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What Every Entrepreneur Can Learn From Under Armour’s Early Beginnings

Kevin Plank Under Armour 2016Kevin Plank Under Armour 2016
Founder and CEO of Under Armour Kevin Plank speaks at the 2016 CES trade show in Las Vegas, Nevada, January 6, 2016. Photograph by Steve Marcus — Reuters

The sports world loves an underdog story. And the saga of Under Armour, the sports clothing and accessories company that has carved out a space in a market dominated by well-established players like Nike, has all the elements of a wonderful, up-from-under narrative.

In 1996, University of Maryland football player Kevin Plank launched Under Armour with the design of his moisture-wicking T-shirts. The Baltimore-based company now produces and sells men’s, women’s and children’s apparel, footwear, and accessories. UA even overtook Adidas early in January, according to The Wall Street Journal, which reported that Under Armour’s U.S. sales of footwear and apparel totaled $2.6 billion in the 11 months through Jannuary 3, compared with $1.6 billion for Adidas.

This is truly a David and Goliath story, especially when one considers the challenge UA encountered as a new young company facing titans like Adidas, Nike and Reebok (now part of Adidas). UA has succeeded not by going head-to-head against the big players, but by carving out a niche; it has delivered the right product at the right price with the right channels and the right message to target a younger demographic, the millennials and Gen Z. Brand is determined by customer experience, which is optimized when all the elements of strong marketing – product, price, communication and channels – work together in a coherent manner.

UA’s every move – even seemingly unoriginal moves such as creating a tagline or bringing in a celebrity spokesperson – has been carefully aimed at its target younger demographic. In this manner, UA has grown – and will continue to grow with this demographic as they go through their life cycle. Their memorable tagline – “I Will” – has proven to be a brilliant move to target the key millennial market. It reflects persistence and resilience and even gives permission to fail, an important aspect for young adults who will go through life experiencing their fair share of downs with the ups.

In terms of celebrity endorsements, UA has consistently partnered with the up-and-coming rather than the established sports stars. UA struck gold with its relationship with Golden State Warrior point guard Stephen Curry. On May 10, Curry became the first unanimous winner of the NBA’s Most Valuable Player award, his second straight MVP. Within hours, UA launched and sold out its limited edition Curry basketball shoes.

The selection of 22-year-old golfer Jordan Spieth as an UA model has also proved to be a shrewd move by Ryan Kuehl, Under Armour vice president for sports marketing and sponsorships. Speith was only 19 when he was signed, but Kuehl saw something in the way Spieth handled himself, saying, “He was mature beyond his years.” And although Spieth had what has been described as a “meltdown” at the Masters in April, his ability to rebound has proved to be a benefit to UA. Endorsement deals with sports figures do typically represent a significant risk, either from a potential scandal that erupts or a failure of ability, but UA’s tagline comes in to save the day. “I Will” gives permission to Spieth – and by extension UA customers – to have a bad day or a bad phase; the words imply that ultimately she or he will prevail.

Given a recent setback, UA executives may have to keep faith in their own slogan. Earlier this month, UA announced that two of its key executives would be leaving, sparking concerns over the company’s future; shares immediately fell more than 7%. UA Chief Merchandising Officer Henry Stafford will leave in July after six years with the company, as will Chief Digital Officer Robin Thurton. The positions will be internally filled, at least temporarily, from those presumably steeped in the UA culture.

This turnover will test if UA’s long-term strategic planning and implementation has been institutionalized and internalized. If so, UA will likely experience continuity, even if there is a short-term hiccup or blip. Consider the Harvard Business Review article: “If Brands Are Built Over Years, Why Are They Managed Over Quarters?” A company’s culture takes a long time to build; once built, it takes an equally long time, if not longer to change! Based on what UA has done so far, I would bet on the long-term positive prospects.

The takeaway for entrepreneurs is not to give up in the face of what appears to be a formidable market. Try to stake out a well-differentiated target market or niche; avoid aiming to be all things to all people. Craft a well-defined strategy, and implement it in a cohesive and consistent manner. Your “brand” has to be more than the message; it has to be based on the whole customer experience. An underdog, in other words, must have a well-crafted strategy and implementation proposal, not just a dream.

Sharmila C. Chatterjee is Senior Lecturer in Marketing and the Academic Head for the Enterprise Management Track at the MIT Sloan School of Management.