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What Nike Got Right to Become a Giant

By the time Nike came up with the ‘Just do it’ slogan, they managed to expand their share of the pie all over North America, achieving a 43% cut. The shoe dynasty dominated the scene throughout the 70s and 80s and overcame many hurdles before it establishes itself as one of the top players in the field. As of now, they have the number one brand in the footwear industry and the 14th most valuable in the world.

The name ‘Nike’ comes from the Greek goddess of victory, and the whole enterprise began when Phil Knight envisioned an innovative shoe capable to be manufactured cheaply in Japan. But as always, narratives of success hide components of luck and many of the key elements that contributed to it making it seem as if it was easy and smooth when it wasn’t. Below are some key points that allowed for the dreamy teenager to create one of the biggest giants in the sportswear industry.

The Marketing Strategy

I was dumbfounded to stumble upon the fact that one of the key changes Nike ever did was to shift its strategic view from a product-based company to a marketing-oriented one.

“We used to think that everything started in the lab. Now we realize that everything spins off the consumer. And while technology is still important, the consumer has to lead innovation. We have to innovate for a specific reason, and that reason comes from the market. Otherwise, we’ll end up making museum pieces.” — Phil Knight.

What struck me the most in this mindset shift was how strongly it relates not only to businesses and their strategies but to the personal level as well. It’s how you progress as a person realizing the intricacies of working in a team, getting along with others, and progressing in the interpersonal level instead of minding your business and doing a job well done. A team is worth more than its components, and that is a truth that takes maturity to see. But still, there is a never-ending stream of tech-savvy people, obsessed with their little technologies and personal achievements, forgetting what is the actual role of everything in the bigger scheme of things.

In one of the most famous presentations of Steve Jobs in 1997, after having just returned to Apple from his previous dismiss a few years back, he was at some point encountered by an angry audience member confronting him in ways he wouldn’t anticipate:

“Mr. Jobs, you’re a bright and influential man, It’s sad and clear that on several counts you’ve discussed, you don’t know what you’re talking about. I would like, for example, for you to express in clear terms how, say, Java and any of its incarnations addresses the ideas embodied in OpenDoc. And when you’re finished with that, perhaps you can tell us what you personally have been doing for the last seven years.”

Apart from the first shock from such a blatant attack, questioning the technological knowledge of Steve Jobs, and it is quite obvious how set aback he was by hovering over the question for about 20 full seconds, his response was actually quite enlightening and original.

Steve argued that if you are to reach a larger audience and relate to people, you need to start backwords. From the customer need towards the technology and not the other way around as it would seem more intuitive to some. You are not sitting down asking what can Java or some other platform offer to you and what you can do with it for the user but you circle around the customer putting him at the center of the universe and asking about his needs. Then you work all the way back to how you can accomplish that bigger vision after having established what you want to do.

Starting Backwards

This kind of thinking although well-established by now is many times misunderstood by many people that obsess over the technology or even the quality of the product. There was a time that Nike was also centered around how to make the strongest product possible, forgetting that such an aspiration could have many drawbacks and many times wouldn’t even be the biggest priority for its customers. And by focusing on the mere strength of the shoe they would neglect other more crucial aspects of it and how it plays out in the whole customer’s life ecosystem. The venture would eventually lead them to be demolished by the opposite brands, the likes of Reebok and Adidas that would focus on more customer-friendly approaches. And that was one of the key turning points on their marketing approach.

It’s actually fascinating to realize that the inspiring approach to the ideas rather than the product, can be traced in Nike quite early on. They would always focus more on the effects and general benefits someone could get rather than the product itself. People don’t care so much about the shoes themselves as much as for the impact it will have on their lives. Thus they built their strategy around targeting the emotions and aspirations of the customers instead of promoting just the good shoe qualities.

Nike’s ads rarely mention their products.

Targeting The Emotions

One of the finest examples of their approach is the way they marketed Jogging and a healthy lifestyle instead of the product itself. It goes beyond words to realize that they weren’t selling just a piece of cloth but a whole different approach in life.

In one of his interviews, Jeff Bezos asked the following question, in the era that Amazon was focused mostly on the books-domain. What was really the competitor of Amazon at that point in time? Was it all the bookstores in the neighborhood corner, or the big chain book store with their big series of shelves demonstrating every book imaginable? Was it the libraries and other means you could get to buy a book? Actually, that would be a limited view of the issue. The true competitor was anything striving to take the time off the consumer. It was TV, alongside with the cafeterias calling out on people to spend their time in them, all the way to theaters and different kinds of entertainment. Anything that would compete for the customer’s attention and wasn’t about reading can be considered a competitor in the bigger scale. We are living in the attention economy, aren’t we?

And that is the truth Nike realized as well and is so brilliantly manifested throughout their marketing strategy. They wouldn’t compete against other manufacturers simply inside the shoe industry. They didn’t emphasize the quality of the laces or the height of the sole and the plasticity of the tow tip. They projected a whole different way of living along the lines of sports and fitness. They projected the vision of success and the work it takes to get there. The madness of following your dreams and smashing through everybody else’s opinions.

Not Being Afraid To Take Risks

“There comes a time in every life when the past recedes and the future opens. It’s that moment when you turn to face the unknown. Some will turn back to what they already know. Some will walk straight ahead into uncertainty. I can’t tell you which one is right. But I can tell you which one is more fun.” — Phil Knight

One of the key components of Phil Knight’s philosophy was the willingness to take risks and immerse into unknown territories where things could get quite shaky. Obviously there were many blunders along the way and things weren’t always as smooth as one could imagine them to be. One can only bring in mind the failure when expanding into the causal-shoes territory which proved to be a disaster. Being a shoe company they got the thinking that it should be an easy transition creating a functional and solid shoe for the world that they could wear at all times. The endeavor appeared to be harder than it seemed.

“Since we happened to be good at shoes, we thought we could be successful with casual shoes. But we got our brains beat out.” — Phil Knight

But what was important is that from the moment they realized the mistake they weren’t attached to it in the way the investment bias would dictate but reacted to it in a timely manner. They analyzed it, saw the mistakes, and moved forward from then on, taking the lesson from it and minimizing the impact. And that’s about the biggest lesson you can get from it.