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How A Kid With $0 Created Nike | MagnatesMedia | YouTubeToText
YouTube Transcript: How A Kid With $0 Created Nike
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Summary
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The content chronicles the ambitious journey of Phil Knight, from a confused graduate with a radical idea to the co-founder of Nike, the world's largest sports apparel company, highlighting the challenges, innovations, and controversies that shaped its rise.
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first year of sales were 1964 and we
sold eight thousand dollars we made a
240 profit today his company Nike has
grown in 30 billion dollars in sales
last year thanks to Shopify for
sponsoring this video [Music]
[Music]
Little Knights suddenly woke up he'd
just been having a nightmare where his
life had no purpose except it wasn't
just a dream this was his reality unsure
what to do with his life Phil went to
the University of Oregon where he
studied journalism and developed his
interest in running it was here that he
met with the track coach Bill Bowerman a
famous coach in America who trained
Olympic athletes Phil trained under
Bowerman as a middle distance Runner and
the two men struck up a great friendship
they didn't know it at the time but that
friendship would later become the
foundation of the biggest Sports company
in the world but we'll get to that after
graduating with the journalism degree in
1959 Phil was still very confused about
what to do with his life deep down he'd
wanted to become an athlete but at 24
years old he had to admit it the dream
was dead despite all the lessons and
training at College he just hadn't got
to the level needed and now he felt lost
Phil even enlisted in the Army and
completed a year of service thinking
that might give him a sense of direction
it didn't he was left frustrated and
angry so after the Army Phil enrolled in
The Graduate School of Business at
Stanford University and it was here at
Stanford that he finally found his
calling whilst working on an assignment
to invent a new business Philip had an
idea that would change his life forever
on a piece of paper he wrote can
Japanese sport shoes due to German
sports shoes or Japanese cameras did to
German cameras you see Phil had noticed
how two Japanese camera come Nikon and
Canon had replaced German cameras in the
market which used to be much more
dominant and he wondered if the same
thing could happen with running shoes
now at the time two German companies
Adidas and Puma were the leading running
shoe brands in America and they had a
very stronghold of the markets but Phil
had heard the Japanese were
experimenting with some new shoe designs
and he also knew that it would be
cheaper to produce shoes in Japan as
well so Phil got extremely invested in
this assignment for his business class
and genuinely started to believe that
there was a great business opportunity
here to import Japanese shoes into the
American Market
but when Phil presented this to the
class nobody else seemed to see it that
way he even told some of his friends
about the idea none of them seemed to
pay much attention either of course if
Phil did want to actually pursue this
idea himself he knew how difficult it
would be he didn't know anyone in Japan
to reach out to and he knew absolutely
nothing about importing Japanese shoes
or even had to sell them in America for
that matter so could he really just do it
it [Music]
[Music]
after graduating from business school in
1962 Phil found himself back at home
living with his parents that familiar
feeling was back that his life was just
passing him by and he needed to do
something meaningful one day Phil
finally decided he couldn't just keep
waiting for some magic opportunity and
he had to go and create an opportunity
for himself so fill in one of his
friends decided to take a long trip to
go traveling around the world Phil had
stayed obsessed with his idea of
bringing Japanese shoes to the American
market and so he figured as part of the
trip he would visit Japan to see if he
could make his crazy idea into a reality
but first they visited classic European
cities backpacked through Asia and even
stopped in Greece where Phil saw the
Temple of Athena Nike dedicated to the
goddess of Victory Phil and his friend
then went to Hawaii and that's where
things changed [Music]
bill and his friends surfed relaxed on
the beach and loved the whole place so
much they ended up getting jobs in
Honolulu selling encyclopedias door to
door simply so they could afford to stay
in this Hawaiian Paradise a little
longer however Phil was pretty shy and
didn't do well at the sales job at all
and eventually he decided he'd done
enough relaxing and it was time to leave
his friend had met a girl and stayed
behind though so Phil said goodbye and
continued his trip alone and Phil
already knew exactly where he wanted to
go next it was time to get serious about
his dream it was time to go to Japan [Music]
foreign
1962 in the city of Kobe Phil came
across one particular running shoot that
caught his eye the brand was called
tiger and the shoes were manufactured by
a company called onitsuka not only did
he like the design the shoes take the
two main criteria Phil needed they were
clearly high quality shoes and yet they
were relatively cheap Phil liked the
shoe so much that he cold called the
owners of the shoe brand and managed to
arrange a meeting feeling both nervous
and excited Phil put on a suit and went
to meet the manufacturers of the
Japanese shoe he liked so much before
going he bought a copy of how to do
business with the Japanese and memorized
as much information as he could despite
Phil having zero expertise in the
business he introduced himself in the
meeting as an American shoe distributor
who was going to help Market their shoes
in America it turns out the onitsuka had
been looking for a way to sell it shoes
in America already so they were actually
very excited when Phil came to them with
the same idea perhaps that's why they
were willing to overlook the fact that
filled it like he was fresh at a
university which he quite literally was
but despite being a recent graduate in
his 20s with no actual experience into
running a business Phil had memorized
lots of facts and statistics about the
American shoe market from his assignment
at University and so he was basically
able to recite parts of his presentation
during the meeting and so it looked like
he completely knew what he was talking
about the Japanese managers were
impressed however one of the mass fill a
very simple question what's the name of
a company you're from Phil suddenly felt
his heart beating faster of course the
truth was Phil didn't have a company
name because he didn't actually have a
company yet he just had this crazy idea
to import Japanese shoes to America
Phil's mind started racing for a split
second he felt completely out of his
depth I just wanted to be back home with
his parents and that's when his mind
suddenly flashed to the blue ribbons
from his childhood that he used to have
hung up on his wall after a second pause
Phil replied gentlemen I represent blue
ribbon Sports of Portland Oregon he just
kind of blurted the name out of nowhere
since in truth he'd never expected to
get this far but after inventing a
company name on the spots Phil could
feel his confidence increasing he went
on to explain the size of the American
market and how on its because tiger
shoes were different to what they had in
America meaning there was a huge
opportunity if onitsuka and him teamed
up the Japanese company was so Keen they
basically began pitching Phil and asked
him if he would be their distribution
partner in the U.S to which Phil
obviously agreed and then he asked them
to ship over some samples to his address
in America it seemed like Phil's crazy
idea was about to become a reality [Music]
[Music]
one month two months three months four
months the time kept passing and no shoe
samples arrived Phil couldn't understand
it he'd returned to America so excited
and optimistic because it seemed like
his meeting with the Japanese shoe
manufacturer had gone so well so he
wrote to them to find out what was going
on with the samples he'd been promised
which he'd paid fifty dollars for he
then got a letter back saying she's
coming in just a little more days Phil
was back at his parents house and so he
showed the letter to his dad who just
chuckled and said son that 50 bucks is
long gone
Phil really been scammed depressed Phil
went and got a job to try and make some
money he ended up working as an
accountant but he didn't really like it
and then suddenly one morning 12 sample
pairs of shoes from Japan arrived on its
doorstep they were finally here and it
was worth the wait they were just like
he'd hoped Phil was so excited that he
went to see his old running coach Bill
Bowerman to show him the new shoes and
see what he thought Bowerman was highly
respected in the world of running and
he'd always been obsessed with improving
athlete's shoes in fact back when Phil's
at University with him he'd notice
Bowerman take students shoes and cut
them open and make adjustments for
example adding more cushion or using
more lightweight materials and then
stitching them back together sometimes
his experiments just made their feet
painful but quite often Powerman
improved the shoes and made them better
or more comfortable for running one
thing was for sure Bauman really knew
his stuff when it came to running shoes
and that's why Phil had been so Keen to
hear his opinion on his new Japanese
running shoes surprisingly Bowman liked
the sample shoes so much that he offered
to be Phil's business partner and
Bowerman was basically the perfect
partner to have each spent his his life
on the track training athletes was one
of the most experienced track coaches
with countless records and he was
obsessed with the construction of track
shoes so Phil and bowermont agreed to be
co-founders of this new company Blue
Ribbon sports with both of them
investing 500 each into their new
company and all that money was used to
order 300 pairs of shoes from Japan at a
price of roughly 3.33 per pair Phil also
wrote a letter to onitsuka asking if
Blue Ribbon Sports could be the
exclusive distributor of these tiger
shoes in the Western United States they
agreed and shortly after in April 1964 a
shipment of 300 tiger shoes arrived from
Japan Phil now had a shooter player a
business partner and hundreds of shoes
to sell it was just one problem
what Phil didn't have was anywhere to
sell the shoes you see when Phil went to
all of the local sporting goods stores
to see if they'd stock the shoe they
didn't take Phil seriously and they said
they had no need for another track shoe
so Phil realized he was gonna have to
[Music]
Phil had 300 pairs of shoes to sell so
he began going to track meets and
running clubs and started selling the
shoes from the trunk of his car he would
enthusiastically show the shoes to
Runners coaches and fans at the running
track his commitment and drive together
with bowerman's connections saw them
sell out all 300 pairs within just three
months it was interesting because in the
past when Phil had tried sales he'd
failed horribly but that was when he was
selling encyclopedias door to door when
it came to these running shoes selling
them seemed strangely easy and Phil felt
that was because customers could sense
his personal belief in the product his
conviction that these shoes genuinely
were better than Alternatives made
people want to buy them plus Billy there
was demand for these high quality shoes
an affordable price as by the end of
their first year Blue Ribbon Sports had
sold 8 000 worth of shoes and so Phil
used the money he made to order 900 more
pairs from Japan shortly after this they
recruited some sales reps mostly
ex-runners who shared their vision of
what the company was trying to do and
who solely worked on commission they'd
get two dollars for every pair of shoes
they sold and so they drove all over
America to every high school and college
track meet they could this success
allowed Phil to get a business loan from
the bank so they could move Blue Ribbon
Sports out of Phil's parents basement
and into its first real office however
since Bowerman still had a full-time job
Phil decided to hire the company's first
full-time employee Jeff Johnson The Man
Who Would later go on to come up with
the company's iconic name Nike but for
now they were still called Blue Ribbon
Sports and it was sales Rising rapidly
in 1966 they were able to open their own
retail store to sell their shoes kind of
a move they made was they designed the
store to be a sanctuary for runners a
place they could hang out and talk and
browse shells full of books related to
running which helped them attract a lot
of attention to the store and whilst
Phil and the new employee Johnson worked
on the business side of the operations
Bauman was handling the creative side of
things for example Bowerman began to
Tinker with the shoe designs once a
shipment arrived from Japan he would
take a few shoes and rip them apart to
see how they were designed once he'd
studied the shoe he would make notes on
how to improve them these notes were
then sent to the manufacturer in Japan
asking for changes to be made before the
next shipment you could say that Balman
was basically now designing on its Super
Shoes for them around this time Bowman
also started coaching popular Runners
and future Olympians helping to build
their brand further and sell even more
shoes and not just that but Bowerman
almost single-handedly made jogging
popular you see back in the 60s jogging
was not a mainstream exercise at all but
Bauman wrote a book about it that
surprisingly sold over a million copies
and helped kick-start the popularity of
jogging which of course meant more
people were in need of jogging shoes and
what better place to buy them than the
company of the man would popularize
jogging in the first place in fact one
of Bauman's shoe designs called the
Cortez became the highest selling shoe
in 1969 with blue ribbon making a total
revenue of around three hundred thousand
dollars so business was booming and
everything seemed to be going great
between Phil's company Blue Ribbon
Sports and onitsuka in Japan together
they'd created a partnership that
brought success to both parties but what
Phil didn't know was the onitsuka was
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[Music]
Phil asked onitsuka if Blue Ribbon
Sports could be the exclusive
distributor for Tiger shoes across all
of America not just the West like
previously agreed but they initially
said no because they didn't think Phil's
company was big or established enough to
handle that and they wanted someone with
offices on the East Coast on the spot
Phil immediately said but we do have
offices on the East coasts in reality
they didn't but onitsuka believed fell
and was impressed that blue ribbon
seemed like a much bigger company than
they'd initially realized so they struck
a deal for Blue Ribbon to be the
exclusive us partner for the tiger brand
shoes and Phil ordered 20 000 more pairs
the executive from onitsuka told them
he'd ship them to Blue ribbons East
Coast office which of course they didn't
really have so after the meeting to try
and raise money for these new offices
Phil sent out flyers advertising the
chance for people to invest in Blue
Ribbon Sports they said it was a
fast-growing shoe company looking to
expand and people could buy shares they
then sat back and waited for people to
invest but nobody at all responded it
was humiliating and also extremely
worrying that nobody seemed to believe
in the potential of their business as
nobody at all wanted to invest their
money the only money they did get was
from the parents of one of blue ribbon's
early employees Bob woodell his parents
knew the company desperately needed cash
and offered to put in eight thousand
dollars which was literally their entire
life savings it drained their balance to
almost zero and put them in a very
difficult financial situation but they
wanted to do what they could to give the
company the best chance of survival Phil
didn't want to take their money but the
banks were refusing to loan him anymore
and so he had no other real choice on
the plus side Phil and Bowerman both
loved the shoes created by onitsuka they
respected the quality of the Japanese
brand and of course it seemed a win-win
for both sides because thanks to their
company Blue Ribbon Sports onitsuka had
now become a formidable brand in the
United States so Phil understandably
thought that the future of his company
was with onitsuka but the truth is they
had some problems and they were about to
get even bigger you see the initial
success of Blue Ribbon Sports had led to
the rapid opening of new stores which
often left fill in a risky situation
where he constantly had to worry about
cash flow to support the increase in
stores and employees Phil had to get
more facilities hire more staff and
order more shoes the Cortez for example
had quickly become one of the most
popular shoes in America and they were
selling out faster than they could keep
up with so Phil repeatedly tried to have
onitsuka send the shoes faster to meet
the demand but the Japanese brand
continued to send them at the same Pace
it was only later that Phil found out
that onitsuka had been selling to their
Japanese customers first as their
priority and simply importing whatever
was left over to the US it was unfair
but there wasn't really much Phil could
do to compound the situation onitsuka
was slow to produce the suggestions and
innovations that Phil and Bowerman
shared with them and sometimes they
completely ignored their suggestions
which infuriated Bowerman who'd been
working hard on new designs and
improvements so hoping to improve the
situation with their supplier and
discuss renewing their contracts Phil
arranged another in-person meeting with
a representative from onitsuka a man
named katami but the meeting was strange
kitami said blue ribbon sales were
disappointing and didn't seem that
interested in renewing a long-term deal
with blue ribbon Phil couldn't
understand her he felt his company had
definitely earned the contract extension
after all onitsuka's success in the
United States was down to Blue Ribbon
Sports they'd introduced the tiger brand
in America and sales were growing every
year Phil even showed them a survey that
revealed that 70 of American Runners
wore or owned one of their shoes not to
mention that Bowman had helped improve
their shoe designs Phil had already been
a little suspicious but onitsuko was
planning to make Partnerships with other
Distributors and it was becoming
increasingly clear that something wasn't
right so when katami left the room Phil
took a folder out of his briefcase it
contained a list of 18 athletic shoe
Distributors across the US and a
schedule of appointments to meet with
them it was now clear that onitsuka was
secretly plotting to replace Blue Ribbon
and find a new distributor from their
perspective now that they'd gained a
significant foothold in the United
States thanks to Blue ribbon's efforts
the onitsuka executives decided that
they needed to move on to more
experienced Distributors to expand and
their revenue Phil was outraged but most
of all he was hurt he confronted them
about this and pointed out they still
had a contract in place for at least
another year however the Japanese
Brandman gave Phil an ultimatum either
we buy 51 of Blue Ribbon sports or
otherwise we make deals with other
distribution Partners Phil Knight
immediately rejected their offer to buy
his company he didn't want to sell and
he couldn't believe this was happening
but Phil knew there was really only one
way forward now if onitsuko was going to
start partnering with other American
foreign [Music]
[Music]
it took a little while for Phil to get
over the shock of everything that had
gone down in the meeting but when he did
he decided to strike back Phil and
Bowerman realized that losing the
onitsuka tiger brand wasn't necessarily
the end of the world in fact maybe this
was an opportunity they could be so much
more than just a distributor after all
the Cortez onitsuka's best-selling shoe
was Bauman's design so why couldn't Blue
Ribbon just make their own shoes and
sell them plus that way they wouldn't
have to keep waiting for shipments to
arrive and they could make as many shoes
as they wanted so the two co-founders
gathered the whole team together and
began working on creating their own
original shoes instead of selling
onitsuka's tiger shoes but first they
needed a new name Phil initially wanted
to call their new brand Dimension six
but pretty much nobody else liked that
name and then Jeff Johnson their first
employee said an idea had suddenly come
to him in a dream the previous night
let's call it Nike Phil just looked at
him blankly and said what it's the Greek
Wing goddess of Victory Johnson
explained don't throw it back to the
temple he visited whilst traveling he
had to admit that connection to Victory
certainly made a lot of sense for a
sports brand but the truth was that Phil
himself actually wasn't that Keen on the
name Nike at first but the problem was
they were running out of time and had to
decide on a name right now because they
needed to start making plans for their
new shoe brand as soon as possible so
left with few other options Phil agreed
to go with the name Nike next up they
needed a logo so they recruited a
graphic design student from a nearby
University to create it and she came up
with the now iconic swoosh she got paid
just 35 dollars for it but now that the
name and logo were sorted out there was
one more crucial thing they needed to do
to really take the fight to onitsuka
Phil needed a shoe manufacturer who
could produce their new high quality
shoes and affordable price they already
had the design they wanted to use for
their first shoe with the Nike logo
which was basically a new version of the
popular Cortez but they had to find the
right manufacturer to make it and all
the initial manufacturers they tested
seemed to have quality control issues at
a company meeting Phil told his
employees our partnership with onitsuka
is over and we're completely on our own
now we have this this new line we're
working on now which we're calling Nike
but there are big problems with the
quality we're trying to get it fixed but
we don't have much time so there's no
margin for error Phil looked down the
table at the employees in the meeting
and realized everyone was slumped in
their seats looking defeated as if
losing their deal with onitsuka meant
the end of Blue Ribbon Sports Phil
realized he needed to inspire his team
and so he pivoted his speech and said so
in other words this is the moment we've
been waiting for everyone around the
table looked up and Phil continued no
more selling someone else's brand
onitsuko has been holding us down for
years their late deliveries their mixed
up orders their refusal to hear and
Implement our design ideas let's not
look at this as a crisis let's look at
this as our Liberation as Phil stopped
speaking he could sense a wave of relief
around the table the mood had changed
after Phil's speech and the employees
felt that maybe just maybe this wasn't
the end of the company at all they all
got to work on how they could make this
new Nike brand successful and how they
could partner with the right
manufacturers although Phil made sure he
didn't make the same mistake he'd made
with onitsuka so rather than committing
to just one manufacturer he established
a network of Manufacturers which gave
him full control over production that
wasn't quite the end of their dealings
with onitsuka though as they actually
sued Blue Ribbon Sports claiming
starting this new Nike brand reached
their contract which stated Blue Ribbon
would only sell tiger shoes Phil then
countersued that onitsuka had actively
been trying to break its exclusivity
deal with blue ribbon Sports and in the
end both parties eventually settled and
went their separate ways in 1971 the
company Blue Ribbon Sports officially
became Nike and at by this point a
company cost a million dollars in sales
per year and from then onwards Nike's
expansion skyrocketed as they began to
grow into the most famous sports brand
we know and recognize today at the 1972
Olympics Nike featured heavily giving
them a lot of exposure on a global stage
Revenue rapidly Rose to 14 million
dollars in 1976 and then doubled in just
one year to 28 million dollars in 1977.
around that time fill opened new
factories around the world and continue
to reinvest everything in more grow and
it was working Nike was on a huge
upswing they weren't only gaining market
share but they were also fast becoming a
fashion statements however their success
was being envied by a lot of American
brands who were watching very closely
waiting for the moment to strike the
[Music]
things seem to be going great for Nike
sales are amazing word of mouth was
positive and their legal disputes were
behind them the only slight problem was
they were actually still quite cash poor
Phil was reinvesting every penny he
could back into more growth and even
borrowing money to help ramp up
expansion faster to him it was grow or
die so he kept ordering more and more
shoes opening more stores and hiring
more employees to help fund this
expansion Phil was thinking about taking
the company public but then one morning
he got a letter that changed everything
it was a bill from the U.S Custom
Service saying Nike owed them 25 million
dollars at first Phil thought it must be
a joke or some strange mistake if they
actually did owe 25 million to the
government they'd be out of business it
would all be over just like that
everything they'd worked for after a few
phone calls it soon became clear that
the bill was completely real and the
actual reason behind it was something
surprisingly Sinister what had happened
was that Nike's American competitors
Keds Converse and a few small factories
were getting scared of Nike's popularity
and growth they saw Nike as a threat
that could potentially shut them out of
the market so they'd sent
representatives to Washington and
lobbied the customs office to
effectively put a stop to Nike's growth
by enforcing something called American
selling price ASP was an archaic rule
from before the Great Depression but
said if there was a shoe manufactured by
a company in the US then anyone
importing a similar shoe from abroad
must pay an import duty of 20 of the
competitors selling price the whole idea
behind this law was to promote
nationalism and essentially prevent
companies from importing products that
could be made in America and Nike's
competitors had lobbied the federal
government to enforce this old rule you
see because Nike wasn't manufacturing
its shoes in America but in Japan their
competitors realized all they needed to
do was make a copy of Nike shoes and
make them extremely expensive by doing
that they had successfully created an
American Alternative and even though
Nike shoes were the original thing
because Nike's products were being
imported from another country they got
hit with the ridiculously high import
fees because of this American selling
price rule this basically meant Phil
would have to pay an additional six
dollars on every pair they imported to
make matters much worse the import
duties were back dated three years on
every pair of shoes Nike had imported
which ultimately had led to the 25
million dollar bill they received Phil
knew there was no way Knight could pay
that much money it would bankrupt them
there was only one option and that was
the fights Phil hired one of the best
lawyers he could find and for three
brutal Years Phil went neck and neck
with the customs office and the likes of
Converse and kids in courts Mike also
produced a TV commercial telling their
story and explaining what was happening
to them to try and get customers fired
up and on their side and it worked
Nike's competitors and their accomplices
in the government realized Nike were
gonna fight this with everything they
had and in the end they reached a
settlement of 9 million dollars instead
of 25 million Phil still thought this
was outrageous but in those three years
the legal battle had been going on Nike
had grown tremendously and their sales
had reached a whopping 440 million
dollars so they could now afford to
settle and put the whole thing behind
them it had been another close scare but
the company had now made it through
stronger than ever and now it was time
foreign [Music]
[Music]
Nike became a public company which
effectively killed its cash flow
problems completely and allowed them to
ramp up their growth even more and since
Phil alone owned a 46 share of the
company he became a very wealthy man but
also remember earlier on the parents of
one of Nike's early employees invested
their life savings into helping the
company survive when they were low on
cash well they hadn't done that as an
investment to make money at all they'd
simply done it to try and keep the
company alive but they'd been given
shares in return and so after Nike went
public Phil had one of the happiest
moments of his career when he got to
tell them their initial 8 000 investment
was now worth 1.6 million dollars that
money was obviously completely
life-changing for them and they couldn't
believe it from there on night became
bigger and bigger Phil sign deals with
two Chinese factories which made Nike
the first American Shoemaker to be
allowed to do business in China they
also branched out into selling clothes
and this not only helped them make more
money and attract more investors but it
also gave them an advantage when
negotiating endorsement deals with
athletes as they could now offer them
more than just shoes and celebrity
endorsements were actually one of Nike's
biggest keys to success they agreed
deals with rookie athletes like Tiger
Woods and LeBron James in the very early
stages of their career and of course
when they went on to become massive
stars it massively boosted Nike's
popularity although their most lucrative
endorsement of all was with Michael
Jordan they spotted his potential early
on and signed in for a sponsorship deal
back in the beginning of his career and
as Jordan Rose to stardom his shoe line
Air Jordans went on to make hundreds of
millions of dollars by 1986 Nike had
overtaken Converse to become the biggest
sports brand in America and at this
point you might be thinking that Nike is
simply an incredible business success
story but here's the thing behind all
that success was a very dark secrets a
secret that involved violent
intimidation slavery harassment and
child labor and that secret was about to
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[Music]
it was 1991 and everyone working at Nike
was having a normal day but American
labor activist Jeffrey Ballinger
published a report that nearly destroyed
Nike's entire reputation in his film
behind the swoosh he claimed that Nike
secretly used child labor and that the
company exploited people living in
underdeveloped countries the video
claimed that workers in these countries
were forced to live in slums or near
open sewers where they shared toilets
and bath water with over a hundred
different families these workers were
then cramped in factories which were
often housed in damaged buildings that
post fire risks during their work hours
they were denied access to drinking
water or toilets and at the end of the
day after which they'd gone through all
this inhumane treatments they were paid
a mega sum of 1.25 cents then in 2001 a
BBC documentary uncovered use of child
labor and poor working conditions in a
Cambodian Factory used by Nike the
document focused on six girls who all
work seven days a week often 16 hours a
day all of these claims that led to a
lot of backlash with many students and
activists around the world participating
in protest against Nike some people
called for a boycott of all their
products and several universities cut
ties with the shoe brand completely
sales dropped and Nike stock fell by 15
with the company being portrayed in the
media as a company willing to exploit
workers and deprive them of their basic
wages needed to sustain themselves Phil
Knight had always been in a position
where him and his company were the good
guys but this time he was the bad guy it
was a different Challenge and he
responded by promising he would
personally ensure conditions that Nike
factories improved around the world
after that Nike spent the next decade
trying to fix its reputation of course
the truth is the company was basically
founded on the principle of finding
cheaper labor abroad in order to be able
to make good quality shoes that were
cheaper than competitors but to be fair
Nike definitely did make changes to
significantly improved conditions for
overseas workers and many human rights
activists have acknowledged their
efforts to minimize these problems but
allegations never fully stopped a 2005
report by the company found that workers
in up to half of its factories were
still forced to work 60-hour weeks made
less than minimum wage oh we're denied
the use of bathrooms and drinking water
and even more recently in December 2021
the European Center for constitutional
and human rights filed a criminal
complaint against Nike and other brands
alleging that they benefited from the
use of forced labor in China now to be
fair and give the other side to this
Phil would argue that those factories
involved in these scandals weren't
actually Nikes they just rented them
along with other tenants so Nike wasn't
directly controlling these factories
they just made deals with them and
whilst that's not an excuse Phil is
right that singling Out Nike for using
sweatshops misses the bigger picture
which is the countless multinational
companies use overseas labor with very
questionable conditions in parts of
their supply chains many of the items we
all use every day were quite possibly
produced with cheap labor in terrible
working conditions if making videos for
this channel has taught me anything is
that if you look into almost any
business deep enough you're gonna find a
darker side but what's particularly
interesting about Nike is how they've
foreign [Music]
[Music]
Nike launched a new ad titled dream
crazy with former NFL player Colin
Kaepernick as the voice and face of its
new just do it campaign Kaepernick
himself posted a black and white
close-up photo of his face with the
words believe in something even if it
means sacrificing everything that
statement was in reference to a
controversy that began back in 2016 when
Kaepernick himself triggered a political
Scandal by kneeling during the U.S
national anthem to protest against
racial Injustice and police brutality in
America many people including then
president Donald Trump claim that
Kaepernick was disrespecting the flag
and the country so Nike's partnership
with Colin was controversial to say the
least their stock price immediately fell
2.5 percent and many people across the
United States destroyed their Nike shoes
and declared a boycott of the company
but then something interesting happened
a lot of people who shared the same
sentiment behind the theme of Nike's ad
came on their side and many people
started buying and wearing Nike's
products as a show of support thanks to
the controversial and bold marketing
move Nike got more attention than ever
and broke many records gaining 6 billion
dollars in brand value 163 million in
media and an additional 31 bump in sales
the campaign also earned Nike its first
Emmy Award since 2002 for the most
outstanding commercial of 2019. in the
end all the shouts for the boycott of
Nike products had little significance or
any major impact on its sales and this
wasn't the first time that Nike had
leaned into controversies to make more
money in 1988 Nike released its first
just do it campaign the campaign touched
on the subject of ageism featuring an 80
year old marathon runner who ran 17
miles every morning then in February
1995 Nike released a just do it Campaign
which featured a HIV positive Runner so
why does Nike take risks in their ads
that they know will create some
controversy well the reality is Nike
have an experienced marketing team but
assess the risk versus reward and makes
a calculated decision in the case of ads
like these they weighed up the costs and
believed that the benefits were worth it
and it was many other factors obviously
affect sales it's clear that their ad
campaigns have played a huge role in the
company's success between when the first
just do it campaign launched in 1988 to
1998 Nike increased sales from 800
million dollars to 9.2 billion however
after 40 Years Phil stepped down as CEO
his story is pretty remarkable starting
out as a kid with no experience heading
to Japan to try and make his crazy idea
a reality and ultimately building the
biggest sports brand in the entire world
but what about you what's your crazy
idea because if one thing is clear from
Phil's story it's that the timing is
never perfect sometimes you've just got
to take the leap of faith or in the
words of Nike just do it and if you want
some more business stories and lessons
to inspire you check out this video
right here next that I think you're
really gonna like I'll hopefully see you
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