How Nike sold its first shoes(marketingexamples.com)
marketingexamples.com
How Nike sold its first shoes
https://marketingexamples.com/direct/how-nike-sold-first-shoes
42 comments
A good story and a great reminder that choice of founder partner is crucial to your success.
Let's not forget Bill Bowerman.
His wife Barbara's waffle iron is in the same league of corporate lore as Hewlett-Packard's one-car garage.
And the reason Nike's address is One Bowerman Way, Beaverton, Oregon.
Let's not forget Bill Bowerman.
His wife Barbara's waffle iron is in the same league of corporate lore as Hewlett-Packard's one-car garage.
And the reason Nike's address is One Bowerman Way, Beaverton, Oregon.
Dude is a legend. One of my favorite parts in Wild Wild Country is when they're interviewing "local rancher" Jon Bowerman. Paraphrasing, but there's a part where he's talking about his father and it goes something like: "He fought in the war...went behind enemy lines in Italy and convinced the German 8th Army to surrender. Then he led the Ducks to 4 national championships and became US Olympic coach, but retired heartbroken after Munich. Then one day he was in the garage and melted some old retreat rubber with a waffle iron and glued it to an old worn out shoe. The result became...uh...Nike""
You would have liked Arthur Lydiard as well.
His wife Barbara's waffle iron...
That legend has always bugged me. If one used a waffle iron to make running shoe soles, the result would not look like a Nike Waffle Trainer. It would look like, well, a waffle. The soles of Nike Waffle Trainers looked like one took a waffle iron and made it out of rubber. IOW, the legendary mold and result would have to be reversed from reality.
I mean, have I been thinking about this wrong for forty years? You can't make a Nike Waffle Trainer from a waffle iron, right?
That legend has always bugged me. If one used a waffle iron to make running shoe soles, the result would not look like a Nike Waffle Trainer. It would look like, well, a waffle. The soles of Nike Waffle Trainers looked like one took a waffle iron and made it out of rubber. IOW, the legendary mold and result would have to be reversed from reality.
I mean, have I been thinking about this wrong for forty years? You can't make a Nike Waffle Trainer from a waffle iron, right?
It was exactly like him to pour a bunch of latex rubber into a waffle iron to see if his idea was feasible. It is how his mind worked.
My understanding is he ruined three waffle irons before he had a workable piece, including the first one which never opened. I'm not sure if that's accurate but it would definitely be consistent with how he "bird-dogged" a problem.
He had been experimenting with rubberized materials before the waffle iron, using it at first to resurface the track at Marist High School in Eugene after making numerous test pads and coated them with different formulations to see which ones worked best over concrete. At the time, running tracks were usually packed clay, cinders, or other "fines". Great for training by the way (fewer impact injuries) but terrible for breaking 4 minute miles or going under 10.00s in the 100m.
He shifted his attention to shoes after spending time in New Zealand with Lydiard. Lydiard was a cobbler of women's shoes and showed Bill how they were made. Bill's philosophy of making shoes lighter and lighter was no joke. He was "Bill Bowerman serious" and firmly believed athletes needed every form of optimization in order to perform their best, including going so far as to measure the weight difference between wet and dry socks over the distance of a marathon, multiplied by the number of times the leg had to lift the foot, in an attempt to understand how athlete energy is allocated during a race.
My understanding is he ruined three waffle irons before he had a workable piece, including the first one which never opened. I'm not sure if that's accurate but it would definitely be consistent with how he "bird-dogged" a problem.
He had been experimenting with rubberized materials before the waffle iron, using it at first to resurface the track at Marist High School in Eugene after making numerous test pads and coated them with different formulations to see which ones worked best over concrete. At the time, running tracks were usually packed clay, cinders, or other "fines". Great for training by the way (fewer impact injuries) but terrible for breaking 4 minute miles or going under 10.00s in the 100m.
He shifted his attention to shoes after spending time in New Zealand with Lydiard. Lydiard was a cobbler of women's shoes and showed Bill how they were made. Bill's philosophy of making shoes lighter and lighter was no joke. He was "Bill Bowerman serious" and firmly believed athletes needed every form of optimization in order to perform their best, including going so far as to measure the weight difference between wet and dry socks over the distance of a marathon, multiplied by the number of times the leg had to lift the foot, in an attempt to understand how athlete energy is allocated during a race.
I don't think you understand, or just chose to ignore, my question.
https://www.popularmechanics.com/technology/gadgets/a21841/n...
Many years had passed since the Bowermans moved out of the house where the waffle story happened. Located in the western Oregon town of Coburg (population: 1,000), the house was remote, up on a hill and only accessible by a thin one-lane road. There was no way a garbage truck could reach the property, so they often just buried trash in a pit out back. The long-married couple eventually moved away to Fossil, where Bill died in 1999 and Barbara in 2010. But their son, Tom, lived on the family property in Coburg and decided to expand the carport. Digging alongside the house, he came across a treasure trove of Nike history buried alongside the house. There were crudely cobbled-together shoes, old prototype metal plates, cracking rubber soles, peeling molds, and a rusty old waffle iron. Thanks to the distinctive 1930s design, Reames knew this was the appliance that created the Nike we know today.
Many years had passed since the Bowermans moved out of the house where the waffle story happened. Located in the western Oregon town of Coburg (population: 1,000), the house was remote, up on a hill and only accessible by a thin one-lane road. There was no way a garbage truck could reach the property, so they often just buried trash in a pit out back. The long-married couple eventually moved away to Fossil, where Bill died in 1999 and Barbara in 2010. But their son, Tom, lived on the family property in Coburg and decided to expand the carport. Digging alongside the house, he came across a treasure trove of Nike history buried alongside the house. There were crudely cobbled-together shoes, old prototype metal plates, cracking rubber soles, peeling molds, and a rusty old waffle iron. Thanks to the distinctive 1930s design, Reames knew this was the appliance that created the Nike we know today.
> I think after the impending recession when VC money dries up this skill will be in high demand.
The next dry-up will be modest, it might last 12-18 months. The last one lasted a mere 2 to 2 1/2 years and required a rather extreme global recession. The US and globe broadly are drowning in truly enormous amounts of capital yielding nothing or close to nothing. Ten trillion dollars in wealth held in government debt yielding nothing. Tens of trillions more held in other low yielding bonds. There is a lot more real wealth (inflation adjusted) in investor hands today than there was just 20 years ago (at the dotcom bust). That capital is desperate for returns and will remain so. A 1/3 correction in the US stock market would merely set it back to April 2016.
The Fed is now permanently in liquidity mode, primed to rapidly flood the system as needed. They're on twitch notice for the next QE round. This won't change for decades at least, as the Fed must endlessly run debt monetization programs, and always keep rates artificially low, to keep the US Government solvent (5% * $30 trillion = bankrupt US Government).
Pretty much every central bank of consequence is in liquidity flood mode. They're mostly all behaving similarly.
Venture capital will remain ample in such an environment of perma low rates and relatively low inflation.
Ability, skill, will become drastically more valuable over the next ~20 years. Capital will become even easier to access and even more plentiful, if you are competent and or more generally have something to sell. The rich will get richer over the next 20 years and they will always be looking for somewhere to park it. The processes occuring now, including population stagnation in wealthy nations and aggressively advancing automation (robotics, AI, et al.) will push even more wealth to the top (taxes on the rich will rise in some cases to attempt to resolve that, certainly in the US). The returns that a capable individual can generate for capital, will soar in the coming decades. It's going to be an era of rather extreme value-capture amplification for people that have consequential skills; ever greater returns going to ever small groups of people.
With population stagnation and or contraction in much of the developed world (which is only going to get worse), finding enough skilled / talented people will remain the problem, not capital. Simply put, the capital to skilled person ratio in affluent nations will continue to rapidly climb in favor of the skilled persons.
The next dry-up will be modest, it might last 12-18 months. The last one lasted a mere 2 to 2 1/2 years and required a rather extreme global recession. The US and globe broadly are drowning in truly enormous amounts of capital yielding nothing or close to nothing. Ten trillion dollars in wealth held in government debt yielding nothing. Tens of trillions more held in other low yielding bonds. There is a lot more real wealth (inflation adjusted) in investor hands today than there was just 20 years ago (at the dotcom bust). That capital is desperate for returns and will remain so. A 1/3 correction in the US stock market would merely set it back to April 2016.
The Fed is now permanently in liquidity mode, primed to rapidly flood the system as needed. They're on twitch notice for the next QE round. This won't change for decades at least, as the Fed must endlessly run debt monetization programs, and always keep rates artificially low, to keep the US Government solvent (5% * $30 trillion = bankrupt US Government).
Pretty much every central bank of consequence is in liquidity flood mode. They're mostly all behaving similarly.
Venture capital will remain ample in such an environment of perma low rates and relatively low inflation.
Ability, skill, will become drastically more valuable over the next ~20 years. Capital will become even easier to access and even more plentiful, if you are competent and or more generally have something to sell. The rich will get richer over the next 20 years and they will always be looking for somewhere to park it. The processes occuring now, including population stagnation in wealthy nations and aggressively advancing automation (robotics, AI, et al.) will push even more wealth to the top (taxes on the rich will rise in some cases to attempt to resolve that, certainly in the US). The returns that a capable individual can generate for capital, will soar in the coming decades. It's going to be an era of rather extreme value-capture amplification for people that have consequential skills; ever greater returns going to ever small groups of people.
With population stagnation and or contraction in much of the developed world (which is only going to get worse), finding enough skilled / talented people will remain the problem, not capital. Simply put, the capital to skilled person ratio in affluent nations will continue to rapidly climb in favor of the skilled persons.
Sounds a bit "free lunchy" to me. So nothing can stop the tidal wave of more government freshly printed money? What about the fact the money is really debt and that needs to be kept serviced? What about another credit crunch?
Hyperinflation? What if people run from holding USD. Not likely, but who knows what will happen in 20 years time?
Hyperinflation? What if people run from holding USD. Not likely, but who knows what will happen in 20 years time?
> Sounds a bit "free lunchy" to me. So nothing can stop the tidal wave of more government freshly printed money?
Of course it's not a free lunch long-term. The cost will come due in the form of eventual sharper currency debasement, after the earlier stage process of traditional debt monetization by QE or similar (I'd expect some Fed experiments on that front). You could try to run higher inflation on an annual basis to chip away at the debt, or do larger sharper events more rarely. I think the Fed will strongly prefer sharper one-off events of big QEs (for a year or such in a recession context). In recessions, often people pile into such perceived safe investments, which is an opportunity for the Fed to take advantage of.
The US still has plenty of room to play with more traditional QE yet, before it gets to the later stages of the Japan scenario. As do the Eurozone and China. The US can likely hold at least 1.5x its GDP in national debt, probably more like 2x to 2.5x, before it starts to see more serious problems. Japan doesn't have the global reserve currency, and we've seen what they've been able to handle.
Eventually the debt - if it continues to pile up - gets so extreme there is no other option than to do sharper debasement. The recent QE (in both the US and Eurozone in their respective forms) was kicking the can down the road. China is similarly doing a lot of can kicking right now. Eventually no matter what the central banks do the debt problems and interest payments get too large, they suck up too much of a nation's free capital, and they're forced into a more serious currency event.
The Fed has to keep pushing the interest cost per dollar of debt down. That has gradually diminishing potential though, as realistically you can only go so far down. Japan, for the most prominent recent example, found the lower limits of what's possible there. They're a forecast for what the US, Eurozone and China may face.
The Fed is an enabler of bad behavior and I expect they'll continue doing it (some of it is intentional as a prop, some of it is a side effect). They enable the US Govt to borrow money at artificially cheap rates, which increases over-spending by Congress. They enable the military industrial complex and its spending levels (they temporarily keep the US from having to make a choice between social welfare and present high military spending levels). They enable Congress to kick the can down the road on spending, avoiding political-career decision risks. They enable artificially low tax rates (eventually you have to pay for the budget deficits & debt, one way or another), for pretty much everyone. They enable artificially low mortgage rates and other borrowing rates, which pumps up consumer behavior and inflates housing prices.
Of course it's not a free lunch long-term. The cost will come due in the form of eventual sharper currency debasement, after the earlier stage process of traditional debt monetization by QE or similar (I'd expect some Fed experiments on that front). You could try to run higher inflation on an annual basis to chip away at the debt, or do larger sharper events more rarely. I think the Fed will strongly prefer sharper one-off events of big QEs (for a year or such in a recession context). In recessions, often people pile into such perceived safe investments, which is an opportunity for the Fed to take advantage of.
The US still has plenty of room to play with more traditional QE yet, before it gets to the later stages of the Japan scenario. As do the Eurozone and China. The US can likely hold at least 1.5x its GDP in national debt, probably more like 2x to 2.5x, before it starts to see more serious problems. Japan doesn't have the global reserve currency, and we've seen what they've been able to handle.
Eventually the debt - if it continues to pile up - gets so extreme there is no other option than to do sharper debasement. The recent QE (in both the US and Eurozone in their respective forms) was kicking the can down the road. China is similarly doing a lot of can kicking right now. Eventually no matter what the central banks do the debt problems and interest payments get too large, they suck up too much of a nation's free capital, and they're forced into a more serious currency event.
The Fed has to keep pushing the interest cost per dollar of debt down. That has gradually diminishing potential though, as realistically you can only go so far down. Japan, for the most prominent recent example, found the lower limits of what's possible there. They're a forecast for what the US, Eurozone and China may face.
The Fed is an enabler of bad behavior and I expect they'll continue doing it (some of it is intentional as a prop, some of it is a side effect). They enable the US Govt to borrow money at artificially cheap rates, which increases over-spending by Congress. They enable the military industrial complex and its spending levels (they temporarily keep the US from having to make a choice between social welfare and present high military spending levels). They enable Congress to kick the can down the road on spending, avoiding political-career decision risks. They enable artificially low tax rates (eventually you have to pay for the budget deficits & debt, one way or another), for pretty much everyone. They enable artificially low mortgage rates and other borrowing rates, which pumps up consumer behavior and inflates housing prices.
[deleted]
Your comment was a great read! Thank you.
So, what would it take for that future not to happen? Or what should the people that are going to be the most affected do?
So, what would it take for that future not to happen? Or what should the people that are going to be the most affected do?
Apparently HN has a text limit. All this time and I've never run into it (that I recall).
So I posted the reply to this service:
https://justpaste.it/43z7i
So I posted the reply to this service:
https://justpaste.it/43z7i
For posterity's sake, please consider posting this excellent reply as a comment here, broken into pieces (replies to yourself). People do do that for this reason, and this is an appropriate comment for it.
I just finished reading the book yesterday. It's amazing what Nike had gone through to become the company today. I learned to have great respect for Phil Knight, but I don't understand why he mistreated Jeff Johnson. In the book, Jeff Johnson clearly believes in the company and Phil Knight. He goes out of his way several times, sacrificing himself to make the company afloat. And yet, Phil Knight doesn't treat Johnson with the respect he deserves. He flat out ignores him for an extended period while Jeff Johnson reaches out for input from his boss. That's rude even for a boss. Why would Phil Knight do this? He doesn't explain in the book and it's really annoying.
> . And yet, Phil Knight doesn't treat Johnson with the respect he deserves...
One of the things that surprises me whenever I read other people's reviews of Shoe Dog is how most don't seem to get the point, revealed by a careful reading between the lines, that Phil Knight is as ruthless, cold blooded, and cunning as any other billionaire entrepreneur out there. Not that I hold this against him; but time and time again in the recounting of how he grew the business, he would reveal these traits. He was however smart enough to conceal this under layers of PR fluff.
One of the things that surprises me whenever I read other people's reviews of Shoe Dog is how most don't seem to get the point, revealed by a careful reading between the lines, that Phil Knight is as ruthless, cold blooded, and cunning as any other billionaire entrepreneur out there. Not that I hold this against him; but time and time again in the recounting of how he grew the business, he would reveal these traits. He was however smart enough to conceal this under layers of PR fluff.
"impending recession" - why are you so sure there will be a recession soon? I've kept hearing people say it for the last four years.
Yes, there will be one eventually, but it could be in 2030 or 2040, as far as we all know.
Yes, there will be one eventually, but it could be in 2030 or 2040, as far as we all know.
Can't resist a little gem from "Shoe Dog".
Nike wanted to introduce a shoe during the 1968 Olympics being held at Mexico City. In honour of the location, they initially called it the "Aztec". But Adidas already had a shoe called "Azteca Gold" and naturally threatened to sue. Bowerman asked "Who was the guy who kicked the shit out of the Aztecs?" . Phil replied Cortez and the iconic Nike Cortez was born :-)
Edit: It seems that Bowerman asked the question. Corrected!
Nike wanted to introduce a shoe during the 1968 Olympics being held at Mexico City. In honour of the location, they initially called it the "Aztec". But Adidas already had a shoe called "Azteca Gold" and naturally threatened to sue. Bowerman asked "Who was the guy who kicked the shit out of the Aztecs?" . Phil replied Cortez and the iconic Nike Cortez was born :-)
Edit: It seems that Bowerman asked the question. Corrected!
Shoe dog is a great book - about how you can afford to be a terrible business person if you have rich parents who bail you out and can live out of their garage. I don't see why people are so impressed by it? Nike shoes aren't even that good today.
How to mistreat your allies (Jeff Johnson)
How to mislead your suppliers and almost lose in court.
Do the marketing methods they used, which is perhaps the impressive part, even work today? Do you show up to track meets with shoes from an unknown brand? I don't think so. Do things that don't scale, but not the exact same things that worked decades ago.
How to mistreat your allies (Jeff Johnson)
How to mislead your suppliers and almost lose in court.
Do the marketing methods they used, which is perhaps the impressive part, even work today? Do you show up to track meets with shoes from an unknown brand? I don't think so. Do things that don't scale, but not the exact same things that worked decades ago.
I love reading anecdotes like this, they inspire me to do similar "non-scalable, good old personal approach".
But sometimes I wonder if they no longer work because we live in different (modern) times?
But sometimes I wonder if they no longer work because we live in different (modern) times?
Sports is probably very specific. Amateurs will mostly buy what professionals recommend, or what their coach wears. These days you see sports stars and brands through social media and on TV, but in those days less so. Going to clubs, track meets, talking to the professionals/enthusiasts/hardcore fans, he would’ve been talking to the equivalent of Instagram influencers today.
Numbers are impressive, really. But with all of that activity on mailing list and personal visits I wonder if he had enough time for life (rest, family).
Indeed. Life's a trade off and Johnson did indeed get divorced. Shoes were his love.
Was it all worth it? Who knows!
Was it all worth it? Who knows!
I think that then he did not have time for this. But after the first sales, I think the amount of time and leisure opportunities have grown a lot.
I like the story. What about product development though? If you come up to athletes, head coches and parents in track events with an average shoe, I don't think this would have worked. I'd love to hear the story how he developed a superior product.
Or is it that in 1964, there was no real track shoe at all.
Or is it that in 1964, there was no real track shoe at all.
I did wonder, what other brands existed at the time? I have no idea.
Was coming to a track meet with branded, fashionable shoes in 1964 the equivalent of turning up in 1998 with an awesome animated Flash website?
Was coming to a track meet with branded, fashionable shoes in 1964 the equivalent of turning up in 1998 with an awesome animated Flash website?
I did wonder, what other brands existed at the time?
The Japanese brand Tiger, for one (later becoming Asics). IIRC, though cannot quickly find a reference, it's the brand Phil Knight was selling out of the trunk of his car before starting Nike with Bowerman.
The Japanese brand Tiger, for one (later becoming Asics). IIRC, though cannot quickly find a reference, it's the brand Phil Knight was selling out of the trunk of his car before starting Nike with Bowerman.
I can't help by wonder what his commission was?
And was it some company honor system that prevented him from starting his own shoe business instead of being the employee? (since he could obviously sell from scratch)
I don't have any idea if a non-compete would be a standard part of the contract in that time.
And was it some company honor system that prevented him from starting his own shoe business instead of being the employee? (since he could obviously sell from scratch)
I don't have any idea if a non-compete would be a standard part of the contract in that time.
Well, you could probably ask the same question of any good salesperson today. The answer is likely that people stick to what they want to do and what they're good at. If you want to build a company, you build a company. If you want to sell, you find a product you can sell and you excel at that.
I'd hazard a guess that Johnson was really great at doing what he did to create Blue Ribbon when he had the backing of an established company behind him, but starting from absolute zero might not have been his cup of tea.
I'd hazard a guess that Johnson was really great at doing what he did to create Blue Ribbon when he had the backing of an established company behind him, but starting from absolute zero might not have been his cup of tea.
I've been having a hard time getting people to sign up for my service, I found that it's easiest to get to know a person then shill them your product. I guess that's the equivalent of what Jeff Johnson was doing. It's a lot of work for little return, especially for a social media site. A shoe has a lot bigger profit margin compared to a website (per user). I'm still learning though, the site has a lot of other useful examples
From LinkedIn to here. Hmm.
I didn't see anything about how Nike willingly enabled child labor and human rights violations?
thats cause they didn't "enable child labor" or "violate human rights" to sell their first 50,000 shoes
But it is part of the Nike history and should have been mentioned. It is disgusting to read that kind of fanboy publication, deeply bowing before a company that helped to construct the modern international slavery system.
There’s nothing wrong with looking at something and appreciating a particular trait, or a particular victory that was achieved without having to apologize for every bad thing that the same person or company has ever done.
I think that this is true as long as the thing that you are appreciating itself was being done for good and noble purposes, or not in furtherance of a greater evil.
So you can look at something about China, or something about George Washington, or something about Apple/Nike/Google, and recount that history in full appreciation of the magic that went into succeeding in that moment.
I think if every time you say something good about someone/something you’re supposed to disclaim everything terrible, you’ll have a hell of a lot of disclaiming to do.
I think that this is true as long as the thing that you are appreciating itself was being done for good and noble purposes, or not in furtherance of a greater evil.
So you can look at something about China, or something about George Washington, or something about Apple/Nike/Google, and recount that history in full appreciation of the magic that went into succeeding in that moment.
I think if every time you say something good about someone/something you’re supposed to disclaim everything terrible, you’ll have a hell of a lot of disclaiming to do.
Personally, it’s a great example of amazing sales and how to build a brand.
There’s no reason why brands today couldn’t learn from Nike’s sales/branding story without having to emulate their manufacturing sins.
There’s no reason why brands today couldn’t learn from Nike’s sales/branding story without having to emulate their manufacturing sins.
Learn what? Create a cult of people that buy subpar quality for expensive prices.
Yeah, every time there's an article about the United States ever, we should mention the Trail of Tears. That'll help.
It contributes to my belief that there are way too many technical founders working on absolutely horrible ideas that would be able to the foundation for a great company but don't have the skill set to determine what that is. I think after the impending recession when VC money dries up this skill will be in high demand.