{"id":561501,"date":"2019-11-08T14:50:35","date_gmt":"2019-11-08T19:50:35","guid":{"rendered":"https:\/\/www.snkrsday.com\/?p=561501"},"modified":"2019-11-08T11:37:02","modified_gmt":"2019-11-08T16:37:02","slug":"how-blue-ribbon-sports-became-nike","status":"publish","type":"post","link":"https:\/\/www.snkrsday.com\/how-blue-ribbon-sports-became-nike\/","title":{"rendered":"How Blue Ribbon Sports Became Nike"},"content":{"rendered":"

Phil Knight<\/strong> started his career selling imported Japanese shoes, not by manufacturing his own. In fact, it was only frictions with the Japanese company that forced him to found Nike<\/strong>.<\/p>\n

If they\u2019d kept their partnership amiable, Phil might have been working with Onitsuka for decades and Nike might never have happened.<\/p>\n

\"\"<\/p>\n

Now let’s contextualize two things first about this time period: running isn\u2019t really considered a sport or a hobby. It\u2019s hard to believe, but at this time jogging to get exercise is something only maniacs would do. To be fair, everyone still smokes like a fiend and heart disease hasn\u2019t been figured out yet. So Blue Ribbon is still selling the Onitsuka shoes primarily to student athletes \u2013 popular as they were, they’re still a small niche.<\/p>\n

Second, venture capital didn’t really exist. Small businesses get their startup cash from banks, but banks have different priorities from today\u2019s venture capital firms. They didn’t want to grow too quickly, they want new companies to get profitable quickly and to never let sales exceed their cash balance. But, Blue Ribbon was constantly running into money problems.\u00a0As sales soar, they have to make late payments, leaving them on thin ice with the banks.<\/p>\n

Compounding this problem, Onitsuka is trying to cut ties with Phil and Blue Ribbon. Their shoe shipments often arrive late, which gives Blue Ribbon less time to sell shoes, which then makes each loan repayment period tougher.<\/p>\n

\"\"<\/p>\n

So Phil invites Onitsuka exec Kitami to Oregon in hopes of finessin’ his way to a more stable position with the company when all goes awry. Onitsuka wants to deal with a bigger distributor and Blue Ribbon has served their purpose. Kitami\u2019s been mad cryptic and vague about their intentions lately with Blue Ribbons. Smelling something fishy, Phil starts to question. While Kitami\u2019s in the bathroom, Phil steals a folder from Kitami\u2019s briefcase.<\/p>\n

His suspicions are confirmed\u2014 18 shoe distributors in the US and appointments with half of them. Feeling betrayed, he thinks about all of the things he\u2019s done for them. Revolutionizing Onitsuka, transforming the actual shoe and introducing them to an entirely different bag in the Americas. Now Onitsuka was planning to cut them out. As betrayed as Phil feels, he thought to keep the peace and convince Kitami not to abandon Blue Ribbon. He felt too dependent on Onitsuka and their shoes. Kitami leaves Portland to travel around the US, but doesn\u2019t reveal his intentions. When he returns, he has a new solution \u2014 sell Onitsuka 51% of Blue Ribbon.<\/p>\n

It\u2019s an ultimatum \u2014 take the bag, or we drop you. Phil, shocked, stalls saying he needs to talk with Bowerman.<\/p>\n

The Birth of Nike<\/h3>\n

Enlightened, Phil realizes a few things:
\n1. Onitsuka and Kitami cannot be trusted.
\n<\/em>2. Blue Ribbon and Onitsuka are done.<\/em>
\n 3. They need to stay together as long as it takes to develop other supply sources.<\/em><\/p>\n

So he can either a)\u00a0scare off other distributors Onitsuka is meeting with by sending threats to sue<\/em>\u00a0or b)\u00a0find a new plug.\u00a0<\/em>He remembers a shoe factory in Guadalajara, Mexico where Adidas had manufactured shoes. He visits and impressed, places an order for 3,000 pairs of leather football shoes. Technically, it\u2019s not a breach in contract as that only concerns running shoes. Anyways, Onitsuka had already broken the spirit of their deal he felt.<\/p>\n

For the shoes manufactured in Mexico, he needed a logo and a company name. Carolyn Davidson, the college designer who helps periodically with marketing materials, comes up with the Swoosh idea after multiple trial and errors.\u00a0They pay her $35. Blue Ribbon agrees it looks new, fresh, and timeless, but Phil doesn\u2019t love it. Now they just need a name.\u00a0<\/span><\/p>\n

\"nike<\/h3>\n

Phil proposes Dimension Six, which everyone hates. Others propose animal names, like Bengal or Falcon. Johnson eventually says, \u201cNike. It has good properties \u2014 iconic brands are usually short and often have a strong sound, like Clorox, Kleenex. And Nike is the goddess of victory.”<\/p>\n

So they move forward with their new name and logo. Unfortunately, the first shoe is trash. In cold weather, the sole split and cracked. To compound problems, First National has reached the end of its line. They will issue no more letters of credit and when they pay off the remaining bills, Blue Ribbon\u2019s account will be terminated.<\/p>\n

After getting rejected a few times, Phil gets a small line of credit from Bank of California. But he needs more money, from a partner that understands growth. Sales are now $1.3 million, doubling each year and they aren\u2019t slowing.<\/p>\n

Luckily Nissho, Japanese trading company saves the day, courtesy of Tom Sumeragi saying Nissho is willing to make loans to Blue Ribbon. Nissho itself had gone to Onitsuka to convince them to allow the deal, but Onitsuka had refused. Nissho was embarrassed by the rejection, a $100 billion company being rejected by a $25 million company, and that spurred their help. They draft a 4% revenue share agreement and Nissho introduces Blue Ribbon to shoe manufacturers and genuine \u201cshoe dogs,\u201d people who \u201cdevoted themselves wholly to the making, designing, buying, and selling of shoes.\u201d<\/p>\n

The Waffle Iron<\/h3>\n

Phil Knight and Sumeragi meet with factories in Japan, one being Nippon Rubber, part of Bridgestone Tire.<\/p>\n

Knight shows them the Cortez in the morning and after lunch there\u2019s sitting a brand-new Cortez, Nike Swoosh and all. Confident, Phil describes shoes for a range of sports, including tennis, basketball, and running shoes. Within a few days, he gets samples \u2014 not perfect, but effective. In a late-night creative session, Phil names all the shoes \u2014 the tennis shoe was Wimbledon, the basketball shoes were the Blazer and the Bruin, running is the Cortez, Marathon, Obori, Boston, Finland, and Wet-flyte.<\/p>\n

\"\"<\/p>\n

He returns to Portland and meets with Bowerman. They comment that the outer sole of the training shoe hadn\u2019t changed in 50 years \u2014 still no soul (pun very much intended.) Bowerman thinks about how he created a new track surface out of polyurethane, just like in the Olympics, where he was on track to be head coach of the Olympics.<\/p>\n

Bowerman, inspired, sees his wife\u2019s waffle iron and thinks about the gridded pattern. Waiting for her to leave the house, he sneakily\u00a0takes some urethane and melts it upon the iron molding, and it seals shut, forgetting releasing agents. But he keeps trying and eventually succeeds with the help of a third party rubber manufacturer.<\/p>\n

He sews the insoles to the bottom of running shoes and issa instant breakthrough.<\/p>\n

Never give up.<\/p>\n","protected":false},"excerpt":{"rendered":"

Phil Knight started his career selling imported Japanese shoes, not by manufacturing his own. In fact, it was only frictions…<\/p>\n","protected":false},"author":328306,"featured_media":918190,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1224791,1225514],"tags":[4,1225675,1205932],"cultivate_rss":[],"class_list":{"2":"type-post"},"acf":[],"yoast_head":"\nHow Blue Ribbon Sports Became Nike | Snkrs Day<\/title>\n<meta name=\"description\" content=\"Where to buy How Blue Ribbon Sports Became Nike shoes. 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