Finding a great brand that's growing fast and buying the stock while the company is still small can lead to life-changing returns.

Nike (NYSE:NKE) first started selling athletic shoes under its trademark brand in 1972. The Nike Cortez is considered a classic -- a style that the company still sells today.

That first year marked the beginning of an explosive decade of growth, which came amid a brutal bear market for investors. But even a staggering economy in the late 1970s couldn't slow down the rapid revenue growth Nike was experiencing.

From 1972 through Nike's initial public offering (IPO) year in 1980, revenue climbed from less than $2 million to $269.8 million. Both revenue and profits roughly doubled every year.

A golfer wearing Air Jordan golf sneakers.

Image source: Nike.

Nike had its IPO on Dec. 2, 1980. The stock was first sold to the public at $22 per share and traded in the over-the-counter (OTC) market on the NASDAQ. There have been seven stock splits -- all 2-for-1. This means shareholders received two shares for every one share they owned. But unfortunately, a stock split is not free money, as the share price is cut in half so that the total value of the investment stays the same.

If you had bought just one share at the IPO price, you would own 128 shares worth $11,520 based on the current trading price of $90 per share.

But if you had invested $10,000, you would own 58,181 shares. That investment would have a value today of $5,236,290.

Many investors (including myself) might look at that as a pipe dream. Who would be lucky enough to buy a great growth stock at its IPO and make millions? The thing is, Nike was already becoming a household name by 1980. It was a relatively small company by today's standards, but Nike's shoes were being worn by famous athletes at major sporting events at the time.

In the early 1980s, Nike had already emerged as a leading supplier of athletic shoes. In the 1981 annual report, the company stated, "Today, Nike shoes have a reputation as being among the most technically innovative shoes on the market." Nike was the first company to make shoes with full-length cushioned midsoles, lightweight nylon uppers, the unique Waffle-sole, and the patented Air-Sole.

Investors who took the Peter Lynch approach ("invest in what you know") could have conceivably bought some shares of Nike. The stock actually traded below its IPO price through the first half of 1981. You could have bought shares for as low as $17.50 early that year.

However, I don't believe discovering Nike and buying around the IPO price would have been the most difficult thing to do. The real challenge for early investors would have been remaining patient during a brutal period for the company in the mid-1980s.

A lesson in patience

By 1985, growth had dramatically slowed down at Nike. Revenue for the fiscal year ending May 31, 1985, grew just 2.9% -- a far cry from the explosive growth just a few years earlier. What's more, profits dropped that year to $10.3 million, down from $40.7 million the previous year.

Nike stock plummeted 66% between 1982 and 1984. In hindsight, it would have been a huge mistake to follow the herd. But based on how Nike founder and CEO Phil Knight described the state of the business back then, it would have seemed like the right choice to sell and move on.

Here is what Knight said in his 1984 letter to shareholders:

Several factors affected us. Most significantly, our domestic footwear market is changing, edging away from athletic looks to a renewed demand for fashion and traditional styles. These changes resulted in inventory valuation losses over three times greater than 1983.

It's fascinating that the trends toward "fashion and traditional styles" hurt Nike in the mid-1980s, when today the sneaker giant is seeing booming business from the trend toward athleisure wear. The athleisure trend has essentially bridged the gap between mainstream fashion and athletic wear, which is fueling Nike's current momentum.

There is something to the idea of never selling a single share of any stock you buy. The reward of sticking with that one great stock can more than pay for the losers. Companies don't operate in a static environment; great businesses will find a way to keep growing. Nike certainly did.

A young rookie in the National Basketball Association (NBA) named Michael Jordan arrived on the scene the same year Knight penned those words in the 1984 annual report. Nike was about to conduct a business school lesson for the ages in how you effectively market a brand.

But there was an element of luck involved.

Jordan came close to signing a shoe deal with Adidas (OTC:ADDYY) (OTC:ADDDF), but Nike was offering to pay him more than his annual salary as a player with the NBA's Chicago Bulls. It was a gamble for the swoosh brand, because no one knew Jordan would become an iconic star.

The rest is history. That 2.9% growth rate Nike experienced in 1985? The Air Jordan shoe line experienced "unprecedented market success" when it was introduced, and Nike revenue soared to $2.235 billion by 1990 -- more than doubling in just five years.

The Jordan Brand makes up less than 10% of Nike's revenue today, but the introduction of the Air Jordan in the 1980s breathed new life into a company that was struggling. It's difficult to imagine where Nike would be today without His Airness.

Over the past few decades, Nike has innovated and marketed its way to being one of the top consumer discretionary brands. An investor who exercised true patience would currently be earning $51,199 per year in dividend income off their $10,000 investment in Nike stock at the IPO -- and that's before taking into account any potential dividend reinvestment along the way.