money for them.

Ben: That's a huge amount of the family's net worth.

David: Phil converts that into stock before the actual IPO and becomes a millionaire and changes his life.

Ben: Wow. His funding method was basically convertible notes. All the small pre-IPO friends and family funding he's doing here is convertible notes.

David: 1971, the "Agnus Mirabilis" or "Horribilis". Now I've taken out both the Latin and the French. Obviously that funding route is not going to work for the next stage of development.

Finally Knight, I think he's reading a magazine or newspaper article about a Japanese trading company. It's odd that he'd never heard of Japanese trading companies before, given how much of their business is in Japan, but it was a strong interest of Onitsuka, as you can see, for Phil and Blue Ribbon not to learn about Japanese trading companies.

Ben: That's a very odd kind of company that doesn't exist, at least in today's tech ecosystem.

David: No, it doesn't exist in the US or in most countries.

Ben: It's a hybrid of a lender and a supply chain partner that does the primary business.

Daisen: Private equity / partnership company.

Ben: Yes. In this specific case, it is a company that produces a lot of cash in a business. What do you do with the company's cash? You can do something boring, you can invest strategically, and you can use all of your unique human relationships obtained from the parent company in the duudery to conduct a financial business that advises investment. Especially in the procurement of international products, you can use the fact that you have a lot of money to open a bank that is competitive.

David: Yes, it provides what Blue Ribbon really needs to make a loan of asset colloors. It may have been Nissho Iwai to meet at a Japanese trading company that had a branch in Portland at a local branch in Portland. It is now called twin.

It is still $ 40 billion. At that time, in 1971, it was an annual sales of $ 100 billion. I think it was the sixth place as a Japanese trading company. There are other companies like Mitsubishi, Mitsui, and Sumitomo, which many of the listeners have heard. These were huge companies, especially in the 1970s, when Japan had really emerged. I also talked in Sony's episode. Nissho Iwai was a natural blessing for the Blue Ribbon.

Ben: It was OK to fall. That was the characteristic of a Japanese commercial company. If you don't clarify what you want in advance, you may have been completely a private equity route when you put this pledge or this and this and this. 。 Suddenly, they can own your company's dominance or take over management to put your subordinates.

It was a PE type financing, and often acquired and absorbed the financing business. Phil Night continued to say: What kind of negotiations with them can be negotiated so that their profits match my profits, but to prevent my control from impairing? Daisen: Private equity / partnership company.

It was a PE type financing, and often acquired and absorbed the financing business. Phil Night continued to say: What kind of negotiations can be done with them so that their profits match my profits, but to prevent my control from impairing?

David: Yeah, it's a little scary. According to Shoe Dog, Phil walks into the Nissho Iwai offices in Portland. Nissho Iwai's Portland, Oregon branch. There he meets a guy named Tom Sumeragi, one of the executives who would later become a great connection for Nike and Phil. He offers to put all of his stock in Nike right there at the meeting at the Portland branch. Phil is like, wow, how do I make a deal with these guys?

Ben: Yeah. They're pretty keen. You couldn't get a better deal than this. What's going on?

Dawe: It ends up being too much.

Ben: Why too much? The first thing you need to know is that Nissho knows the manufacturers in Japan. They start asking Phil Knight questions. Are you going to make your own shoes? Are you looking for relationships with more factories? They start feeling like, eventually, we could tip the scales in some way and help this company win. If we work with them as a partner in fundraising, that's a very good thing for us.

DAVID: In retrospect, Phil would have called Onitsuka and said, "I'm stuck with my finances. I've just met with Nissho Iwai. They've said they'll loan me all of my orders. Can I do that? They immediately say absolutely not.

Absolutely not, because, as you say, Ben, they know what's going to happen here. Nissho would have said to Phil, thank you for buying Onitsuka stock. I think Onitsuka is a company in Kobe that does $20, $30, maybe $40 million in revenue.

Ben: Yeah, and they could be dragging that along.

David: Nissho is at 1000 It's a billion-dollar company. Nissho would say, I'll introduce you to a manufacturer in a factory in Japan, make your own shoes, make your own brand, do it with these tiger cubs. That's exactly what it was.

Ben: Right. Before we get into how this whole thing plays out, how this funding plays a key role and how it all falls apart on the actual foundation of Nike making its own shoes, now's the perfect time to talk about our next brand, Crusoe.

David: Crusoe is honestly one of the coolest companies in the world right now. It's a cloud infrastructure provider. Like AWS and Azure, it's designed for AI training and inference.

Just like Phil Knight had the crazy idea to buy blue ribbon Adidas, Crusoe and its founders Chase and Curry had the crazy idea a few years ago that they could buy AWS and Azure. Incredibly, they really did it. For many AI workloads, Crusoe is more cost-effective than any traditional cloud provider.

Ben: The way they do it is genius and crazy. (1) They get better performance by building infrastructure specifically for AI. Literally their entire data center is just rows and rows of NVIDIA A100S and H100s, so they have the advantage of focus and specialization. (2) This is really special for Crusoe. They waste electricity on powering their data centers.

David: That's so cool.

Ben: One NVIDIA H100 running at full power uses as much electricity as 10 average U. S. homes.

David: Oh, that's crazy. Crusoe went out to oil fields (I'm thinking Texas, Montana, etc.) across the US and the world and built data centers on top of oil and gas wells and renewable energy sites like wind farms.

As some of you may know, oil and gas production involves a process called flaring, where you have to burn the excess product. This is a huge waste of energy. As you can imagine, this is also a huge greenhouse gas problem. It destroys the ozone and increases carbon dioxide emissions. Crusoe solves these problems and converts the heat that is being emitted into AI workloads.

Ben: They're literally building AI data centers on top of wells that would be flaring.

David: Yeah, it's crazy. The key insight that made this possible is that Amazon, Microsoft, and Google data centers need to be physically located close to where the "internet" is happening. But for 99% of AI workloads, latency is not an issue. Crusoe can put these data centers right where the energy is being generated in the oil fields and wind farms.

We're talking about Nike's asset financing strategy here, but what Crusoe is doing also requires billions of dollars. They're not raising venture capital, but a similar structure to Nike, raising money from large endowments and foundations, not Japanese commercial companies. If Nissho Iwai is interested, they'd be happy to help.

If you, your company, or if your investment company has AI workloads that can use lo w-cost and highe r-performance infrastructure, and those who are now listening to this podcast, Crusoecloud. com Access /ACQUIRED or click the program notebook.

Ben: By the way, Blue Ribbon is an interesting situation in which banks are driven out of banks. Banks still have funds and have a sales account, but you can't borrow any more to raise funds to buy inventory. You need funds to buy the next round to grow the company. What happens from Nissho's entry here?

David: Basically, this is the beginning of a series of events that are later prosecuted in court. Onitsuka is very nervous. They know what their relationship with Chang means for the Blue Ribbon, which is not good for them.

They are starting to make a partnership with other sales agencies in the United States. In any case, Blue Ribbon thinks that he will end his relationship with them. In addition, the last trump card is to the Philies the acquisition of Blue Ribbon. Phil thinks he is smart here. He stopped. I don't say Jesus or no. I feel like let me talk to Bowman.

Ben: Yes. One of the things I tried to understand is that he doesn't value the shoe dog. Phill just says that he had contacted Onitsuka, bought 51 % of Blue Ribbon, and suggested to maintain him as a minority partner. In an interview, Phil Night is talking about buying it at book value.

David: Yes, I read it.

Ben: How much is the book value of a company that has been restricted by 100 % shares?

Ben: Zero, more exaggeratedly, the value of stocks. In 1971, it should have been $ 1. 3 million, but I think the cost was $ 60-7 million.

David: But perhaps they turned the strain over and over again. The stock price is always less.

Ben: It's a terrible transaction. Baiout. Fill Knight basically doesn't want to play with them, don't want to reduce them, so they don't say anything.

David: At this point he thinks Onitsuka is over. With Nissho, we intend to create our own factory relationships and make their own shoes. But I can't close the tiger. It takes time to analyze these things. He stops because he needs tiger shoes in the meantime.

Ben: By the way, this relationship so far was incredibly fruitful. Thanks to the Blue Ribbon, 70 % of the runners are wearing Onitsuka shoes in the United States.

David: That's very important. There are many things. Phil hired a spy. There are times when Onitsuka's management visits the Blue Ribbon headquarters. Phil steals documents from the man's briefcase.

Ben: Literally, a man gets up to go to the toilet or something, and the Phil removes it from the folder and copy it.

David: Yes, very bad. Even worse, as Phil has said many times, it's a combination of Han and extremely introverted and really naive. He wrote a note of hiring a spy from Onitsuka. There are many things like this.

They literally glare at Mexico, and there is no escape without a gunfight. Someone has to shoot first. Phil shoots first. He shoots first like Han. Mexico's confrontation was (a) that was the local situation, and (b) the first gunshot sounds in Mexico.

While Phil was waiting for Nissho Iwai to have a relationship between Japanese factories, he used to use Adidas to make a soccer grid for Olympics in Guadalahara during the 1968 Mexico City Olympics. I remembered that there was a factory. He says the soccer jacket made by Adidas was very good. Go to the factory and find out if you can get a grid. Sell it in the United States as a blue ribbon of American football. " Technically, he doesn't violate the monopoly contract with Onitsuka. This has room for discussion.

Ben: The contract has a clause that gives Phil Night exclusive or something for three years. Instead, importing track shoes of other brands is prohibited. Theoretically, he thinks he's fine unless we are truck shoes.

David: I'm going to a Mexican factory. He says he can get shoes. Yes, of course. What do you want to attach? When made for Adidas, there were three Adidas stripes. What kind of design do you want your version of this shoe? By the way, what do you do? San Phil, I'll contact you again.

He returns to Portland and who else calls? Caroline Davidson, a par t-time art category of Blue Ribbon Sports with an hourly wage of $ 2. He asked her to design something like Adidas stripes on the side of the soccer / football grill. Thanks to Scott Reams, I was able to accurately grasp the time series and details.

Ben: And you can listen a little in a fragment of Phil Night interviews and shoe dogs. Because here is obviously the origin of Suchosh and Nike. What is the end of it?

The most interesting thing is from Scott. He posted it in Linkedin and talked to Caroline himself. According to her recollections, they were originally seeking structural support as a design element in the request to make something to be swoosh. She brought several designs. They didn't like none. In the second correction, the demands of supporting in some form were rejected, only sewing branding.

David: And it's very important, but it's not that name here. First, we're just talking about the logo of the shoes. Oh, Susse is the wings of the victory. different. It's in front of the name.

Ben: Yes. Literally, it is not inspired by the Greek mythology victory goddess. I was just in France. I stood in front of a wing victory statue. It's a beautiful, incredible thing in Paris. The legend that Suss has been inspired by this wing has been handed down forever. By the way, the name Nike is derived from this swuss design.

David: As you said, sketches take two cycles. When the second sketch comes back, there is no more time. A call is received from the factory, and the shoes will be completed soon. All you have to do is put a veneer. What is good?

Finally, Phil, Jeff Johnson, Bob Woodell and the others were sitting there. I have to pick one person. Maybe, I don't know. It looks like a sign of choice, but maybe it's the best of the bunch.

The famous line that Phil said, "I don't love it, but maybe it will grow on me." That's the swoosh. After all, we're giving Carolyn's stock to the company before the IPO, so her hourly rate is more than $2. But on this project, it was $35.

Ben: That says she spent over 17 and a half hours, but she just came up with some billing price. I did the math on IPO shares. When Nike went public, they gave you 500 shares. Today the stock is about $110, and it's split 7 times. If you split $110 a share 2 to 7 times, 500 shares is worth $7 million.

David: That's great. I heard Phil say that somewhere. I think it was a commencement speech at GSB, and he said he owns stock.

Ben: Yeah. He's publicly stated that he didn't sell a single share from 2016 to 2017.

Ben: That's cool.

David: They send the logo. And then shortly after that, they get a call from the factory in Mexico. Okay, the shoe is done. The shoe is ready to be handled and shipped. What should we name this shoe model? It could be Cortez, or a gold Aztec, or whatever you want to call it. What should we name this shoe model?

Back at Nike HQ, everybody sits around and brainstorms. This is where all the famous ideas come out. Phil Knight loves Dimension Six. Other people bring up all kinds of naming ideas, like the bracelet, the Falcon, whatever. The idea of naming the shoe model, what should we name this cleat, this collarbone? They don't bring in the name of the company.

Ben: The idea is to call it Blue Ribbon Dimension Six.

David: Yeah. Legend, as far as we know, and this is true, in typical Phil Knight style, can't make a decision. They're waiting for it to end. Same thing happened with the logo. They banged on about it. The night before we finally gave the name of the shoe to the factory, Jeff Johnson came in and said, "I had a dream and the name Nike came to me. What are you all talking about?"

It looks like a goddess of Greek mythology with wings. This is a Nike football grill. Everyone, well, I like this because I like this one more than other things. But it wasn't that big. Although it was a big deal, it was not a big deal. This was not for Nike. This was the model name of the football brief.

Ben: I didn't know if it would work.

David: Yes, and it didn't work.

Ben: I found out that this factory was not very good.

David: No, I don't think it was a problem. I don't think the factory was fine. They were making Olympics shoes for Adidas. The problem was in Guadalahara, so Guadalahara is not very cold. The shoes were wonderful, but they would break when the temperature was low. I had never tested in the cold.

At least Americans know that many American football games will be played in a cold temperature. They ordered 3, 000 pairs. And it sold. That year, the Notre Dame Football Team wore it, at least the fourth quarter back wearing it. It was a good start for Nike and Swush.

Ben: Yes. It's amazing that I didn't give up saying that distribution seemed better than making shoes.

David: That's right. Again, aside from whether or not he violated the agreement with Onitsuka, it would eventually judge that the court would not violate it. But this is a game. The relationship was over, the bridge was burned and over.

Ben. For me, it's a little bit on Nike's DNA.

David: Yes. What is the corporate value of Uber to stand for your toes since Travis?

Ben: That's right. We are in fierce competition. At this point, it was to survive, so I know that. But for their entire existence, what do we do without thinking that others can't do it? That's what has been repeated over and over again in Nike.

David: Most of these situations, including this matter, will develop into a lawsuit. Probably beyond the line. On the other hand, it is like the early Uber standing to the toes. Instead, it was the taxi industry. It's a good thing for those who cross the line. Otherwise, Nike does not exist.

With that, Onizuka has severed ties. He will not send any more tigers to Blue Ribbon. Phil finally makes a deal with Nissho Iwai. The key part of the deal is that Nissho (1) will fund all the money Blue Ribbon needs going forward, almost to the moon. It's a $100 billion company in sales, certainly much bigger than any bank in Oregon. They'll do it at market rates.

(2) Nissho will help Blue Ribbon establish a direct manufacturing relationship in Japan. And (3) in exchange for all of this, Nissho will get a 4% royalty on every pair of shoes Blue Ribbon sells.

Ben: Plus, there's the financing. The interest on the loan has already been paid, and then there's the 4% royalty on top of that.

David: Ah, that's how trading companies work.

Ben: Is that just on the stock that was loaned out, or on all sales?

Daiei: I think it's on all sales.

Ben: Wow: Wow, is that still the case?

David: I don't know. I don't think he's doing it the same way. I know his relationship with Nisoh Iwai went on for like 30-40 years, like a really long time. If it's still going on, I don't think it's on the same terms. But it's been going on for a really long time.

Ben: Wow. There's some crazy stuff we didn't cover about getting his house in order at this point in history with such a strong backing. He got chased out of a lot of banks. The FBI got involved. He spent all the money he had to buy stocks. His paychecks bounced and stuff.

It all came back to haunt him. He got called in by banks, his banks called the FBI, he got investigated for fraud. It was a crazy two years.

David: Yeah. Shoe Dog has a lot of personal stories from Phil Knight that are worth reading just for that.

Ben: You could say this now in 1971.

Ben: They can take a deep breath and say the job ahead is still hard. We'll have to figure out how to design and manufacture our own shoes, but at least we have a real finance partner who's willing to work with us.

David seems to be. When that is all, Phil will go to Japan, cooperate with Nippon Chang, visited many factories, and eventually meet the Nippon Rubber Factory. Then look around many factories and test if you can become a good partner. He took out Cortets and asked the factory how long it would take to make the version of the shoes.

He meets Japanese rubber. In the morning, they say they want to go for lunch. Borrow shoes and examine a little. I will come back after lunch and give an answer. " They come back after lunch. There is a replica near the perfect perfect Cortes on the table in the hall. Phil, oh, that's the case.

Ben: He met all other factories and said he would contact you again a few weeks later. And while eating lunch, I made one thing.

David: I was surprised. He is excited. I order various models. At least what we and Bowman designed. Oh, no problem. Can I also have tennis shoes, basketball shoes and classic shoes? Yes, yes, yes, I feel like you want what you like.

He was confident that he was not like Phil Night, and he said: Let's start with the name of the model. Wimbledon tennis shoes, Forest Hill tennis shoes, blazer basketball shoes, blu e-in basketball shoes, marathon, and of course Cortetz. It's wonderful, it's like trying to do everything.

Ben: These are Nike's franchise that endured the trials of time. Many of these shoes are still made.

David: Certainly blazer is. I agree. Of course, Cortets. Yes, great. And Phil is another box. Is it a bright orange color? I want to make it stand out. Nippon rubber is good, anything.

Ben: That's the best.

David: That's the best.

Ben: Until now, it was orange.

David: By the end of this journey, Phil and Blue Ribbon Sports have a new brand from Japan, with a new brand called Nike, a goddess with a wing of victory. It is being sent out to the world. David seems to be. When that is all, Phil will go to Japan, cooperate with Nippon Chang, visited many factories, and eventually meet the Nippon Rubber Factory. Then look around many factories and test if you can become a good partner. He took out Cortets and asked the factory how long it would take to make the version of the shoes.

Ben: He met all other factories and said he would contact you again a few weeks later. And while eating lunch, I made one thing.

Ben: These are Nike's franchise that endured the trials of time. Many of these shoes are still made.

David: Certainly blazer is. I agree. Of course, Cortets. Yes, great. And Phil is another box. Is it a bright orange color? I want to make it stand out. Nippon rubber is good, anything.

Ben: That's the best.

David: That's the best.

Ben: Until now, it was orange.

David: By the end of this journey, Phil and Blue Ribbon Sports have a new brand from Japan, with a new brand called Nike, a goddess with a wing of victory. It is being sent out to the world. David seems to be. When that is all, Phil will go to Japan, cooperate with Nippon Chang, visited many factories, and eventually meet the Nippon Rubber Factory. Then look around many factories and test if you can become a good partner. He took out Cortets and asked the factory how long it would take to make the version of the shoes.

Ben: He met all other factories and said he would contact you again a few weeks later. And while eating lunch, I made one thing.

Ben: These are Nike's franchise that endured the trials of time. Many of these shoes are still made.

David: Certainly blazer is. I agree. Of course, Cortets. Yes, great. And Phil is another box. Is it a bright orange color? I want to make it stand out. Nippon rubber is good, anything.

Ben: That's the best.

David: That's the best.

Ben: Until now, it was orange.

David: By the end of this journey, Phil and Blue Ribbon Sports have a new brand from Japan, with a new brand called Nike, a goddess with a wing of victory. It is being sent out to the world.

Ben: Yes. Nike was established in 1971. This is a wholly owned subsidiary of Blue Ribbon Sports, which is the role of producing a lineup of shoes designed by Nike, owned by Blue Ribbon Sports, or contracting with manufacturers. Of course, it will be overturned later, and Nike will be the parent company. But now he is a subsidiary of Blue Ribbon.

David: I was surprised. Phil comes home and talks to Bowman. Here again, the sporadic but amazing Boweman's genius is demonstrated for Blue Ribbon / Nike. Bowman's jazz, he's wonderful. This is the first time that the Onitsuka people have liked this much. But he doesn't care about that. How to worry, wait, there's a factory now. Can you tell them exactly? Are you a new highest research and development of Blue Ribbon Sports? Let's start work.

That weekend, it should have been right after the sunset. He told Bowman about the situation and decided to go home. On Sunday morning, the building was sitting there. My wife, Barbara, is making waffles for breakfast. According to Scott, this is really what happened. The building was inspired. He said, honey, would you lend me this waffle iron? The waffle iron did not return.

He returns to a mountain house. There was a polyurethane tank there. The University of Oregon has just rebuilt his work and made a polyurethane truck instead of a truck. Bowman at that time was wonderful. This is the future, this will be like this in the Olympics. But the shoes I wear on the runner can't grip the trucks well. He looked at the waffle iron and asked if he would apply polyurethane to the waffle iron.

Ben: There are two problems. You can imagine how to grip the truck. Well, there are two problems. (1) The hig h-temperature polyurethane is very poisonous. This man has been experimenting for many years, so he has been smoking hig h-temperature terrible chemicals.

David: He is literally a mad scientist.

Ben: Yeah, (2) Put a hot polyurethane on the waffle iron, the iron sticks forever.

Daisen: Yes, that's exactly the case.

Ben: Apparently, the first real waffle shoes seemed to get hints from this design, but he couldn't make it with conventional waffle iron.

David: According to Scott, everyone thought that the prototype of the waffle iron was lost. Many years after the building died, I think his children have been around the premises and behind. In the mountainous area, there was no service for garbage, so I abandoned garbage on the back of the garbage. I was doing a house renovation or something. A waffle iron was discovered from the garbage mountain for some reason. That's Nike until now.

Ben: That's amazing.

David: That's amazing, right? Of course, it leads to a waffle coach, which was also a Bowman's genius invention and became the first wonderful shoe for the new Nike brand. After all, after bonding the first waffle iron, a gypsum type is made in the waffle iron, poured polyurethane into it, and a waffle sole for shoes. It works incredibly well in artificial surfaces, such as astrotif, which does something at this point, as well as trucks.

The Football Team at the University of Oregon wears it with a new Astrotahfield that year. That's amazing. They were wearing a waffle trainer and beat Oregon State University. It's an incredible advertising effect for Nike.

Ben: I think the waffle trainer has begun to be crushed by the state. That's the first hint of sneakers lifestyle shoes.

David: That's right. I forgot what the first colorway was.

Ben: Look at the sneaker head and colorway.

David: Finally, Phil, oh, this is blue. Fits Blue Jeans. The normal old school coach is blue and yellow swoosh. I think many of them were sold as lifestyle shoes that fit Blue Jeans.

Ben: That eventually became a ful l-fledged Nike business.

David: Success in Astrotf in the field. Success on trucks. That year, this was 1972, but it was the first year that Blue Ribbon was purely sales as Nike.

Just two years ago, for the last year with Tiger, they remember that they had made a profit of $ 500, 000. They have resolved their relationship with Tiger, began production at their own factory, manufactured waffle coaches, and received a total of $ 3. 2 million from Nippon Chang. What a wonderful situation!

Ben: Nike designed shoes i n-house and ordered the manufacturer directly. I don't think the merit for business at the moment is not to increase the margin. It is purely live. Whether we can persuade people to buy something that is not an onitsu catger.

At this point, Blue Ribbon has a great distribution and we trust the company, so we're going to buy anything from them, or because Onitsukatigar was a really good shoe for runners. People really like it.

David: Yes, and that was the first thing. Regardless of Tiger and Onitsuka, people bought blue ribbon shoes and bought Bill Bowman shoes.

Ben: That's surprising. It's exactly the opposite of my intuition. You will definitely think that there are popular shoes among other competitors, so if you don't wear them, you won't be able to compete in the same way. If you wear it yourself, you can like it. After all, it is very strange that human relationships are important. You can trust this shoe seller. I guess it's good.

David: Bowman was that important. He started running. Not only the legendary coach Bill Bowman, but he also started running. In order for Nike to become Nike, it was necessary to converge things and something like butterfly wings.

At the time of the birth of Nike and the Blue Ribbon became independent, Bauwaman undertakes Steve Prof anyway, a runner who inherits Oregon gene. tragedy. Surprisingly, there are many people who have been in a traffic accident recently due to the young James Dean Bari and have been covered by acquired matrix.

Pre was an American runner. He was active in Oregon as a runner for Bowman, and decorated the cover of "Sports Illustrated". He is at the same time an American record of all distance from 2, 000 meters to 10, 000 meters.

Ben: It's crazy, he died with each of those records.

David: Oh, I can't believe it: I can't believe it. He was at the University of Oregon, and after becoming a professional, for Nike, for Bowman and his Olympic team. I can't write any more.

Ben: In fact, he couldn't receive a paid recommendation in the AAU rules.

David: Oh, that's another finger here.

Ben: Like he took the papers out of his briefcase, he'll do anything to win. Phil Knight made sure (a) he was a candidate for Nike, and (b) he made sure he didn't have to worry about money by finding a clever way to do something different, not a paid endorsement.

David: That's one of those things where Nike was 1000% on board with it, with the AAU and the amateur authorities and whatnot.

Ben: Nike has always been on the side of the athletes, and that's a big part of their strategy.

David: Right. The rules of amateur sports and the rules of the Olympic Organizing Committee were that you had to be an amateur. You couldn't be a professional athlete. You couldn't get endorsements or get funding to compete.

He was a poor kid from Oregon. He graduated from college, he wasn't going to college anymore, but he literally had to bartend to make money. This is criminal. What Phil did was he decided to hire Puri as a Nike employee as their national PR director for $5000 a year.

Ben: No blame.

David: Right. There's this great quote and shoe dog. Phil says, "He can run fast." I said, "He can run fast." Such a great quote. This is a perfect summary and a little preview of number 3 after Nike's "10 principles of Nike."

Number 3 is so great. It's about perfect results, not perfect process. Break the rules, fight the law. This is what Phil and Nike are doing here. This is the first marketing front to start this early Nike book. You can get the best advertising for $5000.

Ben: I basically kind of invented sports marketing. There were early ideas at the time about sponsoring athletes, but this is the invention as we know it today. Every sports brand is defined by the athlete and this is really the first example of that.

David: Right. This is part 1 of this amazing reboot of the Nike startup book that Phil is putting together here. Part 2 is just as amazing and groundbreaking. He came up with an idea that he calls the "Future Estimation Program."

The retail mechanism at that time-Nike always had a directly managed store, but of course it was also sold through a retail store-a retail store made an order to Nike, bought shoes, and resell it to a retail store. , Pay the price to get the stock. That is the retail mechanism. That is the country's law, not a formal law, but all mechanisms.

Phil is thinking about this idea. He has a partnership with Nissho Iwai, but the cash flow is still tough. He went to a retail store, and said that if you guarantee your order six months ago and pay the price, you would get a 7 % discount. This will be called the Nike Future Full Filling Program.

This program basically relocates funds from banks and Nissho Iwai to retailed customers. At first, not only retailers, but at first, waffle trainers appear. However, a waffle trainer has appeared. The only way to get waffle trainers, sweet sweet stock, and delicious waffles they want is to apply for the Futures program.

Ben: Now, Nike has begun to take the distribution strategy as a wholesaler. It is sold to the retail chain. It's been several decades since the early 70's. Most of them reach customers through retailers, an intermediate company.

David: Yes, that's the second part. And the third part is clear, and it's something that has happened all the time. However, now that Nike has begun to make shoes i n-house, it is outsourcing and global outsourcing of manufacturing.

Again, Nike is not making shoes at its own factory. In fact, they buy a factory in New Hampshire on the way. Phil sent Jeff Johnson to buy a factory and run it. This was a temporary measure during the tiger.

Ben: Fence.

David: Yes, it was a fence.

It was Ben's secret fence. Again, break the rules and fight the law. They use their funds, which were supposed to buy stocks, as a capital for purchasing and rebuilt the factory, and secretly operates their factories with funds that should not be used for that purpose. I was. But again, Nike breaks the rules and is fighting the law. And today, there is a huge company here.

David: Sounds good. Breaking the rules and fighting the law sounds a lot more exciting than just treading water. Global outsourcing. It started off with Nippon Rubber in Japan, of course. But as I just said, Japan is rising in the global economy. Now Nixon is slowly reducing the dollar's peg to the yen, and the yen is starting to move against the dollar.

The yen was pegged to the dollar from the end of the war until the mid-1970s. Currencies have moved, and the Japanese economy, of course, has risen tremendously over those decades, so now exchange rates are a big problem for Nike in terms of importing from Japan. Labor costs are going up too.

Basically, you can't get shoes for $3 a pair right away. That means you have to make your shoes in other countries. Phil and his management team started flying around Asia. Taiwan, Korea. Then they went to China, Indonesia, Vietnam, and that's where the global Nike production machine was born.

First mainly to Taiwan, then Korea, and then China, which is where they're moving big time, both in terms of production and sales. I think there's a scene in Shoe Dog where, in 1963, they're on a trip around the world and they're looking at China from Hong Kong and they're dreaming of like 2 billion pairs of shoes in China. I think Nike was one of the first companies to sell in China, the first shoe company.

Ben: They opened up the country for manufacturing, to sell and to open factories.

David: There's no point in doing the Nike episode if we don't talk about the downside to that. Of course, the upside is cheap shoes. I think you can make a strong argument in a lot of these countries that this is part of a coming process in the global economy.

If you look at what's happened in the Japanese economy, the Korean economy, the Taiwanese economy, they've gone from making shoes to making chips to making technology to being a global economic power. That's part of the process. At the same time, the people who work in these factories are making 70 cents a day.

Ben: Right. So here we go into the '90s, where this is really the flashpoint, and then we'll go back to history. You might as well stay here while you're here.

The news is really scary, such as child labor, soccer sewing sewing, high temperature, and toxic adhesive ...

Ben: Others. Nike fans thought that the company had a great reputation, but this was the natural end point of the idea that had been in the company's DNA. Literally, the Phil Night Stanford paper is to arbitrarily exploit inexpensive labor from imports and sell it to a market that pays higher prices. You should have noticed that if you leave it alone, it could be like this.

Furthermore, Nike is abusing this. They tried to behave as if they were their own problems. He literally told the press, oh, we did not make shoes. Mark Parker later withdrawn the statement with a stance that "ignorance is not bliss." We must understand syste m-like issues and cooperate with factory partners to solve them.

They worked tremendously to wipe out their actions. We made new standards for factory partners. We published a supplier list. Conducted factory audits by third parties. It also makes a huge investment in R & D. He invented a new type of adhesive without toxic and continued to share it with his competitors.

David, there are still more theoretical and interesting questions. What is the pass line? And who should decide it? It is clear that a company draws a clear line like child labor and has caused public opinion to rebound, but what if the line is ambiguous? Is there no problem with a 7 5-degree factory? Or is it a fine of $ 3 if the average hourly hourly wage in the field is $ 2?

After all, from shoes to smartphones, to manufacture the products you buy, even if it's better than all other options, do you work under conditions that you can't tolerate. It is inconvenient to sit down on the idea that you have to do it. Companies have to deal with the sitting range.

One end makes the absolute margin maximum. In an extreme example, the client creates a working condition that does not have any problems at all. In the 1990s, Nike chose to sit in a distant place to maximize the margin. He intentionally pretended what was happening at the factory. They were wrong because it led to people exploitation.

David: When this controversy happened, one of the things that Nike was really surprised was why we all do it, both other shoe companies and apparel companies doing this?

Ben: Oh, but Nike started. It's the biggest.

David: But I think it's more. People love Nike. It was a big betrayal because the brand symbolized many things. I was disappointed. I thought it was a better brand. Nike is a brand that inspires greatness, but it's not great.

However, it is very ironic that all other factors that led Nike to success did not impose the best standards that the whole company was aiming for. Nike customers thought that wasn't the case.

Ben: Yes, they noticed that they could not say, "We are a brand that impresses you while eating cakes. By the way, whenever there is any problem. Oh, that's one of our suppliers. We don't make shoes. Even if it is technically correct, public opinion will be guilty of you.

David: Well, in the mi d-70's. In 1974, Nike Startup Playbook, Sports Marketing, basically "pr e-sponsor" for $ 5, 000, outsourcing funds to retail partners, and global outsourcing of manufacturing. It was combined in 1974 and had an explosive success in just one year.

Ben: It's almost 100 %. It doubled almost from 1973 to 1974.

David: 1974 is also an important year for Blue Ribbon. I won the trial. Eventually, Onitsuka reconciled by paying $ 400. 000 to the blue ribbon. A trial with Onitsuka triggered Rob Strasser to Phil Night and Nike Orbit.

Ben: He was a lawyer in the trial. David: One of the things that Nike was really surprised when this controversy happened, why are all other shoes and apparel companies doing this?

Ben: Oh, but Nike started. It's the biggest.

However, it is very ironic that all other factors that led Nike to success did not impose the best standards that the whole company was aiming for. Nike customers thought that wasn't the case.

Ben: It's almost 100 %. It doubled almost from 1973 to 1974.

Ben: He was a lawyer in the trial. David: When this controversy happened, one of the things that Nike was really surprised was why we all do it, both other shoe companies and apparel companies doing this?

Ben: Oh, but Nike started. It's the biggest.

However, it is very ironic that all other factors that led Nike to success did not impose the best standards that the whole company was aiming for. Nike customers thought that wasn't the case.

Ben: It's almost 100 %. It doubled almost from 1973 to 1974.

Ben: He was a lawyer in the trial.

David: Yes. Strasser was a junior lawyer at a Portland law firm working on Nike cases. Strasser was out. This guy wasn't cut out to be a corporate lawyer. In fact, he came in after a blue ribbon settlement as an in-house lawyer. But Phil quickly realized, oh, this guy is much more valuable as my lawyer.

Everyone else at Nike at the time was a former runner. Most of them ran for Bowerman. Strasser is about 6'10" and I think he weighs over 1000 pounds. He's as outsized in personality as he is in actual size. His nickname Inside Nike comes from Rolling Thunder, a guy who rolls like thunder. He and Phil, of course, end up fighting. There was a terrible betrayal.

Ben: For a while, they were as brazen as thieves.

David: Right. The first thing Phil took from the league was to explode the very early concept of sports marketing, which was to make sponsorship deals with athletes. Before Rob came on board, they had already done their first official sponsorship deal with an athlete, with tennis player Ilie Nastasi. He paid him $10, 000 to wear Nike tennis shoes. Wow, how quaint.

When Strasser came on board, he started sponsoring organically. He went out and negotiated with athletes and agents. He signed with people who were not big stars, but who were just craftsmen, and who were half the role of an NBA player for peanuts. He took the player and the agent out of the deal. They got... I don't know how much... it wasn't much.

Ben: Basically, the shoes are free.

David: And Nike is on national TV every night. That leads to Strasser's big initiative. If you saw the recent Air Jordan movie, "Air," it was totally Sonny Vaccaro-esque. Strasser hires Sonny Vaccaro to launch Nike's college basketball program, which is a masterstroke as well.

Strasser would have Sonny travel around the country and sign coaches from major basketball schools to be Nike coaches. There would be nothing stopping those school coaches from mentoring and mentoring and running Nike clinics.

Ben: No. Pay them whatever you want.

David: Pay them whatever you want, right?

Ben: And they can tell the team what they want. There's no contract between the team and the coach about wearing shoes. But if the coach says he likes this shoe company, he has to wear them on the field.

David: What do you think the players are going to do?

Ben: It's really a team policy.

David: Right. Strasser and Vaccaro spent a month getting UNLV, Georgetown, Texas, and Arkansas. They got legendary Iona coach Jimmy V to sign a contract to coach for Nike and for the team to wear Nike. This is hilarious.

This is all happening. The Washington Post is disputing this. They have a real pearl article saying this is a disgrace. Nike is selling the purity of college sports. The kids are being exploited. At least they're getting free shoes here now.

The article incorrectly states that Iowa is one of the schools Nike doesn't have a contract with. Lute Olson, the coach at Iowa, was a legendary coach, and then he coached at Arizona, and a lot of our listeners know Lute Olson. And then Lute, Iowa, Arizona, he signed with them, and he became a great Nike coach. It's unbelievable.

Strasser gets the same playbook in college football. He gets the same playbook in the college football world. It's unbelievable. Selling football is never a big business for Nike, but college football is huge.

Ben: There's a lot of eyes on that swoosh.

David: There's a lot of eyes on that swoosh.

Ben: We've become very clear about our strategy in sports marketing. These endorsement deals are not about wanting to buy the sneakers that basketball players are trying to sell, or the cleats that your favorite football team wears on the field. Nobody plays football except for college guys and a few NFL players, so there's nothing to buy. But what you see is that swoosh, and having that brand solidified in your mind is what real athletes wear.

David: One thing that stands out -- and this is obvious, but it didn't really hit home until I started digging into Nike research -- there are really only three sports that matter. Nike, Adidas, and Reebok sponsor a lot of sports. But running, basketball, and tennis are the only sports that matter.

No matter how popular a sport is, the average person doesn't wear baseball, football, or soccer cleats. To this day, the marketing for Nike and other athletics companies, the athletes, everything you see on TV is not about getting you to buy the shoes that the athletes are wearing. It's about getting you to buy Nike.

Ben: Right. Think of the funnel as a billboard, because each one of them is an impression of the brand. You need to create products that meet the needs of your life so that you can participate in the brand story by buying what you need in your life.

You see the moving billboards and the athletes running around, and you're inspired. But the products that the athletes wear are made for their sport journey, and the products that you buy in the store are made for your sport journey, and increasingly your lifestyle journey.

David Buy a win.

Ben: Right. Their whole business is finally figuring out this multi-sided equation. Literally, their income statement says, can we create the right mix of products that will get people to join our brand and fund us?

David: I don't want to say Strasser created this grand strategy on his own. I don't know if Phil or anyone at Nike understood this strategy, but Strasser is certainly executing it in an incredible way. Nobody else is doing that. In the late '70s, we had a bunch of college coaches running great. Meanwhile, the jogging movement was getting bigger and bigger.

Ben: Right. They still only make running shoes. They don't have any clothing, they don't have any shoes for other sports. They have some side business stuff, but over 90% of their revenue is running shoes.

David: Right. Buy a waffle trainer and wear it with blue jeans.

Ben: Yes. In the late 70's, sales doubled in one year, doubled in one year. Sales, which were $ 14 million, were $ 29 million and $ 71 million, achieving $ 150 million in 1979.

David: Yes, it was officially changed to the company name Nike in 1976. 1977 was a big year as you said. The sales of that year were $ 70 million. I signed a contract with John McKenro.

Ben: It was a ful l-fledged organization by splitting 1, 000 employees.

David: There are two others. Former NASA engineer and real mad scientist Frank Rudy were added to the umbrella.

Ben: When I heard this idea, Phil Night was not his fan.

David: At first he thought it was a crazy idea. When Phil was meeting Rudy, I didn't even know how Rudy was in my office. Who is this crazy man? He tried to get rid of them, and Rudy, yes, Adidas didn't want it. Phil, oh, said, "A", let's try it. Probably, Phil ran in the prototype of the air shoes, and I think he said, oh, this was really good.

Ben: For those who don't know, the Air Max, Air Jordan, and Air Force 1, which I am listening to, are literally airbags. There is a nitrogen bag in the midsole. Think of what is between the rubber of the sole and the inside of the soles. This does not use a small airbag that does not burst like magic, but may extend to the toes that can be used as a foam cushion.

David: That's right. Rudy was really a genius. Phil is good, trying to do it. Who else delegated to? Rob Strasser went to trade with Rudy. They did trading. Each time Nike sells one pair of air sole technology shoes, Rudy gets 10 to 20 cents royalty. Eventually Nike acquires Rudy's company, and Rudy becomes Nike's employee.

In 1977, the strasser is still here. I don't know the detailed circumstances around here. Scott Reams has posted a great post to Linkedin. But as far as we know, Ben, as you said, the company was growing up. New employees think that Nike is winning.

Strasser got wrinkled one day. He went to his typewriter and lit a note on fire. He Xeroxed it, copied the note and stuck it on the walls around Nike's offices. This document is really amazing. I've tweeted about it before. It's gone viral.

Ben. Here's how the Internet describes it: This is a document written by Phil Knight that articulates Nike's principles.

Here's what's wrong with this passage: (1) Phil Knight didn't write it, Rob Strasser wrote it. (2) Nike's principles, which are also wrong. When this was written, they were still Blue Ribbon Sports. (3) At the top of the document, there's that subtle swoosh. This is never a Nike swoosh. This is something that someone at some point tried to make look like an older version of the swoosh.

The older version of the swoosh does exist. It's still in the USPTO under the swoosh trademark. It's Caroline's manual version of the swoosh, and it doesn't look like this weird, thin, sad thing.

It's not Nike or the swoosh. There was no swoosh on the document. This was typewritten. How do you do that? Not Phil Knight, yeah. Oh my god, this principle is amazing. I'm going to introduce this episode, but before that, let me tell you about my third favorite company in this episode. David, who is that?

David: Statistics.

Ben: Yeah, another acquired company. This is the first time he's been sponsored for a full season. Statsig helps modern visionaries transform the way they develop software. High-performing product teams run multiple experiments every day. If you're a company that uses statistical data and is familiar with modern product development principles, you know this.

StatSig gives you all the tools you need to create, measure, and learn faster as a product organization. Integrate feature flags. StatSig has an incredibly powerful statistics engine with powerful analytics. StatSig enables you to experiment 10x faster in your company while providing near real-time visibility into how those features are actually impacting business metrics.

David: It's been really fun to watch Statsig evolve. Even in the last few months, the market was clearly hungry. Most companies today partner with expensive, inconvenient, disconnected point solutions or undervalued in-house product experimentation tools. StatSig partners with large enterprises. We also have a startup program. StatSig helps some of the hottest, fastest-growing brands and AI.

There's a quote I particularly like. This is what a data scientist said to one of our customers: "We run like a large experimentation organization in the tech business, organizing, monitoring, and analyzing multiple experiments, and providing intuitive visualizations so that even non-technical users can make informed business decisions."

The data scientist's home company, AI startup Black Crow, runs statistics natively in Snowflake data warehouses. We spoke on an ACQ2 episode with Kamakshi from Samooha about bringing computation to data warehouses like Snowflake.

Ben: Yes. As a member of the Acquired community, you get access to exclusive offers, including 5 million free events every month, like white-glove onboarding and migration experiences. Learn more at statsig. com/acquired and accelerate your product experimentation 10x.

One more thing. David and I are doing a product development forum event in San Francisco called Statsig Live. It's going to be a great lineup of speakers, honestly. We'll have the Chief Product Officer of Brex, the Chief Marketing Officer of Instacart, the CTO of Figma. We'll also have Vijaye Raj, CEO and founder of Statsig, who you may recognize from our ACQ2 episode. It should be pretty awesome.

If you want to join David and me at our event in San Francisco on August 10th, click the link in the show notes to sign up. Make sure you get your spot because they're selling out fast. I look forward to seeing you at a Statsig event. So, David, what are those principles?

Nike's principle in 1977, by Rob Strasser. (1) Our business is changing. (2) We are always aggressive. (3) As already mentioned, perfect results are important, and perfect processes are not important. Break the rules and fight the law. (4) Fight for business. (5) Don't assume anything. Keep your promise. Drive yourself, drive others, and stretch yourself strongly. (6) Live in the land. (7) Your work will not end until the work is over. (8) Risk, bureaucracy, personal ambition, energ y-t o-energy university, knowing our weaknesses. (9) It is not enough. (10) If you do the right thing, you can make money automatically.

Ben is really good.

David: That's really good. The last word is very good for all the business so far. It's very easy to be caught by other silly things. You can do the right thing, make products loved by customers, do the right marketing, and build a brand to make almost automatic money.

Ben: I read it different from reading this. When I didn't know my journey in Nicky, I was reading, oh, this is amazing, wow, this is really fun. I can't believe that their official values are like that. No, this is all of the consciousness written by Rob Strasser in a typewriter.

This includes things that Nike never says today. Living in the land, it is valuable. It's like you have a big job problem, it's not good. You will know where this comes from. Break the rules and fight the law. Risk, bureaucracy, personal ambition. This is a prophecy by Rob Strasser, who disliked Nike's bureaucracy after IPO and collided with Phil Night.

David: To develop his personal ambition.

Ben: And he developed his own personal ambition, left Adidas, and went to Adidas. I love Nike brands. I also want to work for a company with such a poor and punchy value.

David: This is definitely one of the cases, "I don't know, but Buddha." Nike's principle by Rob Strasser in 1977. (1) Our business is changing. (2) We are always aggressive. (3) As already mentioned, perfect results are important, and perfect processes are not important. Break the rules and fight the law. (4) Fight for business. (5) Don't assume anything. Keep your promise. Drive yourself, drive others, and stretch yourself strongly. (6) Live in the land. (7) Your work will not end until the work is over. (8) Risk, bureaucracy, personal ambition, energ y-t o-energy university, knowing our weaknesses. (9) It is not enough. (10) If you do the right thing, you can make money automatically.

Ben is really good.

David: To develop his personal ambition.

Ben: And he developed his own personal ambition, left Adidas, and went to Adidas. I love Nike brands. I also want to work for a company with such a poor and punchy value.

David: This is definitely one of the cases, "I don't know, but Buddha." Nike's principle in 1977, by Rob Strasser. (1) Our business is changing. (2) We are always aggressive. (3) As already mentioned, perfect results are important, and perfect processes are not important. Break the rules and fight the law. (4) Fight for business. (5) Don't assume anything. Keep your promise. Drive yourself, drive others, and stretch yourself strongly. (6) Live in the land. (7) Your work will not end until the work is over. (8) Risk, bureaucracy, personal ambition, energ y-t o-energy university, knowing our weaknesses. (9) It is not enough. (10) If you do the right thing, you can make money automatically.

Ben is really good.

David: To develop his personal ambition.

Ben: And he developed his own personal ambition, left Adidas, and went to Adidas. I love Nike brands. I also want to work for a company with such a poor and punchy value.

David: This is definitely one of the cases, "I don't know, but Buddha."

Ben: But they are amazing. What remains today in the principles of Nike that they distribute among employees, and this is what you and I love and what we think about in Acquired is that we are constantly aggressive.

David: You can’t win by playing from defense.

Ben: No. So, we are approaching 1980. They are going to go to the exchange, and this is a completely company for the production of running shoes. There are still no signs that Nike is located where Nike is located today, where they have clothes where they are diversified in many sports. In their income, they, in fact, are a company producing running shoes and men. That's where their income comes from.

David: Nike entered the IPO in the second week of December 1980, in the same week as Apple.

David: It's amazing.

Ben: You can reach Shoe Dog, practically not mentioning the market value in IPO. This is the most crazy thing. This really emphasizes that then no one thought that the corporate value matters.

デビッド：そう。ipo 時の総額は約約 4 億ドルでした。それにてアップルアップルは 18 億ドルた。興味深いことに株式前にバウワーマンは持ち株のを・ナイトに売却てててててててててててててててて HIP ます。実際、これは先資金調達の一部に関係していた。、ナイキ大きくなるにつれ、知名度高い上場企業の株ににはたくなかっ "

もちろん、彼は人生の終わりに向かっ定年を迎えていた彼は自分の株をフィルにうと言う。PO 後にしとき、フィルは会社の 46 ％所有、一夜にてアメリカアメリカアメリカアメリカアメリカアメリカアメリカアメリカアメリカててててててててててててててててててててててててててててて HIP で最も裕福な人物一人となった。

ベン：クレイジーなのは当時アメリカで最も裕福なの一人が 1 億 7800 万ドルだったということ。。。。

デビッド：まったく違う。アメリカで最もな男とはほど遠かったが、それでも米の見出しを飾ったシュー・ドッグ』はでている。読み返すにに忘れいた。ジョーダンは出 L 。ナイキには、基本に株式公開直後にような大転落もない。フィルはを終わらせるために深い瞬間を選んだ。だだだだだ

ベン：そうですね、特にの直後、フィルは 1 年間も不在ですね。仕事が終わっ、手を洗ったようなだ。。だ。だだ

デビッドベン、仕事がまで終わりじゃないんだよ。

ベン：さあ、どうぞ。全体が、思い上がってたんだ。彼らはトップにて、僕たちランニングランニング市場にいる。私たちは魔法ような宇宙的成長トレンドの中永遠にいるんだんだんだんだんだんだんだんだ HI 。間違いなく続くよ。

Fitness explosive spread continues, but running is not the continuous handling. It's really difficult to have more than 50 % share in such an industry.

David: The early Nike did a lot of things, but made a serious mistake. Running and jogging were confused with a wider fitness explosion. A wide range of fitness explosion was a huge secular trend that continued to this day.

The running boom was part of the fashio n-based fitness cycle and a periodic trend. Running and jogging were over, and aerobics became popular, as all of the 1980s in the 1980s, which were different from the 70's. Nike never saw this and refused to do aerobics in the first place.

Ben: That's attractive. Reebok USA was established in 1980. In 1988, Reebok surpassed Nike by sales.

David: Yes, over $ 1 billion.

Ben: Nike hasn't lost its popularity in the running world. The people who were running did not stop running, and Nike was rising at this unusual growth pace in the field of running. Even if running continued, their growth rate would have declined significantly, and the market share would not have stopped. They really had to look elsewhere. I think that I couldn't find the next market.

David: Reebok was originally a British company and started as Foster and Sands. They are the companies that made track shoes for the 1924 British Olympic team, which became the original of the movie "Battle of War". The Reebok we know is completely different from the time, not the present. Paul Fireman, a marketin g-led company established by an American.

In a blink of an eye, they worked on a business plan to make money with the trend of aerobics, and made a very good shoe on his feet, although Nike's authority was told. Using pure white, soft, wrinkled leather, it looked good and was popular with women. It was just something that Nike was not. As you said, their success was steeper and faster than Nike. Ironically, Reebok was later acquired by Adidas and returned to private equity.

Benwao. It's economically working. He just raised $ 22 million in IPO, and was a lot of money at the time. After that, basically no more money was needed. However, the company is basically made up of borrowings and $ 22 million.

You will know how fat and lazy they are. They were always hungry for capital. I finally got it. In a lifetime, they were losing dogs. They are not losing dogs. They account for half of the current market and have overwhelming brand power. But at the same time, as the aerobics boom arrives, Adidas is becoming a very realistic competitor in sports marketing transactions.

Nike realized that they didn't have much capital. Adidas understood that if we paid, they would wear our products, and we understood that our inexpensive ads disappeared.

David: On the other hand, in the fitness market, which is the real reason for our core consumers, that is, people buy track shoes, the sound you hear is Reebok.

David: Interestingly, in terms of finances, only a few quarters of Nike's revenue are declining. I think it's due to forward guidance. I'm running again. Retailers had to decide their order six months earlier. Nike was able to survive at least overcoming this situation, but the real fundamental driving force of the business is ugly at this time. As I said, the market is disappearing.

So it was the story of 1984. Phil Knight wrote in a letter to shareholders this year: As George Owell predicted, 1984 was not a good year for Nike. What we have talked about has happened so far, but in 1984, it was a very surprising thing that would look like a child's play in Nike. 。 That is, a young man named Michael Jordan from North Carolina has entered the door.

The movie Air has just been released, and it's a very fun summer hit movie. It's a lot of fun to do an episode of Nike because Movie Air has just been released.

Ben. No, it's a really fun fiction.

David: The rough place is drawn correctly. Michael Jordan saved 100 % Nike. It is 100 % correct that Michael Jordan saved Nike.

Ben: There are many small mechanics that we are absorbed in. The strasser baby had traded, and Vacaro's baby did not trade. Vacaro has never been to North Carolina and negotiated with Michael's mother at Michael's house. None of them actually happened. Even if it didn't work, I didn't intend to shoot all the basketball clubs. Again, the fact is true. What I was really interested in was the character they slaughtered.

I know the spoilers because they are reviewing the movie that you probably didn't see. But Phil Night is not like Phil Night. He is a countryside. Looking at his interviews so far, reading everything about him, I don't think Ben Affleck's character resembles Phil Night. Anyway, the air is fun. This is the real story.

David: Michael Jordan, Air Jordan 1 and Jordan brands are the big important things that he didn't just save Nike. He changed the world. It's a supe r-camping way, but it's 100 % true.

Today, no matter what events, buildings, or venues you walk today, you'll be wearing sneakers when you look at what people are wearing. Most people wear basketball shoes and sneakers. It wasn't before Air Jordan. Air Jordan and Michael Jordan made sneakers culture.

Ben: Nike is aiming for a chance. There was a child from North Carolina and was nominated third in the draft. He is really good. He played to win the championship in NCAA Final 4, but it was different from LeBron in high school.

David: Yes, he was nominated in third place.

Ben: That's right. I lived near Acron, Ohio, and he went to St. Vincent, the famous St. Marys. He was one of the best players in the NBA when he was in high school.

Jordan was insufficient. He was a different type of player. It wasn't as big or physical as the players who swept the NBA at the time. A big contract with Jordan was really gambling for Nike, rather than any athlete today.

David: Then, let's talk about the content of this transaction and why it was so different. As I said, Nike is turning his back on the wall and had to do something to save the company. It was a strasser that summarized this transaction, chasing Jordan with Sony Vaccaro as described in the movie, but the strasser summarized everything.

The contract is a minimum guarantee of $ 2. 5 million in five years, but the finances are not. The groundbreaking point of the contract was that payment was calculated as 5 % royalty of Air Jordan's gross profit.

Ben: It's close to the book industry. For the first $ 500, 000 a year (about 50 million yen), he first hit him. But once you start selling, 5 % of your shoes will be his share.

David: That's right. That structure was completely revolutionary. At that time, the shoe contract method was Magic Johnson and Rally Bird's big star at the time. Both of them signed a contract with Converse. Their contract was about $ 100, 000 per year for cash payments to wear Converse arms. Ben, have you ever put on Converse's arm?

David: Do you know what it is?

David: It's not a wing bird. It's not a signature shoes. Nike says to you to make a signature shoes, and gets on the updraft from there. They did it on purpose. Not Jordan wanted, Nike wanted. They thought that Jordan had to boost to build a dream here. It is necessary to connect everything.

Ben: It's a great counter positioning. Converse has too many star players and can't contract. Converse has too many star players, so you can't contract with such a player. Nike has nothing to lose. Of course, you can let go of some of the upside. If the Converse does, or if Adidas does so, what you lose by letting go of the upside is quite large.

Of course, Nike was a rich man who cut off Jordan for years and years. However, Nike actually did what the competitors could not do, and it was wise to know what was small, cash, and not in the NBA. What are the benefits?

David: That's right. There is further beyond that. In this contract, Nike Basketball Shoes sold 400. 000 pairs the previous year. The contract includes a clause in which Jordan gets a royalty for the increase in sales beyond the baseline of the Nike Basketball Shoes.

Ben: I didn't know that.

David: That's such a mechanism. We discussed in the first half of this episode. Hello effect. Yes, Jordan is important. I will talk about Air Jordan 1 later, but it's not Jordan. It's about Swoosh, the hello effect and the rise in sales of the whole company.

Ben: I didn't know that Jordan had a royalty of shoes other than Jordan.

David: That's right. This will eventually change to Jordan brand and Jordan line. Zion Williams and Jason Tatum are Jordan's athletes. This is part of it. Nike also guarantees the minimum advertisement to advertise the Jordan Line. Everyone is here. It also gives Jordan's stock options. This is a ridiculous transaction and is wise for Nike.

Ben: There's something interesting here. I was thinking about whether to express it as a partnership. David, you and I are the acquired partners. Both benefit from upside and downside. That is a partnership. Is it a partnership? Is there a scenario where Jordan is disadvantaged, or is all the disadvantage of Nike?

David: No, there is a minimum deposit, so it's all of Nike. The $ 2. 5 million in five years seems to be a bitter measure now, but that was big. There is no other player who has such a big money.

This is the problem, and it was written in the movie. That's right. Jordan didn't want to do business with Nike. Nike was a secon d-class player. Jordan wanted Adidas. Jordan was a teenager in the 1980s. Hi p-hop, break dance, track suit, Sheltu, it was Adidas. Jordan was looking for it. David: That's right. There is further beyond that. In this contract, Nike Basketball Shoes sold 400. 000 pairs the previous year. The contract includes a clause in which Jordan gets a royalty for the increase in sales beyond the baseline of the Nike Basketball Shoes.

Ben: I didn't know that.

Ben: I didn't know that Jordan had a royalty of shoes other than Jordan.

David: No, there is a minimum deposit, so it's all of Nike. The $ 2. 5 million in five years seems to be a bitter measure now, but that was big. There is no other player who has such a big money.

This is the problem, and it was written in the movie. That's right. Jordan didn't want to do business with Nike. Nike was a secon d-class player. Jordan wanted Adidas. Jordan was a teenager in the 1980s. Hi p-hop, break dance, track suit, Sheltu, it was Adidas. Jordan was looking for it. David: That's right. There is further beyond that. In this contract, Nike Basketball Shoes sold 400. 000 pairs the previous year. The contract includes a clause in which Jordan gets a royalty for the increase in sales beyond the baseline of the Nike Basketball Shoes.

Ben: I didn't know that.

Ben: I didn't know that Jordan had a royalty of shoes other than Jordan.

David: No, there is a minimum deposit, so it's all of Nike. The $ 2. 5 million in five years seems to be a bitter measure now, but that was big. There is no other player who has such a big money.

Ben: To say more, Jordan didn't want to be a Nike partner, so he basically didn't become a partner and he backed up the truck for him. Some of the trucks were floating rewards and some were cash. However, there is no doubt that Nike has no influence, Jordan has all the influence, and has signed an incredible contract to date.

David seems to be. Jordan later abandoned his contract with Adidas. I don't want to be with Nike. I really want to be with Adidas. There is no need to match it. Would you like to come to the nearby pool hall somewhere?

Adidas says that if you pay $ 100, 000, you'll get it. " Jordan reluctantly chose Nike. But it's very correct and very important. That creates an incentive. Even if Jordan is not disadvantageous, it feels good.

Ben: Jordan is always offense. A man who plays to win. If he motivated him, he and Phil Night will really improve.

David: This is like this. This is the 1st Air Jordan 1S for the first year, this is quite amazing. Some people may know this, and others may hear and blow it out. This is because there is a second part different from what you expect. In the first year, Air Jordan 1S sold $ 126 million. This is related to shoes and related products.

Ben: David, do you know what their goals were?

David: $ 3 million in three years. This is equivalent to about 15 % of Nike's annual total sales.

Ben: In the first year, 1. 5 million feet were sold in six weeks after the release.

David: Leave Jordan to reach the rest of Nike's basketball to Halo's right. 5 % of the first year's sales of $ 126 million is fine. In 1985, Jordan gained $ 6. 3 million from Nike. Do you know how much the contract between Jordan and Bulls was? $ 6. 3 million in seven years is pretty cool.

Ben: He signed a contract with Nike in the first year and earned exactly the same amount.

David: He earned the entire seve n-year contract with Bulls in the first year.

Ben is amazing. I always want to think of the story that Jordan took risks and gained a great profit with the back end. He was immediately paid and did not need to offset it. He received a cash warranty, raised the royalties, and immediately happened, and grew even larger from there.

David: I think there are two things in the tournament. Neither would happen if Jordan did not become Jordan.

Ben: That's right. In fact, it is literally true. What were the three clauses? There was a contract, even if he won the rookie king, won the NBA final, or not awarded the MVP.

David: Interesting. I didn't know it.

Ben: Basically, if you played a tremendous activity, you would give you 5 % of the whole farm or a farm. If not.

David: Interesting. Nike had protection.

Ben: Yes. Michael Jordan. No matter what, he got all three. I needed to be an al l-star, not the NBA final.

David: Interesting, I think he did it in the first year.

David: That's because other players have taken away the ball from him and frozen him too jealous. (1) Jordan should have been in Jordan. (2) He paid enormous sacrifice.

There is a great word when Jordan first transferred to Nike. Phil Night and Nike made me in a dream. It's very sweet on the surface, but the back is very dark. Michael Jordan's life was no longer a normal person or close.

To some extent, it will be the same. Now you are Down. But at the time, that was the first time. Jordan becomes a dream and it is very difficult to live as a real human being. There was also a disadvantage.

Ben: That's right, David, you say. Suppose I came to you and said, "Hey, pay for it, so go up your revenue." What you need to do is work hard to do what you are good at and be passionate. By the way, in the next few months, I'm going to use your face for a $ 5 million paid media. What is it, what? It's good for living normally.

David: That's right.

David: Again, it's normal in modern times. Everyone understands it. Levlon graduated from high school and contracted with Nike, and when he went to the NBA, he knew what he would be involved in.

Ben: Why did it sell so much? It's interesting that $ 126 million in the first year. Why was there an unusual demand? Did people like Michael Jordan? I think this is the first example of them who really covered the ability to recognize the incredible marketing opportunity.

In 1984, Jordan began wearing an improved Air Jordan in the pr e-season and war m-up. He was now wearing black and red shoes called Jordan Bread. These shoes are black and red. NBA is over with white.

Jordan is ready to play in the league with these black and red shoes. To this day, no images have been found on the coat of black and red improved air Jordan, the predecessor of Air Jordan 1. We are not sure if it really happened.

David: Yes, it takes time to make new shoes. Air Jordan 1 is still in production.

Ben: That's right, but black and red are attracting attention from the league. David Stern said that he wouldn't be wearing it, if he would wear it, he would compensate. In fact, as a result, he wrote a letter that he literally did not specify the amount, but wearing black and red shoes is contrary to the league policy. Don't touch Air Jordan or Air Jordan 1, just wear these black and red shoes. This gives Nike a great opportunity to create a marketing moment.

In fact, it will be very expensive. This is because this subtle mechanism is 1000 dollars for the first violation and $ 5, 000 for the second violation after a while. There is a possibility that the third violation of the 82 games will be $ 10, 000 for the third violation. It's a big deal for Nike and a big problem for Jordan.

Before wearing the black and red shoes in the game or changing them. Air Jordan 1 is a symbol of white and red, and can be purchased, and then remakes all of them. AJ1 is not BRED. BRED caused a major problem.

Anyway, Jordan was shot with an incredible commercial, where he was standing there and buried the camera from his head to his feet wearing black and red. He just screams and puts a black bar on his shoes. These shoes are very large, so they are prohibited in the NBA. And everyone is enthusiastic.

David: Great. It's a very good story. In 1984, Jordan began wearing an improved air Jordan during the pr e-season and war m-up. He was now wearing black and red shoes called Jordan Bread. These shoes are black and red. NBA is over with white.

David: Yes, it takes time to make new shoes. Air Jordan 1 is still in production.

David: Great. It's a very good story. In 1984, Jordan began wearing an improved Air Jordan in the pr e-season and war m-up. He was now wearing black and red shoes called Jordan Bread. These shoes are black and red. NBA is over with white.

David: Yes, it takes time to make new shoes. Air Jordan 1 is still in production.

David: Great. It's a very good story.

Ben: The code of all this is that even after reading all these books and watching all these videos and watching all these interviews, I still don't know how many dollars actually handed over. Some say it was $5000 for an 82-game season. Some say it wasn't $1000, and then it was nothing.

I've even heard that there was no dollar exchange between Nike and the NBA, Nike and Michael Jordan, because no fines were ever levied. Nike made the Air Jordan 1 as a threat before anything was enforced. If anyone knows, send me a DM on Slack or put it in the general channel. I'd be very interested.

David: But what's so great is that it doesn't matter. That's the story, that's the dream. It doesn't matter.

Ben: Right. It's just going to be made into a terrible Hollywood movie that it was 5, 000 for 82 games, and no one remembers.

David: Okay. That's not the dark side of Michael Jordan's fame. I think that's crazy. I don't think anyone really knows that.

Nike sold $126 million worth of Air Jordan 1 shoes and merchandise in the first year. Fact. Another fact that's come to light is that Nike sold $150 million worth of Air Jordan shoes and merchandise in the first three years. Look at that and say, wait a minute, what happened?

Ben: Something bad happened in years two and three.

David: Right. Sure, something bad happened in years two, three and the first year. Nike needed to make the first year of their Jordan deal a huge success, so they flooded their channels. They flooded retailers with Future Fulfillment and all that. And that's how they got $126 million in sales. There was actually not $126 million in demand for Jordan products that year.

Ben: It was a good ad, but it wasn't a $126 million demand ad.

David: Probably....: Probably -- I'm making this up -- $50 million, $70 million, $100 million demand. It was unprecedented for a shoe in a single year, but Nike was essentially on steroids.

This was a big problem because retailers and the demographic had a big hangover the following year into Year 2, made worse by two problems: (1) Jordan broke his foot early in Year 2 and missed most of the season, and (2) the Air Jordan 2 was terrible. There's no other way to put it.

Here's the fact that a contract with Jordan, Jordan 1, a collaborative work with his partner Peter Moore, and all of these masterminds have become scammers. Air Jordan 2 was $ 100 and Air Jordan 1 was $ 65. Air Jordan 2 was made of Italian luxury leather. This doesn't look like Nike's way. I don't think it's a good basketball shoes. Want to play basketball with Gucci leather? Probably impossible.

Jordan didn't like these shoes. It wasn't suitable for playing basketball and very tough. It was hard to wear. It didn't fit his style. (A) He wasn't playing. (b) He had no motivation to push shoes. I was motivated economically, but I didn't like the shoes. Everything has fallen apart.

In addition, while this happened, the strassers and others were with him, but the strasser really became a villain inside Nike and escaped. He will launch a new department called the New Product Division in an office complex different from other departments in Nike.

Ben: Steve Jobs's Macintosh.

David: 100 %. Literally, the similarities here are unfortunately a tragic ending. He was away from the night, separated from the other part of the company, and established a new campus and a new department. He had to launch all the new products through him through this new team, and obliged them to control and rationalize the process. Jordan 2 was born here. Obviously, it's not very good shoes. That is a big problem.

Obviously, there is only one way to end this. Either the strasser becomes a Nike CEO or the strasser leaves Nike. This is because (1) Nike's CEO is Phil Night, and (2) Nike has double voting rights. Phil Night controls all the highly voting stocks and controls the Board of Directors. Really, for the strasser, that's the end.

In 1987, they had a big fight. The strasser leaves the company. He further left the company with Peter Moore, launched a consulting company called Sports Incorporated in Portland, and worked well. You can imagine the future where the night and the strasser reconcile. They became friends again, saying, "Rob, you have made a great contribution on the way Nike has walked. Sports Incorporated is one of the main clients of Adidas.

Ben: And ultimately the only customer.

David: Eventually Adidas bought the company, moved its North American headquarters to Portland, Oregon, and made Strasser CEO of Adidas America. Incredibly, tragically, this is just awful. Eight months after he took over, Strasser had a massive heart attack and died, I think at age 46. It's awful.

That kind of betrayal is irreparable. Ben, you talked earlier about Nike culture. There's a quote from Jeff Johnson of Blue Ribbon, who I think had already left the company at this point.

In his book, he asks Rob to be CEO of Adidas. He said, "Adidas, I know it's not like it was back then, but the people at Adidas were Huns. When Rob died, Phil didn't go to the funeral. It was really shocking."

Ben: There's a quote in this Portland Monthly article that sums it up, talking about why Strasser isn't known by many outside the company and why his role feeds into the story. Why? Because his work is integral to both, and therefore it's incredibly hard to write him neatly into the mythology of either.

For Adidas, it was the fat American ex-Nico and It was a brand rebirth designed and executed by Nike's artistic partners. For Nike, Strasser's legacy as a traitor is overshadowed, if not tarnished. Phil Knight could have just quit, but he went to work for Adidas. I never forgave him.

David: And yet the repercussions of that incident continue to this day. Adidas' US headquarters is still in Portland, Oregon.

Ben: Yes, and they worship a lot of Nike people.

David: Right: Right. Now, back to Jordan. The plot thickens here. Jordan is in a bad mood.

Ben: Strasser was his subordinate.

David: Yeah. Strasser was his subordinate. Strasser left, started a new company, started working at Adidas, became CEO of Adidas. Jordan went to Adidas. The writing is on the wall.

Ben: Jordan's contract is 90 years, right?

David: Not just a 90-year contract, he's trying to renegotiate it. Jordan in his third year is very unhappy. The gears are turning at Adidas. Not in command yet, but with Strasser whispering in his ear, Adidas is going to do a Jordan-type deal for Jordan. Michael always wants to do it anyway. He'll rip up his contract with Nike and go with them.

Return to Nike and Phil. This is a serious war mode. They are planning a meeting with Jordan. I think it was the end of the third year of the contract to save Jordan and quit. They intend to do anything, such as reorganization of contracts, financial increase, and other shoes. Phill talks to Tinker Hatfield, a young star of Nike's design team.

Ben: Former Nike architecture and design team, not hired as a shoe designer.

David: He was an architect. That is very important. Tinker was another type of Bowman. He made a work for Bowman in Oregon, learned architecture, and came to Nike. Along with Mark Parker, Nike's CEO, he designed Air Max and air trainers. Nike has revived in the field of running and training, and has finally competed with air trainers in aerobics.

Now that the strasser and Moore are gone, Tinker is a star that Jordan can provide. Fly to Chicago and go with the Nike Jordan, the Howard White. Talk to them. You have a shield or on a shield.

The tinker has come out. He remembers that he became a shoe designer after training as an architect. What do architects do when they meet their clients? Ask a question. What do you want? What kind of specification?

Tinker sits with Jordan and tells me where I don't like Jordan 2. It's too difficult to break. OK, it's cool. What else is the problem? There is height. It's too heavy. I'm Michael Jordan. I need a caricature on my feet. I want to fly. No extra weight is needed. OK, cool.

In the ideal world, Michael, what shoes do you want? What is it? Michael wants a wonderful basket shoes outside the coat. Like Jordan 2, it's great outside the coat, but it's the worst basket shoes. Tinker pointed out so.

He returned to Nike, worked hard, and Jordan came to the last pitch meeting. He appeared for hours late. When Phil started the meeting, he said he would start. Like an architect, Tinker put his shoes under a black cloth above the table.

Phil took over the meeting to a tinker, Michael, I wrote about our conversation. This is Jordan 3. He removes the shroud and hands his shoes to Jordan. The shoes you ordered.

He goes straight to the checklist. You can wear soft leather that you do not need to get used to, new shoes each game. Supporting power that does not feel the weight of the high top with a medium cut height that is neither a high top nor a low top. Elephant skin creates an off style without impairing the field performance. And the ultimate is no swuss. There is a small swuss on the back tab.

The main logo is Vero's Jordan Jump Man logo. The Jumpman logo has been around for a long time. It was actually designed by Peter Moore, but it wasn't. It was always swoosh and jumpman.

Ben: It's a heresy in Nike today. But Michael Jordan didn't want to be a Nike, so the only way to keep him hide the swuss.

David: Phil Knight was able to get 100 % of Blue Ribbon Sports, and could get 51 % of Bill Bowman's Blue Ribbon Sports.

Ben: The point of such an offer is to give a big impression, so it's pretty crazy. They strongly complained that working with you in the long term without putting swoosh on the side of these shoes is quite useful. It was very correct.

David: Sure. As part of that, they negotiated the contract. Jordan agreed to stay in Nike. The Jordan brand has become a subsidiary of Nike, and has all managed its own shoes, unique wear, unique color, unique logo, and unique advertisements. Eventually, it takes several years, but Zion Williamson begins to wear Jordan. Jason Tatum is wearing Jordan.

Ben: The official uniform supplier of Michigan University is Jordan, not Nike for some reason.

David: UNC is Jordan.

Ben: Do you know what has changed with this reorganization?

David: Oh. The contract has been extended for another seven years and the royalty for gross profit is the same 5 %, but there is a new and new commitment to make Jordan's sub brands more unique. The total warranty was increased to at least $ 18 million. From $ 2. 5 million to $ 18 million in three years.

After all, like $ 2. 5 million, in 1988, 1989, and 1990, the Jordan brand sales continued to increase, and sales were $ 200 million, $ 300 million, $ 400 million, and $ 500 million. , It doesn't make sense. If you do commercials between Spike Lee and Spike and Mike, that's the case.

Ben: It's because of your shoes.

David: Wieden+Kennedy must be shoes. Jordan can easily earn at least $ 100 million during this contract.

Ben: in 7 years.

David: Yeah, you know the money he earned at the NBA.

Ben: He earned about $ 90 million in the entire career under the basketball contract. I said so in the first year from the beginning. Nike's income far exceeded the NBA income.

David: Yes. In the retail business, it is interesting that Jordan 3 and Jordan as a whole will become luxury brands in the retail business. Jordan is a Nike Louis Vuitton trunk. Jordan is a trunk of Louis Vuitton in Nike. Yes, it sells a lot. But,. A lot of wallets can be sold.

Ben: Yes. Is the price of Jordan 3 $ 200?

Da i-卫: It's $ 100, but it's from 1988 to 1989.

Ben: Yes. I see, I'm convinced. David. At the end of the seve n-year contract, he was talking how much he had earned. Today in 2023, there is something magnificent in the Jordan brand, and I don't think people can handle what has happened in the last three years.

The Jordan brand is the most rapidly growing department in Nike. Nike grows 10 % every year, but the Jordan brand has been growing 35 % in the past three years. The Jordan brand has grown 35 % and has made billions of profits. Last year, they reported that FY22 and Jordan brand revenue was $ 6 billion. Let's assume that this 5 % number is still quite accurate. Jordan earns more than $ 300 million a year from the Jordan brand with a 5 % royalty.

David: I last retired 20 years ago.

Ben: No athletes earn $ 300 million a year. Michael Jordan will earn $ 5 billion in Jordan brands and, or, or $ 10 billion. He is essentially the founder of a brand that has grown 35 % over $ 6 billion of more than $ 6 billion.

David: All Nike businesses, distribution, marketing.

It's a mysterious thing. He has been active for many years to build a brand equity, but now has a passive job to maintain it. Of course, he has information about who is contracting with Jordan brand. This is a voting. However, Michael has a huge brand Equity because Michael is not involved in trouble and has a dream.

Nike is completely satisfied with this agreement because it has obtained 95 %. They are satisfied with the $ 300 million check. If you win the opposite side of $ 6. 6 billion, I will do so. However, Jordan had to shake his life to become Michael's dream and continue. He is a synonym for the brand, so it must be perfect to maintain the brand.

David: Yes, it's Michael's dark side. Before moving to the rest of Nike, I would like to say another important thing about Jordan, dream construction, and cultural change. Also, this timing cannot be ignored. All of this overlapped with the rise of ESPN and the Sports Center. It was very important.

In the early days, Nike was "advertising expenses" when Steve Profnotine decorated the cover of "Sports Illustrated" magazine, or when tennis players on the cover of "Sports Illustrated" magazine. You can use the X million dollars, but if our shoes are posted on the cover of the Sports Illustrated Magazine, it's worth $ 20 million. " ESPN, Sports Center, and their athletes, Michael Jordan, appeared on television for 24 hours every night, and became a free advertisement of $ 20 million overnight.

Ben: That's a good point. In 1988, after the rise of Jordan brand, they started a JUST DO IT campaign. I guess that's the first WIEDEN+KENNDY ad.

David: The second biggest thing. Tinker Hatfield and Mark Parker c o-work.

Ben: They are also finding their feet. You can not only run, but also diversified. You can find a lot of places to sell your dreams. You can create various products to make money from your dreams and let people participate. As of 1988, Nike's market capitalization has reached $ 1 billion. They opened their first Nike Town in Portland.

The early '90s, late '80s, early '90s were just good times for Nike. I think they had a market cap of $5 billion in 1991. They had a market cap of $10 billion in 1996. They were really executing the strategies that we've talked about, at scale, until all the things that we've already talked about, like the labor issues and now the controversy, happened.

Tough years. It's interesting that the dot-com crash was also a tough year for them. They went from a market cap of $20 billion to $8 billion. They weren't a tech company by any means yet, but they were struggling at the exact same time.

David: One thing that's interesting about that is, losing Kobe from Adidas was big.

Ben: Yeah, it was huge. Everybody forgets that. Everybody forgets that Kobe was an Adidas athlete, just like they forget that Kanye was a Nike athlete or a Nike rapper.

David: The early 2000s was not a good time for Nike. It's interesting that Kobe bought Adidas and went to Nike because he was unhappy with Adidas and wanted what Nike could give him.

Ben: Oh, I got the numbers. Kobe was at Adidas from 1996 to 2002 and allegedly hated the Kobe 2 so much that he paid $8 million to get out of his contract to go to Nike. This was a big win for Nike and a big turnaround. 2002 is when Nike started to get back on track.

David: Yeah. I think it was partly because of the shoes. The Kobe 2 was a mess in everyone's eyes. Nike can do things for athletes. Nike can do things for athletes, for big superstars, that other companies can't do.

Ben: It was right around the same time in 2003 that LeBron got into the NBA and Nike kicked him out of high school. In 2002 they got Kobe. In 2003 they got LeBron. They cleaned up their image, they cleaned up their factories, they cleaned up their supply chain. In 2003 they bought Converse for $309 million. They were once enemies, now they're Nike's enemies. Converse's billion dollar capitalization is a fraction of that.

In 2003 Michael Jordan retires. It's interesting. In 2003 Jordan Brand was doing $700 million a year in revenue. Today it's $6. 6 billion. That's the delta since he quit basketball.

David: So they're both horrible numbers. $700 million is good, $6 billion is good.

Ben: That's right. Jordan has completely graduated from the sponsor contract and has become a brand. Jordan's platonic ideal is more than people.

In 2006, another important thing happened. In Apple in 2006, Steve Jobs was still the CEO. Many people know Tim Cook, but Tim will be a director of Nike. I think I became a director at the end of 2005.

Immediately, Nike began helping Nike to understand how to change business using digital technology. In 2006, they released Nike+iPod. However, Nike helped to understand the whereabouts of the pack.

David: This was the first company to use plus as a product name.

Ben: Really?

Daisen: That moment led to the splendor of today's digital products.

Ben: Are you all grateful for it?

David: Plus, Plus, Plus, Plus, Plus, Plus. I'm surprised that there is no Jordan Plus. Jordan is well managed by the brand.

Ben: I didn't know that. It's interesting.

David: That was a positive origin.

Ben: It was a small one on a shoe insole and it was interesting. It measures all stride and running indicators and reports it to the iPod. This is because there was a small 3 0-pin connector inserted into the iPod.

However, as it has evolved into fuel belts and the fuel belt evolves into an iPhone app, Nike has begun to build a way to build directly with customers through such a series of services, as well as such a series of services. 。

From 2006 and 2013 to 2014, they launched a new strategy. It was a clear moment that the company changed the DNA. I returned to the technology department in 2006. The acquisition strategy has also been completely changed. He acquired Converse and bought a starter. The starter was scheduled to be like a Wa l-Mart brand.

David: That's right, Call Hahn. Ben: That's right. Jordan has completely graduated from the sponsor contract and has become a brand. Jordan's platonic ideal is more than people.

Immediately, Nike began helping Nike to understand how to change business using digital technology. In 2006, they released Nike+iPod. However, Nike helped to understand the whereabouts of the pack.

David: This was the first company to use plus as a product name.

Ben: Really?

Daisen: That moment led to the splendor of today's digital products.

Ben: Are you all grateful for it?

David: Plus, Plus, Plus, Plus, Plus, Plus. I'm surprised that there is no Jordan Plus. Jordan is well managed by the brand.

Ben: I didn't know that. It's interesting.

Elim Poon - Journalist, Creative Writer

Last modified: 27.08.2024

Nike began as a distributor for Japanese running shoes before becoming the largest athletic apparel company globally, excluding luxury brands. The brand's. This recognition is not only due to its iconic sportswear but also because of its impressive marketing strategy. Phil Knight and Bill Bowerman. Nike's marketing strategy revolves around building a strong brand identity. The company, founded by track and field coach Bill Bowerman and.

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