How Nike sold its first shoes

https://marketingexamples.com/direct/how-nike-sold-first-shoes

by harrydry • 7 years ago

265 40 7 years ago

zarriak• 7 years ago

Shoe dog is a great book. It was really interesting to read him talk about his issues with liquidity and him lamenting the lack of VC funding at the time. Of course he doesn't really address the downsides of VC funding but the local bank he works with is a quaint reminder of how far things have come. A good story and a great reminder that choice of founder partner is crucial to your success.

It contributes to my belief that there are way too many technical founders working on absolutely horrible ideas that would be able to the foundation for a great company but don't have the skill set to determine what that is. I think after the impending recession when VC money dries up this skill will be in high demand.

johnohara4• 7 years ago

A good story and a great reminder that choice of founder partner is crucial to your success.

Let's not forget Bill Bowerman.

His wife Barbara's waffle iron is in the same league of corporate lore as Hewlett-Packard's one-car garage.

And the reason Nike's address is One Bowerman Way, Beaverton, Oregon.

defen• 7 years ago

Dude is a legend. One of my favorite parts in Wild Wild Country is when they're interviewing "local rancher" Jon Bowerman. Paraphrasing, but there's a part where he's talking about his father and it goes something like: "He fought in the war...went behind enemy lines in Italy and convinced the German 8th Army to surrender. Then he led the Ducks to 4 national championships and became US Olympic coach, but retired heartbroken after Munich. Then one day he was in the garage and melted some old retreat rubber with a waffle iron and glued it to an old worn out shoe. The result became...uh...Nike""

mikestew3• 7 years ago

His wife Barbara's waffle iron...

That legend has always bugged me. If one used a waffle iron to make running shoe soles, the result would not look like a Nike Waffle Trainer. It would look like, well, a waffle. The soles of Nike Waffle Trainers looked like one took a waffle iron and made it out of rubber. IOW, the legendary mold and result would have to be reversed from reality.

I mean, have I been thinking about this wrong for forty years? You can't make a Nike Waffle Trainer from a waffle iron, right?

adventured3• 7 years ago

I think after the impending recession when VC money dries up this skill will be in high demand.

The next dry-up will be modest, it might last 12-18 months. The last one lasted a mere 2 to 2 1/2 years and required a rather extreme global recession. The US and globe broadly are drowning in truly enormous amounts of capital yielding nothing or close to nothing. Ten trillion dollars in wealth held in government debt yielding nothing. Tens of trillions more held in other low yielding bonds. There is a lot more real wealth (inflation adjusted) in investor hands today than there was just 20 years ago (at the dotcom bust). That capital is desperate for returns and will remain so. A 1/3 correction in the US stock market would merely set it back to April 2016.

The Fed is now permanently in liquidity mode, primed to rapidly flood the system as needed. They're on twitch notice for the next QE round. This won't change for decades at least, as the Fed must endlessly run debt monetization programs, and always keep rates artificially low, to keep the US Government solvent (5% * $30 trillion = bankrupt US Government).

Pretty much every central bank of consequence is in liquidity flood mode. They're mostly all behaving similarly.

Venture capital will remain ample in such an environment of perma low rates and relatively low inflation.

Ability, skill, will become drastically more valuable over the next ~20 years. Capital will become even easier to access and even more plentiful, if you are competent and or more generally have something to sell. The rich will get richer over the next 20 years and they will always be looking for somewhere to park it. The processes occuring now, including population stagnation in wealthy nations and aggressively advancing automation (robotics, AI, et al.) will push even more wealth to the top (taxes on the rich will rise in some cases to attempt to resolve that, certainly in the US). The returns that a capable individual can generate for capital, will soar in the coming decades. It's going to be an era of rather extreme value-capture amplification for people that have consequential skills; ever greater returns going to ever small groups of people.

With population stagnation and or contraction in much of the developed world (which is only going to get worse), finding enough skilled / talented people will remain the problem, not capital. Simply put, the capital to skilled person ratio in affluent nations will continue to rapidly climb in favor of the skilled persons.

ta1234567890• 7 years ago

Your comment was a great read! Thank you.

So, what would it take for that future not to happen? Or what should the people that are going to be the most affected do?

quickthrower2• 7 years ago

Sounds a bit "free lunchy" to me. So nothing can stop the tidal wave of more government freshly printed money? What about the fact the money is really debt and that needs to be kept serviced? What about another credit crunch?

Hyperinflation? What if people run from holding USD. Not likely, but who knows what will happen in 20 years time?

jsnk• 7 years ago

I just finished reading the book yesterday. It's amazing what Nike had gone through to become the company today. I learned to have great respect for Phil Knight, but I don't understand why he mistreated Jeff Johnson. In the book, Jeff Johnson clearly believes in the company and Phil Knight. He goes out of his way several times, sacrificing himself to make the company afloat. And yet, Phil Knight doesn't treat Johnson with the respect he deserves. He flat out ignores him for an extended period while Jeff Johnson reaches out for input from his boss. That's rude even for a boss. Why would Phil Knight do this? He doesn't explain in the book and it's really annoying.

Lordarminius• 7 years ago

. And yet, Phil Knight doesn't treat Johnson with the respect he deserves...

One of the things that surprises me whenever I read other people's reviews of Shoe Dog is how most don't seem to get the point, revealed by a careful reading between the lines, that Phil Knight is as ruthless, cold blooded, and cunning as any other billionaire entrepreneur out there. Not that I hold this against him; but time and time again in the recounting of how he grew the business, he would reveal these traits. He was however smart enough to conceal this under layers of PR fluff.

simonebrunozzi• 7 years ago

"impending recession" - why are you so sure there will be a recession soon? I've kept hearing people say it for the last four years.

Yes, there will be one eventually, but it could be in 2030 or 2040, as far as we all know.

rootsudo• 7 years ago

From LinkedIn to here. Hmm.

EugeneOZ• 7 years ago

Numbers are impressive, really. But with all of that activity on mailing list and personal visits I wonder if he had enough time for life (rest, family).

DigitalTerminal• 7 years ago

I think that then he did not have time for this. But after the first sales, I think the amount of time and leisure opportunities have grown a lot.

harrydry3• 7 years ago

Indeed. Life's a trade off and Johnson did indeed get divorced. Shoes were his love.

Was it all worth it? Who knows!

techntoke2• 7 years ago

I didn't see anything about how Nike willingly enabled child labor and human rights violations?

harrydry3• 7 years ago

thats cause they didn't "enable child labor" or "violate human rights" to sell their first 50,000 shoes

FAKEDETECTOR• 7 years ago

But it is part of the Nike history and should have been mentioned. It is disgusting to read that kind of fanboy publication, deeply bowing before a company that helped to construct the modern international slavery system.

vmurthy• 7 years ago

Can't resist a little gem from "Shoe Dog".

Nike wanted to introduce a shoe during the 1968 Olympics being held at Mexico City. In honour of the location, they initially called it the "Aztec". But Adidas already had a shoe called "Azteca Gold" and naturally threatened to sue. Bowerman asked "Who was the guy who kicked the shit out of the Aztecs?" . Phil replied Cortez and the iconic Nike Cortez was born :-)

Edit: It seems that Bowerman asked the question. Corrected!

harrydry3• 7 years ago

haha! I remember reading this. Made me smile

soyyo• 7 years ago

sorry for the nitpicking, but it is actually Cortés, Cortez seems to be an anglicisation

wiradikusuma• 7 years ago

I love reading anecdotes like this, they inspire me to do similar "non-scalable, good old personal approach".

But sometimes I wonder if they no longer work because we live in different (modern) times?

westiseast3• 7 years ago

Sports is probably very specific. Amateurs will mostly buy what professionals recommend, or what their coach wears. These days you see sports stars and brands through social media and on TV, but in those days less so. Going to clubs, track meets, talking to the professionals/enthusiasts/hardcore fans, he would’ve been talking to the equivalent of Instagram influencers today.

randomlogin• 7 years ago

I can't help by wonder what his commission was?

And was it some company honor system that prevented him from starting his own shoe business instead of being the employee? (since he could obviously sell from scratch)

I don't have any idea if a non-compete would be a standard part of the contract in that time.

HeyLaughingBoy• 7 years ago

Well, you could probably ask the same question of any good salesperson today. The answer is likely that people stick to what they want to do and what they're good at. If you want to build a company, you build a company. If you want to sell, you find a product you can sell and you excel at that.

I'd hazard a guess that Johnson was really great at doing what he did to create Blue Ribbon when he had the backing of an established company behind him, but starting from absolute zero might not have been his cup of tea.

achingtooth• 7 years ago

I've been having a hard time getting people to sign up for my service, I found that it's easiest to get to know a person then shill them your product. I guess that's the equivalent of what Jeff Johnson was doing. It's a lot of work for little return, especially for a social media site. A shoe has a lot bigger profit margin compared to a website (per user). I'm still learning though, the site has a lot of other useful examples

mtw• 7 years ago

I like the story. What about product development though? If you come up to athletes, head coches and parents in track events with an average shoe, I don't think this would have worked. I'd love to hear the story how he developed a superior product.

Or is it that in 1964, there was no real track shoe at all.

westiseast3• 7 years ago

I did wonder, what other brands existed at the time? I have no idea.

Was coming to a track meet with branded, fashionable shoes in 1964 the equivalent of turning up in 1998 with an awesome animated Flash website?

mikestew3• 7 years ago

I did wonder, what other brands existed at the time?

The Japanese brand Tiger, for one (later becoming Asics). IIRC, though cannot quickly find a reference, it's the brand Phil Knight was selling out of the trunk of his car before starting Nike with Bowerman.

pombrand• 7 years ago

Shoe dog is a great book - about how you can afford to be a terrible business person if you have rich parents who bail you out and can live out of their garage. I don't see why people are so impressed by it? Nike shoes aren't even that good today.

How to mistreat your allies (Jeff Johnson)

How to mislead your suppliers and almost lose in court.

Do the marketing methods they used, which is perhaps the impressive part, even work today? Do you show up to track meets with shoes from an unknown brand? I don't think so. Do things that don't scale, but not the exact same things that worked decades ago.

How Nike sold its first shoes

Related Stories