Nike
A global athletic footwear and apparel company that began as a shoe importer called Blue Ribbon Sports.
Nike appears here as a partner and customer, not a case study. WeWard, which reached 20M users without paid ads, works with Nike as an affiliate that pays only on sales, so founders can pitch big brands directly on commission. Nike also uses FLORA to visualize the shoe itself, not just its marketing, so look beyond marketing for product uses.
- 1Approach brands directlyWeWard pitches platforms and brands
- 2Offer to promoteCommission-only deal
- 3Brand pays on salesTracking technology already in place
- 4Nike joins partnersAlongside Adidas, Expedia, Booking.com, Amazon
From Yves Benchimol on WeWard's affiliate deals
What was said about Nike
1Growing on borrowed money: grow or die
Knight put every dollar back into inventory and kept doubling orders. Oregon banks lent only up to book value, so Knight ran Blue Ribbon near 100% debt to assets and had to sell inventory fast to repay the bank and borrow again. Revenue went from $8,000 in 1964 to $16,000 in 1965 and kept roughly doubling, reaching $150 million in 1979.
He believed true demand always exceeded annual sales, so cutting an order made no sense. Banks repeatedly threw him out, including over a $1.2M credit line in 1970, and the Japanese trading company Nissho Iwai financed inventory in exchange for a 4% royalty on sales. The hosts credit the pressure with shaping Nike's culture but flag the survivorship bias: "the roadside was littered with cautious, conservative, prudent entrepreneurs."
Knight kept a day job for seven years before drawing a salary. Even with sales doubling for a fifth straight year, Blue Ribbon could not pay its co-founder. Knight worked as an accountant, then taught accounting at Portland State to free up time, and only went full-time in 1969 at an $18,000 salary.
He put his own paycheck into the company account. Early unit economics were thin: Tigers sold at $6.95, cost $3.50, and after $1.75 in commissions left about $1.75 a pair.
Retailer prepayments for a 7% discount fixed Nike's cash flow. Late shipments delayed loan repayments, which blocked new borrowing and the next order. Knight's Futures program offered retailers like Nordstrom, Kinney and Athlete's Foot up to 7% off for nonrefundable orders placed and paid six months ahead.
Retailers refused at first, but waffle trainer demand was so high that prepaying was the only way to get stock. It shifted financing from banks and Nissho to customers, gave longer lead times and more leverage with lenders, and later softened Nike's early 1980s revenue dip.
Debt instead of venture equity left Knight owning 46% at IPO. Knight relied on bank loans, trading company financing and convertible notes from friends and family. At the December 1980 IPO, which valued Nike at about $400 million, he still owned 46% and was worth about $178 million.
A local public offering under the tech-sounding name Sports-Tek had failed, and neither venture investors nor Portland business people bought in. Knight resisted going public for fear of losing control until his mentor Chuck saw only debt and no cash and called it mandatory. An early employee's family loan of $8,000 became $1.6 million in stock.
2From a Stanford paper to breaking with Onitsuka
Knight bet Japanese shoes would beat Adidas as Japanese cameras beat Leica. In a 1962 Stanford entrepreneurship paper, Knight argued Japanese makers could undercut Adidas and Puma in running shoes the way Nikon had undercut Germany in cameras. Classmates met it with boredom and not one question.
Few people ran track, so nobody saw a big market. He spent weeks in the library on importing and exporting and treated the idea as a place he had to get to.
He pitched Onitsuka on undercutting Adidas, the shoe American athletes wore. A shy 23-year-old, Knight went to Kobe and invented a company name, Blue Ribbon Sports, and a $1B market on the spot. Track shoes were maybe a $100M to $200M market; Onitsuka sent samples about a year later and gave him 13 western states.
Onitsuka had already studied the US market and wanted a partner. The first 12 pairs arrived in Oregon, and Knight sent two to Bowerman right away.
Belief in the product sold shoes where sales skill had failed. Knight failed at selling encyclopedias and mutual funds, but selling Tigers from his car trunk at Pacific Northwest track meets he could not write orders fast enough. He concluded people sensed his belief and wanted some of it.
He wore his Army Reserve uniform to catch free military flights to California with a duffel of shoes, and measured kids' feet at his parents' house. "Belief is irresistible."
When Onitsuka turned on him, Knight planned quietly, then reframed the break. Knight learned Onitsuka was secretly lining up other US distributors. He stayed long enough to scare off replacements while finding the factories Adidas used outside Japan and developing the Nike line; when the cut came early, he told a slumping team it was their independence day.
He reminded them they had done $2 million in sales the prior year that had nothing to do with Onitsuka, and the break freed them from late deliveries and ignored design ideas. His questions in the recliner: what do I know, what comes next, "What's the next step I have to take?"
3Bowerman, Johnson and a company that celebrated runners
Bowerman's Jogging book grew the market by celebrating running itself. Bowerman's 1967 book Jogging sold millions of copies when almost nobody ran, helping start America's fitness movement. Blue Ribbon's western distribution put shoes on the new joggers' feet.
Knight thought his old coach had popped a screw. Bowerman's line, "If you have a body, you're an athlete," widened the market far beyond Olympians and still anchors Nike's stated purpose.
Bowerman's obsession with lightness gave Nike its product culture. Bowerman took 49% after each partner put in $500, because he wanted access to shoemaking. He tore runners' shoes apart and rebuilt them, reasoning that one ounce saved per step equals 55 lb over a mile.
He tried snakeskin, deer hide and fish skin; Adidas had ignored his design letters in the 1950s. His nylon-upper design for the 1968 Olympics became the Cortez, still nearly unchanged today.
Jeff Johnson won the first full-time job through sheer devotion. Johnson mailed Knight constant letters on sales, ads and stores. Told the company owed the bank $11,000 with negative cash flow, he asked to join anyway, and became the first full-time employee in summer 1965.
He worked seven days a week, kept an index card on every customer's size and preferences, and later came up with the name Nike. Knight: "I tell the man Blue Ribbon is sinking like the Titanic, and he responds by begging for a birth in first class."
The first store was a sanctuary for runners, not just a shop. Johnson furnished it with yard-sale chairs and shelves of books every runner should read, many from his own library. It was a place to hang out and talk, and he sent customers Christmas cards, birthday cards and race congratulations.
The host calls this the key to Nike's marketing: celebrating customers, not only selling to them.
Tell people what to do, not how, and let them surprise you. Knight gave Johnson one message, sell more shoes, and left the method to him. Johnson built customer files, ad campaigns and the first store, and hit a store sales target Knight had not expected him to reach.
Knight withheld praise, a habit he took from Bowerman, who hoarded it "like uncut diamonds." Johnson pleaded for encouragement that never came.
Knight put people in over their heads and said everyone was. As Nike bought bankrupt factories to control supply and quality, including one in the northeast US, a trusted employee said he knew nothing about running one. Knight laughed: "We're all in over our heads. Way over."
4Athletes as billboards
Every athlete deal is a brand impression, not a shoe sale. Only running, basketball and tennis shoes are worn by ordinary people, so football cleats sell almost nothing. Nike sponsors football anyway because every televised swoosh sells the shoes people can buy, and its income statement calls the roughly $4 billion annual spend demand creation.
Knight's summary: "We're a marketing company and the product is our most important marketing tool."
Knight hired Prefontaine as an employee to get around amateur rules. Amateur rules barred paid endorsements, and Prefontaine, holder of every US record from 2,000 to 10,000 meters, was bartending to pay bills. Knight made him national director of public affairs at $5,000 a year with no duties.
Asked what the title meant, Knight said "it means he can run fast."
Signing college coaches instead of players put whole teams in Nike. Rob Strasser and Sonny Vaccaro paid basketball coaches as consultants and clinic leaders, and the coaches told teams to wear Nike. Within a month they had UNLV, Georgetown, Texas, Arkansas and Jimmy V at Iona.
When the Washington Post attacked the practice and wrongly named Iowa, Lute Olson called to join. Strasser then repeated it in college football for very little.
The Jordan deal turned sneakers into culture, despite a rough follow-up. Jordan got a 5% royalty on gross sales of his line plus a $2.5M guarantee, when Converse paid Magic and Bird about $100,000 a year. Air Jordan sold $126M in year one against a goal of $3M over three years, and the Jordan brand now does $6.6B, growing about 35% a year.
Year one was inflated by pushing stock on retailers through Futures, leaving a hangover; only $150 million of Jordan product sold across the first three years. Jordan broke his foot, and Strasser's $100 Italian-leather Air Jordan 2 was stiff and Jordan disliked it; Strasser left in 1987 for Adidas.
Scale lets Nike outbid every rival for the biggest athletes. Nike is more than twice Adidas's size, and Adidas is far ahead of the rest, because top athletes go where the most money and reach are. Nike holds 86% of performance basketball and 96% of lifestyle basketball shoes.
Kobe reportedly paid about $8M to leave Adidas for Nike. Gross margin is 44% versus Adidas's 46%, so the brand shows up as loyalty, not a price premium.
Nike leaves resale profits to resellers to keep the swoosh attainable. Limited sneakers sold at $150 to $300 resell for thousands in a secondary market estimated at $2 to $6 billion, yet Nike neither raises prices nor runs the marketplace.
The hosts guess Nike wants street tastemakers, not only the wealthy, to take part, unlike Porsche or Louis Vuitton, which capture that premium.
The Kaepernick ad was a brand bet that replaced the 2018 plan. Kaepernick played football, which sells few shoes, and was no longer playing. Nike backed him with a Wieden and Kennedy campaign and changed its media plan in every geography and sport for the rest of the year.
The hosts see it as creative gut feel about the values of the customers Nike wants, taken two years before the George Floyd moment.
5Where Nike stumbled
Nike confused the running boom with fitness and let Reebok take aerobics. Flush from a $22 million IPO and about half the running market, Nike refused on principle to make aerobics shoes. Reebok sold soft white leather shoes to women and passed Nike in sales in 1988 at well over a billion dollars.
The hosts blame hubris, since running alone could not sustain growth.
Saying it did not make shoes turned factory abuses into a crisis. In the 1990s reports of child labor and toxic glue hit Nike, which first told the press it did not make shoes. Under Mark Parker it set supplier standards, published supplier lists, ran third-party audits and shared a non-toxic glue with rivals.
Customers felt betrayed because the brand stood for greatness. Parker's line: "ignorance is not Bliss."
The current risk is losing the sport-by-sport obsession that built Nike. A reorganization replaced sport teams with men's, women's and kids, while Hoka, On and Brooks grow in running. The direct-sales push is wobbling, with inventory pushed back into Macy's and Foot Locker, and China is slowing as local brands rise.
Nike normally refuses Costco but uses it to clear excess inventory.
6Nike's app and the web-to-app handoff
From 2006 Nike bought digital capabilities instead of other brands. With Tim Cook on its board, Nike started with Nike Plus on the iPod and stopped buying brands like Converse, Starter and Cole Haan. Its four apps reach about 500 million users a quarter, and 40% of its $50 billion revenue is direct.
Nike's deep link lands app installs on the exact product viewed. Tapping Nike's smart banner on a LeBron product page opens the app on that shoe with the chosen size, after onboarding. Sephora drops users on the home page, forcing a search and risking losing them.
Steve P. Young: "Had those LeBrons on the web? Have those LeBrons in the app." A QR code during a basketball game can take a viewer to the exact shoe the same way, with analytics on drop-off from scan to install to registration.
Nike loses users by sending them out to the App Store. Sephora's banner installs the app while the shopper stays in Safari, then switches to Open. Young would combine Sephora's in-place install with Nike's deep link.
Nike also hides its banner until the user scrolls and picks a size, which is unnecessary; Sephora keeps it at the top of every page.
Forcing sign-up before shopping is Nike's biggest missed opportunity. Nike makes arrivals from a product page sign up, answer personalization questions and grant location first. Sephora offers skip options on sign-in and Face ID, and Young says asking for registration at checkout works better in what App Masters has seen.
"You want people to shop, and then you make them register and sign up when they're about to check out." He recommends walking the flow in both installed and not-installed states with analytics on each handoff, since even Nike and Sephora leave revenue on the table.
7Phil Knight on drive, money and regret
Knight rejected his father's respectability to chase a crazy idea. His father kept asking "How long do you think you're going to keep jackassing around with these shoes?" while runners had drinks thrown at them from cars. His mother bought a pair for $7, loudly, and wore them around the house.
His rule from a morning run at 24 was "Don't stop," which he later called the only advice anyone should give.
Knight cast Adidas as a monster to fuel his hatred of losing. Adidas had dominated for decades, and Knight admitted he needed to see it as a monster to stay motivated. He said "The world is without beauty when you lose."
A Kobe Bryant biography says Jordan and Knight shared a competitive nature that bordered on insanity. Nike staff still never wear competitors' products.
By the late 1970s Knight saw business as creating, not money. He said business is no more about making money than being human is about making blood. Nike wanted to add something to the lives of strangers.
His top regret was missing his sons' childhood. Knight kept vowing to spend more time with Matthew and Travis and kept slipping back. Matthew vowed never to wear Nikes and later died in a drowning accident in his 20s.
On IPO night he felt regret and wished he could do it all again, a wish that clashed with this one.
Seek a calling, and know giving up is not stopping. Knight told people in their mid-20s to seek a calling, not a job or career, since it makes fatigue easier to bear. He called those who urge never giving up charlatans, because knowing when to try something else can be genius.
He warned that the better innovators get, the bigger the bull's-eye on their backs.
8Nike in other people's lessons
Nike has a brand, a promise people expect it to keep. Seth Godin: "Hyatt Hotels has a logo, Nike has a brand." Nike opening a hotel would be predictable; Hyatt making sneakers would not.
Arielle Jackson notes the name Nike would look unremarkable in a spreadsheet and gained meaning over years; Knight reportedly said he'd sleep on it when first given the name.
Knight and Ovitz pitched a college football playoff 30 years early. A CAA and Nike joint venture showed about 150 NCAA presidents in Kansas City that a playoff would earn schools millions over bowl games. They ignored it, commissioned a 500-page report reaching the same conclusion, and adopted a playoff about 30 years later.
Nike shows up as a partner in other companies' growth stories. Nike uses FLORA's AI tools to visualize the shoe itself, not just marketing, and is a commission-only affiliate partner of the walking app WeWard.
Costco's Kirkland Signature sells nearly $1 billion more a year than Nike.
Phil Knight: Founder of Nike
Phil Knight built it from 12 pairs of Japanese shoes by reinvesting every dollar, doubling sales for years and nearly collapsing on debt. It posted $2 million in sales independent of Onitsuka, used nonrefundable pre-orders with up to 7% discounts to fix cash flow, and went public at a $178 million value for Knight.
Nike shows up as a partner in other companies' growth stories. Nike uses FLORA's AI tools to visualize the shoe itself, not just marketing, and is a commission-only affiliate partner of the walking app WeWard.
Costco's Kirkland Signature sells nearly $1 billion more a year than Nike.
Nike
Grew from $8,000 in 1964 revenue to $150M in 1979 on borrowed money, then won by buying the biggest athletes as billboards. Gross margin is 44%, below Adidas's 46%, so its brand shows up as loyalty rather than price premium. Its scale lets it outbid rivals for athletes.
Knight and Ovitz pitched a college football playoff 30 years early. A CAA and Nike joint venture showed about 150 NCAA presidents in Kansas City that a playoff would earn schools millions over bowl games. They ignored it, commissioned a 500-page report reaching the same conclusion, and adopted a playoff about 30 years later.
How WeWard hit 20M users without paid ads — Yves Benchimol, WeWard
One of WeWard's affiliate partners, paying only a commission on sales.
Knight put every dollar back into inventory and kept doubling orders. Oregon banks lent only up to book value, so Knight ran Blue Ribbon near 100% debt to assets and had to sell inventory fast to repay the bank and borrow again. Revenue went from $8,000 in 1964 to $16,000 in 1965 and kept roughly doubling, reaching $150 million in 1979.
He believed true demand always exceeded annual sales, so cutting an order made no sense. Banks repeatedly threw him out, including over a $1.2M credit line in 1970, and the Japanese trading company Nissho Iwai financed inventory in exchange for a 4% royalty on sales. The hosts credit the pressure with shaping Nike's culture but flag the survivorship bias: "the roadside was littered with cautious, conservative, prudent entrepreneurs."
Knight kept a day job for seven years before drawing a salary. Even with sales doubling for a fifth straight year, Blue Ribbon could not pay its co-founder. Knight worked as an accountant, then taught accounting at Portland State to free up time, and only went full-time in 1969 at an $18,000 salary.
He put his own paycheck into the company account. Early unit economics were thin: Tigers sold at $6.95, cost $3.50, and after $1.75 in commissions left about $1.75 a pair.
Retailer prepayments for a 7% discount fixed Nike's cash flow. Late shipments delayed loan repayments, which blocked new borrowing and the next order. Knight's Futures program offered retailers like Nordstrom, Kinney and Athlete's Foot up to 7% off for nonrefundable orders placed and paid six months ahead.
Retailers refused at first, but waffle trainer demand was so high that prepaying was the only way to get stock. It shifted financing from banks and Nissho to customers, gave longer lead times and more leverage with lenders, and later softened Nike's early 1980s revenue dip.
Debt instead of venture equity left Knight owning 46% at IPO. Knight relied on bank loans, trading company financing and convertible notes from friends and family. At the December 1980 IPO, which valued Nike at about $400 million, he still owned 46% and was worth about $178 million.
A local public offering under the tech-sounding name Sports-Tek had failed, and neither venture investors nor Portland business people bought in. Knight resisted going public for fear of losing control until his mentor Chuck saw only debt and no cash and called it mandatory. An early employee's family loan of $8,000 became $1.6 million in stock.
Knight bet Japanese shoes would beat Adidas as Japanese cameras beat Leica. In a 1962 Stanford entrepreneurship paper, Knight argued Japanese makers could undercut Adidas and Puma in running shoes the way Nikon had undercut Germany in cameras. Classmates met it with boredom and not one question.
Few people ran track, so nobody saw a big market. He spent weeks in the library on importing and exporting and treated the idea as a place he had to get to.
He pitched Onitsuka on undercutting Adidas, the shoe American athletes wore. A shy 23-year-old, Knight went to Kobe and invented a company name, Blue Ribbon Sports, and a $1B market on the spot. Track shoes were maybe a $100M to $200M market; Onitsuka sent samples about a year later and gave him 13 western states.
Onitsuka had already studied the US market and wanted a partner. The first 12 pairs arrived in Oregon, and Knight sent two to Bowerman right away.
Belief in the product sold shoes where sales skill had failed. Knight failed at selling encyclopedias and mutual funds, but selling Tigers from his car trunk at Pacific Northwest track meets he could not write orders fast enough. He concluded people sensed his belief and wanted some of it.
He wore his Army Reserve uniform to catch free military flights to California with a duffel of shoes, and measured kids' feet at his parents' house. "Belief is irresistible."
When Onitsuka turned on him, Knight planned quietly, then reframed the break. Knight learned Onitsuka was secretly lining up other US distributors. He stayed long enough to scare off replacements while finding the factories Adidas used outside Japan and developing the Nike line; when the cut came early, he told a slumping team it was their independence day.
He reminded them they had done $2 million in sales the prior year that had nothing to do with Onitsuka, and the break freed them from late deliveries and ignored design ideas. His questions in the recliner: what do I know, what comes next, "What's the next step I have to take?"
Bowerman's Jogging book grew the market by celebrating running itself. Bowerman's 1967 book Jogging sold millions of copies when almost nobody ran, helping start America's fitness movement. Blue Ribbon's western distribution put shoes on the new joggers' feet.
Knight thought his old coach had popped a screw. Bowerman's line, "If you have a body, you're an athlete," widened the market far beyond Olympians and still anchors Nike's stated purpose.
Bowerman's obsession with lightness gave Nike its product culture. Bowerman took 49% after each partner put in $500, because he wanted access to shoemaking. He tore runners' shoes apart and rebuilt them, reasoning that one ounce saved per step equals 55 lb over a mile.
He tried snakeskin, deer hide and fish skin; Adidas had ignored his design letters in the 1950s. His nylon-upper design for the 1968 Olympics became the Cortez, still nearly unchanged today.
Jeff Johnson won the first full-time job through sheer devotion. Johnson mailed Knight constant letters on sales, ads and stores. Told the company owed the bank $11,000 with negative cash flow, he asked to join anyway, and became the first full-time employee in summer 1965.
He worked seven days a week, kept an index card on every customer's size and preferences, and later came up with the name Nike. Knight: "I tell the man Blue Ribbon is sinking like the Titanic, and he responds by begging for a birth in first class."
The first store was a sanctuary for runners, not just a shop. Johnson furnished it with yard-sale chairs and shelves of books every runner should read, many from his own library. It was a place to hang out and talk, and he sent customers Christmas cards, birthday cards and race congratulations.
The host calls this the key to Nike's marketing: celebrating customers, not only selling to them.
Tell people what to do, not how, and let them surprise you. Knight gave Johnson one message, sell more shoes, and left the method to him. Johnson built customer files, ad campaigns and the first store, and hit a store sales target Knight had not expected him to reach.
Knight withheld praise, a habit he took from Bowerman, who hoarded it "like uncut diamonds." Johnson pleaded for encouragement that never came.
Knight put people in over their heads and said everyone was. As Nike bought bankrupt factories to control supply and quality, including one in the northeast US, a trusted employee said he knew nothing about running one. Knight laughed: "We're all in over our heads. Way over."
Knight rejected his father's respectability to chase a crazy idea. His father kept asking "How long do you think you're going to keep jackassing around with these shoes?" while runners had drinks thrown at them from cars. His mother bought a pair for $7, loudly, and wore them around the house.
His rule from a morning run at 24 was "Don't stop," which he later called the only advice anyone should give.
Knight cast Adidas as a monster to fuel his hatred of losing. Adidas had dominated for decades, and Knight admitted he needed to see it as a monster to stay motivated. He said "The world is without beauty when you lose."
A Kobe Bryant biography says Jordan and Knight shared a competitive nature that bordered on insanity. Nike staff still never wear competitors' products.
By the late 1970s Knight saw business as creating, not money. He said business is no more about making money than being human is about making blood. Nike wanted to add something to the lives of strangers.
His top regret was missing his sons' childhood. Knight kept vowing to spend more time with Matthew and Travis and kept slipping back. Matthew vowed never to wear Nikes and later died in a drowning accident in his 20s.
On IPO night he felt regret and wished he could do it all again, a wish that clashed with this one.
Seek a calling, and know giving up is not stopping. Knight told people in their mid-20s to seek a calling, not a job or career, since it makes fatigue easier to bear. He called those who urge never giving up charlatans, because knowing when to try something else can be genius.
He warned that the better innovators get, the bigger the bull's-eye on their backs.
Founder of CAA Michael Ovitz: "I Just Knew I Was Going to Outwork Every One of Them"
A CAA and Nike joint venture pitched a college football playoff to about 150 NCAA presidents. They ignored it, commissioned a 500-page report with the same conclusion, and adopted a playoff about 30 years later. Phil Knight began by selling Japanese Tiger shoes from his car trunk.
Nike's deep link lands app installs on the exact product viewed. Tapping Nike's smart banner on a LeBron product page opens the app on that shoe with the chosen size, after onboarding. Sephora drops users on the home page, forcing a search and risking losing them.
Steve P. Young: "Had those LeBrons on the web? Have those LeBrons in the app." A QR code during a basketball game can take a viewer to the exact shoe the same way, with analytics on drop-off from scan to install to registration.
Nike loses users by sending them out to the App Store. Sephora's banner installs the app while the shopper stays in Safari, then switches to Open. Young would combine Sephora's in-place install with Nike's deep link.
Nike also hides its banner until the user scrolls and picks a size, which is unnecessary; Sephora keeps it at the top of every page.
3 Critical Mistakes Killing Your App Engagement
Its Safari button sends users to the App Store, then into onboarding and onto the exact product they came from. A QR code during a basketball game can take a viewer to the exact shoe in the app.
Nike's deep link lands app installs on the exact product viewed. Tapping Nike's smart banner on a LeBron product page opens the app on that shoe with the chosen size, after onboarding. Sephora drops users on the home page, forcing a search and risking losing them.
Steve P. Young: "Had those LeBrons on the web? Have those LeBrons in the app." A QR code during a basketball game can take a viewer to the exact shoe the same way, with analytics on drop-off from scan to install to registration.
Nike loses users by sending them out to the App Store. Sephora's banner installs the app while the shopper stays in Safari, then switches to Open. Young would combine Sephora's in-place install with Nike's deep link.
Nike also hides its banner until the user scrolls and picks a size, which is unnecessary; Sephora keeps it at the top of every page.
Forcing sign-up before shopping is Nike's biggest missed opportunity. Nike makes arrivals from a product page sign up, answer personalization questions and grant location first. Sephora offers skip options on sign-in and Face ID, and Young says asking for registration at checkout works better in what App Masters has seen.
"You want people to shop, and then you make them register and sign up when they're about to check out." He recommends walking the flow in both installed and not-installed states with analytics on each handoff, since even Nike and Sephora leave revenue on the table.
Web-to-App Strategy: How Brands Lose Millions Without Deep Linking (Fix Your App Conversions)
Its smart banner opens the app on the exact LeBron shoe with the size selected, but it appears only after a scroll and size pick, sends users to the App Store, and forces sign-in and personalization questions first.
Nike shows up as a partner in other companies' growth stories. Nike uses FLORA's AI tools to visualize the shoe itself, not just marketing, and is a commission-only affiliate partner of the walking app WeWard.
Costco's Kirkland Signature sells nearly $1 billion more a year than Nike.
How FLORA is Reinventing Creative Design with AI
Nike uses FLORA to visualize the shoe itself, not just its marketing. Weber also compares FLORA's founding to Nike, built by a runner for runners.
Nike has a brand, a promise people expect it to keep. Seth Godin: "Hyatt Hotels has a logo, Nike has a brand." Nike opening a hotel would be predictable; Hyatt making sneakers would not.
Arielle Jackson notes the name Nike would look unremarkable in a spreadsheet and gained meaning over years; Knight reportedly said he'd sleep on it when first given the name.
Seth Godin's best tactics for building remarkable products, strategies, brands and more
Nike has a brand while Hyatt has a logo. Nike opening a hotel would be predictable, but Hyatt making sneakers would not.
The current risk is losing the sport-by-sport obsession that built Nike. A reorganization replaced sport teams with men's, women's and kids, while Hoka, On and Brooks grow in running. The direct-sales push is wobbling, with inventory pushed back into Macy's and Foot Locker, and China is slowing as local brands rise.
Nike normally refuses Costco but uses it to clear excess inventory.
Nike shows up as a partner in other companies' growth stories. Nike uses FLORA's AI tools to visualize the shoe itself, not just marketing, and is a commission-only affiliate partner of the walking app WeWard.
Costco's Kirkland Signature sells nearly $1 billion more a year than Nike.
Costco
Kirkland Signature sells nearly $1 billion more per year than Nike. Nike normally refuses Costco but uses the channel to clear excess inventory.
Knight put every dollar back into inventory and kept doubling orders. Oregon banks lent only up to book value, so Knight ran Blue Ribbon near 100% debt to assets and had to sell inventory fast to repay the bank and borrow again. Revenue went from $8,000 in 1964 to $16,000 in 1965 and kept roughly doubling, reaching $150 million in 1979.
He believed true demand always exceeded annual sales, so cutting an order made no sense. Banks repeatedly threw him out, including over a $1.2M credit line in 1970, and the Japanese trading company Nissho Iwai financed inventory in exchange for a 4% royalty on sales. The hosts credit the pressure with shaping Nike's culture but flag the survivorship bias: "the roadside was littered with cautious, conservative, prudent entrepreneurs."
Knight kept a day job for seven years before drawing a salary. Even with sales doubling for a fifth straight year, Blue Ribbon could not pay its co-founder. Knight worked as an accountant, then taught accounting at Portland State to free up time, and only went full-time in 1969 at an $18,000 salary.
He put his own paycheck into the company account. Early unit economics were thin: Tigers sold at $6.95, cost $3.50, and after $1.75 in commissions left about $1.75 a pair.
Retailer prepayments for a 7% discount fixed Nike's cash flow. Late shipments delayed loan repayments, which blocked new borrowing and the next order. Knight's Futures program offered retailers like Nordstrom, Kinney and Athlete's Foot up to 7% off for nonrefundable orders placed and paid six months ahead.
Retailers refused at first, but waffle trainer demand was so high that prepaying was the only way to get stock. It shifted financing from banks and Nissho to customers, gave longer lead times and more leverage with lenders, and later softened Nike's early 1980s revenue dip.
Debt instead of venture equity left Knight owning 46% at IPO. Knight relied on bank loans, trading company financing and convertible notes from friends and family. At the December 1980 IPO, which valued Nike at about $400 million, he still owned 46% and was worth about $178 million.
A local public offering under the tech-sounding name Sports-Tek had failed, and neither venture investors nor Portland business people bought in. Knight resisted going public for fear of losing control until his mentor Chuck saw only debt and no cash and called it mandatory. An early employee's family loan of $8,000 became $1.6 million in stock.
Knight bet Japanese shoes would beat Adidas as Japanese cameras beat Leica. In a 1962 Stanford entrepreneurship paper, Knight argued Japanese makers could undercut Adidas and Puma in running shoes the way Nikon had undercut Germany in cameras. Classmates met it with boredom and not one question.
Few people ran track, so nobody saw a big market. He spent weeks in the library on importing and exporting and treated the idea as a place he had to get to.
He pitched Onitsuka on undercutting Adidas, the shoe American athletes wore. A shy 23-year-old, Knight went to Kobe and invented a company name, Blue Ribbon Sports, and a $1B market on the spot. Track shoes were maybe a $100M to $200M market; Onitsuka sent samples about a year later and gave him 13 western states.
Onitsuka had already studied the US market and wanted a partner. The first 12 pairs arrived in Oregon, and Knight sent two to Bowerman right away.
Bowerman's Jogging book grew the market by celebrating running itself. Bowerman's 1967 book Jogging sold millions of copies when almost nobody ran, helping start America's fitness movement. Blue Ribbon's western distribution put shoes on the new joggers' feet.
Knight thought his old coach had popped a screw. Bowerman's line, "If you have a body, you're an athlete," widened the market far beyond Olympians and still anchors Nike's stated purpose.
Bowerman's obsession with lightness gave Nike its product culture. Bowerman took 49% after each partner put in $500, because he wanted access to shoemaking. He tore runners' shoes apart and rebuilt them, reasoning that one ounce saved per step equals 55 lb over a mile.
He tried snakeskin, deer hide and fish skin; Adidas had ignored his design letters in the 1950s. His nylon-upper design for the 1968 Olympics became the Cortez, still nearly unchanged today.
Every athlete deal is a brand impression, not a shoe sale. Only running, basketball and tennis shoes are worn by ordinary people, so football cleats sell almost nothing. Nike sponsors football anyway because every televised swoosh sells the shoes people can buy, and its income statement calls the roughly $4 billion annual spend demand creation.
Knight's summary: "We're a marketing company and the product is our most important marketing tool."
Knight hired Prefontaine as an employee to get around amateur rules. Amateur rules barred paid endorsements, and Prefontaine, holder of every US record from 2,000 to 10,000 meters, was bartending to pay bills. Knight made him national director of public affairs at $5,000 a year with no duties.
Asked what the title meant, Knight said "it means he can run fast."
Signing college coaches instead of players put whole teams in Nike. Rob Strasser and Sonny Vaccaro paid basketball coaches as consultants and clinic leaders, and the coaches told teams to wear Nike. Within a month they had UNLV, Georgetown, Texas, Arkansas and Jimmy V at Iona.
When the Washington Post attacked the practice and wrongly named Iowa, Lute Olson called to join. Strasser then repeated it in college football for very little.
The Jordan deal turned sneakers into culture, despite a rough follow-up. Jordan got a 5% royalty on gross sales of his line plus a $2.5M guarantee, when Converse paid Magic and Bird about $100,000 a year. Air Jordan sold $126M in year one against a goal of $3M over three years, and the Jordan brand now does $6.6B, growing about 35% a year.
Year one was inflated by pushing stock on retailers through Futures, leaving a hangover; only $150 million of Jordan product sold across the first three years. Jordan broke his foot, and Strasser's $100 Italian-leather Air Jordan 2 was stiff and Jordan disliked it; Strasser left in 1987 for Adidas.
Scale lets Nike outbid every rival for the biggest athletes. Nike is more than twice Adidas's size, and Adidas is far ahead of the rest, because top athletes go where the most money and reach are. Nike holds 86% of performance basketball and 96% of lifestyle basketball shoes.
Kobe reportedly paid about $8M to leave Adidas for Nike. Gross margin is 44% versus Adidas's 46%, so the brand shows up as loyalty, not a price premium.
Nike leaves resale profits to resellers to keep the swoosh attainable. Limited sneakers sold at $150 to $300 resell for thousands in a secondary market estimated at $2 to $6 billion, yet Nike neither raises prices nor runs the marketplace.
The hosts guess Nike wants street tastemakers, not only the wealthy, to take part, unlike Porsche or Louis Vuitton, which capture that premium.
The Kaepernick ad was a brand bet that replaced the 2018 plan. Kaepernick played football, which sells few shoes, and was no longer playing. Nike backed him with a Wieden and Kennedy campaign and changed its media plan in every geography and sport for the rest of the year.
The hosts see it as creative gut feel about the values of the customers Nike wants, taken two years before the George Floyd moment.
Nike confused the running boom with fitness and let Reebok take aerobics. Flush from a $22 million IPO and about half the running market, Nike refused on principle to make aerobics shoes. Reebok sold soft white leather shoes to women and passed Nike in sales in 1988 at well over a billion dollars.
The hosts blame hubris, since running alone could not sustain growth.
Saying it did not make shoes turned factory abuses into a crisis. In the 1990s reports of child labor and toxic glue hit Nike, which first told the press it did not make shoes. Under Mark Parker it set supplier standards, published supplier lists, ran third-party audits and shared a non-toxic glue with rivals.
Customers felt betrayed because the brand stood for greatness. Parker's line: "ignorance is not Bliss."
The current risk is losing the sport-by-sport obsession that built Nike. A reorganization replaced sport teams with men's, women's and kids, while Hoka, On and Brooks grow in running. The direct-sales push is wobbling, with inventory pushed back into Macy's and Foot Locker, and China is slowing as local brands rise.
Nike normally refuses Costco but uses it to clear excess inventory.
From 2006 Nike bought digital capabilities instead of other brands. With Tim Cook on its board, Nike started with Nike Plus on the iPod and stopped buying brands like Converse, Starter and Cole Haan. Its four apps reach about 500 million users a quarter, and 40% of its $50 billion revenue is direct.
Knight cast Adidas as a monster to fuel his hatred of losing. Adidas had dominated for decades, and Knight admitted he needed to see it as a monster to stay motivated. He said "The world is without beauty when you lose."
A Kobe Bryant biography says Jordan and Knight shared a competitive nature that bordered on insanity. Nike staff still never wear competitors' products.
The art of building legendary brands | Arielle Jackson (Google, Square, First Round Capital)
Its purpose is to bring inspiration and innovation to every athlete, and anyone with a body is an athlete. The name would not be picked from a spreadsheet but gained meaning over years of marketing.
Bowerman's Jogging book grew the market by celebrating running itself. Bowerman's 1967 book Jogging sold millions of copies when almost nobody ran, helping start America's fitness movement. Blue Ribbon's western distribution put shoes on the new joggers' feet.
Knight thought his old coach had popped a screw. Bowerman's line, "If you have a body, you're an athlete," widened the market far beyond Olympians and still anchors Nike's stated purpose.
Nike has a brand, a promise people expect it to keep. Seth Godin: "Hyatt Hotels has a logo, Nike has a brand." Nike opening a hotel would be predictable; Hyatt making sneakers would not.
Arielle Jackson notes the name Nike would look unremarkable in a spreadsheet and gained meaning over years; Knight reportedly said he'd sleep on it when first given the name.
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