Posted by Grace Townsley
May 16, 2023 | 5-minute read (981 words)
Phil Knight, the founder and former CEO of Nike, started out as an accountant. Today, he has an estimated net worth of nearly $50 billion. And his story of innovation, consistency and remarkable growth is full of lessons for both entrepreneurs and startup owners.
In this article, we’re taking a look at three major insights entrepreneurs can gain from Knight’s journey to global brand loyalty. Whether you’re a business owner or still thinking about your big venture, read on. Because over the next three lessons, you just might find the inspiration you need to “Just Do It”!
1. Don’t avoid change. Embrace it.
In 1964, Phil Knight cut his hours at his accounting job to launch a shoe company from the trunk of his car. Back then, Knight and Bill Bowerman, his coach, had nothing but $5,000 and a vision to create great running shoes that everyday athletes could actually afford. From that vision, Blue Ribbon Sports (renamed Nike in 1971), was born.
At the time, building a company like Nike was an idea unheard of. Not only was Knight’s dad unsupportive of the business concept, but Knight also faced status quo bias on every front.
Status quo bias refers to the idea that people tend to prefer stability over change, and normalcy over unproven vision. This bias makes many people reluctant to change, resistant to new ideas, and opposed to new information, simply because it’s new.
The lesson we can learn from Phil Knight’s bravery in the face of opposition is this: Just because those around you can’t understand your vision — or don’t believe in your venture — doesn’t mean it’s doomed to fail.
Imagine how different our world would be if Knight had listened to the adversity that surrounded him. Instead, he spent over 50 years leading a multi-billion dollar company.
2. Know when to take calculated risks.
Knight’s success story — built on Nike’s incredible growth — is one centered on innovation. For over five decades, Knight and his team continually pushed the envelope and pursued new ideas as often as possible.
Instead of designing the shoes people wanted, Knight developed a reputation for creating athletic products that athletes never knew they needed. The company sought out new and unconventional ways to improve their products, and pushed hard to stay ahead of the competition.
Knight’s approach to innovation wasn’t built around safe choices. He was willing to take the right risks and find out what could become possible with the right research, design and testing.
For entrepreneurs, there are two valuable lessons to be learned from Knight’s ability to calculate the risks of his big decisions, and make a well-informed decision as a result: Seek out quality information and be ready to pivot when necessary.
Knight didn’t start out making in-demand shoes for athletes around the world. He began by selling Japanese shoes from the trunk of his car. He took a calculated risk by purchasing a large quantity of the shoes up front, cutting back on his hours at his accounting job, and trying his hand at sales. That calculated risk, and the research he put into understanding the shoe market and the needs of athletes, paid off.
Knight’s calculated risk didn’t always pay out. But he was always in a position to pivot when the data suggested a change was necessary. Nike continues to be at the forefront of innovation because of Knight’s ability to research, charge forward and change direction quickly when the risks aren’t worth the reward.
3. Keep a clear vision of the future — and build on the past.
Knight’s vision from the first day of Nike was to create high-quality, affordable athletic shoes designed to help peak performers perform even better.
Throughout Nike’s growth and development, only once did Knight and his team stray from their vision of creating athletic shoes. In the mid-1980s, Nike’s sales of running shoes were on the decline. In an effort to rebuild demand, the brand began developing casual shoes. It seemed like a natural transition, because people had begun wearing Nike shoes for everyday activities — not just athletics.
But the brand shift proved to be a disastrous one, and by 1985, the company faced two consecutive losing quarters, and additional losses in the years that followed. After a significant layoff and major brand redevelopment, Nike refocused on what it was best at — offering active customers high-performance, affordable shoes.
While Nike has since created other performance wear and athletic accessories, the company is still known, at its core, for producing innovative footwear for all kinds of athletes.
Because of Knight’s crystal-clear vision and consistency, the business has developed a loyal following and an unbeatable brand reputation. This commitment to doing one thing, and doing that thing well is a great lesson for entrepreneurs and startups hoping to develop their own devoted customer base.
Entrepreneurs should take note of this lesson: When the opportunity to diversify your product offerings or expand your services arises, consider — will this alternate venture strengthen your brand’s reputation or distract from it? Is this opportunity supplementary to what you already offer, or is it an alternative path that may weaken your market position?
Business success is as much about making the most of opportunities as it is about saying “no” to the wrong ones. And entrepreneurs who learn this lesson early are likely to experience greater success over the course of their ventures.
Phil Knight’s success at Nike is a great lesson for entrepreneurs and startups. By challenging the status quo, taking intentionally thought-out risks, and keeping your core vision in front of you at all times, you can position your company for exceptional growth — no matter what the market is doing (or saying not to!).