How Nike Shoes Were Inspired by Sushi

in 1962 a failing encyclopedia salesman chased an opportunity to sell japanese running shoes instead they were on track to dominate the market until he discovered a design that turned a 50 loan into a 34 billion dollar company [Music] after graduating from stanford business school 24 year old phil knight moved back to his parents home in oregon late at night he would lie on his back in his childhood bed and stare at all of his textbooks trophies and blue ribbons this is me still he'd say to himself like all of his friends phil wanted to be successful but he still didn't know what that meant for him money maybe a family in a house sure if i was lucky these were the goals he was taught to aspire to but deep down he wanted something more meaningful something purposeful creative important and above all different as always these trails of thoughts brought him back to his idea one that he saw as being potentially huge while others saw us crazy at stanford he wrote a research paper on how japanese cameras dominated the camera market and that they could do the same thing for running shoes he even developed a blueprint on how superior running shoes could be produced inexpensively in japan being a runner himself he knew a thing or two about the difference it would make all thanks to his former coach bill bowerman when phil ran for him at the university of oregon he noticed bill would constantly sneak into the locker room and steal the runners footwear he would tear them apart stitch them back up and only hand them back after making some kind of modification they either made the runners run like deer or blade he had good intentions though he wanted his runner saf sleeker softer and lighter shoes to improve their performance to pursue his idea phil knew he had to leave his comfort zone [Music] he was already planning to backpack around the world and decided to make a detour in japan his goal was to meet with onitsuka's executives and ask if you could import their tiger shoes they were extremely popular and the design prevented long distance runners from getting blisters interestingly the founder came up with the design when he was eating sushi and realized an octopus legs had a firm grip because of the suction cups at the bottom before phil could seriously think about approaching them he needed his father's approval and alone he just had to bring himself to picture nitsuka next but first he needed to make his first stop hawaii after one dive at waikiki beach phil and his stanford classmate gary carter decided to stay longer than planned and take up surfing so they both got jobs selling encyclopedias door-to-door phil stuck with it for weeks before quitting he couldn't get past his shyness and failed to make a single sale i think maybe the time has come to leave shangri-la he finally admitted to greg the next day phil bought a ticket to japan he wasted no time in pursuing his idea and arranged a meeting with onitsuka after saying merely one word his pitch was interrupted by one executive what company are you with he asked phil froze he wasn't expecting that question and felt the need to run and hide to the safest place he knew his parents home he pictured his blue ribbons from the track pin to his bedroom wall the only thing he was proud of blue ribbon blue ribbon he blurted as the idea struck him all of the executives smiled encouraging phil to continue his pitch phil explained that america's shoe market was enormous and untapped and that if onitsuka stepped in they could beat adidas and become a profitable venture the executives leaned back and stared at each other would blue ribbon be interested in representing tiger shoes in the u.s they asked yes they would phil responded without hesitation and just like that he made his first order after borrowing 50 dollars from his father only much later would he realize that business is never that simple [Music] over the next few years phil found himself repeatedly flying back to japan to put out fires someone else claimed to be on itsuka's u.s distributor and threaten him not once but twice several banks refused to lend him money even though his sales were increasing onitsuka becomes frustrated and starts to secretly look for other distributors still phil remains loyal and starts working as an accountant six days a week before teaching at portland state university to keep the company afloat dear gary did you ever leave shangri-la i'm an accountant now and giving some thought to blowing my brains out he once wrote in a letter meanwhile phil's business partner coach bill starts thinking about how anitsuka can modify their shoes for americans their bodies are longer and heavier than the japanese and would need a soul with more support after sending the founder and production team a slew of notes sketches and designs they finally gave in and made a prototype [Applause] [Music] uh [Music] eventually several american athletes start training in tigers and blue ribbon makes over 1 million dollars in sales still onitsuka is disappointed you should be doing much better one executive argued stun phil explained that blue ribbon sales had been doubling each year they could only increase their number if they ordered more shoes but banks won't lend them more money so he suggested the idea of borrowing money from a trading company the executively immediately shot down the idea his solution sell blue ribbon to anitsuka what about our written agreement phil asked the executive merely shrugged [Music] selling wasn't an option for phil he didn't have a backup plan and needed time to think so he told the executive that he would have to talk it over with bill instead he begged his bank to lend him more money they not only said no but closed his account too there was no such thing as venture capital back then so phil had no choice but to borrow from a japanese trading company called nisho ewai with their support he pivoted his original idea into a backup plan manufacturing his own shoes but first he needed to come up with a name he settled on nike the greek goddess of victory one of his salesmen dreamt about the idea the night before their deadline next he needed a logo he contacted a young artist that he met while teaching a logo that shows motion he told her with little direction she came up with something simple and timeless [Music] eventually phil started working with a japanese manufacturer called nippon rubber he first asked them to make a shoe based on one of bill's designs which inspired onitsuka's cortez line the results were impressive still bill was convinced they needed something better his runners were now running on polyurethane a spongy surface used for the olympics and their shoes no longer gave them the right grip but what could he possibly do the outer sole of a running shoe which was either waves or grooves across the bottom of the foot hadn't changed in 50 years to no one's surprise it only took him a week to come up with an idea like onitsuka's founder his inspiration came from everyday things things you might eat or find laying around the house while having breakfast with his wife he noticed his waffle iron had a gritted pattern after many failed attempts he successfully created a waffle-like soul when he handed them to one of his runners his grip improved and even better he ran like a rabbit after telling phil they hurriedly call nipon forget the cortez we've got something new when onitsuka found out they demanded that blue ribbon paid them nearly 17 000 instead they took them to court it was a risk that could have made blue ribbon bankrupt and ultimately fail fortunately a federal judge ruled in blue ribbon's favor and onitska had to pay a settlement a year later blue ribbon took off they had retail stores in berkeley los angeles portland and new england but every penny was put back into the business leaving them with little profit and a heavy burden they still owed nisho's 1 million dollars being around 75 000 short they decided to empty all of their stores bank accounts and divert the money to their home office accountant temporarily two days later they had another burden to deal with the bank of california froze its accounts and called the fbi it looks like fraud they nonchalantly told them phil had no choice but to tell nicho and ask for another one million dollar loan they agreed to consider only after reviewing their financials it was then that phil realized their numbers were worse than he thought tom sumaragi the first nisho employee that took a chance on him admitted that he'd always waited to invoice him tom knew the company was struggling and would wait until he suspected they had enough money why did you do such a thing tom superior tata yuki ito demanded because i think they'll be successful he admitted nike is my business child hours later tadayuki forgave phil and tom he gave phil another 1 million dollars and went to the bank of california to pay off his debt before leaving he turned to the banker who repeatedly created problems for phil one more thing he said i believe your bank has been negotiating to become one of nisho's banks that's right the banker told him ah i must tell you that will be a waste of your time to pursue those negotiations any further [Music] eventually phil changed the company's name from blue ribbon to nike it became more than just a brand and into a household word he envisioned that one day people would start wearing nikes everywhere to class at the grocery store and throughout their everyday lives but nike would need to continue innovating and taking more chances in 1977 that fateful day came frank rudy a former aerospace engineer pitched an idea that many rejected and saw us crazy even adidas mr knight i've come up with a way to inject air into a running shoe he explained to phil why phil asked for greater support he answered for the ride of a lifetime phil finally understood how some people felt when he told them about his own crazy idea years ago even though it sounded like comic book stuff he insisted on trying frank's prototype and went for a six mile run he was hooked although a bit unstable they were still one heck of a ride just like frank pitched i think we have something here he told his team before signing a deal with frank that evening phil was convinced it was only a matter of time until his vision for nike became a reality and then the letter came in a standard white envelope with an embossed return address was a bill from the u.s customs service for 25 million dollars they claim that nike owed them import fees because their shoes were manufactured outside the country after investigating phil discovered that his competitors were to blame to slow down nike's growth converse keds and a few small factories lobbied the white house and convinced custom officials to enforce an outdated law phil fought back and filed a 25 million dollar antitrust lawsuit alleging that they conspired to take out nike through underhanded business practices immediately the government asked to settle phil agreed to only pay 9 million dollars instead the lawsuit turned out to be nike's final battle before they were able to go public that year over the next few years they managed to sign some of the world's greatest athletes including michael jordan tiger woods and serena williams they also replaced adidas as the official maker of the nba uniforms and apparel in his memoir phil shares what advice he'd give to others who struggled to find their own definition of success as he did before starting nike i would tell men and women in their mid-20s to not settle for a job or a profession or even a career seek a calling if you're following your calling the fatigue will be easier to bear the disappointments will be fuel the highs will be like nothing you've ever felt this is the story of how nike went from being a struggling startup to a fortune 500 company and eventually the world's largest athletic footwear and apparel brand for more inspiring stories and advice from today's successful leaders don't forget to subscribe to our channel

Channel: Hook

Views: 454,039

Keywords: how nike is made, how nike shoes are made, story of nike, nike story, nike octopus, nike sushi, how nike are made, nike shoes, nike inventor, who made nike, behind nike, the rise of nike, success stories, success story, how nike were made, how shoes are made, who invented nike

Id: m_yMo7qK5Sk

Length: 15min 10sec (910 seconds)

Published: Thu Jun 18 2020