♪ david: what would you say this skill set was you brought, great intellect, great drive, great leadership? phil: all of that. david: let's talk about golf. phil: tiger woods, you could see coming from way back. david: you had someone in michael jordan? phil: you everybody wanted him. david if i wore those shoes -- : phil: you might. david: when you give a $400 million gift, you write a check? is it hard to do that? phil: yes. >> what is the most favorite memory you have? phil: nike is like a work of art. >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright.

♪ david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? i have worn your shoes for many years, but finally get a chance to talk about them. we will talk about my shoes a little bit later. when you first started the company in 1962, you knew nothing about shoe design. you did not know a lot about management, and you did not have any money. so today, the company is worth roughly $100 billion, revenues of $30 billion, 62,000 employees. did you ever imagine when you first started this company in

the early 1960's that it would be what it became? phil: sometimes i would get that question and i would say, we are exactly on plan. [laughter] phil: but with you i can't be a smart -- that wasn't an original question? i thought i was the first to ask that. phil: it was a rise that nobody could foresee. when we started out, total sales for athletic shoes in the united states were about $2 billion, last year we did $9 billion. we are at 450% of the market share. we took advantage of the running boom which became a jogging boom which became a fitness boom. we have benefited from all of that. david: would you say it benefited from being a marketing company or a technology company versus having a better product, marketing, or a combination of both? phil: i have said we are a marketing company and product is our most important marketing tool.

david: and the skill set you brought to it -- what would you say this skill set was you brought? great intellect, great drive, great leadership? phil: all of that. [laughter] david: in equal amounts? phil: if there is one thing, i have been pretty good at evaluating people. that was one of the things i wanted to get through and i hope did come through in the book, how valuable those early partners were, my fellow employees my teammates. , they were terrific. david: speaking of that book, here it is. shoe dog, i must confess i did not know what a shoe dog was. for those were watching, what is that? phil: in 25 words or less, it is somebody who really loves shoes, and that was me. i was a runner. there is no such thing as a ball and a mile. all you really care about are the shoes, so that became important to me, and has been with me ever since. david: you are from oregon, and i think i read the first fossil

we have of a shoe that ever existed is 9000 years old, and in came from oregon, do , you take that as a special sign to start the company in oregon? phil: i have not thought about it that way, but i would take it. david: your father was a newspaper editor, and he told you he would not hire you when you wanted a summer job once. why wouldn't he hire you? phil: he knew me pretty well. there were two major newspapers in portland at the time. the journal, which he was publisher of, he wouldn't hire me so i went across the street to the oregonian and got in and worked there for three summers. david: in high school, you are an athlete and ran, but where -- were you a superstar athlete, average athlete, or what would you say? phil: i was a little better than average, but certainly not a superstar. david: you got a scholarship to go to to the university of oregon? phil: no, i did not. i was a walk on, or run on.

david: your best time was 4.13. -- four minutes, 10 seconds for a mile. 4.13.four: -- david suppose i told you you : could either built nike or run a 3.56 mile? phil: i will take nike. david: ok. phil: but i did pause. [laughter] david: you lettered in three years, and after which you went into the army, after a year in the army, you served in the reserves for a number of years. you went to business school at stanford. how did you pick stanford for a business school? phil: it was and is a good school. i got admitted. [laughter] david: so you got admitted, and then there was a class on entrepreneurship? phil: the professor was a

really dynamic professor and inspirational professor, and he had me write a term paper and was mostly what your grade would be you were supposed to attach , yourself to a small business in the bay area or make up a small business, and he said, make sure you write about something you know, so most of my classmates wrote about some electronics project, which was beyond me, but i remembered my old track coach playing with shoes and i was one of the guinea pigs for that so i was , aware of the process, and it did not make sense to me at the time that running shoes should be made in germany, which were dominating world markets, so i said they should be made in japan and japan can do to german shoes with they did to german cameras. so that was the premise. i worked pretty hard on the paper, and the professor liked it. david: did you get an a on it? phil: i did. then you graduated, and despite this great paper, no shoe company hired you, and then

you didn't have the silicon valley venture capital world, so you did not get a job there. you went back to your home and became an accountant, is that right? is that exciting for you to be an accountant? phil: no, i didn't ever plan to be an accountant for 50 years. i talked to a lot of people about what i should do and i was kind of a finance major at stanford and they said you should get your cpa certificate. that will be a great education and put a floor under your earnings, so that's what i did. david: you went by yourself on a trip around the world? phil: i started out with another guy, but then he got waylaid by a girl in hawaii. so i went on alone. [laughter] phil: i did not have that problem. david: when you were in japan, did you not stop in to see a shoe manufacturer? phil: that was part of the idea inspired by the paper that are -- i wrote that i would call on , japanese shoe manufacturers to see about importing their shoes

in to the united states. i called on one and they were enthusiastic, so it began. you came back and they started shipping new shoes to a company you named blue ribbon. where did blue ribbon come from? phil: first place. they asked me what the name of my company was, i had to come up with something. david: so they started shipping you shoes. your job is to sell the shoes. as i understand you had a green , valeant and you would put them in the trunk and go around the track meets and sell the shoes, is that what you did? phil: that's what i did. david: at that time you had no , vision of building a great global company. phil: i thought it was the start and we could be bigger. obviously, as a set earlier nobody expected it to be as big , as it is. david: at some point they began to be competitive with you, so you begin to build your own company called nike, and you needed a symbol and somebody came up with this swoosh. you paid $35 for that? phil: it was a graphics arts

student at portland state who needed money, and we said she would pay -- we would pay you two dollars an hour to get some designs, and she spent 17.5 hours on that. david: so $35, that's pretty good. phil: it did have a happy ending. when we went public we gave her 500 shares of stock and it is worth over $1 million right now. she has not fully single share. david: that is pretty good. -- sold a single share. david: that is pretty good. did you actually design the shoes yourself or were you the person who figured out what the shoes were going to look like? phil: we were in a hurry. they asked john kennedy how he became a hero, he said it is easy, they sank my boat. tiger basically gave us an ultimatum that cell is 51% of your company or we will set up other distributors. that gave us an idea that we may

be better change manufacturers, so we were in a hurry. the first shoes were in an office in tokyo japan over the , course of the weekend. david: if you have better shoes, can you run faster, or it does not make that much difference? phil: i think shoes are key. we still believe it makes a difference. obviously if you tried to run a , mile in a pair of dress shoes, you will not run as fast as you you are in a pair of four ounce cleats. in the old days when i was running at the university of oregon we had a lot of canvas , upper training shoes. you go out for a six mile run and you come back in your feet -- and your feet were bloody, so it matters. david: the dominant companies were german adidas and puma. ,were they happy with you coming along or did they try to get you out of business? phil: they didn't worry too much about us until it was too late.

we kind of snuck up on them. david: and basketball, you have somebody named michael jordan, a basketball player who you've heard of, right? phil: when he started wearing the shoes we made them really , dramatic. we ran a big ad that said banned in the nba, and every kid wanted the shoes then. [laughter] david: when you wear his shoes, do you jump higher. if i wore the shoes, i would not be jumping higher. phil: you might. david: i might go get some. ♪

♪ david: there was a university of oregon runner, steve prefontaine, a legendary track star, and you became close to him. how did you get him to wear your shoes? phil: we worked at it, worked at it, worked at it.

obviously he had worn adidas his , whole life, but he was right there in eugene, and we had a small office in eugene, and the guy who ran the office became his brother practically and ultimately convinced him to switch to nike, and he was our first roll prominent track and field athlete. david: you went after others. how hard is it? you have to pay them to use your shoes or they just like it so much they use your shoes? phil: they just like it so much. david: really? phil: no. [laughter] david: ok. phil: they demand an endorsement fee from us or whoever. whoever they are going to wear. other than steve the one that , comes to mind is michael johnson at the 1996 olympics in atlanta, the gold shoes which lifted us significantly. david: you made those shoes? -huh. uh

david early on, john mcenroe, he : would from time to time loses does lose his temper, and would that reflect poorly on your shoe? this image was a great tennis player, but sometimes he would lose control, some people might say, and that did not bother you, or did it help sales? phil: the latter. david: oh, it did? ok. phil: he had a bad temper. but always remember that arnold palmer had a bad temper too, but he would keep it in control. you could see him standing there ready to lose it. john went over. he was the arnold palmer who did not keep it in control, but he was probably the most exciting player of his era. in private, he was a perfect gentleman. it was just that he was so intense that it would get away from him sometimes. he was unique in that he lost his temper a lot, but when he played bjorn borg, he never lost his temper once. david: i never really knew john mcenroe as a tennis player, but

when i practiced law early on, the office next to mine was held by man named john mcenroe senior, and he always said his son was a high school tennis player and was really good. you always roll your eyes when you hear this, but then i finally realized he was not exaggerating. [laughter] david: let's talk about golf. a man named tiger woods came along and you signed him up relatively early in his professional career, so was that hard to convince him to do this? phil: tiger woods, you could see coming from way back, three u.s. juniors and then went on to win three u.s. amateurs in a six-year span from the time he was 15 to 20, so he would play occasionally in the portland area and we would always invite him and his father out to lunch, so we were working on that for probably three years before we actually signed him. david: when you signed him up, he wears your shoes exclusively, but then you begin to make golf equipment as well, so you make

golf balls and golf equipment, but now you are out of that business. is that because you want to focus on shoes and not other types of equipment? phil: it is a fairly simple equation. we lost money for 20 years and we realized next year would not be any different. david: so you got out of that. for a while you were doing casual wear as well, the aerobics effort, casual wear. you decided to make athletic shoes into a casual shoe. did that work as well? phil sportswear, shoes and : clothing is still a significant part of our business. david: so it is not just for athletes, but you now try to design shoes for people who are wearing them casually, so you like it when people are wearing suits and your shoes as well? phil: you look great. david: thanks. do you wear anything other than nike shoes? phil: no. david: you wear a tuxedo or something and you wear nike shoes? phil: black nike shoes.

david: in basketball, you have somebody named michael jordan, a basketball player, you've heard of, right? phil: i have heard of him. david was it hard to sign him : up, and why was his shoes so successful, the most successful shoe ever in the athletic world? phil: it was hard to sign him up because everyone wanted him. we won that war. david: was it on your personality? phil: clearly. [laughter] david: not money, just personality? phil: we offered pretty good. but we had a lot of good players. we did not have really great players, and we thought he had the chance to be that. he was obviously way better than we could have imagined, but when he started wearing shoes, we made them really dramatic. red, black, white and he was a , very exciting player. shot,ped and was quick,

did everything well, was handsome spoke well, and the , shoe was distinctive looking avon stern did us a huge favor, and -- david stern did us a huge favor, and he banned them in the nba. and so we ran a big ad that said "banned in the nba" and every kid wanted the shoe. [laughter] david: michael jordan has not played for more than a decade and the shoe is still your best-selling basketball shoe, why is that? phil: we were selling $700 million worth of jordan products when he retired. it has now become a brand and we are selling over $3 billion, but some kids don't even know who he was. it became a brand. it went from an endorsement into a brand. david: when you wear his shoes, do you jump higher? if i wore the shoes, i would not jump higher, right? phil: you might. david: i will go get some. let's take a look at your full interview for a moment. when did you realize you can't take it with you and it is better to give it away?

phil: it was late in the process because i kept thinking it was all going to disappear. i have often said this is a dream, don't wake me. david: when you give a $400 million, $500 million gift, you write a check out? is it hard to give that money? phil: yes. ♪

♪ david: because of the success of the company you are one of the , wealthiest men in the united

states and the world, and also one of the biggest philanthropists. but talk about that for a moment. when did you realize you just can't take it with you and it is better to give it away? at what point in your life do you say i have to do something with this other than hold onto it? phil: it was fairly late in the process because i always thought it was all going to disappear. i often said if this is a dream, don't wake me. but yes as the years went on, it , seemed more real, so as i got older, i said to me can take it -- is said you know, you cannot take it with you, but i wanted to focus on three, four main charities rather than spread across the board. david: to the university of oregon, your alma mater you have , given a couple of hundred million dollars related to athletics, but $500 million recently for a science center, so why did you decide to be so generous to your alma mater? phil: basically, i have to laugh because two of the great entrepreneurs, bill gates and steve jobs, basically dropped

out of college when they were freshmen, and my story is exact opposite. the company nike is really the result of two universities. the university of oregon and stanford, so i tried to get back -- give back to those two schools. the other one that means a lot osu, which has a very outstanding leader in their cancer research area. david the oregon science health : university, you gave them $500 million dollars for cancer research. you also gave $400 million for a new scholarship program at stanford university. when you give that gift, do you write a check out or do you just hand them the money -- is it hard to write out that check? phil: yes. some of it has been given in stock and some paid out over

several years. david: you have two sons, one died tragically in the scuba diving accident. how have you tried to memorialize him in that way? phil: he was a big sports fan, so we gave some money to the university of oregon for the new basketball arena, which was named after him. david: today, what is left for you to accomplish and what do you want to look up list you have not accomplished? phil: i look back over the past couple of years and am pretty happy over the past couple of years, particularly around the philanthropy and what i've been able to do, but i take my time to think about those things and i'm feeling good about things right now. david: do consult with your wife on things like that? phil: absolutely, she has final approval. david: where did you meet your wife? phil: i taught two years at oregon state, and she was one of my students. david: she was a good student? phil: she was quite a good student. she was a better student than i was. david: it is unrealistic to make

these kinds of products in the united states, would you say? shoes and those kinds of things? phil: it is as we speak, but manufactured technology is changing very rapidly, so 5-10 years come out there somewhere there will be shoe manufacturing , -- years, out there somewhere, there will be shoe manufacturing in the united states, which is good news. the bad news is there will be a -- not a lot of jobs -- not be a lot of jobs. it will be automated. david: you never actually hurt your knees so much you don't , have artificial knees or hips, so how did you avoid those problems by running so much and not having damage your body, you were just a graceful runner, or had good shoes? phil: i did not put much strain in my knees because i did not have very much muscle mass, so i was lucky that way. i still get out and walk. when i was when i was out for 70, one of my runs, i was passed by a woman and a baby carriage and realized that maybe i should quit trying to run and just walk. [laughter] david: the athletes you have

met over the years -- you have been involved with some of the most famous athletes, tiger woods, john mcenroe, steve prefontaine, michael jordan among others. do any of them that stand out to you as role models for youth, or do you think all of them are, and which of them have you developed the closest personal relationship with? phil: i know all of them pretty well. they are all of that bit different. -- a bit different. was john mcenroe a role model? yeah, kind of, but a lot of people would disagree with that. which one stands out more than the other -- i really do look at them as my children, kind of and , who is your favorite child, you can't say that. david: does tiger woods give you golf tips, or you don't play golf? phil: i do, badly,. -- badly. he tried to give me a tip, but it didn't work. david: the high point of your career, you would say was when , nike went public or the success nike currently has?

what would you say is the most favorite memory you have? phil: i look at nike as my work of art, if you will and the , whole painting is what matters. david: let's talk finally about leadership. leadership is not clear to people, whether you are born with it, inherit it or become a , leader by education. what you think makes a great leader? phil: they come in all shapes and sizes, don't they? obviously the hollywood prevailing leader is tall, handsome, strong-jawed, but a lot of times the real good leaders are just the opposite. first of all, they have to want it, but they come in all shapes and sizes. i do not know if there is anybody less than that. david: now you are famous for wearing sunglasses, and i appreciate you not wearing them for this interview. is that because you are shy by nature or you don't want people to see you?

some no, basically, i have contact lenses that make the future right, so the future is so bright that i wear them all the time. [laughter] ♪

♪ emily: this is the best of "bloomberg technology." we bring you all of our top interviews from the week in tech. another cyber attack cripples companies. chris young joins us with his take on the latest ransomware and how to contain the threat. a google search for answers and an appropriate responseaf