Shoe Dog: A Memoir by the Creator of NIKE — a review
Tags: Book Review, Business, Running, Startup, Books

Shoe Dog: A Memoir by the Creator of NIKE — a review Jenni Follow Apr 22 · 9 min read

A refreshingly honest reminder of what the path to business success really looks like … It’s an amazing tale — Bill Gates

This is a review of Phil Knight’s book Shoe Dog, the story of how he built Nike. If you’re thinking of starting your own business, read this book. It teaches you that you don’t necessarily need talent or people skills or business acumen. So what do you need to cope with problems that you never imagined or planned for? You need three things — belief in your idea, friends, and the ability to keep going no matter what.

I felt that reading this book was like watching Knight on the ocean — he’s heading up a wave and balanced precariously at the top- all’s well, for a while. Then, with no warning, you see him slip down the other side of the wave — he’s peering into the abyss and it looks like there’s no way out.

Can you ride this one out? Or is it going to dump you? Photo by camila castillo

What’s a shoe dog?

Here’s Knight’s definition:

Shoe dogs are people who devote themselves wholly to the making, selling, buying or designing of shoes with an all-consuming concern about insoles, outsoles, linings, welts, rivets and vamps

A Crazy Idea

What if there were a way, to play all the time, instead of working? Or else to enjoy work so much that it becomes essentially the same thing… I saw my Crazy Idea shining up ahead and it didn’t look all that crazy — the Blue Ribbon Sports Company of Oregon

It started in 1962 — Phil Knight was in his early twenties and he’d just finished his Master’s at Stanford. For one of his final classes, he’d written a research paper about his Crazy Idea — importing Japanese running shoes into the U.S — for which he received an A. He couldn’t stop thinking about it. So, he persuaded his father to lend him the money for a trip around the world. He wanted to see as many places as possible, including Japan. Because this is where he wanted to pitch his idea for running shoes.

Against all expectations, his father lent him the money and he left for Hawaii. Ensnared by the sun, surf and women, he decided to stay and start selling encyclopedias, of all things. But he hated selling, failed dismally, then decided to sell financial securities instead. But, he failed at that too. Finally he decided to continue his journey and flew to Tokyo, where he approached the Onitsuka Corp and offered to sell their Tiger shoes in the U.S. He was scared, he didn’t know what to do or what to say, but they loved his presentation (which had been the same one he’d given in college) and they agreed to send him the shoes.

Belief is irresistable

I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in…Belief is irresistible

Photo by Eddy Lackmann on Unsplash

Despite constant reminders, it took the Onitsuka Corp over a year to send him the shoes, but eventually they arrived. The first thing he did was to send two pairs to his old track coach Bill Bowerman (a real shoe dog “obsessed with how human beings are shod”) who quickly became Knight’s partner and friend. Their initial sales strategy was simple. They drove to as many track meets as they could and talked to the coaches, the runners and the fans. Turns out, that unlike encyclopedia’s, Knight could sell shoes because he believed in running.

It wasn’t long before that first shipment sold out.

Don’t stop

Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought where “there” is

Now that the Blue Ribbon Sports Company was up and running, Knight started employing people. It quickly became clear however, that Knight wasn’t a great communicator; he didn’t really understand business; and he didn’t really understand other people’s motives.

His first employee, Jeff Johnson from California, sent daily letters explaining how things were going, asking for advice and requesting encouragement. Knight never responded, he didn’t know what to say or where to begin. So, not a great manager then. But regardless, Jeff stayed on, and continued to write letters, that Knight continued to not answer.

When his business was only two months old, the first of what would be many problems reared its head. Knight was faced with a legal battle, by a coach, he called “The Marlboro Man”, who insisted that he had been given the rights to sell Tiger shoes exclusively in the U.S.

In what would become a theme in this book, he wrote letters to Onitsuka, received no reply, then got on a plane and headed for Tokyo. Shaking in his shoes, he met with Ontisuka’s representative. He had a pitch ready, but ended up pouring out how he felt, about how personally distressed he was at this turn of events. He appealed to honour and fairness, cited his sales record, dropped names and after he’d finally run out of words, he left with an agreement that he could sell Tiger shoes to the thirteen western states.

He was on top of the world.

After meeting Mr Onitsuka, Knight climbed to the top of Mt Fuji to celebrate — Source

One problem down, innumerable ones to follow.

The supply problem

Onitsuka was guaranteeing me a supply, but their supply was chronically, dangerously, late

Knight was in a constant battle to keep ahead of the demand. Shoes were ordered and sold before they arrived. Then “The Marlboro Man” made another appearance and started poaching his customers. Once again, he flew to Japan, convinced the owner that he had the larger, more established business (which he didn’t) and had offices on each coast and in the midwest (which he didn’t). He then bought $20,000 worth of shoes (with money that he didn’t have) which would be shipped to his East Coast office (which didn’t exist).

It was a constant struggle to find capital, but he eventually found premises and employees. Meanwhile his partner, Bowerman had written a book Jogging, that sold a million copies. Knight hoped this would boost sales, only to discover (to his chagrin) that Bowerman made no mention of Blue Ribbon or Tiger running shoes. But Bowerman was to eventually make it up to Knight, with a totally new design for a running shoe. But meanwhile money was getting tight again.

The banking problem

Money wasn’t our end game. But whatever our aim or end, money was the only means to get there

The banks that Knight dealt with were extremely conservative and wanted him to bank the money from selling his shoes. Perhaps not an unreasonable request. However, he preferred to put all his money into buying stock (with each order incrementally larger than the previous one), to keep up with increasingly larger orders. So there was nothing to put in the bank. The bank loaned him money, he paid it off, then borrowed more. Eventually he was thrown out of one bank, then another, and finally accused of fraud and threatened with investigation by the FBI.

Back in 1965, your banking options were limited, there were only two major banks in Oregon and no such thing as venture capital. Knight could sell more shoes than he could order, but he was struggling to find the cash to order them, and now his cash sources had run dry.

This looked like the end for Knight, but once again, he refused to give in. He found someone to pay off his debts — a Japanese financier, Nissho — finally someone who believed in Knight’s belief in his company. “Blue Ribbon could be a great success, maybe a $20 million account”. Like a ninja, Nissho swept in and paid off Knight’s debts. All Knight needed to do now was find another bank, which he did, after persistently ringing every bank he could find in Oregon, no matter how small. Another problems solved.

Unfortunately this wasn’t a permanent solution to Blue Ribbon’s ever-increasing need for money. But Bowerman had another idea to help them out in the short-term.

The Nike Cortez

The runner laced them on and ran like a rabbit

In 1970, the outer sole of the training shoe was no different than it had been since it’s creation. But Bowerman was about to change all that with his wife’s waffle iron. One day he was staring at the design of the waffles on his plate, when he had an idea. Although he later destroyed the waffle iron by pouring urethane into it, he kept trying different substances and eventually settled on rubber. He stuck this waffle-like rubber onto the soles of a running shoe and gave it to one of his runners. And just like that, Bowerman had created history with the Cortez shoe. In another history-making step, Knight decided to re-brand Blue Ribbon as Nike (the goddess of victory) and added a tick or “swoosh” on their side. He also decided to sell them in bright orange boxes to differentiate them from his competitors.

With the advent of the Nike Cortez revenue jumped to $84K for that year, Knight was happy for the moment.

But as time went on, Knight spent more time in the courtroom, they continued to have supply issues; they lost friends along the way; and finally ended up with a US Customs bill for $25 million. It seemed the problems were never going to stop.

The going public problem

Going public. No thank you…It’s just not for us. No way. Never.

Photo by Aidan Bartos on Unsplash

To keep growing, Blue Ribbon needed millions. They looked at going public, and decided they never wanted to be answerable to stockholders. So they applied for a loans. They issued debentures to a small group of people. Knight frequently discussed going public, and everyone voted against it, every time. But with 90% debt, eventually going public became mandatory and in 1980, Nike created 50 million shares with only 2 million of those going to the public at $22/share.

Knight’s money problems were over and he was the majority shareholder, he still ran the company, there would be no struggles for control. So how did he feel? He writes that he felt regret, because he honestly wished he could go back to the beginning and do it all over again.