Business Ideas - 3 Business Lessons From Philip Knight

Hi, I'm Evan Carmichael, and welcome to another edition of Modeling the Masters. I believe that the fastest and most effective way to grow your business is to model the strategies of people who've already done what you're trying to do. So today we're going to look at how a young man left a secure job that his father wanted him to take to follow his passion in the sporting world. He went on to build one of the most recognizable brands in the world. This is a story of Nike founder Philip Knight and the top 3 lessons that you can learn from his success. Philip Knight is the co-founder and chairman of Nike. Growing up in Portland, Oregon, Knight discovered he had a love for running and went to train with the legendary track coach Bill Bowerman at the University of Oregon. In addition to coaching, Bowerman was experimenting with creating new types of shoes and Knight field-tested them on the track for him. After graduating, Knight went to graduate school at Stanford and signed up for a small business class. He had to create a business plan in the class and thought back to Bowerman's shoes. In his business plan, Knight developed a blueprint for superior athletic shoes which could be produced cheaply in Japan. After taking a job as an accountant to make his father happy and hating it, Knight flew to Japan to find a factory to make his shoes. He returned home to create a partnership with Bowerman. They each invested $500 into the business and named it Blue Ribbon Sports, later changed to Nike. In its first year, the company sold only $364 worth of shoes, but Knight was determined to make the company work and stuck with it until it did. Today, Nike brings in almost $20 billion in revenue. Knight's stake in the company gives him an estimated net worth of $12.7 billion making him the 60th richest person in the world. By having the courage to leave the job that his father wanted him to take, Knight was able to start his own business and eventually build one of the most recognizable companies in the world. To help you courageously grow your business, here are 3 action items that you can learn from Philip Knight. Action item number 1: Have a clear focus. As entrepreneurs, it's often hard to stick on your path when you're not getting the momentum you were hoping for or when things seem to be falling apart around you. But almost every business owner has to go through those dark days to get to the light at the end of the tunnel, and you need to have the faith and courage to stick to your vision and stay completely focused on doing what you set out to do. As Nike grew, Knight had to decide what the focus of his business would be. Should he expand to get into the fashion business? Since he had such success sponsoring athletes, should he expand and start sponsoring other celebrities? Knight decided that for his company to continue growing, he would have to have a clear focus on what he wanted the company to be. It would make it easier for him to make decisions and also allow his team to work towards a common goal. According to Knight, "We wanted Nike to be the world's best sports and fitness company. Once you say that, you have a focus. You don't end up making wingtips or sponsoring the next Rolling Stones world tour." We're not in the fashion business. We're in the sports business, and there's a big difference. Action Item #2: Think of business as war. The business world is very competitive, and some industries are more cutthroat than others. If you're offering a new product or service that you're hoping will take customers away from your competition, expect that those competitors will fight back hard. Have a plan to beat them and to start winning their market share. Being a former athlete himself, Knight loved competition and relished the chance to compete in the business world. Knight treats business as war and has instilled within his company a healthy dislike of its competitors. Always trying to one-up his competition, when Reebok went to the expense of sponsoring the entire Atlanta Olympic Games, Nike sponsored just the top athletes but gained much more valuable coverage than Reebok. It was also his competitive streak that made him want to sign a 20-year-old Stanford golfer named Tiger Woods before his competition could. It cost Knight over $40 million, but it was a price tag well worth it in order to keep his golfing prodigy out of the hands of his competitors. Nike is a very competitive organization, and Knight wouldn't have it any other way. According to Knight, "Sports is natural, instinctive, competitive, and in the end, rewarding. All of us at Nike get to earn a living in that world." A world that is easy to believe in. Business is war without bullets. Action item number 3: Just do it. The single thing that differentiates entrepreneurs from everyone else is that you went for it. You left the security of a steady paycheck to venture into the unknown for your chance to determine your own destiny. You need to keep this attitude in mind as you grow your business. Don't be afraid of making mistakes. You won't be able to do anything significant if there isn't a risk of failure. Nike is known for its slogan "Just Do It," and it's a statement that accurately reflects how Philip Knight acts as an entrepreneur. He's always taking chances, is willing to fail, and pushes the conventional limits to accomplish his goals. A great example is his relationship with basketball superstar Michael Jordan. In 1984, Knight signed a young Jordan to a sponsorship deal. It was a big risk as Jordan was only 21 years old and was just breaking into the league. The idea of players being sponsored was also a new phenomenon and was a risky and unproven concept. The deal proved to be a huge success for Nike and provided a big publicity and sales boost for the company. If Knight was afraid to just do it, if he had been afraid to make a mistake, the deal would have never happened. According to Knight, The trouble in America is not that we are making too many mistakes, but that we are making too few. So remember, have a clear focus, think of business as war, and just do it. To finish up this video, I wanted to share one of my favorite true stories about Philip Knight and some of his best quotes. In 1972, Knight decided his company, Blue Ribbon Sports, needed a new name and a new logo. Knight liked the name Dimension Six, but his staff disagreed. One employee suggested Nike, after the Greek goddess of victory. Knight then paid $35 to Carolyn Davidson, a University of Oregon student, to design the now-famous swoosh logo. At the time, Knight said, "I don't love it, but it'll grow on me." He was under a deadline to pick a logo, so he went with it, and a new company was born. Thank you for joining me for another edition of Malina Masters. If you enjoyed the video, please give it a thumbs up below. I'd also love to hear your thoughts and feedback if you want to leave a comment. And stay tuned for the next episode.