Nike

**Ben Gilbert** (0:00)
Listeners, you should know, David and I were texting before this debating, do we change this thing around? Do we play with this? Should we reorganize this section? And he texted me, let's just do it. So in the honor of Bad Jokes by David Rosenthal, here we go. Welcome to season 13, episode 1 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

**David Rosenthal** (0:41)
I'm David Rosenthal.

**Ben Gilbert** (0:43)
And we are your hosts.
There's an age-old question in business. What is more important, a great product or great marketing? Well, today, we have literally the perfect case study in that very question in Nike. Does breakthrough innovation drive that business? Or is their core competency really around their profound advertisements and their sponsorship deals with athletes and teams, or their probably best in the world brand positioning? To understand it, we have to examine Nike's entire 60-year history, of course, because this is Acquired.

**David Rosenthal** (1:17)
And because Shoe Dog is so good.

**Ben Gilbert** (1:19)
That's amazing. You gotta start at the beginning. So really, the question is, what makes this company the single largest apparel business in the world today, outside of luxury, of course? And how is it possible to be a shoe company that does over $50 billion in revenue when they technically don't make a single shoe? So you may think you know Nike from the movie Air or Shoe Dog, but what hasn't been told is how those old stories tie to the gigantic shift in strategy that Nike is really in the middle of right now. Well, LPs, we gotta thank you for voting for this episode. David and I have had it in our episode backlog for two, three years. And when we put it up for a vote, the overwhelming majority of you selected this as our next episode. So if you also want to vote for future episodes and become an acquired LP, that is acquired.fm slash LP. If you want an update every time we drop a new episode, so you don't miss it, you can sign up at acquired.fm slash email. And we'll be dropping little Easter eggs and hints in those emails to tease about what the next episode is going to be. So that's acquired.fm slash email. Don't miss a new episode. And lastly, make sure you check out ACQ2, our second show where we interview people who are building their companies today available in any podcast player. And without further ado, listeners, as always, this show is not investment advice. Dave and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only. David Rosenthal, what is that stack of books on your desk?

**David Rosenthal** (2:53)
Oh my God. I think Amazon owes a thank you note to Acquired LPs, because I bought every Nike book out there. I mean, my six foot long desk is covered in Nike books. It's so fun to read all of them.

**Ben Gilbert** (3:05)
I thought there was just Shoe Dog. I didn't realize there was the literally over a dozen that you and I collectively read.

**David Rosenthal** (3:10)
There's so many of them. I read thousands of pages, but there are three books that all basically tell more or less the same story that we weave together to come up with our core Acquired Nike story here today. And I bring it up because it's actually pretty important what these three books are. The first, of course, is Shoe Dog, The Goat Business Memoir of All Time. The second is a book called Just Do It, that was written by the journalist Donald Katz. Ben, do you know who Donald Katz is?

**Ben Gilbert** (3:44)
I do not.

**David Rosenthal** (3:45)
So Don, after he wrote this book, and I think he wrote one or two other books, he had quite the career change. He went on to found the company Audible.

**Ben Gilbert** (3:55)
Oh, really?

**David Rosenthal** (3:56)
Isn't that crazy?

**Ben Gilbert** (3:58)
It's kind of cool that that was founded by a journalist.

**David Rosenthal** (4:00)
Yeah. Just wow. So he wrote kind of the canonical third-party journalist take on Nike. And then the third book is a book called Swoosh, which I bet most people have not read, but kind of like Taste of Luxury. I think people who are really in the know in the footwear industry have read this book. It was written by one JB Strasser and her sister, Laurie Beckland. JB Strasser is Julie Strasser, who was the wife of Rob Strasser, who was the designer behind Jordans. Now, Rob, if you've seen the movie Air, the character played by Jason Bateman is Rob Strasser, Nike's legendary first head of marketing. An item, among many, that is not discussed in the movie, is that Rob, shortly after signing Jordan, had an enormous fight with Phil Knight, left the company with Peter Moore, who was the designer behind Jordans, and ended up joining Adidas as CEO of Adidas America, just a few short years later.