Shoe Dog: A Memoir by the Creator of Nike
Phil Knight, 2016
In 1962 Phil Knight, a 24-year-old runner, decided to sell Japanese running shoes in America and made up the name of his company right at the negotiating table. For the next eighteen years it kept coming close to collapse: banks turned it away, its main supplier decided to drop it, and the government sent it a bill for 25 million dollars. The founder of Nike tells honestly how he lived through it and why you can’t stop.
Who it is for
For anyone starting their own business or dreaming of one, for lovers of running and sport, and for everyone curious how a small company from Oregon survived debt, lawsuits and betrayal and became Nike.
Let everyone else call your idea crazy . . . just keep going. Don’t stop.
A morning run in the fog
A foggy morning in 1962, in Oregon. Phil Knight, twenty-four, is running down an empty road and thinking about something strange. On paper he’s a grown-up: he has finished university, earned a degree from Stanford’s business school and served a year in the army. Yet he still feels like the same shy, skinny kid who hasn’t done anything yet. He knows only one thing: he wants his work to feel like play, the way running does for an athlete.
He has an idea he himself calls his Crazy Idea. Back in a seminar at Stanford he argued that Japanese running shoes could push aside German ones, just as Japanese cameras had pushed aside German cameras. His classmates listened, bored. And now, as he runs, Knight gives himself a piece of advice: let everyone call the idea crazy, just don’t stop. Half a century later he would call it the best advice any of us should ever give.
Shoe Dog tells what happened next, from 1962 until the company went public in 1980. Knight rarely gives interviews, and here he isn’t writing a polished success story. He tells how a small firm came within a step of collapse again and again: banks refused to lend it money, its main supplier decided to drop it, and the government sent it a bill for 25 million dollars. He doesn’t hide his own mistakes either.
Ahead are six stories: how to sell what you believe in, why growth eats money, why having a single partner is dangerous, where inventions come from, what kind of people build a company, and what winning means in the end. Let’s start with the first meeting, when Knight didn’t even have a company yet.
A company invented in a second
Autumn 1962, the Japanese city of Kobe. Knight, in his one good suit, sits at the head of a long table, and across from him are the executives of Onitsuka, the firm that makes Tiger running shoes. The very first question catches him off guard: what company does he work for? There is no company. Knight remembers the blue ribbons he won for his races and hung on the wall of his room, and blurts out: “Blue Ribbon Sports of Portland.”
Then he repeats his Stanford paper almost word for word and says the American market for athletic shoes could grow to a billion dollars. The Japanese agree, and Knight asks them to send samples. He has to wait more than a year for them. He sends two pairs from the first shipment to his old track coach, Bill Bowerman, and Bowerman unexpectedly offers to become his partner. Each puts in five hundred dollars, and in the spring of 1964 the first order arrives: three hundred pairs at 3 dollars 33 cents a pair.
The most interesting part starts with the selling. In Hawaii Knight had tried selling encyclopedias door to door and failed: the rejections hurt him, and the memorized lines sounded fake. Now he drives to track meets, sells the shoes straight out of the trunk of his Valiant, and can’t write the orders down fast enough. Later Knight would realize: it wasn’t selling. He believed the world would be better if people ran a few miles every day, and that running was better in his shoes. People sensed that belief and wanted a piece of it.
It’s the difference between a promoter who pushes a flyer at you outside the subway and a friend who says, “Go to this café, it’s really good.” The words are almost the same, but you believe the friend because the friend actually likes it. Even earlier, selling shares in mutual funds, Knight had noticed the same thing: he wasn’t eloquent, but he knew the product and told the truth, and people liked that.
What does this mean for any business? First check what you yourself believe in, and only then go to people. Look for buyers where they need what you have: two sporting goods stores showed Knight the door, while at the stadiums the orders poured in by themselves. And don’t be afraid of the first “no”: rejection is hard for a shy person, but believing in the product helps you get through it.
About the author
Phil Knight, a former University of Oregon runner and a graduate of Stanford’s business school, founded the company that became Nike in 1964 with his coach Bill Bowerman. He ran it for about forty years and then stayed on as chairman of the board.
All books by this author: Phil Knight
Terms from the book
- Johnson
- Stanford
- Hayes
- Robinson
- Young
- Kobe: A port city in the south of Honshu, Japan’s main island. Onitsuka had its headquarters there.
- Onitsuka: A Japanese shoe company from Kobe founded by Kihachiro Onitsuka, and also its founder. In the book it made the Tiger running shoes that Knight’s company sold. Today it is known as ASICS.
- Tiger: Onitsuka’s brand of running shoes, which Knight’s company sold in the United States from 1964 to 1972.
- Blue Ribbon: Blue Ribbon Sports, the name of Knight’s company before it became Nike. A blue ribbon is the prize for first place.
- Bowerman: Bill Bowerman, the legendary track coach at the University of Oregon, Knight’s teacher and partner, a co-founder of Nike and the inventor of the waffle sole.
- Valiant: The Plymouth Valiant, an inexpensive American car in which Knight drove his shoes around to track meets.
- Price Waterhouse: A large international accounting firm. Knight worked in its Portland office.
- Nissho: Nissho Iwai, a large Japanese trading company. In the book it financed the purchases of Knight’s company and was its main creditor for many years.
- Exeter: A town in New Hampshire, in the eastern United States, where Knight’s company had its own shoe factory.
- Giampietro: Bill Giampietro, a shoemaker from New England who helped set up the factory in Exeter.
- Tadayuki Ito: The finance manager of Nissho’s Portland office, who bailed out Knight’s company in 1975.
- Kitami: An Onitsuka manager in charge of exports, then of operations, who broke the contract with Knight’s company in 1972.
- Davidson: Carolyn Davidson, an art student at Portland State University who drew the Nike logo, later nicknamed the Swoosh.
- Woodell: Bob Woodell, a long jumper on Bowerman’s team. After an injury he was left in a wheelchair, and later he became one of the company’s executives.
- polyurethane: A synthetic material similar to springy rubber. It is used for running tracks and for parts of shoes.
- Tailwind: A 1978 Nike running shoe with air cushions in the sole. The first batch turned out to be defective.
- Rudy: Frank Rudy, a former aerospace engineer and the inventor of the air cushion in the sole of a running shoe.
- Patton: George Patton, an American general of the Second World War whom Knight admired.
- Buttface: A joking nickname Nike’s executives used for their off-site meetings and for themselves. A word from the book, not an official name.
- Strasser: Rob Strasser, the lawyer who handled the lawsuit against Onitsuka and then became one of Nike’s executives.
- Bork: John Bork, a track coach who ran the company’s store in Los Angeles and later left to join Kitami.
- Eugene: A city in Oregon, home of the University of Oregon and its famous stadium.
- Prefontaine: Steve Prefontaine, known as Pre, the star of American running in the 1970s and a student of Bowerman’s. He died in a car crash in 1975 at the age of 24.
- American Selling Price: An old rule of American customs under which the duty on an imported product could be calculated from the price of a similar American product instead of the price of the product itself.
- antitrust: An antitrust suit is filed when someone believes competitors have colluded to push a rival out of the market.
All terms
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