Phil Knight: The Entrepreneurial Genius Behind Nike

1 minutes reading time
Published 16 May 2024
Author: Emil Persson
Reviewed by: Kasper Karlsson

While the athletic apparel industry is filled with fierce competition, there has been a clear king of the hill for the last decades: Nike. The company, with its iconic “Swoosh” logo and impressive ad campaigns, has gone from a small Oregonian outfit selling imported Japanese trainers to one of the most recognizable and famous brands in the world. One of the key reasons for this is the company's co-founder and long-term CEO, Phil Knight. A former track and field athlete with a penchant for marketing and brand-building made Nike into what it is today, and his story is as inspiring as it is fascinating.

Key Insights

  • Meeting his Co-founder: His decision to run Track and Field while in university led to him meeting Bill Bowerman, and the two would go on to found Nike together.

  • Blue Ribbon Sports: What would later go on to become Nike began as Blue Ribbon Sports, an importer and seller of Japanese athletics shoes.

  • A skilled entrepreneur: Knight was the CEO of Nike for four decades, and was one of the key drivers in making the company what it is today.

  • Philanthropic work: Phil Knight has been a generous donor to several causes at his Alma Maters, including contributions to both athletic and academic programs.

The Making of an Entrepreneur: Phil Knight’s Formative Years

Phil Knight was born on February 24, 1938, in Portland, Oregon. His father, William W. Knight, was a lawyer turned newspaper publisher, a factor that introduced a blend of media, communication, and business into Knight's environment from an early age. Growing up in the Portland area, Knight attended Cleveland High School, where he was involved in sports, though not outstandingly so. He tried his hand at several sports but found a home in Track and Field, where he was relatively successful. It was his love of running fostered in high school that would later prove to be a key cornerstone in the foundation of Nike.

After high school, Knight continued his education at the University of Oregon in Eugene, where he earned a degree in journalism in 1959. At Oregon, Knight ran track under coach Bill Bowerman, who would later become his business partner in founding Nike. Bowerman was constantly searching for ways to improve his runners' shoes, a quest that undoubtedly sparked Knight's interest in athletic footwear. The relationship formed between Knight and Bowerman during these college years was based on a mutual obsession with maximizing running shoe potential, which laid the groundwork for their future business collaboration. Following his graduation from the University of Oregon, Knight enlisted in the Army, serving one year on active duty and seven years in the Army Reserve. His time in the military offered him discipline and a broader view of the world, aspects he stated would later influence his business practices.

The Stanford Years and the Birth of a Business Idea

After his service in the armed forces, Knight decided to further his education by attending Stanford University to pursue a master's degree in business administration, graduating in 1962. It was during his time at Stanford that Knight developed a keen interest in entrepreneurship. A key moment in his academic career was his enrollment in a small business class where he was tasked to write a research paper. His paper, titled "Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?", essentially proposed importing high-quality, low-cost running shoes from Japan. This idea planted the seed for what would eventually become Nike, as he aimed to break the domination held by Adidas and Puma over the U.S. athletic footwear market.

Further reading: Adidas vs Puma: The story of the Dassler Brothers

His time at Stanford also equipped Knight with essential business theories and an understanding of the importance of marketing, which would be crucial for his future company's success. After graduating from Stanford, he traveled around the world, including a stop in Japan. In Japan, he made a cold call at the Onitsuka Tiger shoe company (later known as ASICS), posing as a representative of an American distributor interested in selling their shoes in the U.S. This bold move led to an initial agreement that allowed him to import shoes to the U.S., setting the stage for his future enterprise. He, together with Bowerman, founded Blue Ribbon Sports (BRS), and the two would run the company together. Knight was in charge of the business side of things, while Bowerman focused on the products.

Knight began selling shoes from the trunk of his car at track meets across the Pacific Northwest. As his side hustle slowly started to take off, the foundation of Nike began to solidify. This phase of his life, combining academic theory with practical experience and a daring entrepreneurial spirit, was crucial in transforming his initial vision into a viable business.

Nike is Founded

When the distribution agreement with Onitsuka Tiger ended, Bowerman found themselves without any shoes to sell. However, they were both keen on continuing to sell shoes and this time they were going to do it under their own banner with their own products. The two formed Nike, named after the Greek goddess of victory, and a logo was created by graphic design student Carolyn Davidson. Bowerman had developed a shoe with a new type of sole that provided better grip, and after a lot of trial and error, they had their first product. The newly formed company started selling their innovative shoe exclusively to U.S. track and field athletes, but soon enough the first consumer product was released: the Nike Aztec. The shoe became more or less an overnight success, and Nike came flying out of the starting block with one clear ambition: domination.

Phil Knight's Tenure as Nike CEO

Phil Knight served as CEO from the company's early days in 1964 until 2004, and as Chairman until 2016. His leadership spanned four decades during which Nike evolved from a small enterprise selling running shoes out of the trunk of Knight's car into a global powerhouse in sports apparel and athletic shoes. His tenure as CEO was marked by visionary strategies, innovation in product design, and a keen understanding of brand and consumer dynamics, all of which played critical roles in propelling Nike to its industry-leading position.

Phil Knight's contributions were not limited to operations and logistics; he was also a marketing pioneer. Knight's insight into the power of branding became evident with the introduction of the "Just Do It" slogan in 1988 and the subsequent ad campaign. This campaign helped position Nike not just as a supplier of athletic gear, but as a lifestyle brand for all those who make fitness a part of their daily lives.

Knight also understood the value of endorsement deals, and a significant part of Nike’s strategy was to sign top athletes to promote their products. The most notable of these was the deal with Michael Jordan in 1984, which not only helped make Nike a household name but also revolutionized sports marketing and celebrity endorsements. The Air Jordan brand remains a massive revenue stream for Nike.

Knight’s tenure also saw Nike's transformation into a global juggernaut. He pushed for expansion into Europe, Asia, and South America, understanding early on the potential of these markets well before globalization became a business imperative. This expansion was not without its challenges, including criticism of labor practices in overseas factories. Knight addressed these issues by implementing stricter oversight and higher standards for Nike’s supply chain, which improved the company's image and sustainability practices.

Retirement and Legacy

Phil Knight retired as CEO in 2004, leaving behind a vastly different company from the one he started. When he stepped down, Nike had annual sales of more than $12 billion and was the largest seller of athletic footwear and apparel in the world. His strategies of embracing technological innovation, aggressive marketing, and global expansion had been key drivers in shaping the company.

Knight's legacy at Nike is profound. He not only built a successful business but also created a brand that is synonymous with sports, innovation, and motivation across the globe. His understanding of the business landscape and ability to adapt to changing dynamics continue to influence Nike long after his retirement.

Personal Life

Phil Knight has maintained a relatively private personal life despite his significant public profile as a business leader. He met his future wife Penny when she was at University, and the two have been married since 1968. The couple had three children together, but tragically their son Matthew passed away in a scuba diving accident in 2004.

Phil Knight's Relationship With his Alma Maters

Phil Knight holds both of his Alma Maters near and dear to his heart, and his philanthropic engagements with both the University of Oregon and Stanford University are extensive. At the University of Oregon, Knight's donations are varied and extremely generous. One of the most notable contributions was the $100 million donation to create the UO Athletics Legacy Fund. He also funded the construction of the Matthew Knight Arena, named in memory of his late son, which serves as a state-of-the-art venue for basketball and other events. Naturally, the student-athletes representing the university all do so while wearing the Nike Swoosh on their uniforms. Beyond athletics, Knight has supported academics, including a $500 million donation to the Oregon Health & Science University (OHSU) in partnership with the university to support cardiovascular research. The relationship between Nike and the university runs deep and it is a partnership valued immensely by both sides.

Stanford University has also benefited significantly from Knight's generosity, and he has co-founded a massive scholarship program aimed at supporting students from poorer backgrounds. He has also frequently been a speaker at both Stanford and University of Oregon events.

Shoe Dog: Praised by Warren Buffett and Bill Gates

Shoe Dog is a memoir written by Phil Knight, which chronicles the early days of the company up to its evolution into one of the world's most iconic and recognizable brands. Published in 2016, the book offers an intimate and candid look into the tumultuous and inspiring journey of building a global enterprise. The story progresses through the foundational years of Nike, detailing the many challenges Knight and his early team faced, including financial struggles, disputes with suppliers and competitors, and numerous legal battles. What stands out in the narrative is not just the business aspect but also Knight's reflections on the risks he took and the relentless pursuit of his vision.

The book provides readers with insights into the complexities of starting and scaling up a business in the competitive world of athletic wear. Knight's narrative style is engaging and filled with anecdotes, and he proves himself as a talented storyteller. The book does more than just recount the chronological growth of Nike; it dives deep into the emotional and philosophical motivations behind Knight’s business decisions. Shoe Dog was incredibly well received and has received praise from the likes of Warren Buffett and Bill Gates, and is today considered by critics and readers alike as one of the “must reads” in the genre of business memoirs.

Closing Thoughts

At the time of the writing of this article, Phil Knight is alive and well and is enjoying retirement and in the presence of his family. Being in his mid-80s he has naturally taken a step back from public appearances and enjoying his golden years in the Oregon countryside, close to the Nike Headquarters. When looking back at his life and work, it's impossible not to be impressed with how he went from selling imported sneakers from the back of his car to creating one of the most famous and influential brands in the world. For those interested in entrepreneurship and the building of businesses, Phil Knight's story highlights how calculated risk-taking, hard work, and skill are the keys to success.

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