In the mid-1980s, the Nike company made a strategic decision that would transform its culture and marketing forever. The company introduced the Air Jordan 1, designed for then rookie Michael Jordan. However, it wasn’t just any sneaker. It deliberately ignored the NBA’s dress code, which required players’ shoes to be at least 51% white to maintain a uniform appearance. The Air Jordan 1, with its bold black and red design, disobeyed these standards.
Nike was fully aware of the implications. Each time Michael Jordan wore the sneakers, the NBA fined him $5,000. Rather than changing the design or avoiding the controversy, Nike chose to pay the fines. They viewed it as a marketing investment, framing the narrative around individuality and challenging the status quo. This strategic risk paid off massively, resonating with the public (during and after games) and propelling the Air Jordan brand into iconic status. The result: a multibillion-dollar athletic footwear behemoth.
This story is a captivating example of how sometimes taking calculated risks can lead to extraordinary success. Every significant breakthrough comes with inherent risks and costs. For Nike, the risk included substantial fines and the possibility of backlash. In personal finance, taking similar risks might involve investing in unconventional markets, starting a business in a competitive industry or pursuing a career that doesn’t offer immediate stability.
For instance, you might consider investing in a start-up instead of sticking solely to established stocks and bonds. Conservative wisdom advises caution, but investing in a non-traditional product could offer returns far exceeding those of more predictable investments. It’s not about acting recklessly, but recognizing opportunities where the potential reward justifies the risk.
Conventional financial advice often emphasizes security and stability—steady jobs, saving a fixed percentage of income and investing in low-risk portfolios. While these are solid principles, they don’t always lead to noteworthy wealth or income. More specifically, a 21-year-old single should have an entirely different approach to investments and career choices than a 30-year-old family man. Every age and stage should have its own calculations of what is suitable and appropriate for each individual.
Another example is real estate investing, which is often seen as a reliable wealth-building strategy. However, some creative investors specialize in multi-family investment properties or larger real estate syndications instead of purchasing traditional single-family homes. These choices carry their own risks but offer opportunities for higher returns if managed effectively.
Nike’s success with the Air Jordan 1 wasn’t just about the cost of defying a rule; it was about transforming what could have been a setback into a unique opportunity. In life, unexpected costs can often be reframed as catalysts for growth. Whether it’s a market downturn affecting your investments or an unforeseen expense—these moments can be used to reassess, restrategize and pivot toward new opportunities.
If you face a job loss, for instance, it might be the impetus needed to pursue that side business or passion project you’ve always considered. The key is to see beyond the immediate damage and focus on the long-term potential gains.
Nike’s story with the Air Jordan 1 is more than a tale of sports marketing genius; it’s a lesson in the power of calculated risks. Sometimes, achieving significant success requires understanding the cost of doing business, taking informed risks and viewing setbacks as opportunities. In all instances, a trusted advisor, coach, mentor or family member should be consulted.
Would you rather live in a gorgeous, luxurious mansion with only one bedroom where you would have to sleep with your entire family and extended family, or live in a modest home with separate small bedrooms for each family member? Please email or message me to let me know your choice! Please let me know if you have a good “Would you rather” question, and we will highlight your submission.
Shmuel Shayowitz (NMLS#19871) is a respected real estate & finance executive, writer, speaker, coach, and advisor. As the president and chief lending officer of Approved Funding, a leading national mortgage banker and direct lender, Shmuel has facilitated over $3 billion of mortgages over the past two decades. Shmuel’s expertise spans various licenses and certifications, including specialized mortgage underwriter, licensed real estate agent, and accredited coach. His market insights and experience are highly sought after in the real estate, finance, and coaching industries. In addition, Shmuel is a seasoned real estate investor and property manager, facilitating thousands of rentals nationwide. Shmuel can be reached at www.approvedfunding.com/shmuel.
