Cool Runnings

By Sean Gregory / Beaverton

My goal: a 10-min. mile (fear not, olympians). Wearing a pair of Nike Plus running shoes, I wind along a tree-covered Oregon trail, glancing at my iPod nano every few strides. I wish that little chip in my Nikes would malfunction. It's telling the nano my pace, and the nano in turn is taunting me: a 10-min. 30-sec. clip, with about another half a mile to go. I sprint--and almost die--near the finish. One mile completed, the nano screen reads. My time: 9 min. 42 sec. Yes! Cue the Chariots of Fire music!

With Nike Plus, a group of Nike executives has combined the world's top sporting-goods brand with the world's most beloved gadget, all while cleverly capitalizing on the social-networking craze. Getting to the finish line wasn't any easier for them than it was for me. Nike, based in Beaverton, Ore., had to bring together people across divisions to conceive and create the product, test and retest the Nike Plus shoe to meet the exacting standards of both Nike and Apple, and along the way meld the cooler-than-you-are cultures of two very different companies.

The result is a product that could completely transform the way we run. "Nike Plus is not just another product aimed at improving the cushioning of the footwear," says Matt Powell, an analyst at SportScanInfo, an athletic-footwear research firm. "It gets at improving the experience for the runner, at building a community."

The $29 Nike Plus iPod kit, which was launched in mid-2006, allows runners to put a tiny sensor at the bottom of a $100 Nike Plus running shoe. The kit also includes a small receiver that attaches to an iPod nano and measures the runner's speed, distance and calories burned. The data pop up on the nano's screen while it plays. (Or push a button, and a voice will tell you how you're doing.) There's an aftermarket for all that info at nikeplus.com where runners can upload their data, compare speeds and even challenge a worldwide community to top their times.

To get Nike Plus to market in July 2006, marketing chief Trevor Edwards brought together managers from apparel, technology, research, footwear design and music, all working with Apple on the technology. "The best teams get a little borderless," says Michael Donaghu, Nike's director of footwear innovation. "We got really borderless, much more than we have on some other ideas."

This extreme collaboration has paid off. According to SportScanInfo, Nike captured 56.7% of the $3.6 billion U.S. running-shoe market through the seven months ending in August 2007, compared with 47.4% in 2006. "No question, Nike Plus is one of the primary drivers of the company's running growth this year," says Powell. Competitors New Balance, Asics and Adidas have lost market share in running shoes.

Nike's success is all the more remarkable given its earlier technology stumbles. One attempt at a gadget that could measure a runner's speed and distance was a clunky pod that attached to a shoelace. Mark Parker, then Nike's co-president and now its ceo, called the pod "the tumor" and in 2004 clamored for something better. Donaghu's group presented a prototype with a tracking device tucked under the sole. "The thought was to get rid of the tumor by making it disappear," says Michael Tchao, the general manager for Nike Plus.

Meanwhile, a device called the iPod was gaining momentum. "You could go to any city, anyplace around the world, and we were noticing that people were running with music," says Edwards. "You kind of go, Aha!" At a team meeting, a designer presented a sketch of an iPod in a Nike shoe. Another "aha!" moment. Sure, you can't place an iPod in a sneaker, but what if that sensor tucked beneath the shoe could talk to the iPod and reveal the data while runners listened to their music? In late 2004, Nike pitched the idea to Apple executives, who bit. They saw that Nike cared deeply about technological innovation, and a partnership was born.

It wasn't a perfect fit. Apple is famously secretive, surprising the market with its new products, while Nike usually informs retailers of its plans six months in advance. In this case, Nike acquiesced to the Apple way, putting Nike Plus on sale just 50 days after announcing it. The project carried code names: Nike, the goddess of victory in Greek mythology, was Victoria North, and Apple was Victoria South.

As the product was perfected, Nike had another puzzle: What would runners do with all that data? Stefan Olander, the company's director of digital content, joined the Nike Plus team early on to figure that out. Nike knew runners were logging results by hand. What if this product could do it for them? The result was nikeplus.com "The site puts you and your achievements at the heart of this," says Olander. About 500,000 runners from more than 160 countries have signed on, and some 30 million miles (48 million km) have been uploaded. The site graphs distances for each jog and can tell runners how fast they were going at each point along the way. A map function lets them view popular routes in their neighborhoods.

This booming digital community has changed the way Nike thinks about innovation. To Nike, you're no longer just buying a sneaker. You're joining a global jogging club--and keeping up with fellow runners will, the company hopes, motivate you to buy more Nikes. "In the past, the product was the end point of the consumer experience," says Olander. "Now it's the starting point."

Nike Plus faces some stiff challenges. Sure, Nike is gaining market share in running, but consumer tastes are shifting away from that type of shoe. According to market-research firm NPD Group, fashion-themed sneakers overtook running shoes as the top-selling category in the athletic-footwear market in July 2007 for the first time. "The athletic-footwear market will see some tough sledding for the next couple of quarters," says John Shanley, an analyst at Susquehanna Financial Group.

But why stop with running shoes? In early October the company will release the Nike Amp Plus, a wristband that serves as a remote control for your nano. And Nike may expand the Plus concepts--measuring performance and building interactive websites around the data--to other sports. So the Nike Plus team might have many laps to go. But it's surely sprinted out of the blocks.