How Blue Ribbon Sports Turned into Nike
The story of Nike starts before it was even called that, all the way back in 1964 when Phil Knight and his college track coach Bill Bowerman met for lunch. Knight had samples of Japanese running shoes that he wanted to sell in the United States, and he had sent them to Bowerman in the hopes he might make some sales, but mainly for his approval. Instead, he walked away with a business partner. Bowerman and Knight agreed to go fifty-fifty on Knight’s business, then called Blue Ribbon Sports. Twelve years later, this business would become Nike, a now $153-billion business, but how exactly did Blue Ribbon Sports turn into Nike?
was an accountant and business major, but he was also an athlete. This meant he not only knew how to build and grow a business, but he also knew the ins and outs of a good technical shoe, and most importantly, he had the innate desire to win. In 1962, after graduating from Stanford, he began to give more thought to a paper he'd written arguing the superiority of Japanese shoe production and the potential for it to overtake the German market in the US. With a burning feeling to investigate further, he planned to go on a round-the-world trip that just so happened to include a side-stop in Japan. To get there, he used all of his savings, sold his cherry black 1960 MG, and convinced his dad to lend him a grand.
When he finally got to Japan after an unexpectedly long stint in Hawaii, he made an appointment to visit the factory, now known as . After a tour of the manufacturing process, he met the executives with no other plan than to present his pitch. When they asked what company he was with, the first thing Knight thought of was the one thing he was proudest of – the wall of blue ribbons in his room. 'Blue Ribbon. Gentlemen, I represent of Portland, Oregon'. After Knight’s pitch, the executives all stood up and abruptly left the room, and while Knight thought this meant he'd been rejected, they soon returned and offered him the opportunity to become the American distributor for the Onitsuka Tiger Limber Up. To start the partnership off, Knight agreed to pay $50 for samples to be sent to the US.
Knight travelled for another four months before returning home in February 1963, and despite the time that had passed since the Onitsuka meeting, all he wanted to know was whether his shoes had arrived. Alas, they had not. While waiting for them, Knight became an accountant and despite the respectable salary, he thoroughly hated it and contemplated whether his travel days were his peak. Finally, over the Christmas break, Knight received the notice that his Japanese shoes had landed on American shores. He was delighted when he ripped open the large box in early 1964 to discover 12 beautiful pairs of cream and blue Limber Ups. Without even thinking twice, he sent two pairs straight to his college track coach at the University of Oregon, Bill Bowerman.
Bowerman was the most famous track coach in America at the time, and he was renowned for modifying his runner's shoes to enhance their performance. He had coached multiple Olympians at this stage, and Otis Davis, a runner who won Olympic gold in the 400m, to this day still credits Bowerman with making the shoes he won in. This experience made him the perfect complement to Knight's business expertise. When Knight sent Bowerman the Onitsuka shoes, he wasn't expecting much. At best, he'd buy a few pairs for his team, and at worst, he'd disagree with their quality and dash Knight's hopes. Instead, Bowerman arranged a lunch for the two where he said, 'Those Japanese shoes, they're pretty good. How about letting me in on the deal?' It was the ultimate validation for Knight. Not only did the man he respected so much like the shoes, but he was willing to go fifty-fifty in the investment.
From there, it became a selling game, and Knight continued to sell them out of the back of his car for the next few years, doubling the sales year on year for five years straight. There were a few crucial moments for Blue Ribbon Sports in that time. The first is the deal Knight made with Onitsuka to be the exclusive U.S. distributor for the Tiger's track-and-field line in 1966, the second was when Bowerman proposed a new model to Onitsuka in 1968 – a combination of their Spring Up and Limber Up, which they named the – and lastly, when Knight was finally able to quit his job and go full time at BRS in 1969.
In 1971, despite their sales success (they ended up hitting $1.3 million that year), Knight was under immense pressure. Not only had their bank severed the partnership because of the lack of equity, there was also an increasing demand from Onitsuka to perform better or lose the contract. The executive from the Tiger company was going behind Knight's back and looking for a new American distributor, even though they had renewed their partnership with BRS just months prior. Essentially, they were planning to dishonour the contract and instead offer to buy out Blue Ribbon Sports for a 51 per cent ownership split. Dissatisfied with this attempt to take over and fuelled by a need to beat Onitsuka to the inevitable breakup, Knight decided it was time for Blue Ribbon Sports to go straight to the source and find a manufacturer. But to sell those shoes, he'd need a brand.
Knight wasn’t all that fond of the name, but he was desperate to get it finalised so he could place the order. After days of brainstorming, the first full-time BRS employee, Jeff Johnson, phoned and said the name had come to him in a dream: Nike the Goddess of Victory. The famous Swoosh was actually created before the name was, as Knight had commissioned graphic designer student Carolyn Davidson for a bargain $35. All she had to go on was Knight’s brief to create a logo that represented ‘movement’. Earlier this year, the Twitterati were outraged that she had only received this meagre amount, but rest assured, she was compensated further in 1983. Knight and then-president Bob Woodell presented Davidson with a gold diamond ring that had the Swoosh engraved on it along with 500 shares, which are now estimated to be worth $7 million – a much more fitting payment for what became an internationally-recognised logo. Later that year, Nike took another big step forward: Bowerman was inspired by his waffle iron and designed the first bespoke Nike sneaker – the Moon shoe.
Onitsuka found out about Nike in 1972 and subsequently sued for breach of the non-compete clause, and Blue Ribbon Sports then filed their lawsuit against Onitsuka claiming breach of contract and trademark infringement. Blue Ribbon Sports won the legal battle in 1974, resulting in the right to continue selling the Cortez and $400,000 in damages. This left Knight the freedom to continue building Nike, and in 1976, Nike fully took over Blue Ribbon Sports.
That lunch between two friends on January 25, 1964, created one of the most powerful partnerships in sneaker history. Both Bowerman and Knight contributed tremendously to the growth of the company, with Knight at the helm of the business's sales and strategy while Bowerman designed the shoes and practically invented recreational jogging with his 1966 book. Nike's influence throughout the past 60 years is so significant that it's hard to fathom it all started with a $1000 investment and an accountant selling shoes out the back of his car.