From a Car Trunk to a Waffle Iron: How Nike Started

A school paper and a big question

Phil Knight was a middle-distance runner at the University of Oregon who later went to business school at Stanford. For a class assignment in the early 1960s he wrote a paper asking a simple question: could Japanese running shoes do to the German brands what Japanese cameras had already done to German cameras, by offering similar quality at a lower price?

Most people would have handed in the paper and moved on. Knight decided to test his own idea. After graduating he travelled to Japan, visited the shoemaker Onitsuka, which made the Tiger brand, and introduced himself as the representative of a US company. That company did not really exist yet. By his own account he made up the name Blue Ribbon Sports on the spot.

Two people, $500 each

Onitsuka sent samples, and Knight showed them to his old track coach, Bill Bowerman. Bowerman was obsessed with making athletes faster and was always tinkering with shoes. He liked what he saw, and in 1964 the two men each put in about $500 to start Blue Ribbon Sports.

The early business was not glamorous. Knight kept a day job as an accountant and sold the shoes himself, often from the trunk of his car at track meets. Because he was a runner, he understood his customers. He could explain exactly why a shoe was good, which a salesperson with no athletic background could not do.

Every dollar of profit went back into buying more shoes. Growth was limited by cash, so the company grew steadily rather than quickly, and a first small shop opened in California in the mid-1960s.

The waffle iron experiment

Bowerman kept experimenting at home. According to the company’s own history, he poured liquid rubber into his family’s waffle iron to create a sole with small raised studs that gripped the ground and weighed less than the soles of the time. The first attempt famously ruined the waffle iron, but the idea worked, and it became the basis of the Waffle Trainer, which was a hit with runners in the 1970s.

This is a useful detail for any small-business owner. The product that helped define the brand did not come from a research lab. It came from one person who understood the customer and was willing to try something odd with household equipment.

The name, the Swoosh and the break with Onitsuka

By the early 1970s the relationship with Onitsuka was falling apart, and Blue Ribbon Sports needed its own brand. An early employee suggested the name Nike, after the Greek goddess of victory. For the logo, Knight asked a graphic design student at Portland State University, Carolyn Davidson, to create something. She was paid $35 for the Swoosh, a figure that has been retold many times.

Knight has said he was not in love with the design at first, only that he hoped it would grow on him. It did. A few decades later it was one of the most recognised symbols in the world.

What this story teaches anyone starting a small business

• Test an idea with real customers early. Knight sold shoes in person before he built anything bigger, so he learned what runners actually wanted.
• Start small and reinvest. With only $1,000 between the two founders, profit went straight back into stock.
• Know your customer from the inside. Both founders were athletes, which made their advice credible.
• Do not wait for a perfect brand. The name and logo came years after the business started, and only when they were needed.
• Look for small improvements. A lighter, better-gripping sole mattered more to runners than clever advertising.

A note on accuracy

This story is based on public accounts, including interviews and the company’s own history. Details such as exact dates, amounts and who said what differ between retellings, so treat the finer points as approximate.

What is a problem you understand better than most people? Share it in the comments below and tell us whether you have ever tried selling something in person.