tv The David Rubenstein Show Peer to Peer Conversations Bloomberg July 3, 2017 3:00pm-3:31pm EDT
>> this is bloomberg television. it we have breaking news this hour. a car crashed into a crowd at boston's logan airport and 10 people have been taken to hospital with emergency services saying injuries are of varying severity. driver error is being investigated as the cause. reserve chair janet yellen hospitalized over the weekend visiting london. she was treated for an infection and admitted friday, discharged today. she says she's returning to washington and expects to receive her schedule this week. tesla reports second-quarter deliveries are up to just over
22,000 vehicles. just over 10,000 were model x. the tesla ceo elon musk said reduction of the model three will begin friday. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. now we return to unscheduled programming. -- our scheduled programming. ♪ >> the company is now worth a market capitalization of $100 billion. revenues of $30 billion. 62,000 employees. youyou ever imagine when
started this company that it could ever be what it became? get that question, i say we are exactly on plan. [laughter] but with you, i can't be a smart ass. >> that wasn't an original question? was a ride that nobody could foresee. about $2tic sales were million. last year, we did nine. it was 450% market share. of the runningge boom which became a jogging boom which became a fitness boom and we benefited from all of that. >> did the company benefit more from a marketing company or a technology company? a combination of both? ios 8 we are a marketing company and the product is her is our most important marketing
tool. >> the skill set you brought, what would you say you brought? intellect, drive, leadership? >> all of that. >> in equal amounts. >> i've been pretty good at evaluating people. and that was one of the things i wanted to get through and i hope did come through in the book, how valuable the early partners were. my teammates. they were terrific. >> speaking of the book, here it is. i did not know what issue dog was. -- a shoe dog. >> it was someone who really loves shoes. that was me. i was a runner. all you really care about is the shoes. it became important to me and has been with me ever since.
>> you are from oregon and you said the first fossil we have as issue is 9000 years old. and it was from oregon. is that a special sign that it was designed for you to start this company? >> i haven't really thought of it that way. but i will take it. >> your father was a newspaper editor and when you wanted a summer job once, he told you he wouldn't hire you. why wouldn't he hire you? me pretty well. but there were two major newspapers in portland at the time. i went across the street and applied for a job and got it. i worked there for three summers. >> you were an athlete and you ran, but were you a superstar athlete, and average athlete? i was a little better than average but i was not a superstar. >> you got a scholarship to go
to the university of oregon? >> i was a walk on. >> your best time is four minutes and 10 seconds for a mile. four minutes 13 seconds. today thati tell you you had these choices. you can either have built nike or run a 3.56 mile. which would you have preferred? >> i will take nike. but i did paul is. >> afterwards, you went into the army, and you served in the reserves for a number of years. had you pick stanford? >> it was and is a good school. >> you got admitted and there was a class on entrepreneurship. >> the professor was really a
dynamic repressor. and he had you write a paper which is mostly what your grade would be and you are supposed to attach yourself to a small business in the bay area or make up a small business. he said to make sure you write about something you know. the electronics project was beyond me. i was one of the guinea pigs. i was quite aware of the process. it didn't make sense to me at the time that running shoes should be made in germany, which were dominating the world market. maybe japan can do to german shoes which abandoned to german cameras. so that was the premise. i worked hard on the paper and the professor liked it. >> you graduated and despite this great paper, no shoe company hired you.
and you didn't have the big silicon valley venture capital. he went back to your home and you became an accountant. with that exciting for you to be an accountant? >> i didn't plan to be an account for 50 years. i talked to a lot of people about what i should do and i was kind of a finance major. you could get your cpa certificate and get great education. that is what i did. >> before you did that, you went by yourself around the world? >> he was going on alone. i did not have that problem. when you were in japan, did he not stop to seek a shoe manufacturer? >> inspired by the paper that i wrote that i would call on the manufacturer to see about
importing shoes into the united states. i called on one, they were enthusiastic. >> they started shipping you shoes to accompany you had named blue ribbon. >> first place. >> i had to come up with something. >> they started shipping shoes and the job was to sell shoes. i understand you had a green valeant and would put them in the trunk and go around the track meets and sell the shoes. no at the time, you had vision of building a great global company. >> i thought we could be bigger. nobody expected to be as big as it is. >> they began to be competitive with you. he began to build your own company and you needed a symbol of a company and somebody came up with the swoosh.
you pay $35 for that? >> a graphic arts students that needed money. we said we will pay you two dollars and hour to get some designs and she spent 17.5 hours on it. >> that's pretty good. >> it did have a happy ending. when we went public, we give her 500 shares of stock and she has not sold a single share and it's worth over a million dollars now. >> you begin your own company after you parted ways with a japanese company. the jew design the shoes yourself? real the person that figured out what the shoes were going to look like? >> we were in a hurry. john kennedy how he became a hero, he said they think my boat. the tigers basically gave us an ultimatum and either sell 51% of your company a book value or we will set up other distributors. it kind of gave us the idea we had better change manufacturers.
>> i reveal the secret. if you have better shoes, can you run faster or does it not make that much different? >> i think the shoes are key. we still believe in the mile run, lighter is better and makes a difference. if you try to run a mile in dress shoes, you won't run as fast as you will in cleats. canvas training shoes. andgo for a six mile run you come back and your feet are bloody. >> the dominant companies were german. where they happy with you coming along? did they try to get you out of business? they kind of didn't worry too much about us.
until it was too late. we kind of snuck up on them. >> and basketball, you had somebody named michael jordan. made the shoes really dramatic. he banned them in the nba. we ran a big as that said band in the nba. >> when you wear his shoes, can you jump higher? >> i think you might. >> i want to go get some. ♪
>> we worked at it and worked at it. he had worn adidas his whole life but he was right there. we had a small office in eugene and the guy that ran the office ,e came his brother practically, and ultimately convinced him to switch to nike. he was our first comment track and field athlete. david: how hard is it, you have to pay them to use shoes? mr. knight: they all liked them so much, they were them. david: really? mr. knight: no. [laughter] it's good enough, that they demand an endorsement fee from us or whoever they are going to wear. the one that comes to mind is michael johnson. significant. john mcenroe was one of
your players. he, from time to time, would lose his temper. did that reflect poorly on your shoe? 's image was that he's a great tennis player but sometimes would lose control. did that help sales? mr. knight: the latter. he had a bad temper. but i always remember that arnold palmer had a bad temper. but he would keep it in control. you see him standing there ready to lose it and john went over. that didnold palmer not keep it in control. he was probably the most exciting player of his era. it was just that he was so intense that it would get away from him some time. he lost his temper a lot. he never lost his temper once.
>> i did not know john mcenroe the tennis player but the office next to mine was held by a man named john mcenroe, senior. he told me his son was really good. you always roll your eyes and i realized he was not exaggerating. .o let's talk about golf a man named tiger woods came along and you signed him on relatively early. was it hard to convince him to do this? tiger woods you could see coming from way back. from the time he was 15 to 20. occasionally in the portland area and we would invite him and his father out to lunch. so we were working on that for probably three years before we signed him. sign him up, he was your shoes exclusively.
you also began to make golf equipment? and you played golf balls and golf equipment. but now you're out of the business. >> it is a verily simple equation. we realized next year was not going to be any different. david: for a while, you are doing casual wear as well. there was the aerobics effort. you decided to make athletic shoes into a casual kind of shoe. we had sportswear, shoes, and clothes a significant part of the business. david: it's not just for athletes, you design shoes and have been for some time. you like it when people are wearing suits and wearing shoes as well. you wear a tech sedo or
something and you where -- mr. knight: black nike shoes. and basketball, you had somebody named michael jordan. a basketball player you have heard of. was it hard to sign him up? why was his shoe so successful? sign him uprd to because everybody wanted him. and we won that bid. we won that war. >> not money. just personality. we had a lot of the players. we didn't have great players, but we thought he had the chance to be that. he was way better than we ever could. black andred and white. he was a very exciting player.
he was handsome and he spoke well. david stern did us a huge favor. he banned it in the nba. ad that said "banned in the nba" and every kid wanted to shoe. david: it is still may be a best-selling basketball shoe? we were selling billions worth of jordan already and some kids knew who he was but some kids didn't know who he was. it became a brand. david: can you jump higher? if i were the shoes, i wouldn't jump higher. you might. >> when did you realize you just can't take it with you? and better to give it away?
men in the world. you're also one of the biggest philanthropist. this talk about philanthropy for a moment. when did you realize you can't take it with you and better to give it away? at what point, do you say you have to do something with this other than hold onto it? mr. knight: kerley late in the process because i thought it was all going to disappear. i often said, if this is a dream, don't wake me. as the years went on, it became more real. can'tot older, i said you take it with you but i wanted to focus on three or four main charities rather than try to spread across the board. given a couple hundred million dollars related to athletics, but you have given millions to a science center. i did you decide to be so generous? mr. knight: i have to laugh is , theyeat entrepreneurs
dropped out of college when they were russian. my story is the exact opposite. the company is really the result of two universities. i tried to get back to those, the main contributions. another one that means a lot to leader.ry outstanding you gave them five or million dollars for cancer research. gave a new scholarship program at stanford university. so when you give a $400 million gift, do you actually write a check out or do you wire the money? is it hard to write that check? >> yes.
it is stock, some of it is paid out over a few years. have two sons, one that died tragically in a scuba diving accident and in his honor, you have done some things. how have you tried to immortalize him in that way? he was a big sports fan and we gave money to the university of oregon. i have looked back on these last couple of years and i'm pretty happy with what has happened. ahead.ill be more going i take my time on those things and i'm feeling pretty good right now. david: do you consult with my wife -- with your wife on that? mr. knight: she has final approval. david: where did you meet your wife? mr. knight: i taught a portland state and she was one of my students. she was a better student than i was.
david: it's unrealistic to make these things in the united states? mr. knight: it is as we speak, but technology is changing rapidly. the bad news is there won't be a lot of jobs. you were a runner for quite some time. you never actually hurt your knee so much that you don't have artificial knees. how did you avoid those problems? >> i did not put too much strain on the knees because i didn't have much muscle mass. i still get out and walk. was 70, i got passed by a woman with a baby carriage. i thought maybe i should quit trying to run and just walk. the athletes you have met
over the years, you have been involved with tiger woods, john mcenroe, michael jordan. do any of them stand out as a person that is a role model for youth into you think all of them are? and which one to be developed the close relationship with? mr. knight: all the ones you mentioned i liked a lot and pretty well. is john mcenroe a role model? kind of. i think people might disagree with that. but which one stands out more than the other? do look at them as my children, kind of. who is your favorite child, you can't say that. david: did tiger woods give you golf tips? do you play? mr. knight: i do, badly. he tried to give me a tip but it did not really work. when: was the high point nike went public or came to the
success it currently has? >> i look at nike as my work of art. the whole painting is what matters. david: leadership is not clear to people. you become a leader. who do you think makes a great leader? mr. knight: they come in all shapes and sizes. times, real good leaders are just the opposite. just the people that -- first of all, they've got to want it. i don't know that there is anyone lesson. -- any one lesson. david: you're famous for wearing sunglasses and i appreciate you wearing them -- not wearing
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