While I really enjoyed listening to the perspective of Nate, I think you guys understated the implications of Nike’s SJW marketing and activism to the fall in its market performance. You guys walked into it with the Caitlin Clark situation, which is clearly a product of identity politics run awry.
Angering WNBA fans by giving CC a shoe first puts zero dollars at risk, while doing one potentially creates a top selling release of the year. Yet they didn’t because there is *has to be an odious culture of SJW politics to prevent such an obvious business decision. They don’t even market her despite having her on a deal for over a year. A company know for making a sports figure larger than life was getting lapped by an insurance company. https://youtu.be/zCSKeVzQ6a4
This is the result of years of promotion of current thing culture war issues that are now driving internal decisions. Once they believed it was good for business now it’s hurting them. Hoist with their own petard.
Ethan, you’ve mused how Nike was immune from the backlash like other companies, positing they were too big to fail. I think cultural entrenchment was a factor plus with some moats from exclusive licensing deals, but I think the chickens came home to roost later than expected because of the nature of the business. Nike is not an every week purchase. I might be in market for a pair of basketball ball shoes every year or two. So the impact of people voting with their dollars had a lagging effect to consumer sentiment. I would also guess that effect also compounds as fewer people see the brand as cool and aspirational.
I have a bit of knowledge when it comes to the athletic sneaker business. A large part of the talent working on biomechanics and performance of shoes was steered towards innovative materials- not to improve performance but to improve *sustainability*. Shoe companies had teams of highly paid engineers focusing on making *sustainable* shoes made out of mushrooms or reclaimed ocean trash and though it was good for PR it was not good for the consumer. If you’re a performance company you should probably put performance first imo. Then comes fashion then comes everything else.
Honestly every piece of clothing I've bought over about the last 10 years seems like the material has been spec'd down to the bare threads. Nate mentioned On Cloud shoes, which I love and now I'm a loyal customer, but I only use them for casual. I would never wear them for running. For that I still buy Mizuno Wave Riders, been wearing those for over 20 years.
The problem is Nike is so so much faster they could fuck around with shoes made of slime mold and people would still be coloring adidas logos on their shoes during marathons (I do think others have caught up a bit though)
This was a fun conversation to listen, always enjoy hearing Nate's insights on HoS.
I think you guys made a great point about how so much of creative decision making requires "feel" and can't always be deduced down to data. So much of today's business environment is obsessed with optimization and "data driven decision making" and so obviously too many business leaders are gonna take the conservative approach and follow all of those fancy charts and dashboards prepared for them. Plus it's a lot easier to justify your decision making to Wall St. and investors.
I think it just depends on who your audience is. Going woke is a great idea if your audience is actually woke. But if it is not it is highly dangerous/destructive and these companies have burned through a huge amount of marketing capital/goodwill on pushing string on ideological fronts.
The hilarious thing is I honestly thing they often create more hostility towards the causes they are advocating for than they positivity they engender.
Surprised new balance didn’t get much of a mention here, where I work (UK, 70% ish female, avg age around 27, 80% I’d guess under 35) and a lot are wearing new balances in the office (a lot of the under 25s, esp females wearing them) - I still have them as a ‘dad shoe’ brand but they’ve made huge headway with the younger people, the 80s adidas’s also seem more popular now, Veja as well amongst a lot of women (although Kate Middleton likes them which may explain that one)
It’s a classic case of a company consuming its capital, which in the case of Nike is its IP. They underinvested and that made the short term returns look fantastic but that always comes back around
Caitlin Clark could lean heavily into the culture wars and make her signature sneaker deal with Carhartt. Big chonky khaki high tops with a Gadsen flag on the side.
Three points - 1. So Nike tries to go for the woman market and business lags. They sign the hottest woman athlete in the world and no shoe. Which could lead to shorts , etc with a KC logo. I stand all day at work gave mostly worn Nike - went to a shoe shop and the guy talked me into Hoka’s in 2 months my foot pain went from a 5-6 to a 1 or less. 3. People do get conservative as they age but that’s no excuse to stop innovation. Don Henley summmed it up best 40 years ago - I saw a Deadhead sticker on a Cadillac.
While I really enjoyed listening to the perspective of Nate, I think you guys understated the implications of Nike’s SJW marketing and activism to the fall in its market performance. You guys walked into it with the Caitlin Clark situation, which is clearly a product of identity politics run awry.
Angering WNBA fans by giving CC a shoe first puts zero dollars at risk, while doing one potentially creates a top selling release of the year. Yet they didn’t because there is *has to be an odious culture of SJW politics to prevent such an obvious business decision. They don’t even market her despite having her on a deal for over a year. A company know for making a sports figure larger than life was getting lapped by an insurance company. https://youtu.be/zCSKeVzQ6a4
This is the result of years of promotion of current thing culture war issues that are now driving internal decisions. Once they believed it was good for business now it’s hurting them. Hoist with their own petard.
Ethan, you’ve mused how Nike was immune from the backlash like other companies, positing they were too big to fail. I think cultural entrenchment was a factor plus with some moats from exclusive licensing deals, but I think the chickens came home to roost later than expected because of the nature of the business. Nike is not an every week purchase. I might be in market for a pair of basketball ball shoes every year or two. So the impact of people voting with their dollars had a lagging effect to consumer sentiment. I would also guess that effect also compounds as fewer people see the brand as cool and aspirational.
I have a bit of knowledge when it comes to the athletic sneaker business. A large part of the talent working on biomechanics and performance of shoes was steered towards innovative materials- not to improve performance but to improve *sustainability*. Shoe companies had teams of highly paid engineers focusing on making *sustainable* shoes made out of mushrooms or reclaimed ocean trash and though it was good for PR it was not good for the consumer. If you’re a performance company you should probably put performance first imo. Then comes fashion then comes everything else.
Honestly every piece of clothing I've bought over about the last 10 years seems like the material has been spec'd down to the bare threads. Nate mentioned On Cloud shoes, which I love and now I'm a loyal customer, but I only use them for casual. I would never wear them for running. For that I still buy Mizuno Wave Riders, been wearing those for over 20 years.
The problem is Nike is so so much faster they could fuck around with shoes made of slime mold and people would still be coloring adidas logos on their shoes during marathons (I do think others have caught up a bit though)
A profitable company should hire people who actually like the company. Don’t marry a person whose driving desire is to change you into somebody else.
This was a fun conversation to listen, always enjoy hearing Nate's insights on HoS.
I think you guys made a great point about how so much of creative decision making requires "feel" and can't always be deduced down to data. So much of today's business environment is obsessed with optimization and "data driven decision making" and so obviously too many business leaders are gonna take the conservative approach and follow all of those fancy charts and dashboards prepared for them. Plus it's a lot easier to justify your decision making to Wall St. and investors.
BTW... Ethan... "Meat Space?" How about "human space" or "physical space?"
Nike... Ubisoft... Disney/Marvel/SW... "Go woke, go broke" is reductive and not the complete story. But it seems to be part of it.
I think it just depends on who your audience is. Going woke is a great idea if your audience is actually woke. But if it is not it is highly dangerous/destructive and these companies have burned through a huge amount of marketing capital/goodwill on pushing string on ideological fronts.
The hilarious thing is I honestly thing they often create more hostility towards the causes they are advocating for than they positivity they engender.
Surprised new balance didn’t get much of a mention here, where I work (UK, 70% ish female, avg age around 27, 80% I’d guess under 35) and a lot are wearing new balances in the office (a lot of the under 25s, esp females wearing them) - I still have them as a ‘dad shoe’ brand but they’ve made huge headway with the younger people, the 80s adidas’s also seem more popular now, Veja as well amongst a lot of women (although Kate Middleton likes them which may explain that one)
It’s a classic case of a company consuming its capital, which in the case of Nike is its IP. They underinvested and that made the short term returns look fantastic but that always comes back around
Caitlin Clark could lean heavily into the culture wars and make her signature sneaker deal with Carhartt. Big chonky khaki high tops with a Gadsen flag on the side.
Three points - 1. So Nike tries to go for the woman market and business lags. They sign the hottest woman athlete in the world and no shoe. Which could lead to shorts , etc with a KC logo. I stand all day at work gave mostly worn Nike - went to a shoe shop and the guy talked me into Hoka’s in 2 months my foot pain went from a 5-6 to a 1 or less. 3. People do get conservative as they age but that’s no excuse to stop innovation. Don Henley summmed it up best 40 years ago - I saw a Deadhead sticker on a Cadillac.