0:03 first year of sales were 1964 and we
0:04 sold eight thousand dollars we made a
0:08 240 profit today his company Nike has
0:10 grown in 30 billion dollars in sales
0:18 last year thanks to Shopify for
0:20 sponsoring this video [Music]
0:23 [Music]
0:26 Little Knights suddenly woke up he'd
0:27 just been having a nightmare where his
0:30 life had no purpose except it wasn't
0:33 just a dream this was his reality unsure
0:34 what to do with his life Phil went to
0:36 the University of Oregon where he
0:38 studied journalism and developed his
0:40 interest in running it was here that he
0:42 met with the track coach Bill Bowerman a
0:43 famous coach in America who trained
0:46 Olympic athletes Phil trained under
0:48 Bowerman as a middle distance Runner and
0:49 the two men struck up a great friendship
0:51 they didn't know it at the time but that
0:52 friendship would later become the
0:54 foundation of the biggest Sports company
0:57 in the world but we'll get to that after
0:59 graduating with the journalism degree in
1:01 1959 Phil was still very confused about
1:03 what to do with his life deep down he'd
1:05 wanted to become an athlete but at 24
1:08 years old he had to admit it the dream
1:10 was dead despite all the lessons and
1:12 training at College he just hadn't got
1:14 to the level needed and now he felt lost
1:16 Phil even enlisted in the Army and
1:18 completed a year of service thinking
1:19 that might give him a sense of direction
1:22 it didn't he was left frustrated and
1:24 angry so after the Army Phil enrolled in
1:25 The Graduate School of Business at
1:28 Stanford University and it was here at
1:29 Stanford that he finally found his
1:31 calling whilst working on an assignment
1:33 to invent a new business Philip had an
1:35 idea that would change his life forever
1:37 on a piece of paper he wrote can
1:39 Japanese sport shoes due to German
1:41 sports shoes or Japanese cameras did to
1:44 German cameras you see Phil had noticed
1:46 how two Japanese camera come Nikon and
1:48 Canon had replaced German cameras in the
1:49 market which used to be much more
1:51 dominant and he wondered if the same
1:53 thing could happen with running shoes
1:55 now at the time two German companies
1:57 Adidas and Puma were the leading running
1:59 shoe brands in America and they had a
2:01 very stronghold of the markets but Phil
2:02 had heard the Japanese were
2:04 experimenting with some new shoe designs
2:05 and he also knew that it would be
2:07 cheaper to produce shoes in Japan as
2:09 well so Phil got extremely invested in
2:10 this assignment for his business class
2:12 and genuinely started to believe that
2:13 there was a great business opportunity
2:16 here to import Japanese shoes into the
2:17 American Market
2:19 but when Phil presented this to the
2:21 class nobody else seemed to see it that
2:22 way he even told some of his friends
2:24 about the idea none of them seemed to
2:26 pay much attention either of course if
2:27 Phil did want to actually pursue this
2:29 idea himself he knew how difficult it
2:31 would be he didn't know anyone in Japan
2:33 to reach out to and he knew absolutely
2:35 nothing about importing Japanese shoes
2:37 or even had to sell them in America for
2:40 that matter so could he really just do it
2:40 it [Music]
2:51 [Music]
2:53 after graduating from business school in
2:56 1962 Phil found himself back at home
2:58 living with his parents that familiar
2:59 feeling was back that his life was just
3:01 passing him by and he needed to do
3:03 something meaningful one day Phil
3:04 finally decided he couldn't just keep
3:06 waiting for some magic opportunity and
3:07 he had to go and create an opportunity
3:10 for himself so fill in one of his
3:11 friends decided to take a long trip to
3:13 go traveling around the world Phil had
3:15 stayed obsessed with his idea of
3:16 bringing Japanese shoes to the American
3:18 market and so he figured as part of the
3:20 trip he would visit Japan to see if he
3:22 could make his crazy idea into a reality
3:24 but first they visited classic European
3:26 cities backpacked through Asia and even
3:28 stopped in Greece where Phil saw the
3:30 Temple of Athena Nike dedicated to the
3:32 goddess of Victory Phil and his friend
3:34 then went to Hawaii and that's where
3:35 things changed [Music]
3:41 bill and his friends surfed relaxed on
3:42 the beach and loved the whole place so
3:44 much they ended up getting jobs in
3:46 Honolulu selling encyclopedias door to
3:48 door simply so they could afford to stay
3:49 in this Hawaiian Paradise a little
3:52 longer however Phil was pretty shy and
3:53 didn't do well at the sales job at all
3:55 and eventually he decided he'd done
3:56 enough relaxing and it was time to leave
3:58 his friend had met a girl and stayed
4:01 behind though so Phil said goodbye and
4:03 continued his trip alone and Phil
4:04 already knew exactly where he wanted to
4:07 go next it was time to get serious about
4:09 his dream it was time to go to Japan [Music]
4:15 foreign
4:18 1962 in the city of Kobe Phil came
4:19 across one particular running shoot that
4:21 caught his eye the brand was called
4:23 tiger and the shoes were manufactured by
4:25 a company called onitsuka not only did
4:27 he like the design the shoes take the
4:29 two main criteria Phil needed they were
4:31 clearly high quality shoes and yet they
4:33 were relatively cheap Phil liked the
4:35 shoe so much that he cold called the
4:36 owners of the shoe brand and managed to
4:38 arrange a meeting feeling both nervous
4:40 and excited Phil put on a suit and went
4:41 to meet the manufacturers of the
4:44 Japanese shoe he liked so much before
4:45 going he bought a copy of how to do
4:47 business with the Japanese and memorized
4:49 as much information as he could despite
4:51 Phil having zero expertise in the
4:53 business he introduced himself in the
4:55 meeting as an American shoe distributor
4:56 who was going to help Market their shoes
4:59 in America it turns out the onitsuka had
5:00 been looking for a way to sell it shoes
5:02 in America already so they were actually
5:04 very excited when Phil came to them with
5:06 the same idea perhaps that's why they
5:07 were willing to overlook the fact that
5:09 filled it like he was fresh at a
5:11 university which he quite literally was
5:13 but despite being a recent graduate in
5:15 his 20s with no actual experience into
5:17 running a business Phil had memorized
5:19 lots of facts and statistics about the
5:20 American shoe market from his assignment
5:22 at University and so he was basically
5:24 able to recite parts of his presentation
5:26 during the meeting and so it looked like
5:28 he completely knew what he was talking
5:29 about the Japanese managers were
5:32 impressed however one of the mass fill a
5:34 very simple question what's the name of
5:36 a company you're from Phil suddenly felt
5:38 his heart beating faster of course the
5:40 truth was Phil didn't have a company
5:42 name because he didn't actually have a
5:44 company yet he just had this crazy idea
5:46 to import Japanese shoes to America
5:48 Phil's mind started racing for a split
5:50 second he felt completely out of his
5:51 depth I just wanted to be back home with
5:53 his parents and that's when his mind
5:55 suddenly flashed to the blue ribbons
5:56 from his childhood that he used to have
5:58 hung up on his wall after a second pause
6:01 Phil replied gentlemen I represent blue
6:03 ribbon Sports of Portland Oregon he just
6:05 kind of blurted the name out of nowhere
6:07 since in truth he'd never expected to
6:09 get this far but after inventing a
6:10 company name on the spots Phil could
6:12 feel his confidence increasing he went
6:14 on to explain the size of the American
6:16 market and how on its because tiger
6:17 shoes were different to what they had in
6:18 America meaning there was a huge
6:20 opportunity if onitsuka and him teamed
6:23 up the Japanese company was so Keen they
6:25 basically began pitching Phil and asked
6:26 him if he would be their distribution
6:28 partner in the U.S to which Phil
6:30 obviously agreed and then he asked them
6:32 to ship over some samples to his address
6:34 in America it seemed like Phil's crazy
6:37 idea was about to become a reality [Music]
6:43 [Music]
6:47 one month two months three months four
6:49 months the time kept passing and no shoe
6:51 samples arrived Phil couldn't understand
6:53 it he'd returned to America so excited
6:55 and optimistic because it seemed like
6:57 his meeting with the Japanese shoe
6:59 manufacturer had gone so well so he
7:00 wrote to them to find out what was going
7:02 on with the samples he'd been promised
7:04 which he'd paid fifty dollars for he
7:05 then got a letter back saying she's
7:08 coming in just a little more days Phil
7:10 was back at his parents house and so he
7:11 showed the letter to his dad who just
7:13 chuckled and said son that 50 bucks is
7:15 long gone
7:17 Phil really been scammed depressed Phil
7:19 went and got a job to try and make some
7:20 money he ended up working as an
7:22 accountant but he didn't really like it
7:24 and then suddenly one morning 12 sample
7:26 pairs of shoes from Japan arrived on its
7:28 doorstep they were finally here and it
7:30 was worth the wait they were just like
7:32 he'd hoped Phil was so excited that he
7:33 went to see his old running coach Bill
7:35 Bowerman to show him the new shoes and
7:37 see what he thought Bowerman was highly
7:38 respected in the world of running and
7:39 he'd always been obsessed with improving
7:42 athlete's shoes in fact back when Phil's
7:43 at University with him he'd notice
7:45 Bowerman take students shoes and cut
7:47 them open and make adjustments for
7:49 example adding more cushion or using
7:51 more lightweight materials and then
7:52 stitching them back together sometimes
7:54 his experiments just made their feet
7:56 painful but quite often Powerman
7:58 improved the shoes and made them better
7:59 or more comfortable for running one
8:01 thing was for sure Bauman really knew
8:03 his stuff when it came to running shoes
8:04 and that's why Phil had been so Keen to
8:06 hear his opinion on his new Japanese
8:08 running shoes surprisingly Bowman liked
8:10 the sample shoes so much that he offered
8:12 to be Phil's business partner and
8:13 Bowerman was basically the perfect
8:15 partner to have each spent his his life
8:17 on the track training athletes was one
8:18 of the most experienced track coaches
8:20 with countless records and he was
8:21 obsessed with the construction of track
8:24 shoes so Phil and bowermont agreed to be
8:26 co-founders of this new company Blue
8:27 Ribbon sports with both of them
8:29 investing 500 each into their new
8:31 company and all that money was used to
8:34 order 300 pairs of shoes from Japan at a
8:37 price of roughly 3.33 per pair Phil also
8:38 wrote a letter to onitsuka asking if
8:40 Blue Ribbon Sports could be the
8:41 exclusive distributor of these tiger
8:44 shoes in the Western United States they
8:47 agreed and shortly after in April 1964 a
8:49 shipment of 300 tiger shoes arrived from
8:51 Japan Phil now had a shooter player a
8:53 business partner and hundreds of shoes
8:56 to sell it was just one problem
8:58 what Phil didn't have was anywhere to
9:01 sell the shoes you see when Phil went to
9:02 all of the local sporting goods stores
9:04 to see if they'd stock the shoe they
9:05 didn't take Phil seriously and they said
9:07 they had no need for another track shoe
9:09 so Phil realized he was gonna have to
9:15 [Music]
9:18 Phil had 300 pairs of shoes to sell so
9:20 he began going to track meets and
9:22 running clubs and started selling the
9:24 shoes from the trunk of his car he would
9:25 enthusiastically show the shoes to
9:27 Runners coaches and fans at the running
9:29 track his commitment and drive together
9:31 with bowerman's connections saw them
9:33 sell out all 300 pairs within just three
9:36 months it was interesting because in the
9:37 past when Phil had tried sales he'd
9:39 failed horribly but that was when he was
9:41 selling encyclopedias door to door when
9:43 it came to these running shoes selling
9:45 them seemed strangely easy and Phil felt
9:47 that was because customers could sense
9:49 his personal belief in the product his
9:50 conviction that these shoes genuinely
9:51 were better than Alternatives made
9:54 people want to buy them plus Billy there
9:55 was demand for these high quality shoes
9:57 an affordable price as by the end of
9:59 their first year Blue Ribbon Sports had
10:01 sold 8 000 worth of shoes and so Phil
10:04 used the money he made to order 900 more
10:06 pairs from Japan shortly after this they
10:08 recruited some sales reps mostly
10:09 ex-runners who shared their vision of
10:11 what the company was trying to do and
10:13 who solely worked on commission they'd
10:14 get two dollars for every pair of shoes
10:16 they sold and so they drove all over
10:18 America to every high school and college
10:20 track meet they could this success
10:21 allowed Phil to get a business loan from
10:23 the bank so they could move Blue Ribbon
10:24 Sports out of Phil's parents basement
10:27 and into its first real office however
10:28 since Bowerman still had a full-time job
10:30 Phil decided to hire the company's first
10:33 full-time employee Jeff Johnson The Man
10:34 Who Would later go on to come up with
10:37 the company's iconic name Nike but for
10:38 now they were still called Blue Ribbon
10:40 Sports and it was sales Rising rapidly
10:43 in 1966 they were able to open their own
10:45 retail store to sell their shoes kind of
10:47 a move they made was they designed the
10:48 store to be a sanctuary for runners a
10:50 place they could hang out and talk and
10:52 browse shells full of books related to
10:53 running which helped them attract a lot
10:55 of attention to the store and whilst
10:57 Phil and the new employee Johnson worked
10:58 on the business side of the operations
11:00 Bauman was handling the creative side of
11:02 things for example Bowerman began to
11:05 Tinker with the shoe designs once a
11:06 shipment arrived from Japan he would
11:08 take a few shoes and rip them apart to
11:10 see how they were designed once he'd
11:11 studied the shoe he would make notes on
11:13 how to improve them these notes were
11:14 then sent to the manufacturer in Japan
11:16 asking for changes to be made before the
11:18 next shipment you could say that Balman
11:20 was basically now designing on its Super
11:23 Shoes for them around this time Bowman
11:24 also started coaching popular Runners
11:26 and future Olympians helping to build
11:28 their brand further and sell even more
11:30 shoes and not just that but Bowerman
11:32 almost single-handedly made jogging
11:35 popular you see back in the 60s jogging
11:37 was not a mainstream exercise at all but
11:39 Bauman wrote a book about it that
11:40 surprisingly sold over a million copies
11:42 and helped kick-start the popularity of
11:45 jogging which of course meant more
11:46 people were in need of jogging shoes and
11:48 what better place to buy them than the
11:50 company of the man would popularize
11:52 jogging in the first place in fact one
11:53 of Bauman's shoe designs called the
11:55 Cortez became the highest selling shoe
11:58 in 1969 with blue ribbon making a total
12:00 revenue of around three hundred thousand
12:03 dollars so business was booming and
12:04 everything seemed to be going great
12:05 between Phil's company Blue Ribbon
12:08 Sports and onitsuka in Japan together
12:09 they'd created a partnership that
12:12 brought success to both parties but what
12:15 Phil didn't know was the onitsuka was
12:23 hearing this story of Nike shows how
12:24 difficult it was for entrepreneurs to
12:26 execute on their ideas back then Phil
12:28 literally started by selling shoes out
12:31 of his car but now anyone with an idea
12:32 for a product can start selling online
12:36 quickly and easily with Shopify Shopify
12:37 allows anyone even those with no
12:40 technical skills at all to create grow
12:42 and manage a business what I love about
12:45 Shopify is how much time it saves you in
12:46 just a few clicks you can create a
12:48 stunning professional looking online
12:50 store that's completely tailored to your
12:52 business and begins selling your
12:54 products and receiving payments for me
12:56 having an online business had always
12:57 been my goal I wanted to be able to
12:59 travel anywhere in the world and know
13:01 that wherever I am my business is still
13:03 making money and thanks for the support
13:04 from you guys I've now been able to do
13:06 that but that's why I genuinely think
13:08 Shopify is so awesome it lets
13:10 entrepreneurs with an idea make that
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13:14 anywhere in the world so if you're ready
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13:27 [Music]
13:30 Phil asked onitsuka if Blue Ribbon
13:31 Sports could be the exclusive
13:33 distributor for Tiger shoes across all
13:35 of America not just the West like
13:37 previously agreed but they initially
13:39 said no because they didn't think Phil's
13:40 company was big or established enough to
13:42 handle that and they wanted someone with
13:44 offices on the East Coast on the spot
13:46 Phil immediately said but we do have
13:48 offices on the East coasts in reality
13:50 they didn't but onitsuka believed fell
13:52 and was impressed that blue ribbon
13:53 seemed like a much bigger company than
13:55 they'd initially realized so they struck
13:57 a deal for Blue Ribbon to be the
13:59 exclusive us partner for the tiger brand
14:01 shoes and Phil ordered 20 000 more pairs
14:04 the executive from onitsuka told them
14:05 he'd ship them to Blue ribbons East
14:07 Coast office which of course they didn't
14:10 really have so after the meeting to try
14:11 and raise money for these new offices
14:13 Phil sent out flyers advertising the
14:15 chance for people to invest in Blue
14:17 Ribbon Sports they said it was a
14:18 fast-growing shoe company looking to
14:21 expand and people could buy shares they
14:22 then sat back and waited for people to
14:26 invest but nobody at all responded it
14:27 was humiliating and also extremely
14:29 worrying that nobody seemed to believe
14:31 in the potential of their business as
14:32 nobody at all wanted to invest their
14:34 money the only money they did get was
14:36 from the parents of one of blue ribbon's
14:38 early employees Bob woodell his parents
14:40 knew the company desperately needed cash
14:42 and offered to put in eight thousand
14:44 dollars which was literally their entire
14:46 life savings it drained their balance to
14:48 almost zero and put them in a very
14:50 difficult financial situation but they
14:51 wanted to do what they could to give the
14:53 company the best chance of survival Phil
14:55 didn't want to take their money but the
14:57 banks were refusing to loan him anymore
14:59 and so he had no other real choice on
15:01 the plus side Phil and Bowerman both
15:03 loved the shoes created by onitsuka they
15:04 respected the quality of the Japanese
15:06 brand and of course it seemed a win-win
15:08 for both sides because thanks to their
15:10 company Blue Ribbon Sports onitsuka had
15:12 now become a formidable brand in the
15:14 United States so Phil understandably
15:16 thought that the future of his company
15:19 was with onitsuka but the truth is they
15:21 had some problems and they were about to
15:23 get even bigger you see the initial
15:25 success of Blue Ribbon Sports had led to
15:27 the rapid opening of new stores which
15:29 often left fill in a risky situation
15:31 where he constantly had to worry about
15:32 cash flow to support the increase in
15:34 stores and employees Phil had to get
15:36 more facilities hire more staff and
15:38 order more shoes the Cortez for example
15:40 had quickly become one of the most
15:41 popular shoes in America and they were
15:43 selling out faster than they could keep
15:45 up with so Phil repeatedly tried to have
15:47 onitsuka send the shoes faster to meet
15:49 the demand but the Japanese brand
15:51 continued to send them at the same Pace
15:53 it was only later that Phil found out
15:55 that onitsuka had been selling to their
15:56 Japanese customers first as their
15:58 priority and simply importing whatever
16:00 was left over to the US it was unfair
16:02 but there wasn't really much Phil could
16:04 do to compound the situation onitsuka
16:06 was slow to produce the suggestions and
16:08 innovations that Phil and Bowerman
16:09 shared with them and sometimes they
16:11 completely ignored their suggestions
16:13 which infuriated Bowerman who'd been
16:14 working hard on new designs and
16:16 improvements so hoping to improve the
16:18 situation with their supplier and
16:19 discuss renewing their contracts Phil
16:21 arranged another in-person meeting with
16:23 a representative from onitsuka a man
16:26 named katami but the meeting was strange
16:28 kitami said blue ribbon sales were
16:29 disappointing and didn't seem that
16:31 interested in renewing a long-term deal
16:33 with blue ribbon Phil couldn't
16:34 understand her he felt his company had
16:36 definitely earned the contract extension
16:38 after all onitsuka's success in the
16:40 United States was down to Blue Ribbon
16:42 Sports they'd introduced the tiger brand
16:43 in America and sales were growing every
16:46 year Phil even showed them a survey that
16:47 revealed that 70 of American Runners
16:50 wore or owned one of their shoes not to
16:51 mention that Bowman had helped improve
16:54 their shoe designs Phil had already been
16:56 a little suspicious but onitsuko was
16:57 planning to make Partnerships with other
16:59 Distributors and it was becoming
17:01 increasingly clear that something wasn't
17:04 right so when katami left the room Phil
17:06 took a folder out of his briefcase it
17:08 contained a list of 18 athletic shoe
17:10 Distributors across the US and a
17:11 schedule of appointments to meet with
17:13 them it was now clear that onitsuka was
17:15 secretly plotting to replace Blue Ribbon
17:17 and find a new distributor from their
17:19 perspective now that they'd gained a
17:20 significant foothold in the United
17:22 States thanks to Blue ribbon's efforts
17:24 the onitsuka executives decided that
17:25 they needed to move on to more
17:27 experienced Distributors to expand and
17:30 their revenue Phil was outraged but most
17:32 of all he was hurt he confronted them
17:34 about this and pointed out they still
17:35 had a contract in place for at least
17:37 another year however the Japanese
17:39 Brandman gave Phil an ultimatum either
17:42 we buy 51 of Blue Ribbon sports or
17:43 otherwise we make deals with other
17:45 distribution Partners Phil Knight
17:47 immediately rejected their offer to buy
17:49 his company he didn't want to sell and
17:50 he couldn't believe this was happening
17:53 but Phil knew there was really only one
17:55 way forward now if onitsuko was going to
17:56 start partnering with other American
18:02 foreign [Music]
18:06 [Music]
18:07 it took a little while for Phil to get
18:09 over the shock of everything that had
18:11 gone down in the meeting but when he did
18:13 he decided to strike back Phil and
18:14 Bowerman realized that losing the
18:16 onitsuka tiger brand wasn't necessarily
18:18 the end of the world in fact maybe this
18:20 was an opportunity they could be so much
18:22 more than just a distributor after all
18:24 the Cortez onitsuka's best-selling shoe
18:27 was Bauman's design so why couldn't Blue
18:29 Ribbon just make their own shoes and
18:31 sell them plus that way they wouldn't
18:32 have to keep waiting for shipments to
18:33 arrive and they could make as many shoes
18:36 as they wanted so the two co-founders
18:37 gathered the whole team together and
18:39 began working on creating their own
18:40 original shoes instead of selling
18:43 onitsuka's tiger shoes but first they
18:45 needed a new name Phil initially wanted
18:47 to call their new brand Dimension six
18:49 but pretty much nobody else liked that
18:51 name and then Jeff Johnson their first
18:53 employee said an idea had suddenly come
18:54 to him in a dream the previous night
18:57 let's call it Nike Phil just looked at
19:00 him blankly and said what it's the Greek
19:01 Wing goddess of Victory Johnson
19:03 explained don't throw it back to the
19:05 temple he visited whilst traveling he
19:07 had to admit that connection to Victory
19:08 certainly made a lot of sense for a
19:10 sports brand but the truth was that Phil
19:12 himself actually wasn't that Keen on the
19:14 name Nike at first but the problem was
19:16 they were running out of time and had to
19:18 decide on a name right now because they
19:19 needed to start making plans for their
19:22 new shoe brand as soon as possible so
19:24 left with few other options Phil agreed
19:26 to go with the name Nike next up they
19:28 needed a logo so they recruited a
19:30 graphic design student from a nearby
19:32 University to create it and she came up
19:34 with the now iconic swoosh she got paid
19:37 just 35 dollars for it but now that the
19:38 name and logo were sorted out there was
19:40 one more crucial thing they needed to do
19:42 to really take the fight to onitsuka
19:43 Phil needed a shoe manufacturer who
19:45 could produce their new high quality
19:47 shoes and affordable price they already
19:48 had the design they wanted to use for
19:50 their first shoe with the Nike logo
19:52 which was basically a new version of the
19:54 popular Cortez but they had to find the
19:56 right manufacturer to make it and all
19:57 the initial manufacturers they tested
20:00 seemed to have quality control issues at
20:01 a company meeting Phil told his
20:03 employees our partnership with onitsuka
20:05 is over and we're completely on our own
20:06 now we have this this new line we're
20:08 working on now which we're calling Nike
20:09 but there are big problems with the
20:11 quality we're trying to get it fixed but
20:13 we don't have much time so there's no
20:15 margin for error Phil looked down the
20:16 table at the employees in the meeting
20:18 and realized everyone was slumped in
20:19 their seats looking defeated as if
20:21 losing their deal with onitsuka meant
20:23 the end of Blue Ribbon Sports Phil
20:25 realized he needed to inspire his team
20:28 and so he pivoted his speech and said so
20:30 in other words this is the moment we've
20:32 been waiting for everyone around the
20:34 table looked up and Phil continued no
20:36 more selling someone else's brand
20:38 onitsuko has been holding us down for
20:40 years their late deliveries their mixed
20:42 up orders their refusal to hear and
20:43 Implement our design ideas let's not
20:45 look at this as a crisis let's look at
20:47 this as our Liberation as Phil stopped
20:49 speaking he could sense a wave of relief
20:51 around the table the mood had changed
20:53 after Phil's speech and the employees
20:55 felt that maybe just maybe this wasn't
20:57 the end of the company at all they all
20:59 got to work on how they could make this
21:01 new Nike brand successful and how they
21:01 could partner with the right
21:04 manufacturers although Phil made sure he
21:05 didn't make the same mistake he'd made
21:07 with onitsuka so rather than committing
21:09 to just one manufacturer he established
21:11 a network of Manufacturers which gave
21:13 him full control over production that
21:14 wasn't quite the end of their dealings
21:16 with onitsuka though as they actually
21:18 sued Blue Ribbon Sports claiming
21:19 starting this new Nike brand reached
21:21 their contract which stated Blue Ribbon
21:23 would only sell tiger shoes Phil then
21:25 countersued that onitsuka had actively
21:27 been trying to break its exclusivity
21:29 deal with blue ribbon Sports and in the
21:31 end both parties eventually settled and
21:34 went their separate ways in 1971 the
21:36 company Blue Ribbon Sports officially
21:38 became Nike and at by this point a
21:39 company cost a million dollars in sales
21:42 per year and from then onwards Nike's
21:44 expansion skyrocketed as they began to
21:45 grow into the most famous sports brand
21:48 we know and recognize today at the 1972
21:50 Olympics Nike featured heavily giving
21:53 them a lot of exposure on a global stage
21:55 Revenue rapidly Rose to 14 million
21:58 dollars in 1976 and then doubled in just
22:01 one year to 28 million dollars in 1977.
22:02 around that time fill opened new
22:04 factories around the world and continue
22:06 to reinvest everything in more grow and
22:08 it was working Nike was on a huge
22:10 upswing they weren't only gaining market
22:12 share but they were also fast becoming a
22:15 fashion statements however their success
22:17 was being envied by a lot of American
22:19 brands who were watching very closely
22:21 waiting for the moment to strike the
22:30 [Music]
22:31 things seem to be going great for Nike
22:33 sales are amazing word of mouth was
22:35 positive and their legal disputes were
22:37 behind them the only slight problem was
22:39 they were actually still quite cash poor
22:41 Phil was reinvesting every penny he
22:43 could back into more growth and even
22:44 borrowing money to help ramp up
22:47 expansion faster to him it was grow or
22:49 die so he kept ordering more and more
22:50 shoes opening more stores and hiring
22:52 more employees to help fund this
22:54 expansion Phil was thinking about taking
22:56 the company public but then one morning
22:59 he got a letter that changed everything
23:01 it was a bill from the U.S Custom
23:04 Service saying Nike owed them 25 million
23:06 dollars at first Phil thought it must be
23:08 a joke or some strange mistake if they
23:10 actually did owe 25 million to the
23:12 government they'd be out of business it
23:13 would all be over just like that
23:16 everything they'd worked for after a few
23:18 phone calls it soon became clear that
23:20 the bill was completely real and the
23:22 actual reason behind it was something
23:24 surprisingly Sinister what had happened
23:26 was that Nike's American competitors
23:28 Keds Converse and a few small factories
23:30 were getting scared of Nike's popularity
23:32 and growth they saw Nike as a threat
23:34 that could potentially shut them out of
23:35 the market so they'd sent
23:37 representatives to Washington and
23:39 lobbied the customs office to
23:40 effectively put a stop to Nike's growth
23:42 by enforcing something called American
23:45 selling price ASP was an archaic rule
23:47 from before the Great Depression but
23:48 said if there was a shoe manufactured by
23:50 a company in the US then anyone
23:51 importing a similar shoe from abroad
23:54 must pay an import duty of 20 of the
23:56 competitors selling price the whole idea
23:57 behind this law was to promote
23:59 nationalism and essentially prevent
24:00 companies from importing products that
24:02 could be made in America and Nike's
24:04 competitors had lobbied the federal
24:06 government to enforce this old rule you
24:08 see because Nike wasn't manufacturing
24:10 its shoes in America but in Japan their
24:12 competitors realized all they needed to
24:14 do was make a copy of Nike shoes and
24:16 make them extremely expensive by doing
24:18 that they had successfully created an
24:20 American Alternative and even though
24:21 Nike shoes were the original thing
24:22 because Nike's products were being
24:24 imported from another country they got
24:26 hit with the ridiculously high import
24:27 fees because of this American selling
24:29 price rule this basically meant Phil
24:30 would have to pay an additional six
24:33 dollars on every pair they imported to
24:34 make matters much worse the import
24:37 duties were back dated three years on
24:38 every pair of shoes Nike had imported
24:40 which ultimately had led to the 25
24:43 million dollar bill they received Phil
24:44 knew there was no way Knight could pay
24:46 that much money it would bankrupt them
24:48 there was only one option and that was
24:50 the fights Phil hired one of the best
24:51 lawyers he could find and for three
24:53 brutal Years Phil went neck and neck
24:55 with the customs office and the likes of
24:57 Converse and kids in courts Mike also
24:59 produced a TV commercial telling their
25:00 story and explaining what was happening
25:02 to them to try and get customers fired
25:04 up and on their side and it worked
25:06 Nike's competitors and their accomplices
25:08 in the government realized Nike were
25:09 gonna fight this with everything they
25:11 had and in the end they reached a
25:13 settlement of 9 million dollars instead
25:15 of 25 million Phil still thought this
25:17 was outrageous but in those three years
25:19 the legal battle had been going on Nike
25:21 had grown tremendously and their sales
25:23 had reached a whopping 440 million
25:25 dollars so they could now afford to
25:27 settle and put the whole thing behind
25:29 them it had been another close scare but
25:30 the company had now made it through
25:33 stronger than ever and now it was time
25:42 foreign [Music]
25:46 [Music]
25:49 Nike became a public company which
25:50 effectively killed its cash flow
25:52 problems completely and allowed them to
25:54 ramp up their growth even more and since
25:57 Phil alone owned a 46 share of the
25:59 company he became a very wealthy man but
26:01 also remember earlier on the parents of
26:03 one of Nike's early employees invested
26:05 their life savings into helping the
26:06 company survive when they were low on
26:09 cash well they hadn't done that as an
26:10 investment to make money at all they'd
26:12 simply done it to try and keep the
26:13 company alive but they'd been given
26:16 shares in return and so after Nike went
26:18 public Phil had one of the happiest
26:19 moments of his career when he got to
26:21 tell them their initial 8 000 investment
26:24 was now worth 1.6 million dollars that
26:26 money was obviously completely
26:27 life-changing for them and they couldn't
26:29 believe it from there on night became
26:31 bigger and bigger Phil sign deals with
26:32 two Chinese factories which made Nike
26:34 the first American Shoemaker to be
26:36 allowed to do business in China they
26:37 also branched out into selling clothes
26:39 and this not only helped them make more
26:41 money and attract more investors but it
26:42 also gave them an advantage when
26:44 negotiating endorsement deals with
26:45 athletes as they could now offer them
26:48 more than just shoes and celebrity
26:49 endorsements were actually one of Nike's
26:51 biggest keys to success they agreed
26:53 deals with rookie athletes like Tiger
26:55 Woods and LeBron James in the very early
26:56 stages of their career and of course
26:58 when they went on to become massive
27:00 stars it massively boosted Nike's
27:02 popularity although their most lucrative
27:03 endorsement of all was with Michael
27:05 Jordan they spotted his potential early
27:07 on and signed in for a sponsorship deal
27:09 back in the beginning of his career and
27:11 as Jordan Rose to stardom his shoe line
27:13 Air Jordans went on to make hundreds of
27:16 millions of dollars by 1986 Nike had
27:18 overtaken Converse to become the biggest
27:20 sports brand in America and at this
27:22 point you might be thinking that Nike is
27:23 simply an incredible business success
27:27 story but here's the thing behind all
27:30 that success was a very dark secrets a
27:31 secret that involved violent
27:33 intimidation slavery harassment and
27:36 child labor and that secret was about to
27:41 okay it's time for a very quick break
27:43 while I ask you a favor if you're
27:45 enjoying this video so far please turn
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27:48 media I'm posting many movies about
27:51 business money marketing and more but
27:52 just subscribing doesn't always mean
27:54 you'll see them so please consider
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28:03 [Music]
28:06 it was 1991 and everyone working at Nike
28:07 was having a normal day but American
28:09 labor activist Jeffrey Ballinger
28:11 published a report that nearly destroyed
28:13 Nike's entire reputation in his film
28:15 behind the swoosh he claimed that Nike
28:17 secretly used child labor and that the
28:19 company exploited people living in
28:21 underdeveloped countries the video
28:22 claimed that workers in these countries
28:24 were forced to live in slums or near
28:26 open sewers where they shared toilets
28:27 and bath water with over a hundred
28:29 different families these workers were
28:31 then cramped in factories which were
28:32 often housed in damaged buildings that
28:34 post fire risks during their work hours
28:36 they were denied access to drinking
28:38 water or toilets and at the end of the
28:39 day after which they'd gone through all
28:41 this inhumane treatments they were paid
28:46 a mega sum of 1.25 cents then in 2001 a
28:48 BBC documentary uncovered use of child
28:50 labor and poor working conditions in a
28:52 Cambodian Factory used by Nike the
28:54 document focused on six girls who all
28:57 work seven days a week often 16 hours a
28:58 day all of these claims that led to a
29:00 lot of backlash with many students and
29:02 activists around the world participating
29:04 in protest against Nike some people
29:05 called for a boycott of all their
29:07 products and several universities cut
29:09 ties with the shoe brand completely
29:11 sales dropped and Nike stock fell by 15
29:13 with the company being portrayed in the
29:15 media as a company willing to exploit
29:17 workers and deprive them of their basic
29:19 wages needed to sustain themselves Phil
29:21 Knight had always been in a position
29:22 where him and his company were the good
29:25 guys but this time he was the bad guy it
29:26 was a different Challenge and he
29:28 responded by promising he would
29:29 personally ensure conditions that Nike
29:31 factories improved around the world
29:33 after that Nike spent the next decade
29:35 trying to fix its reputation of course
29:37 the truth is the company was basically
29:39 founded on the principle of finding
29:41 cheaper labor abroad in order to be able
29:42 to make good quality shoes that were
29:45 cheaper than competitors but to be fair
29:46 Nike definitely did make changes to
29:48 significantly improved conditions for
29:50 overseas workers and many human rights
29:51 activists have acknowledged their
29:54 efforts to minimize these problems but
29:57 allegations never fully stopped a 2005
29:59 report by the company found that workers
30:00 in up to half of its factories were
30:02 still forced to work 60-hour weeks made
30:04 less than minimum wage oh we're denied
30:06 the use of bathrooms and drinking water
30:09 and even more recently in December 2021
30:11 the European Center for constitutional
30:12 and human rights filed a criminal
30:14 complaint against Nike and other brands
30:16 alleging that they benefited from the
30:18 use of forced labor in China now to be
30:20 fair and give the other side to this
30:21 Phil would argue that those factories
30:23 involved in these scandals weren't
30:25 actually Nikes they just rented them
30:27 along with other tenants so Nike wasn't
30:28 directly controlling these factories
30:30 they just made deals with them and
30:32 whilst that's not an excuse Phil is
30:34 right that singling Out Nike for using
30:35 sweatshops misses the bigger picture
30:37 which is the countless multinational
30:40 companies use overseas labor with very
30:41 questionable conditions in parts of
30:44 their supply chains many of the items we
30:45 all use every day were quite possibly
30:47 produced with cheap labor in terrible
30:50 working conditions if making videos for
30:51 this channel has taught me anything is
30:52 that if you look into almost any
30:54 business deep enough you're gonna find a
30:57 darker side but what's particularly
30:59 interesting about Nike is how they've
31:07 foreign [Music]
31:11 [Music]
31:14 Nike launched a new ad titled dream
31:16 crazy with former NFL player Colin
31:18 Kaepernick as the voice and face of its
31:20 new just do it campaign Kaepernick
31:21 himself posted a black and white
31:23 close-up photo of his face with the
31:25 words believe in something even if it
31:27 means sacrificing everything that
31:28 statement was in reference to a
31:30 controversy that began back in 2016 when
31:32 Kaepernick himself triggered a political
31:33 Scandal by kneeling during the U.S
31:35 national anthem to protest against
31:37 racial Injustice and police brutality in
31:39 America many people including then
31:40 president Donald Trump claim that
31:42 Kaepernick was disrespecting the flag
31:44 and the country so Nike's partnership
31:46 with Colin was controversial to say the
31:48 least their stock price immediately fell
31:50 2.5 percent and many people across the
31:52 United States destroyed their Nike shoes
31:53 and declared a boycott of the company
31:56 but then something interesting happened
31:58 a lot of people who shared the same
32:00 sentiment behind the theme of Nike's ad
32:01 came on their side and many people
32:03 started buying and wearing Nike's
32:05 products as a show of support thanks to
32:07 the controversial and bold marketing
32:09 move Nike got more attention than ever
32:11 and broke many records gaining 6 billion
32:14 dollars in brand value 163 million in
32:16 media and an additional 31 bump in sales
32:19 the campaign also earned Nike its first
32:21 Emmy Award since 2002 for the most
32:24 outstanding commercial of 2019. in the
32:25 end all the shouts for the boycott of
32:27 Nike products had little significance or
32:30 any major impact on its sales and this
32:31 wasn't the first time that Nike had
32:33 leaned into controversies to make more
32:35 money in 1988 Nike released its first
32:37 just do it campaign the campaign touched
32:39 on the subject of ageism featuring an 80
32:41 year old marathon runner who ran 17
32:43 miles every morning then in February
32:46 1995 Nike released a just do it Campaign
32:48 which featured a HIV positive Runner so
32:50 why does Nike take risks in their ads
32:51 that they know will create some
32:54 controversy well the reality is Nike
32:55 have an experienced marketing team but
32:58 assess the risk versus reward and makes
33:00 a calculated decision in the case of ads
33:02 like these they weighed up the costs and
33:03 believed that the benefits were worth it
33:05 and it was many other factors obviously
33:07 affect sales it's clear that their ad
33:09 campaigns have played a huge role in the
33:11 company's success between when the first
33:13 just do it campaign launched in 1988 to
33:16 1998 Nike increased sales from 800
33:19 million dollars to 9.2 billion however
33:21 after 40 Years Phil stepped down as CEO
33:24 his story is pretty remarkable starting
33:26 out as a kid with no experience heading
33:28 to Japan to try and make his crazy idea
33:30 a reality and ultimately building the
33:32 biggest sports brand in the entire world
33:35 but what about you what's your crazy
33:38 idea because if one thing is clear from
33:40 Phil's story it's that the timing is
33:42 never perfect sometimes you've just got
33:44 to take the leap of faith or in the
33:48 words of Nike just do it and if you want
33:49 some more business stories and lessons
33:51 to inspire you check out this video
33:53 right here next that I think you're
33:55 really gonna like I'll hopefully see you
