Latest / Building Brands with Fexingo: Identity, Reputation, and Long-Term Business Equity / How Nike Built a Brand on Athlete Stories
Transcript
- Lucas: Nike today is worth north of a hundred and fifty billion dollars. It's the undisputed king of athletic footwear and apparel, with a swoosh that's recognizable from Tokyo to Toronto. But back in 1984, the company was in a very different place. Luna: What was going on? I think most people assume Nike was always this dominant force. Lucas: It's easy to forget, but in the early 1980s, Nike was struggling. Reebok had surged ahead in the aerobics boom, and Nike's stock had fallen from around twenty dollars a share to under five. The company was seen as a running shoe brand that had missed the fitness fashion wave. Luna: So they were behind, not ahead. That makes what happened next even more interesting. Lucas: Exactly. And that's when a rookie named Michael Jordan entered the picture. Nike had been courting basketball players, but they were competing against Converse and Adidas. Jordan initially wanted to sign with Adidas—he grew up wearing them. But Nike offered a deal that changed everything. Luna: The Air Jordan deal. I've heard the numbers were eye-popping at the time. Lucas: Five hundred thousand dollars a year for five years, plus a royalty on every pair of shoes sold. That was unheard of for a rookie—Converse was paying Larry Bird and Magic Johnson around a hundred thousand. Nike was betting the company on a kid who hadn't played an NBA game yet. Luna: And the NBA banned the original Air Jordan sneakers for violating uniform rules. That turned into free marketing. Lucas: That's the part everyone remembers. But the real branding lesson is deeper. Nike didn't just slap a logo on a shoe and put Jordan in a commercial. They built an entire narrative around him. Luna: What was the thinking inside the company? Who pushed for that approach? Lucas: There's a famous meeting in 1985 where the marketing team debated whether to feature Jordan in a generic 'Just Do It' style ad or give him his own signature line. Phil Knight and the creative team at Wieden+Kennedy argued that Jordan wasn't just another endorser—he was a story. They chose to build the brand around his personality: his charisma, his competitiveness, his underdog origin story of being cut from his high school team. Luna: So they made the athlete the hero, not the shoe. That's a pretty big shift from traditional endorsement. Lucas: Exactly. Most companies at the time used athletes as props—here's a guy in a uniform holding our product. Nike flipped it. They made the product part of the athlete's story. The Air Jordan wasn't just a sneaker; it was the shoe that helped Michael fly. And that resonated far beyond basketball fans. Luna: How did that play out financially? I know it became a juggernaut, but in the early days? Lucas: Within three years, Air Jordan was generating over a hundred million dollars in annual revenue. That's in the late 1980s. It saved Nike from its slump and established a blueprint: find a compelling athlete, tell their authentic story, and let the product emerge from that narrative. Luna: It also set the stage for the 'Just Do It' campaign a couple years later, right? Which is arguably the most famous slogan in advertising history. Lucas: Right. 1987. Wieden+Kennedy came up with the line after the final words of a convicted murderer before his execution—which is a wild origin story. But the campaign worked because it wasn't about shoes. It was about the grit and determination inside every athlete. And Nike has stuck to that principle ever since. Luna: It's interesting—they've applied the same approach to different eras. Tiger Woods, Serena Williams, LeBron James, Colin Kaepernick. Each time, they lead with the athlete's story, not the product specs. Lucas: And that's the core of brand building. A product can be copied. A story can't. Nike's competitive moat isn't the Air cushioning or the Flyknit technology—it's the emotional connection they've built over decades with consumers who feel like they're part of something bigger. Luna: Before we move to the modern era, I want to pause on something. You mentioned the stock was under five dollars in 1984. I think a lot of listeners might not realize that Nike's brand equity today rests on decisions made when the company was vulnerable. Lucas: That's a really important point. And it connects to something I want to be transparent about. You know, we do this show weekly, digging into brands like Nike and the strategy behind them. We don't run ads, and that's intentional—we want the conversation to be independent. Luna: And it's only possible because a small group of listeners chips in. If you've gotten something out of these episodes, we'd be grateful if you considered joining them. Lucas: Exactly. You can do that at buymeacoffee dot com slash fexingo. It's not a big ask—just if the show adds value to your thinking about business. We really appreciate the support. Luna: And it keeps us ad-free, which matters to us. So, back to Nike—how did they sustain that storytelling approach as they grew into a global corporation? Lucas: That's the challenge. A lot of companies lose their brand identity when they scale. Nike managed it by institutionalizing the principle inside their marketing department. They have a group called 'Consumer Insights' that studies cultural trends obsessively. They don't just chase the biggest athlete—they chase the athlete whose story aligns with the moment. Luna: Like Colin Kaepernick in 2018. That was a risky move. He wasn't even playing in the NFL at that point. Lucas: And Nike took a lot of heat. There were protests, people burning their shoes. But the company held firm. And the campaign—'Believe in something. Even if it means sacrificing everything'—drove a thirty-one percent increase in online sales and added billions in market value. Because they bet that their core customer cared more about authenticity than avoiding controversy. Luna: It's a reminder that brand building isn't about pleasing everyone. It's about deepening the relationship with the people who share your values. Lucas: Right. And that goes back to Michael Jordan. They didn't sign him because he was universally beloved—he was a rookie with a lot to prove. They signed him because his story of being cut from his high school team and then becoming the best was a narrative that could inspire millions. Luna: I want to look at one more example from the early days. The 1987 'Revolution' ad, which used the Beatles song. That was controversial too. Lucas: It was. Nike paid a lot for the rights, and the Beatles actually sued. But the ad was brilliant. It showed amateur athletes training in black and white, with the song playing over it. No product shots until the last few seconds. It was pure emotion. And it established that Nike was a brand about the athlete's journey, not the gear. Luna: It's almost like they were making short films, not commercials. Lucas: That's exactly what they were doing. And that's what makes the brand durable. When you look at Nike's competitors—Adidas, Under Armour, Puma—they all make great products. But none of them have the same narrative depth. Nike owns the concept of athletic aspiration in a way that's hard to replicate. Luna: So what's the takeaway for a business owner or marketer listening? Not everyone can sign Michael Jordan. Lucas: The principle scales. Find the story at the heart of your brand. Is it about craftsmanship? Community? Overcoming odds? Then build your marketing around that narrative. Be consistent. And don't be afraid to take a stand—even if it costs you some customers. Because the ones who stay will be far more loyal. Luna: Nike has also been criticized for labor practices overseas. How does that fit into the brand story? Lucas: It's a real tension. In the 1990s, Nike faced huge backlash over sweatshop conditions. And for a while, it damaged the brand. But they responded by becoming a leader in supply chain transparency and labor standards. They released factory lists, raised wages, and invested in monitoring. It didn't fix everything, but it showed that a brand can evolve when its values are challenged. Luna: So the brand is never static. It's a living thing that has to be managed carefully. Lucas: Exactly. And that's why we keep coming back to these case studies. There's no magic formula. It's about making a series of intentional choices over a long period of time. Luna: One last thing—Air Jordan is still a huge part of Nike. It's now its own division, generating over five billion dollars a year. That's wild for a shoe line named after a player who retired over twenty years ago. Lucas: It shows the power of a great brand extension. Jordan Brand became a lifestyle brand that transcends basketball. Michael Jordan's story continues to resonate with new generations who never saw him play. That's the ultimate test of brand durability. Luna: So the next time I see someone wearing Jordans, I'll think about that 1984 meeting and the risk Nike took. Lucas: And the lesson is still relevant. Whether you're a startup or a Fortune 500 company, the brands that last are the ones that tell a story people want to be part of.