In Shoe Dog, Phil Knight chronicles the journey of creating Nike, a globally-recognized athletic shoe and apparel company. Like many entrepreneurs, Knight started by solving his own problem—wanting high-quality, low-cost running shoes. He offers an honest perspective about the imperfect process of building a successful company.
Published in 2016, Shoe Dog is a guide to starting a business, following your crazy ideas, and overcoming obstacles. By offering his personal experience as a testament to the power of hard work and creativity, Knight aims to inspire other entrepreneurs, artists, and people trying to find their way in life.
Knight breaks down the process of creating Nike. First, we’ll discuss his Crazy Idea to sell Japanese running shoes. Next, we’ll describe how he followed this idea with his first company Blue Ribbon and some of the major developments during this period. Then, we’ll discuss how Blue Ribbon transitioned into Nike and how Nike became the successful brand it is today. Finally, we’ll explore Knight’s reflections on Nike and advice for young entrepreneurs, such as learning as you go and trusting your team.
Knight’s journey began with what he calls his “Crazy Idea”, or his way of making a mark on the world. His Crazy Idea was to partner with Japanese shoe companies and sell their shoes in America. He’d written his thesis on this topic in college, and he was passionate about both shoes and running. Although he didn’t have a concrete idea of what he wanted to do with his life or how he would execute this Crazy Idea, he decided to follow it and see where it took him.
Knight recommends following your own Crazy Idea, which he believes will motivate you more than the pursuit of money, success, or other people’s approval. Knight wants people to be passionate about what they do, just as he was with selling running shoes. Throughout the book, he advises readers to follow a calling rather than settling for a job.
Insights From Built to Last
Knight’s “Crazy Idea” is similar to Jim Collins and Jerry I. Porras’s idea of a Big Hairy Audacious Goal, or a BHAG, which is a goal that takes you out of your comfort zone. In Built to Last, Collins and Porras argue that BHAGs typically take 10 to 30 years to achieve and have a 50 to 70 percent chance of success. Your BHAG is supposed to be ambitious, as this will kick-start forward momentum. To accomplish a BHAG, keep these four ideas in mind:
Fully commit to it: You need to be willing to do whatever it takes to ensure your BHAG’s success.
Look beyond the money: Be driven by the urge to accomplish the impossible, not by profit.
Make it institutional: If setting a BHAG for your company, build the goal into the ethos of your organization so future employees and leadership can maintain the momentum of the goal.
Keep setting more BHAGs: To avoid complacency, continue setting goals even after you’ve achieved your initial BHAG.
When he was 24, Knight traveled to Japan to pursue his Crazy Idea. He pitched his idea to a Japanese shoe manufacturer, Onitsuka, whose shoes he liked. He wanted to be Onitsuka’s distributor in America, and he believed it would be a profitable venture—he told Onitsuka that they could surpass Adidas, the dominant shoe brand at the time.
His passion for his Crazy Idea paid off, and the businessmen agreed to his plan. They accepted Knight’s proposal and asked for the name of his company. Despite not yet having a company, he told them Blue Ribbon, inspired by his childhood wall, decorated with blue ribbons from track.
(Shortform note: Knight admits that he started his company by lying about having a company. Ambitious entrepreneurs often follow the advice of “fake it till you make it”: Theranos founder Elizabeth Holmes lied about her company’s blood testing technology, and Reddit created fake user accounts to populate its site. But what if you’d rather take the honest route? Instead of lying about qualifications or product updates to investors or business partners, try being forthright about the issue and offering a detailed plan to show that you’ve already thought ahead about the problem.)
Knight’s Crazy Idea got an unexpected boost when he sent samples of Onitsuka’s shoes to his college running coach, Bill Bowerman, who had always sought out high-quality running shoes for his team. At the time, Bowerman was the most famous track coach in America, training local champions and Olympic track stars, and Knight hoped he would like the shoes enough to order a few. So Knight was shocked when Bowerman said he not only liked the shoes, but he also wanted to be a part of the business.
Bowerman wanted Knight to retain operational control of the company, so they worked out a deal—they’d split the company 51% to 49%—Knight with the 51%. They each put money into Blue Ribbon, and Knight got his investment from his dad.
At first, Knight and Bowerman sold the shoes at track meets. Knight showed Onitsuka’s shoes to runners, coaches, and fans, who enthusiastically bought the shoes. Just a few months later, their fledgling company sold out of their shoes and ordered another shipment of 300 shoes.
(Shortform note: As Bowerman did for Knight, a good co-founder can complement your skills and create a more manageable workload. When looking for a good business partner, Tony Robbins recommends looking for someone who is solution-oriented, has a good reputation, shares your values, and has clear communication skills. You and your business partner should also reach a fair agreement on who runs the company and how to split equity. You should also solidify an exit strategy in case either of you want out of the business.)
Knight soon faced a problem: financing. As a small business founded in the 1960s, Blue Ribbon got startup money from banks, not venture capitalists. But the banks were reluctant to lend too much money to an unproven entity.
By 1965, Blue Ribbon was growing fast and doubling sales regularly—they sold $8,000 their first year. But this cash was quickly turned around to order the next, larger shipment of shoes. And because Onitsuka’s shoe shipments often arrived late, Blue Ribbon had less time to sell shoes, which then made each loan repayment period tougher. Thus Blue Ribbon struggled to meet bank payments and fought a low cash balance. This would be a problem for Knight for many years.
Three Funding Issues Start-Ups Face
Financing is a common problem for start-ups and small businesses, and many of the 90% of failed start-ups cite cash-flow problems as a reason for going out of business. Experts advise that to prevent funding issues, follow these three tips:
Don’t ignore scalability: When looking for funding, many founders don’t clearly communicate how they will grow their business. Show investors and financial institutions a plan for how you’ll use the money they loan or invest in your company. This was the main problem for Knight—he didn’t clearly plan or communicate how he’d use investors’ money.
Don’t neglect personal relationships: When networking with potential investors or banks, make a personal connection—don’t just try to secure funding. Even if they do provide financial support, you’ll be working with them, so foster a good relationship.
Know how funding works: There are several ways to fund your business: venture capital, loans, angel investors, and so on. Research different options and determine what’s best for your company. While Knight was limited with his options in the 1960s, new businesses now have more ways to fund ventures.
Knight knew he’d need a strong team to succeed, and from the start, he hired people who were hard workers and understood the appeal of running. He sought out people who could bring unique insights that would help the company grow, including Bowerman, Jeff Johnson, and Bob Woodell.
1) Bill Bowerman proved to be an asset to Blue Ribbon. His reputation kept growing as two of his runners won medals in the 1964 Olympics, thus giving Blue Ribbon more credibility. Additionally, Bowerman experimented with the shoes and made improvements; for example, he realized that they needed more arch support since American bodies carried more weight than Japanese bodies, which turned out to be an important early development for the company.
2) Jeff Johnson was an acquaintance of Knight’s in college and became Blue Ribbon’s first full-time employee when Knight hired him as a salesman. Johnson had an intense passion for running, so he connected easily with customers since they were also runners. Johnson brought a relentless, hardworking energy to the team—even when, a year after he joined the company, he got in a car crash and broke his skull, he continued to sell shoes. Knight was always impressed by Johnson’s results, and he eventually agreed to Johnson’s request to open the company’s first retail store, in Los Angeles. Later, when Knight needed to quickly open an East Coast store to expand the company, he put Johnson in charge of it.
3) Later, Knight hired Bob Woodell. Woodell was a former track star who was paralyzed from the waist down due to an accident. Knight liked him because he seemed eager to prove himself despite his disability. Knight asked him to run the company’s second retail store in Eugene, Oregon. Like Johnson, Woodell excelled at any job and grew with the company, eventually becoming its operations manager and later helping to design apparel.
Qualities of a Great Team
Knight acknowledges that much of Nike’s success comes from building a great team. But what makes a great team? Experts identified three key qualities of effective teams:
Intellectual Diversity: when the members of your team have a range of different experiences, backgrounds, and education, thus leading to more creative solutions. Gender and racial diversity also fall under this category.
Psychological Safety: when teammates feel safe enough to share their thoughts and ideas. When all members of the team are comfortable speaking up, the team can work better together as a whole.
Shared Purpose: a goal that the whole team believes is worth fighting for. Your shared purpose will most likely be your Crazy Idea. A shared purpose can also help create a shared identity.
These characteristics fit Knight’s team: While they came from similar backgrounds in athletics, they brought different individual strengths and experiences to the company, and Knight made them feel comfortable enough to share their ideas (it was Johnson’s idea, for example, to open the company’s first retail outlet in Los Angeles). Most importantly, each of them believed in the shared purpose of Knight’s Crazy Idea.
Despite Blue Ribbon’s impressive sales and new shoe designs, Knight began to worry about his partnership with Onitsuka. There were a few reasons for Knight’s worry:
Frustrated, Knight contacted a trusted Onitsuka employee, asking him what was going on. He confirmed that while there were no firm plans, Kitami was considering breaking Blue Ribbon’s contract and was looking for other distributors. Upon learning this information, Knight invited Kitami to Oregon. He wanted to show Kitami the business he and his team had built in an effort to change Kitami’s mind about cutting ties with Blue Ribbon.
(Shortform note: Onitsuka was motivated to find other distributors by a desire to increase their customer reach. Naturally, this was also Knight’s desire for Blue Ribbon. In Bowerman and the Men of Oregon, Kenny Moore suggests that Onitsuka’s goals and actions weren’t aligned—by failing to send correct shoe sizes or to manufacture shoes fast enough to meet consumer demand, and by hesitating to commit to a longer contract with Blue Ribbon, they failed to align their goals with Blue Ribbon’s goals as well. Thus, ironically, in pursuing more customers they blinded themselves to the company that could help them achieve that goal.)
But Kitami’s visit to Oregon didn’t help Knight’s relationship with Onitsuka. In fact, the visit confirmed Knight’s suspicions that Onitsuka planned to replace Blue Ribbon: While Kitami was in the bathroom, Knight examined a folder from his briefcase. The folder contained a list of 18 shoe distributors in the US, and Kitami planned to meet with half of them. Knight realized that separating from Onitsuka was inevitable. He decided the best course of action would be to first threaten to sue the other distributors in order to scare them off of taking Onitsuka’s business before Knight was ready to replace it, and second, to find another manufacturer for Blue Ribbon.
(Shortform note: By threatening to sue rival distributors, Knight was employing a common business strategy that some companies use to delay inevitable change. Ironically, in Bowerman and the Men of Oregon, Moore contends that many of the potential shoe distributors Onitsuka had spoken to—who Knight was threatening to sue—wouldn’t agree to work with Onitsuka anyway until they had formally ended their partnership with Blue Ribbon. Thus Knight’s threats of legal action to other manufacturers may have been unnecessary, as his actual opponent was now Onitsuka.)
Worried that Onitsuka would cut ties with Blue Ribbon, Knight started searching for a manufacturer to replace Onitsuka. He created a back-up company to use while he scouted for other manufacturers. He asked his team for name ideas, and Johnson suggested Nike—a name that came to him in a dream. Although Knight didn’t love it at first, he eventually chose the name Nike for the back-up company. He also liked that Nike was the Greek goddess of victory.
Knight hired a college artist named Carolyn Davidson to design a logo, and after multiple trials, she came up with the Nike Swoosh. They paid her $35. The Blue Ribbon team agreed it looked new, fresh, and timeless, but as with the Nike name, Knight didn’t love it.
(Shortform note: The $35 Knight originally paid Davidson would be worth $247 in 2022. Knight also gave her a diamond and gold Swoosh ring and 500 shares of Nike stock in 1983. Those 500 shares, which she never sold, are now worth close to $1 million.)
Seeking financial support for his new business, Knight found a Japanese trading company called Nissho, which was willing to make loans to Nike. Nissho also introduced Knight to other shoe manufacturers.
(Shortform note: Some researchers believe that creating a back-up plan is detrimental to success, since it creates the space for failure—so why did Knight benefit from creating a back-up plan? It could be because Knight clearly defined his success by his progress toward his Crazy Idea, not by the success of Blue Ribbon—the company was simply a vessel for achieving his Crazy Idea. Knight’s back-up plan succeeded because it supported his larger goal, thus creating flexibility for achieving his Crazy Idea. So when formulating a back-up plan, identify whether you’re creating more space for success—flexibility, like in Knight’s case—or creating space for failure.)
Eventually, Onitsuka heard about Nike. Kitami flew to the US to confront the Blue Ribbon team about it. Knight told him Nike was a back-up plan in case Onitsuka cut ties with Blue Ribbon. When Kitami asked if Nike shoes were currently in stores, Knight lied, telling him they weren’t. But Kitami traveled to Los Angeles and inspected the store, where he found hundreds of Nike boxes in the storage room. Kitami formally voided Blue Ribbon’s contract.
As expected, Onitsuka filed for breach of contract in Japan. Blue Ribbon quickly filed against them in the United States. In 1974, the trial began in Portland. Over several days, members of Blue Ribbon and Onitsuka were interviewed as witnesses. Knight explains that each member of the Blue Ribbon team gave questionable testimony, and Kitami lied on the stand.
After a tough legal battle, Blue Ribbon eventually won the case in the US. The judge ruled only on the trademarks and not on the contract breach, stating it seemed like a case of hearsay. He said that Blue Ribbon’s testimony seemed more truthful, ruling that Blue Ribbon could keep shoe rights and was due damages. The Blue Ribbon team was ecstatic about their win.
(Shortform note: Knight justifies separating from Onitsuka on the grounds that they weren’t loyal to Blue Ribbon because they were planning on finding another distributor, which would have put them in breach of contract first. However, in Bowerman and the Men of Oregon, Moore explains that as soon as the team sold a pair of Nike’s, they violated their contract with Onitsuka. This may not have been the most strategic decision: Many experts agree that when you suspect a party is going to break your contract, the best course of action is to reach some sort of agreement about it—not breach the contract in response.)
Despite their legal victory, Nike had financial problems to address. The company had an ongoing cash-flow problem because, in his relentless pursuit of growth, Knight insisted on placing shoe orders so large that the company could barely cover the cost. This meant that even though the shoes were selling well, the company’s bank accounts were often depleted, usually after either paying for one of these orders or after paying its financing company, Nissho.
At one point, Nike needed to make a $1 million payment to Nissho but was $75,000 short. To cover the difference, Knight depleted the bank accounts of all Nike’s retail stores and factories, causing workers’ paychecks and creditors’ checks to bounce. In response, their bank dropped them as clients, which meant they no longer had an account from which to pay workers, vendors, creditors, or anyone else.
Knight sought help from Nissho. Nissho audited Nike’s books and found that the company was in poor financial health, with debts looming and no means to pay them. However, Nissho fully believed in Nike’s potential and paid off all of Nike’s debt with the bank. Knight opened an account with a new bank soon after.
Understanding Why Investors Rescue a Failing Company
Like Nike, many of today’s successful companies received outside help to solve their financial problems. In Nike’s case, the rescuing company (Nissho) believed in Nike’s vision—and also stood to profit directly if the company succeeded. The history of business is littered with bailouts driven by similar motives: For example, Elon Musk organized a deal from investors and SpaceX to fund Tesla just hours before going bankrupt, urging investors to believe in his vision for the companies. If Tesla succeeded, the investors and SpaceX stood to profit off its success just as Nissho stood to profit off Nike’s success, giving them an immediate motive for funding it (as long as they bought into its vision).
But there are other reasons why one company might bail out another. In some cases, a competitor might help a rival because they see the competition as crucial to the success of the industry as a whole. For example, Apple almost filed for bankruptcy in 1997, but Microsoft bailed them out with a $150 million investment because they thought the competition would be better for the industry’s—and their own—future. In situations like this, the rescuing company may not stand to benefit directly, but instead hopes to benefit indirectly—less from immediate loan repayments and more from the resulting long-term health of the industry.
After being bailed out by Nissho, Knight and Bowerman focused on innovation. They discussed how the outer sole of the training shoe hadn’t changed in 50 years. Inspired, Bowerman used his wife’s waffle iron to make a gridded pattern for rubber shoe soles. After several rounds of experimenting, he sewed the insoles to the bottom of running shoes—and they were a breakthrough. Within a few years, the waffle soles helped popularize Nike since they broke out of athletic uses. Unlike competitors’ shoes, Nike’s waffle soles became a lifestyle shoe.
(Shortform note: Many experts agree that creative innovations like Bowerman’s are critical to the growth of new companies. In this case, the innovative new waffle soles were such a critical part of Nike’s success that the original waffle iron Bowerman used is on display at Nike’s headquarters. For years, the original iron was lost, but Bowerman’s family found it buried in their backyard in 2011, and they gave it to Nike.)
Knight and his team continued building the Nike brand by signing athlete endorsements. His first endorser was Romanian tennis player Ilie Nastase, and his second was Olympic runner Steve Prefontaine. Nike treated their endorsers as valued members of their team, not merely as billboards to advertise their products. For example, at the time, Olympic athletes weren’t allowed to accept endorsement money from brands, which meant that Prefontaine had virtually no money to live on, as he had very little time to work while maintaining a grueling training and competition schedule. To work around the rule, Nike offered him a position as the National Director of Public Affairs and paid him $5,000 a year. Nike’s good treatment of its endorsers paid off in loyalty to the brand, as Prefontaine, Nastaste, and later, others, proved enthusiastic ambassadors of the shoes.
(Shortform note: Knight’s instinct to recruit athlete endorsers was a smart one since athletes are now one of the most sought-after product endorsers. In Influence, the authors explain that the associative persuasive appeal of athletes is deep and widespread, cutting across ethnic, regional, age, and economic demographic groups. Athletes are also linked to many positive attributes that brands are eager to associate themselves with: youth, strength, winning, prowess, and physical attractiveness. And Nike has continued signing athlete endorsements: Global soccer icon Cristiano Ronaldo’s deal with Nike is estimated at around $1 billion.)
With Nike’s rising popularity and increasing sales came bigger challenges. In 1977, US Customs contacted Nike and asked for $25 million for retroactive duties on imported shoes. While Nike couldn’t afford this $25 million fine, they also couldn’t afford to pay increased duties on a regular basis. If they did, Nike would go bankrupt. The Treasury Department was unsympathetic to Nike’s dilemma.
Eventually, the Nike team took matters into their own hands and aired an advertisement that told the story of an American business being suppressed by the government. Knight notes that the ad received a favorable response. With so much pressure, US Customs decided they wanted to move on. They discussed settlement options and eventually decided on $9 million. Although Knight didn’t want to pay anything, he wrote the check, reflecting on how far Nike had come.
(Shortform note: Although Nike overcame the Customs battle, experts note that the government essentially subsidized Nike at the expense of other shoe manufacturers, who had to pay the full duty price. Nike responded to these claims, saying that the delayed duty pricing hindered their ability to grow as a company and thus catch up to their more established competitors.)
As part of Nike’s expansion, the team finally decided to go public. Knight and his team deliberated about this decision for a long time—they knew going public would help their finances, but Knight was concerned that shareholders would alter Nike’s identity and culture. To solve this problem, Knight and his team issued two kinds of stock—Class A and Class B—that allowed the current team to name three quarters of the board. The team also agreed that Knight should own 46% of the company—they thought Nike needed to be run by one person with a steady vision. These solutions ensured that Knight and his team kept their influence at Nike.
When they went public in 1980, the original Nike team, including Bowerman and Johnson, became millionaires. Knight was worth $178 million. But they didn’t let their newfound wealth get to their heads—instead, Knight and his team went back to work.
(Shortform note: The Nike team delayed going public because they didn’t want shareholders to affect the team’s identity—a common concern for entrepreneurs, who often worry that shareholders will exert unwanted influence on company decisions. This concern proved a long-lasting one for Nike, and in 2015—after stepping down as chairman—Knight created a limited-liability company (LLC) called Swoosh to hold 128.5 million shares of the influential Class A stock in Nike. Swoosh will make it difficult for outsiders to gain control of the company and will also determine much of Nike’s long-term direction.)
After 40 years as Nike’s CEO, Knight stepped down, causing him to reflect on the process of building Nike and achieving his Crazy Idea. (Shortform note: Knight never gave a reason for why he stepped down, but he remained a chairman of Nike’s board of directors until 2015.)
He thought of how far Nike had come—they now had $16 billion in sales, and their products are sold in 5,000 stores worldwide. This reflection inspired him to tell the story of Nike. Knight hoped that young entrepreneurs would find comfort in the fact that even a global company like Nike started somewhere. He offers a few insights throughout the book about his and Nike’s success.
(Shortform note: While Nike had come a long way as of 2016, the company has only continued to grow in the years since the book’s publication. By 2021, Nike’s net worth had increased to over $30 billion. And on the 2021 Fortune 500 list of the largest US corporations by total revenue, Nike ranked 85th.)
Knight believes that much of Nike’s success came from creating an identity as a brand. People resonated with what Nike stood for as a company, and they bought into the Nike identity, which consisted of three core values:
Athletes: Knight believes that athletes are at the heart of Nike. Because the people on Knight’s team were runners, Nike is a brand for athletes created by athletes. They understood and appreciated what it took to be an athlete, to train, and to compete. Customers resonated with Nike’s approach because Nike understood their struggles.
Innovative shoes: Knight and his team cared about how the shoe looked, felt, and impacted the wearer. This mindset about shoes led to Nike—particularly Bowerman—constantly experimenting with their designs to improve their shoes.
(Shortform note: Nike’s shoes are consistently ranked among the most innovative shoes. Their ethos is still reflected in the company today, as evidenced by Nike’s release of a new auto-lacing shoe in 2015.)
Winning: When reflecting on the goal of Nike, Knight came up with one word—winning. Knight wanted Nike to succeed, and he also wanted people who wore Nike shoes to succeed. This ethos is evident in Nike’s “Just Do It” slogan.
Marketing Perspectives on Nike’s Identity
Knight believes Nike’s identity was a reason for its success, and from a marketing perspective, this belief has merit. In Tribes, marketing expert Seth Godin explains that consumers want to buy into a tribe, or a group of people that are connected by a belief. Nike tapped into a group of people (athletes) and connected them with a belief in using athletic excellence to win.
By promoting their “Just Do It” slogan, Nike made consumers feel capable of achieving greatness when they purchased Nike products. Then when a consumer wears Nike apparel, she reinforces her belief that she is part of this tribe and its shared belief in athleticism and winning. Additionally, members of this tribe can identify each other when they wear Nike’s products, as well as advertise the product to other consumers. Thus, Nike’s emphasis on athletes and winning represents a solid marketing strategy.
Knight credits much of Nike’s success to his team and their hard work—he believes he couldn’t have succeeded without them. He recruited friends he trusted and who shared his vision to his team, which included Bowerman, Johnson, and Woodell. Most of them were athletes and shoe dogs, or people who saw crafting shoes as creating the connection between a person and the earth. The team brought this philosophy to their work at Nike.
While Knight and his team were all dedicated to Nike’s success, they also valued enjoying their work. For example, they called each other “the Buttfaces,” and they cultivated a fun company culture, where they were free to dress casually. Knight fought to preserve this dynamic, such as when he put off the decision to go public for fear that shareholders would ruin Nike’s culture.
Teamwork and Debunking the Myth of the Lone Entrepreneur
In Shoe Dog, Knight is generous with giving credit to his team, and he never takes credit for Nike’s success. He inadvertently debunks the myth of the sole inventor, entrepreneur, and CEO who builds their business alone, demonstrating instead that behind every great idea, invention, and business is a team of exceptional people who use their skills for the benefit of a shared vision. For example:
Apple: Although Steve Jobs is heralded for Apple’s success, he had help along the way from his co-founders Steve Wozniak and Ronald Wayne. John Sculley and Jef Raskin also propelled Apple’s growth.
Tesla: While Elon Musk brought much-needed management skills to Tesla, Martin Eberhard and Marc Tarpenning founded Tesla, and J. B. Straubel and Ian Wright improved the software and battery technology for the cars.
Amazon: Jeff Bezos had help building Amazon. MacKenzie Scott was very involved in the company’s success. She worked on the company’s name, business plans, and contracts.
While these entrepreneurs certainly influenced the course and success of each company, none of them built their business alone.
Knight embraced a hands-off management style for Blue Ribbon and Nike. He didn’t give his team guidance on how to complete a task, preferring to trust them and be surprised by their results. While his hands-off approach became a company joke, most employees agreed that they thrived with the freedom to do their jobs to the best of their ability.
For example, Johnson flourished without traditional management, and his work always exceeded Knight’s expectations. Eventually, Knight understood that Johnson would excel at any task he asked him to do, even if the task seemed impossible.
(Shortform note: While Knight believes his hands-off management style benefitted Nike, in Stop Spending, Start Managing, the authors argue that leaders can fall into a macromanagement trap, or when managers are so uninvolved that it’s detrimental for employees, causing confusion, uncertainty, and overworking. Leaders may fall into this trap because they prefer to rely on all-star teams, but these kinds of teams are very rare. For example, the 2004 US Men’s Olympic basketball team had many all-star players but didn’t perform well. Experts explain that guidance and freedom aren’t mutually exclusive, and managers should give employees both.)
Phil Knight has graduated from the University of Oregon and earned an MBA from Stanford, and he doesn’t know what to do. He is 24.
His best lead is a final paper he wrote on shoes. Having been a decent runner on the U of Oregon track team, he’s obsessed with shoes. His paper’s thesis: Japanese companies are poised to burst into the shoe market, just as they had for cameras and displacing the German incumbents. This is his Crazy Idea. His way of making a mark on the world.
It seems obvious to him. He now has to travel to Japan, find a shoe company, and pitch them his Crazy Idea. Along the way, he wants to see and feel the world, for how can you change the world without seeing it? His traveling ambitions have a spiritual air, longing to understand how the Chinese and Buddhists and Greeks and Christians have thought about life for millennia.
There’s one barrier: he needs money. And his father is his best shot. Phil describes his father as obsessed with respectability and grounding in traditional values, and wandering the earth seemed the antithesis of this. Phil’s quite sure his father will demur from funding his wanderlust. But to his surprise, the elder Knight approves, bemoaning his own lack of travel experience in younger days. Phil later realizes a major motivation for his global journey might be to define himself in opposition to his father – to be one who’s not obsessed with respectability.
With his Stanford friend Carter, they fly directly to Hawaii as their first stop. They are smitten by life on the island. Frolicking in the waves and surrounded by beautiful women, Phil decides his plan can wait.
So they get jobs as encyclopedia salesmen. Phil is a terrible encyclopedia salesman. He switches jobs to sell securities, which essentially means cold-calling customers to sell funds. He isn’t a smooth talker, but he knows his product, and he speaks the truth, and his customers like that. He quickly earns enough to cover rent and plenty of surfing time.
Eventually, though, his journey calls to him again. He has been in Hawaii for two months. It’s time to move on. His traveling companion Carter is now tied to Hawaii – he’s met a girl. Phil hesitates to travel alone, but soldiers forth. Soon, he’s in Tokyo.
Phil travels around Tokyo, learning about Zen and observing the rubble remaining from World War 2. His father has two friends in Tokyo, and they dispense business advice – the Japanese are soft negotiators, not fans of the aggressive American style. They’re hard to read. (This will be relevant later.)
Phil feels like now is the time to act. He likes a shoe manufacturer Onitsuka and their shoe line Tiger, and he believes this is where he’ll make his start. He makes an appointment to meet executives and travels south to Kobe, Japan.
At the meeting, the Onitsuka staff ask him what company he’s with. He has no company and no name, but he thinks back to his childhood wall, decorated with blue ribbons from track. “Blue Ribbon Sports of Portland, Oregon,” he says. He launches into his presentation of his paper from Stanford business school, describing the size of the market and the vast opportunity there would be for a Japanese shoe manufacturer to enter America. They could undercut Adidas, the dominant brand at the time.
The executives are excited. They’ve been thinking about entering America for a long time, they say. They show him models of Tiger shoes that have promise. Finally, they ask Phil whether Blue Ribbon would be interested in representing Onitsuka in America. Phil accepts. He asks them to send samples to his address in Oregon.
He’s eager to return to Oregon and begin this new opportunity, but wanderlust gets the best of him. He routes through Hong Kong, Manila, Bangkok, Vietnam, and India, noting the poverty throughout the region. He wanders through Egypt, Jerusalem, and Rome, admiring the remains of the past. He finishes his trip through Paris, Berlin, Vienna, and London, a clear refined contrast to the poverty in Southeast Asia.
Of all his travels, he considers Greece his highlight – in particular, the Temple of Athena, the goddess thought to bring victory, or “nike.” While in stupor by the grandness of the place, he notices a carving of Athena – bending down to adjust her shoe.
Six months after he first left for Hawaii, Phil returns home to Oregon. He greets his family warmly, but he’s concerned about one thing – have the shoes from Onitsuka arrived?
They haven’t.
He sends a letter to Onitsuka, and they reply, promising the shoes will come in a couple of days. In the meantime, he needs a job. His father’s friend, CEO of a publicly-traded company, advises him to get a CPA. If Phil changes jobs, both CPA and MBA degrees would surely prevent his salary from dropping.
Phil takes accounting classes, earns his CPA, then joins an accounting firm. It’s small – with just 4 employees, they work 70-hour weeks. While he waits for shoes to arrive, he yearns to travel, and wonders whether his journey was the peak of his life. Accounting is not his thing.
The Onitsuka shoes arrive! Phil thinks they’re beautiful. After all, they are the embodiment of his future. Immediately, he sends two pairs to his old track coach at U of Oregon, Bill Bowerman.
Phil considers Bill part father figure, part army general. A gruff, tough-love descendant of Oregon Trail pioneers, Bill Bowerman was revered by the track team. Obsessed with performance, Bowerman constantly experimented with shoes to improve his runners’ performance, particularly to make shoes lighter. Bowerman stressed that an extra ounce to a shoe added 55 pounds of lifting over one mile. As a mediocre runner, Phil was Bowerman’s favorite guinea pig (he wouldn’t dare jeopardize the top runners with experimental shoes).
Bowerman was the most famous track coach in America, training local champions and many sub-4 minute milers. So Phil is shocked when Bowerman says not only did he like the shoes, he wants in. They work out a deal – Blue Ribbon would order 300 pairs of shoes, costing $1,000. They’d each put in half the money, and they’d split the company 51-49 – Phil with the 51. Once again, Phil gets his $500 from his father, who has reservations about his MBA son leaving his respectable accounting job to become a wandering shoe salesman.
They order 300 shoes, and Phil fills their basement with the shoes. Even better, they come with an announcement: Blue Ribbon Shoes is now the exclusive distributor for Onitsuka in the West.
Phil sells shoes the best way he knew how – going to track meets and showing the shoes to runners, coaches, and fans. His pitch: Japanese manufacturing makes high-quality shoes for extremely low prices. Word spreads fast – sales are so good, strangers show up at their house to buy Onitsukas. Just a few months later, they sell out of their shoes and order a bigger shipment of 300 shoes.
But suddenly, turmoil strikes in the form of a letter. A high school wrestling coach on the East coast claims that he’s met with Onitsuka’s senior management and has been made exclusive American distributor – Blue Ribbon was infringing on his rights. Perplexed, Phil writes to Onitsuka. No response.
After months of waiting, and with no shoes to sell, Phil makes a last-ditch trip to Japan to resolve the dispute, one way or another. He flies to Japan and books a meeting. He’s tremulous, knowing that his future could be decided here.
In a preliminary first meeting, Phil launches into an impassioned plea saying the 13 West states are his, his company’s growth is strong, and that Onitsuka is honor-bound to continue their agreement. His Japanese counterparty stoically says he’ll be in touch as he leaves.
The next day, he’s scheduled for a meeting with the founder of the company, Mr. Onitsuka himself. The founder says he sees himself in the young Phil Knight. After a pause, Mr. Onistuka grants sales of track shoes in the Western states to Phil, while the wrestling coach can sell his wrestling shoes nationwide.
Phil is ecstatic. Before heading home, he decides to climb Mt. Fuji. Along the way, he charms a British girl, Sarah, an heiress to a chocolate company. Despite her wealth, she seems like a free spirit. They spend two joyful days in Japan, and he invites her to visit in Oregon. Weeks later, she visits, and they spend several more weeks as she charms his family.
But this comes to an end. Her (wealthy) parents disapprove of Phil, and their relationship fizzles through an exchange of increasingly distant letters. Phil wonders whether she saw him mainly as a chance to let loose and rebel, not as a real relationship worth keeping.
The new shoes arrive from Japan, but Phil spends weeks in a distraught stupor over his breakup. His sister Jeanne consoles him. Thankful, Phil offers Jeanne the position of first employee at Blue Ribbon. She accepts.
As it relates to selling shoes, there are a few things to remember about this time. First, running wasn’t really considered a sport or a hobby. It’s hard to believe today, but in the 1960s, jogging to get exercise was something only maniacs would do. To be fair, everyone still smoked like a fiend, and heart disease hadn’t been figured out yet. So Blue Ribbon is still selling the Onitsuka shoes primarily to student athletes – popular as they were, they appeal to just a small niche of the population.
Second, venture capital the way we understand it today didn’t really exist. Small businesses got their startup cash from banks, but banks had very different priorities from today’s venture capital firms. For one, banks didn’t want companies to grow too quickly. They wanted new companies to get profitable quickly and to never let sales exceed their cash balance.
So fast-growing Blue Ribbon run by ambitious Phil is constantly running into issues with their cash balance. Even though their sales are doubling regularly, this cash is quickly turned around to order the next, larger shipment of shoes. Thus Blue Ribbon constantly skates on thin ice with its bank.
Compounding this problem, Onitsuka is painfully unresponsive with Phil and Blue Ribbon. Their shoe shipments often arrive late, which gives Blue Ribbon less time to sell shoes, which then makes each loan repayment period tougher.
Fearing the worst from all these problems, Phil decides to hedge his bets by returning to accounting at Price Waterhouse. He doesn’t love the work, but it pays the bills.
Despite all this bad news, there are two positive developments. First, Phil hires his first full-time employee, a fellow Stanford runner named Jeff Johnson who will sell shoes in Los Angeles. Johnson has a messianic view on running – believing running done right is akin to enlightenment – and Phil hasn’t met anyone with his passion for running.
Secondly, Coach Bowerman continues to be a huge asset. His large reputation keeps growing – two of his runners medal in the 1964 Olympics. And he keeps tinkering with shoes. He learns that Japanese and American bodies are simply different, and thus the shoes need to be different, like more arch support. To have a great chance in the US, he believes Onitsuka needs to customize their shoes for Americans.
He draws up countless designs and sends them to Japan, only to receive no response. Occasionally they relent and make a few prototypes, and indeed they’re far better. Undeterred by Onitsuka’s hesitance, Bowerman even experiments with producing homemade rubber to make new soles.
You might be able to see where this is going.
Blue Ribbon’s first salesman, Johnson has a personality quirk – he sends Phil mountains of letters, detailing his every development, every sale and notable customer. (Shortform note: Just take a minute to remember that business used to be done entirely through phone and letters, not email). Johnson sends advertising ideas (Phil doesn’t believe in advertising), shoe designs (Phil already has enough to deal with Bowerman), and his insistence on opening a retail shop in Los Angeles.
Phil feels smothered and rarely replies to Johnson’s letters. From studying war heroes and generals, he holds a virtue: “Don’t tell people how to do things, tell them what to do and let them surprise you with their results.”
And Johnson delivers results. His customers love him, depending on Johnson to solve their problems in both running and life. Even when he gets in a car crash and breaks his skull, he continues to sell shoes. Phil even issues him a challenge – sell 3,250 pairs of shoes in a few months, and Johnson could open his retail space in LA. And sell he does – now Blue Ribbon has an official runner mecca in Los Angeles.
At one point, Johnson sends one letter that Phil can’t ignore. One of Johnson’s customers says that he can start getting Tiger running shoes from another seller – a wrestling coach somewhere in the East Coast. That same wrestling coach from 1964 who was supposed to stick to wrestling shoes.
This simply can’t do. The wrestling coach is stepping on Blue Ribbon’s turf, capitalizing on all the hard work they’ve done building brand recognition for Onitsuka.
Phil flies to Japan immediately to meet with Onitsuka. (Financially, this is no small feat – he doesn’t have the money, so he puts the charge on his credit card.) He has a new contact – a slick-looking man named Kitami. They settle into a large conference room with other executives.
Phil lays out his case. They’d been doubling their sales each year and projecting $84,000 in sales in 1967. He’d like to become Onitsuka’s exclusive US distributor for track and field. Kitami rebuffs him. They want someone bigger, more established, with nationwide offices. Phil counters that not only do they have a new retail shop in Los Angeles, but they also have offices on both coasts.
(Phil was lying – they didn’t have an East Coast office.)
After some deliberation, Onitsuka delivers good news – Blue Ribbon will be the exclusive distributor of Tiger track and field shoes in the United States. Onitsuka would send shoes immediately to Blue Ribbon’s East Coast office. Take that, wrestling coach.
Phil is both ecstatic and anxious. Anxious because he has to open an East Coast office before the shoes arrive. He also needs someone to run the office.
There’s only one person crazy and passionate enough to do this at a moment’s notice – Johnson.
Johnson does leave for the East Coast, but not without a fight. His father, a salesman himself, pushes Johnson to ask for more – a partnership in Blue Ribbon, $600 in monthly salary, and a third of all profits after 6,000 pairs sold.
Neither Phil nor Bowerman, the only owners of Blue Ribbon, want to give up their equity. So Phil flies to Johnson and his father to negotiate. Despite the arguments of Johnson’s father, Phil holds steady – he would give Johnson a $50 raise, and that was it. Johnson looks torn, but he doesn’t want to quit. He needs Blue Ribbon, and despite Phil’s refusal to answer his letters, Johnson feels like he thrives.
Blue Ribbon is hiring rapidly, and Bowerman has an employee candidate for Phil. Bob Woodell is famous. He was a standout runner at Oregon, but an accident left him paralyzed from the waist down and now in a wheelchair. Phil meets with him and they’re mutually smitten. Phil offers him a job opening Blue Ribbon’s second retail store in Eugene, Oregon.
Bowerman is doing other things, as always. He designs a new training shoe with a more solid sole. Onitsuka actually listens and creates a prototype, and they name it the “Aztec,” in recognition of the 1968 Olympics in Mexico City.
Then Adidas sues – they have a shoe called the “Azteca Gold.” In response, they rename their shoe after the conqueror of the Aztecs – the Cortez.
Bowerman has also written a book called Jogging. Remember how running at this time is a nonsense activity? This book changes that. Jogging sells a million copies, sparking a movement and a whole new generation of runners.
Blue Ribbon moves out of Phil’s apartment and into its first real office. It’s a fixer-upper, with tissue-thin walls and broken windows. Johnson has settled on the location of their first East Coast office – Wellesley, MA, a place where runners seemed to abound and the Boston Marathon runs through.
Blue Ribbon sales are set to double yet again, for its fifth straight year. But they’re still skating on such thin ice that Phil can’t afford to draw a salary.
His accounting job at Price Waterhouse takes up 6 days a week, and Phil wants more time for Blue Ribbon than just weekends and late nights. He quits and takes up a teaching position at Portland State University, paying $700 a month.
He teaches Accounting 101, where a striking young woman with blond hair and blue eyes sits in the front row. She reminds him of Cleopatra and Julie Christie. During roll call, he learns her name – Penelope Parks. She’s shy but is a star student, scoring at the top of her class, and she asks Phil to be her adviser. Phil has a better idea – she should join Blue Ribbon. She agrees.
Penny readily completes miscellaneous operational tasks for Blue Ribbon – bookkeeping, typing, scheduling – with an enthusiasm that lightens the air in their small worn-down office. Phil is bewitched, and they exchange long meaningful glances.
Phil finally asks her out on a date. She shares her background – with four siblings, money was always an issue in her house. She wants security in her life. That’s why she likes accounting – it’s a solid, dependable job.
They keep dating and eventually meet each other’s parents. Penny’s mom, Dot, is a spirited character, seeming like an eternal teenager and more like Penny’s sister than mother. They go out drinking together and Dot seems to approve of Phil.
The relationship moves quickly. Phil wants to elevate their relationship beyond just teacher-student dating (which Portland State doesn’t approve of). They get engaged, just like that, after a few months of dating.
The next day Phil leaves for Japan to develop Blue Ribbon’s partnership with Onitsuka. Newly engaged, he feels like never before that Penny is his partner in life.
“The single easiest way to find out how you feel about someone. Say goodbye.”
In Japan, Kitami (the slick executive from before) greets him warmly. Blue Ribbon’s sales doublings are impressive, and the East Coast office under Johnson gives Kitami confidence. Phil shares new shoe designs like the Boston, featuring a new midsole cushion. They meet often over several weeks, and Phil starts to get a brotherly vibe from Kitami.
Kitami invites Phil to his department’s annual picnic, where typically straight-laced businessmen loosen their ties and go a little nuts. They feast on ample food and have potato sack races. Where Japan once felt just a few years ago like a foreign land with unusual customs, Phil now feels at home.
At the picnic, he meets a middle-aged man, Fujimoto, who shares that he lost his home a few months ago in a typhoon. He’d started over since then, but he hadn’t been able to replace his bicycle. When Phil returns home, he immediately sends $50 to Fujimoto for a new bicycle. This act of friendship cements their relationship, which will come clearly into play later.
In September, Penny and Phil get married in Portland. It’s a good year for Phil.
Once again, sales are poised to double for Blue Ribbon, now at $300,000 this year. Phil feels it’s finally safe to pay himself a salary ($18,000 a year), and he quits Portland State to go full time at Blue Ribbon.
In his last days on campus, he meets an artist, Carolyn Davidson, who complains about not being able to find work. With Blue Ribbon growing and getting press, they could use help with their marketing – print ads, charts, and maybe a logo. He doesn’t know the significance of this meeting until far later.
No momentous business events happen this year, though there are some rumblings of problems to come. Most importantly, Phil starts to doubt Kitami’s sincerity from recent wires and letters. Maybe Onitsuka’s getting ready to raise prices on Blue Ribbon. Maybe they’re making secret arrangements with new distributors again. Phil just senses there’s something off.
So he has a backup plan – an inside man at Onitsuka who can keep tabs on Kitami. In a memo to his company, Phil announces that he’s “hired a spy.” He stresses that this is completely accepted in Japanese business culture. The spy is Fujimoto, the man whose bicycle he replaced.
Blue Ribbon finds a new office in Tigard. Woodell, the former runner in a wheelchair, is promoted to operations manager at Blue Ribbon. Despite his injury, he’s ecstatic at Blue Ribbon – the mission fills his spirits and he always gets the job done.
Now married, Phil and Penny learn to live together. Phil is absentminded and messy, but Penny adapts to him. She adapts to everything, including his meager salary. She learns to stretch the budget each week in groceries.
Penny gets pregnant, and they move into a house in Beaverton, OR. It’s a boy.
The contract with Onitsuka to supply Blue Ribbon with shoes is ending soon. Phil flies to Japan and asks for a 5-year contract with Onitsuka – after all, most of the US success was due to Blue Ribbon, and a survey shows 70% of American runners own Tigers. But Onitsuka is adamant to keep the deal for only 3 years. Why are they so adamant about cutting the timeline short? Phil is suspicious.
Onitsuka keeps hampering Blue Ribbon with late shipments and the wrong shoes in each shipment. The Cortez is selling like crazy, but instead of shipping those, Onitsuka ships Bostons, in the wrong sizes. Onitsuka promises they’re working on improving factories and reliability, but it never really improves.
Phil decides that Onitsuka can’t really be that incompetent – instead what they’re doing is satisfying the Japanese customers first with a limited supply, then exporting what remains to the US.
As always, the bank has problems with Blue Ribbon’s perennially low cash reserves. Higher sales has meant bigger loans, which would be harder to pay off and higher risk if the company collapsed. As always, Phil is frustrated that the banks don’t see the bigger picture – a company doubling every year!
With $600,000 in sales this year, Phil asks for a $1.2 million loan. This sounds crazy to the bank. Stretched to the limit, they give him an unsavory ultimatum – his credit line is now maxed. Blue Ribbon can have no more money until they put more cash into their account. They’re also now imposing sales quotas – miss one deadline and they’ll break the relationship.
So money’s now a problem. First, they need $20k for a shipment from Onitsuka. They don’t have it. Blue Ribbon tries a public offering, hoping to get some interest from investors by selling 30% at 300k. Almost no one bites – they raise just $300.
He eventually scrapes together the $20k from receivables, but they need more cash to operate. He has to do what he vowed never to do – ask everyone he knows for money: former teammates, family, friends. Woodell’s family comes to the rescue. They’re not well off, but they give him their entire life savings - $8,000.
Phil reads about Japanese trading companies that are rising in international prominence and seem to do just about everything – import, export, and extend easy credit to all kinds of companies. He goes to the Bank of Tokyo branch in Portland and asks for help. They direct him to Nissho Iwai, Japan’s 6th largest trading company with $100 billion in sales. After just a short conversation, Nissho Iwai offers him a deal on the spot.
Before he takes the loan, he wires Onitsuka for permission. He doesn’t hear anything for days, weeks.
All of a sudden he gets a call from a shoe distributor on the East Coast. Onitsuka has approached him about becoming its new US distributor.
Phil freezes. What’s going on? They’d signed a 3-year renewal just a few months earlier. Were they breaking the contract?
He contacts Fujimoto, his spy on the inside. Indeed, Kitami and Onitsuka are considering a break with Blue Ribbon. There isn’t a firm plan yet, but Kitami is scouting candidates.
Phil still holds hope – no firm plan means he still has a chance. He invites Kitami to the US to show him what Blue Ribbon is really about.
A groundbreaking year for Phil Knight and Blue Ribbon.
Kitami visits in March, and Phil wants to wow him, make him fall in love with Oregon and Blue Ribbon. They drive him around the Pacific Northwest, feeding them salmon and wine.
But Kitami causes trouble. At First National Bank, he demands that they give Blue Ribbon more money, to everyone else’s chagrin. Then, at Blue Ribbon, he insults the company by saying doubling isn’t enough - sales should be tripling every year. He shoots down Phil’s Japanese trading company idea, fearing that these companies make investments only to research companies, learn their trade secrets, and compete directly with them.
While Kitami’s in the bathroom, Phil steals a folder from Kitami’s briefcase. Their suspicions are confirmed – it lists 18 athletic shoe distributors in the US, and appointments with half of them. Phil feels betrayed – they’d revolutionized Onitsuka, shown them how to make a better shoe, and now Onitsuka was planning to cut them out.
Kitami’s trip ends with dinner at Bowerman’s house. Penny, Phil’s wife, is driving Kitami. They get a flat tire on the road, and Kitami stays in the car and doesn’t help – Penny has to fix it herself.
As betrayed as Phil feels, he believes then that the best course is to keep the peace, to convince Kitami not to abandon Blue Ribbon. Without Onitsuka and their shoes, he wouldn’t know what to do.
Kitami leaves Portland to travel around the US, but he doesn’t reveal his intentions. When he returns, he has a new solution – sell Onitsuka 51% of Blue Ribbon. It’s an ultimatum – accept the deal, or Onitsuka will set up new distributors. Phil is shocked, and he tries to stall by saying he needs to talk with Bowerman.
In a moment of clarity, Phil realizes a few things:
He remembers a shoe factory in Guadalajara, Mexico, where Adidas had manufactured shoes. Phil visits and, impressed, places an order for 3,000 pairs of leather football shoes. Technically, he knows this isn’t a violation, since his Onitsuka contract only concerns running shoes. But he feels Onitsuka had already broken the spirit of their deal.
For the shoes manufactured in Mexico, he needs a logo and a company name. Carolyn Davidson, the college designer who helps periodically with marketing materials, comes up with the swoosh idea after multiple rounds of trials. They pay her $35. Blue Ribbon agrees it looks new, fresh, and timeless, but Phil doesn’t love it.
Then they need to come up with a name. Phil proposes Dimension Six, which everyone hates. Others propose animal names, like Bengal or Falcon. Johnson has a flash of inspiration and proposes Nike. It has good properties – iconic brands are usually short and often have a strong sound, like Clorox, Kleenex. And Nike is the goddess of victory. So they move forward with their new name and logo.
(Shortform note: To Phil’s credit, he’s honest in the book about not being the originator of these ideas, nor falling in love with them at first sight. It’s common for business titans to present themselves as unconquerable geniuses in growing their company, which is why this book is refreshing.)
Unfortunately, the shoe manufactured in Mexico is disappointing. In cold weather, the sole splits and cracks.
To compound problems, First National has reached the end of its line. They will issue no more letters of credit. When they pay off the remaining bills, Blue Ribbon’s account will be terminated. After getting rejected a few times, Phil gets a small line of credit from Bank of California.
But he needs more money, from a partner that understands growth. They now have $1.3 million in sales (continuing to double each year) and he’s still having trouble keeping his company afloat. Nissho, the Japanese trading company, comes to the rescue through its representative Tom Sumeragi. He says that Nissho is willing to make loans to Blue Ribbon. Nissho itself had gone to Onitsuka to convince them to allow the deal, but Onitsuka had refused. Nissho was embarrassed by the rejection, a $100 billion company being rejected by a $25 million company, and that spurred their help.
They seal a 4% revenue share agreement, and Nissho introduces Blue Ribbon to shoe manufacturers and genuine “shoe dogs,” people who devote themselves wholly to the making and selling of shoes. Sound crazy to care so much about shoes? Shoe dogs see crafting shoes as connecting to humanity, being the connection between a person and the earth.
Phil Knight and Sumeragi meet with factories in Japan. They visit a factory called Nippon Rubber, part of Bridgestone Tire. Knight shows them the Cortez in the morning, and after lunch they present a brand-new manufactured Cortez, Nike stripe and all. Confident, Phil describes shoes for a range of sports, including tennis, basketball, and running shoes. Within a few days, he gets samples – they’re not perfect, but they’re very good.
In a late-night creative session, Phil decides to name the shoes – the tennis shoe is Wimbledon. The basketball shoes are Blazer and Bruin. Running shoes are Cortez, Marathon, Obori, Boston, Finland, and Wet-flyte. Finally, he feels proud and free, a bona fide creator.
He’d been in Japan for 3 weeks, and he needs some more time to visit Onitsuka, who might get suspicious if they knew he had been in Japan for this long. Penny flies over and has a panic attack from the turbulent flight and the chaos and crowdedness of Japan.
He visits Onitsuka in Kobe and meets with Kitami, Fujimoto (his ally) and Mr. Onitsuka. They take tours of Kobe and have dinner together. But the offer for Onitsuka to buy out Blue Ribbon is still on the table, so Phil feels a mild tension in the air.
He returns to Portland and meets with Bowerman. They comment that the outer sole of the training shoe hadn’t changed in 50 years – still waves or grooves across bottom. Bowerman thinks about how he created a new track surface out of polyurethane, just like in the Olympics.
Bowerman, inspired, sees his wife’s waffle iron and thinks about the gridded pattern. He takes urethane and melts it, and it seals shut, now useless. He’d forgotten to add releasing agents to the rubber. He keeps trying and eventually succeeds with the help of a rubber company. He sews the insoles to the bottom of running shoes, and it’s a breakthrough.
This is the year they announce Nike at the National Sporting Goods Association Show in Chicago. Right before this, Onitsuka publicly announces they’d acquired Blue Ribbon. This is a bluff to pressure them to sell.
For their debut, Phil wants to package shoes in bright orange boxes to stand out. When they receive the shoes, the boxes look great, but the shoes inside are terrible – they look cheap and shiny, and logos are crooked.
They think they’re doomed, but people crowd around, asking questions and actually buying shoes. What’s going on? The salesmen have been doing business with Blue Ribbon for years, and they know Blue Ribbon isn’t a fraud. Their reputation precedes them.
Word travels to Japan, and Kitami from Onitsuka shows up two weeks later. “What’s Nike?” he asks. Phil responds that it’s a backup in case Onitsuka cuts ties with Blue Ribbon. He lies that Nike isn’t currently yet in stores. Kitami travels to Blue Ribbon’s Los Angeles store to inspect. The store manager Bork is instructed by Phil Knight to deceive Kitami, but he finds hundreds of Nike boxes in the storage room. The gig is up.
A bit later, Kitami shows up with a lawyer. He formally voids Blue Ribbon’s contract with Onitsuka, citing the Nike play as a breach. Kitami has the gall to request Bowerman’s services as a consultant, which of course they refuse.
The next day, Phil addresses his team. He shares news that Onitsuka has terminated their contract, and they may have to face lawsuits for breach of contract. And they’ve got an uphill battle – Nike shoes have quality problems, and they have little margin for error. Everyone looks dejected, especially as there’s an economic recession going on. But Phil rallies the team, saying this is the moment they’ve been waiting for. The chance to make their own brand, and break free of Onitsuka’s limitations. This inspires the crew, and they begin the fight for survival.
In preparation for the 1972 Olympics, the US track-and-field trials are held in Eugene, OR. The central event is Steve Prefontaine, qualifying for the 5000m event. Phil reflects on why Pre is a running celebrity like the country had never seen, and he attributes it to Pre’s passion. Pre always pushes himself to the limit. “No matter the sport – no matter the human endeavor – total effort will win people’s hearts.” Pre’s world-record-setting performance at the trials pushes Phil to fight for Nike’s life.
Bowerman is the head coach of the US Olympics track team that year. But the 1972 Munich Olympics end tragically in a terrorist event and the deaths of Israeli athletes. Bowerman retires from coaching soon after.
But 1972 ends with victories for Nike. Knowing that athlete endorsements are important, Nike signs tennis player Ilie Nastase, who is already wearing Nike Match Points. And the year ends with the University of Oregon Ducks, all clad in Nike waffle shoes, against their rival Oregon State Beavers. Phil feels immense pride in having made the players’ shoes leading to their win.
Prefontaine is in a funk from getting 4th in the 1972 Olympics. But he eventually gets his fire back, and he’s wearing Nikes while winning. Because US Olympic athletes at the time couldn’t collect endorsement money, Pre is also destitute. So Nike signs him as a “National Director of Public Affairs,” or a celebrity endorser, paying $5000 a year. Everywhere Pre goes, Nike goes. People flock to see him, and Pre urges them to give Nike a try.
Phil strongly requests two employees, Woodell and Johnson, to trade roles and locations, transferring between Boston and Oregon. Interestingly, he writes, “in keeping with my personality...I expressed no gratitude. I spoke not a word of thanks or praise.”
Sales are higher than ever at $4.8 million, but this year they lose $57,000. Their investors, the debenture holders, are shocked, even though Nike is gaining national traction. Phil placates them by giving them a fixed conversion rate on stock for five years, and he thinks he’ll never want to go public and have to deal with thousands of shareholders.
As expected, Onitsuka files a suit for breach of contract in Japan. Nike quickly files against them in the United States. Phil is deposed, and some facts don’t look great, like his memo about hiring a spy in Onitsuka, and stealing Kitami’s folder from his briefcase to find he was courting distributors. Despite this, Phil has a legal team he trusts and who insist they’re going to win.
Another problem in the business is creating enough supply to meet the massive demand for their shoes. Their factories are churning out shoes reliably, unlike with Onitsuka, but it’s hard to ramp up supply without taking on inventory risk from unsold shoes. Nike is already walking a fine line of profitability, and any missed shipment would delay payment to Nissho, which would cut down their ability to borrow, which would in turn delay their next factory order.
So Phil has an idea – what if they go to retailers and ask for large upfront orders 6 months in advance with big discounts, up to 7%? At first, the retailers are hesitant, but they turn around when Nike unveils a few flashy new shoes, like an updated Bruin and new Cortezes. Soon even the stragglers desperately sign up to avoid being locked out.
In September, Phil and Penny have their second child, Travis.
The trial with Onitsuka begins in April in Portland on the matter of breach of contract and ownership of trademarks. Over several days, members of Blue Ribbon and Onitsuka are interviewed as witnesses. The stance of Onitsuka is that Blue Ribbon had always engineered a con, employing spies and deception to string them along until they could cut Onitsuka out.
Blue Ribbon has a rocky path to winning. Phil Knight gives questionable testimony about stealing from Kitami’s briefcase and nurturing a spy within Onitsuka (Fujimoto). A former store manager, Bork, has turned traitor and joined Kitami’s team, and he feeds them surgical questions to expose Blue Ribbon’s operations. Bowerman, out of contempt, hasn’t prepared and fumbles through his testimony. And Kitami lies about his movements, claiming he was only exploring distributors for market research, and the idea for Onitsuka to buy Blue Ribbon came from Phil Knight.
But there are silver linings. Iwano, Kitami’s young assistant, testifies honestly that there was a fixed plan to break Blue Ribbon’s contract, and Kitami had discussed it many times. And Kitami suspiciously requests a translator despite his fluent English, and even corrects the translator In English a few times.
Weeks later, the judge has a ruling. He will rule only on the trademarks and not on the contract breach, for reasons not explained. He says ultimately Blue Ribbon’s testimony seems more truthful – Iwano seemed honest, whereas Kitami seemed to practice active deception, especially with the translation. The judge rules that Blue Ribbon keeps all rights to the shoe names Boston and Cortez, and Blue Ribbon is due damages. He will decide damages over a few days.
Phil and the Blue Ribbon legal team are ecstatic. They weren’t expecting a win. A week after the ruling, Onitsuka pre-empts the judge’s damages by offering a settlement of $400,000. Blue Ribbon takes the deal. They sign the papers with Kitami present, and as they leave they awkwardly take the same elevator down.
The lead attorney on the case, Strasser, impresses Phil so much that they recruit him to be in-house counsel for Blue Ribbon.
Back to business: the major issue of the year is manufacturing. By working with Japanese factories, Blue Ribbon is subject to currency and labor cost fluctuations. They need new factories in new countries. Taiwan seems an obvious choice, but they’re still ramping up their quality. Puerto Rico is their second option, and despite the poorer quality they plan to make raw materials in Puerto Rico and assemble shoes in New England.
Johnson, having just moved to Oregon at Phil’s behest, is now tasked with managing the New England factory. He complains but knows that he can trust no one else to do the job, so he moves back cross-country.
This year, Nike is on track to reaching $8 million in sales. Beating Adidas seems like a possibility at this point. They open more stores and make more deals. They sign more endorsements, but Pre is still their top endorser. “We’ll always have Pre,” Phil says.
Financially, Phil Knight constantly pushes the pedal to the metal. He knows there is huge demand for Nike shoes, and he can’t sell them quickly enough. So why limit factory orders to go in the black, when you know the demand is out there? He doesn’t see this as reckless – the demand is there.
This means Blue Ribbon lives check to check, barely making their monthly payments to the Bank of California and Nissho. Just one late payment to Blue Ribbon, and the whole tower might crumble.
And one day, that one check from a retailer is late. They’re $75,000 short, out of a total $1 million, to pay Nissho. To make it work, they deplete the bank accounts of all their retail stores and factories.
Then the factory workers’ paychecks bounce. And their creditors’ checks bounce.
Then Bank of California tells them they no longer want Blue Ribbon’s business, they’re freezing their funds, and they’ve contacted the FBI, since it looks like fraud to them.
Phil Knight takes all this to Nissho. They’re sympathetic, knowing that businesses run on float, but they insist on looking at Blue Ribbon’s books. Sumeragi and Ito, a senior manager, park in Blue Ribbon’s office to audit their finances.
Through all of this, Phil Knight finds it hard to sleep, thinking about his life and questioning his decisions up to that point. If only he’d been a good encyclopedia salesman, he wouldn’t be in this mess.
Near the end of the audit, Sumeragi admits the situation is even worse than it first appeared. He’d delayed sending invoices to Blue Ribbon until he knew they could pay them back. In reality, Blue Ribbon was never paying Nissho on time. Ito questions Sumeragi on why he would do this, and Sumeragi replies that he thinks Blue Ribbon could be a great success. He likes Phil and the Blue Ribbon folks.
Having completed the accounting, Ito is satisfied. “There are worse things than ambition,” he says. Ito travels with Phil Knight and Hayes to Bank of California. There Ito lays down the law: they will pay off Blue Ribbon’s debt in full. And wasn’t Bank of California trying to win Nissho’s business? Consider that before bullying one of their companies. Phil is eternally grateful for this support.
Pre dies in a car accident. Phil had seen him just the day before, in a race and a celebration party afterward. In his eulogy, Bowerman commemorates Pre as a symbol of runner freedom, smashing rules holding back amateur athletes and keeping them poor.
Phil is distraught. But one legacy Pre leaves is a quote: “Somebody may beat me – but they’re going to have to bleed to do it.” Phil commits to this for Blue Ribbon.
This year is relatively crisis-free, and Phil Knight and his team spend their time thinking about the future. Now that Nike is becoming a national, household brand, they officially incorporate as Nike, Inc.
When introspecting about what the ultimate goal of Nike is, Phil comes up with a single word: “winning.” Phil feels personally affronted when runners are wearing shoes other than Nikes. At the 1976 Olympic Trials, multiple qualifying runners are wearing Nike as they qualify to represent the US, and Nike is the talk of the athletic town. But in the actual Olympics, a runner who had previously worn Nikes at the Trials was now wearing Onitsuka Tigers – he wasn’t confident Nikes would last a whole marathon. Phil is crushed. Every rejection of Nike is a rejection of himself.
Luckily, the Nike waffle trainers are more popular than ever. They’re breaking out of athletic uses and becoming an everyday lifestyle shoe, something competitors found hard to do. Sales double again to $14 million.
With this popularity, Nike needs to find new manufacturers who can handle scale, and they finally turn to Taiwan. After scouring dozens of dirty, crowded factories, they find a few shoe dogs they can trust and sign deals. Phil and his mentee drink heavily, prompted by the Taiwanese businessmen. Importantly, given the frictions between Taiwan and China, Phil sets up a sub-company called Athena. He wants to preserve the potential to enter China, with its two billion feet to put shoes on.
Despite their massive sales, finances are continuously an issue, and they continuously ponder whether to go public. It would raise cash to fuel growth, but they feel it would sell their soul and control. So they keep punting it to later, raising loans from new banks.
One loan requires Phil and Bowerman to personally guarantee the loan, which Bowerman doesn’t want to risk anymore. Bowerman wants to sell 2/3 of his stake in Blue Ribbon, which Phil reluctantly accepts. But Bowerman starts feeling idle in retirement and disrespected by Nike, even though they’re giving him the experimental equipment and tools he needs. Phil wants to keep Bowerman happy.
There are countless more difficulties to resolve – a larger warehouse on the East Coast, a larger scale advertising agency, new endorsements for more sports. But Phil gets through it with his ragtag team of Woodell, Johnson, Strasser, and Hayes. They call each other and the team Buttface. The joke is, in how many successful companies can you yell, “Hey, buttface,” and the team turns around?
Why does he love his team so? They’re clearly effective at their work, but they’re also cut from the same cloth. They came from Oregon, and they all had their personal chips on their shoulders to validate themselves to the world (Woodell lost his athletic dreams in an accident and was now confined to a wheelchair; Hayes couldn’t become partner at his accounting firm because he was too fat; Phil was cut from the baseball team and had his heart broken). They had thick skin, and they took each other down a notch. It was them against the world.
But outside of business, Phil feels guilty about his home life. He’s less often at home than he’d like, and his family misses them. Matthew holds a grudge, insisting he’ll never wear a Nike shoe. In contrast, Travis always understands.
Phil continuously questions himself and what he’s doing. Is he a good manager? Is he a good father?
Nike continues its inexorable climb upward. They continue catching national attention. They sign dozens of college sports teams and legendary coaches. There’s a funny story about how in a press release they misspelled Iona as Iowa. Iowa’s head coach calls, angry that Nike had incorrectly claimed a partnership that didn't exist—but then asks to sign with Nike too.
Endorsements: In tennis, they don’t get star Nastase (who asks for $100,000/year), which Phil thinks is irresponsible. But at Wimbledon, they find a young hothead named John McEnroe, and Phil falls in love with him. They have Nikes showing up in Hollywood, with Farrah Fawcett wearing Seniorita Cortezes in Charlie’s Angels. Phil’s father even mentions how prominently Nikes are featured in a basketball game, and Phil feels that he’s finally earning his father’s respect and pride (a longstanding chip on Phil’s shoulder).
They continue their track record of shoe innovation. Bowerman designs the LD 1000, a shoe with a flared heel meant to reduce pressure on the knee. But it’s finicky and requires an exacting stride to avoid injury. Nike recalls and braces for backlash, but instead they receive plaudits – they’re seen as the major innovator in shoes, and their customers are grateful for experiments, failed or not.
And there is one major innovation on the horizon – air in the soles. An aerospace engineer approaches Nike and tells them he can inject air into running soles. Phil is skeptical of this pale lanky man with a “severe vitamin D deficiency,” but he tries a hastily assembled prototype of air soles in his running shoes. He thinks there might be something there.
Rising demand is always a manufacturing problem, but they continue building partnerships with factories in Taiwan, Korea, and Puerto Rico. Funnily, a Korean factory Nike doesn’t partner with sends him a perfect replica of a shoe. Phil writes back with an angry cease and desist and also an offer to partner. They start working together.
Nike launches memorable ad campaigns, centered around a slogan: “There is no finish line.” The ad read, “Beating the competition is relatively easy. Beating yourself is a never-ending commitment.” Despite the positive reception, Phil continues being skeptical about advertising – the product should speak for itself. And where’s the proof that the ads are increasing sales?
Sales reach $70 million. A trusted business adviser laughs at how precarious their float situation is, and he insists going public is mandatory to solve their cash flow problem. Otherwise, Phil might lose his company.
And then a bomb drops. US Customs wants $25 million for retroactive duties on shoes. This is based on an esoteric rule, the “American Selling Price.” In essence, the ASP required import duties on nylon shoes to be 20% of the manufacturing cost, unless there’s a similar shoe on the marketplace – then it’s 20% of the selling price of the competitor’s shoe. A few American competitors like Converse and Keds declared their shoes similar and lobbied hard for this duty. They want to stifle Nike.
They have no ability to pay this fine, nor could they stomach hugely increased duties on a continuous basis. If they did, the company would go bankrupt. While contemplating this, Phil throws tantrums, destroying phones after disappointing phone calls. The phone repairman chastises him as “immature,” and Phil resolves to be less easy to rile up.
Outside of business, Phil’s disappointed that his sons aren’t interested in sports. Matthew is a constant contrarian, unable to obey authority, and stifling under sports rules. He’d go for other players’ shins on the soccer field and cause mayhem. This spread to Travis, who’s a gifted athlete but is turned off by Matthew.
Phil reflects, “of all the negotiations in my life, those with my sons have been the most difficult.” Phil’s life is about sports, his bond with his father was about sports, and both his sons don’t care about sports. This leaves a hole in Phil Knight.
Sales double again – on track for $140 million in 1979. Nike keeps growing. They change headquarters to a 40,000 square foot building in Beaverton, where his office is bigger than their entire first headquarters. They have factories in Taiwan, Korea, England, and Ireland. Industry analysts say that Nike is unstoppable.
Nike launches an apparel business, since this is where Adidas gets most of its sales, and it’s a way to offer more attractive endorsement deals to athletes. Phil starts by appointing a totally unstylish accountant who produces unfashionable, abhorrent clothing. (Phil justifies the appointment of so many accountants and lawyers with the idea that by qualifying for their trade, most were guaranteed to be somewhat competent). But this apparel designer with no fashion sense won’t do. Phil replaces this person with Woodell, who launches a great first clothing line.
This makes him start noticing that people around him dress terribly when they need to impress bankers and investors. Phil institutes a dress code, a move that contradicts the freewheeling Nike culture. His lieutenants rebel, flouting his dress code and requiring Phil to dock their pay for each dress code violation. (Shortform note: Again, to his credit, Phil continues being open about his management failures and doesn’t paint himself as a Napoleon with diehard unquestioning followers.)
Nike continues innovation. They release a shoe called the Tailwind, the first shoe with the mad scientist’s air soles. Nike hypes this shoe with splashy ads, and they fly off the shelves. But then customers start complaining that the shoe is falling apart. They find that tiny bits of metal in the silver paint are rubbing against the upper, slicing it apart. They learn not to put too many product innovations in a single shoe.
Phil starts feeling burnout. After a decade of fighting fires, he starts to see only problems, and he’s not thinking as sharply.
Nike continues the fight against US Customs that started in 1977. Phil meets with the bureaucrat in the Treasury Department who wants Nike’s money. The man is unsympathetic to Phil’s claim that paying the $25 million fine would put Nike out of business, that bullying his “little” company is un-American.
They meet with Senator Hatfield from Oregon, who gladly helps defend one of Oregon’s own. He sends messages to the US Customs bureaucrat who is frustrated by being controlled by more powerful beings, to Phil’s delight.
Nike has once again grown. They open a 3,500 square foot retail space in Portland, which is swarmed with customers. They move to yet even bigger offices in a 46,000 square foot building to house 300 employees. But Phil is aware that all of it could be gone at any point.
This is the final year detailed in Shoe Dog, the year when Nike finally goes public through its IPO.
Tired of the plodding pace with US Customs, Nike goes on the offense. First, Nike launches its own low-cost nylon shoe, called the One Line. The import duties use a comparable shoe as the pricing benchmark, giving rise to the $25 million price. By using their own shoe as the comparable, they might reduce the claim.
Next, they produce a TV ad telling the story of the little Oregon company fighting the big bad government. Being forced to do this was un-American, it says.
Finally, Nike files a $25 million antitrust suit against its competitors and rubber companies, who had conspired to cripple them.
With so much heat, US Customs decide they wanted to move on. They initiate settlement talks, starting at $20 million, then $15 million. Phil doesn’t want to pay anything, even though they need to resolve this to go public, and they need to go public to survive. Eventually, they settle on a final number - $9 million. Phil doesn’t like it, but he agrees. When writing the check, he muses that Nike has come a long way since he wrote his $1 million check in 1975 to pay Nissho – $1 million that he didn’t have.
Now they can go public, but Phil is still terrified of losing control of Nike, that thousands of shareholders will ruin the Nike culture. Their solution is to issue two classes of stock – ordinary class B shares with one vote, and preferred class A shares for the current team that would let them name ¾ of the board.
Nike makes its first inroads into China. Two billion feet is their target prize. Phil wants Nike to be first, knowing it’ll be a huge advantage.
They recruit a China expert called David Chang, who gets them through the bureaucratic nightmare to get a tour in China, hosted by the Chinese government. They see landmarks like the Great Wall and visit old, decrepit factories that produce defective shoes. The Chinese find it common practice to wear mismatched shoes on the right and left. Phil is appalled, but he sees children in canvas shoes, which gives him hope.
Before leaving China, Nike signs endorsement deals with China’s track-and-field federation, which is run by the government. Four years later, the Chinese team appears at the LA Olympics wearing Nike shoes and clothes.
Nike also signs with two Chinese factories, officially becoming the first American shoemaker in 25 years to do business in China.
When they return from China, the IPO process is in full swing. In September, they file to create 20 million shares of class A stock and 30 million of class B. 30 million shares would be held in reserve, and 2 million class B shares are sold to the public, somewhere between $18 and $22 per share. 56% of the class A shares would be held by the early team – Bowerman, their earliest investors, the Buttfaces, and Phil, who would personally own 46%. They agree that Nike needs to be run by one person, with one steady vision.
They go on their IPO roadshow, convincing investors of the value of Nike. Phil tells stories to bankers about the company’s history, their dogged diligence, Bowerman’s experiments with his waffle iron. He wants the New York bankers to know that these Oregonians weren’t messing around.
This is a perfect time to be reflective and nostalgic. Phil remembers all the struggles they endured, not being able to pay Nissho, their paychecks bouncing, Johnson’s endless letters asking for encouragement. Phil’s mom remembers the first time she bought Phil’s Onitsuka shoes.
Phil wants no less than $22 per share. He believes they’re worth that much. A company called Apple is also going public that week, and he believes Nike is worth no less than they are. The bankers initially disagree, but Phil stands his ground, and they relent.
They finally go public. Instantly, the team is made. Bowerman is worth $9 million; Woodell, Johnson, Hayes and Strasser each about $6 million; Phil, $178 million.
Phil muses on becoming a businessman, a word he dislikes. To him, business isn’t about money or deals or fixing problems. It’s about the mission of contributing to other humans. It’s about making strangers happier or healthier, efficiently and intelligently.
He recalls all the sports matches he’s seen where a team had a big lead in the final quarter, relaxed, and lost the game. Even though he’s now wealthier than he had ever imagined, nothing had really changed. So he goes back to work.
In 2006, Phil steps down as Nike CEO. Sales are $16 billion that year (to Adidas’s $10 billion). Nike has 5,000 stores and 10,000 employees worldwide. China is its largest producer of shoes.
Their world headquarters in Beaverton houses 5,000 employees in buildings named after people who helped create the company above a brand – Tiger Woods, Mia Hamm, Steve Prefontaine. The two main streets are named after Bowerman and Hayes. Phil is grateful, and he can’t help feeling the universe has been guiding him, nudging him through success.
The spirit of Nike seems to continue with their newest employees. They come in interested in company history and have an informal discussion group called the Spirit of 72.
Superstar athletes are grateful to Nike and to Phil too. Lebron James gives Phil a Rolex from 1972, engraved with “Thanks for taking a chance on me.” Michael Jordan reserves a front-row seat for Phil at his father’s funeral. Phil considers them family.
In 2000, Phil’s son Matthew dies in a diving accident. Phil and Penny are devastated. Every Nike athlete contacts them, but Tiger Woods is the first one, calling in at 7:30 AM. Phil will never forget this.
There are other losses along the way. Bowerman dies in 1999 in his hometown. Phil recalls crying so much that he gave up on tissues and just draped a towel over his shoulder.
Strasser (the lawyer who guided them through the Onitsuka trial and took on active roles in signing endorsements) dies in 1993. But before this, they have a falling out. Strasser was instrumental in signing Jordan and creating the Air Jordan brand. This success got to Strasser’s head, and he didn’t want to take orders from anyone. After clashes, he quit and went to Adidas, a betrayal that Phil never forgave. (They did, however, hire his daughter, Avery Strasser.)
Phil feels the same sense of betrayal when Nike comes under attack for the sweatshop controversy. Reporters never ask how much worse a factory was before Nike went in, made them better, safer, cleaner. They never see that Nike is just a renter of the factory, not the owner. And they ignore the immense job creation and helping poor countries modernize. Phil reacts angrily to this controversy, which doesn’t help the reaction.
But this spurs them to do better, and now they’re proud of their working conditions. They invent a water-based bonding agent that releases 97% fewer carcinogens in the air and released it for competitors to use. They try to push wages as high as they can, despite controls by foreign governments (one time, an official said it’d be disruptive for shoe workers to make more than doctors).
The other core members of the founding team are still around. Hayes lives on a farm in Tualatin Valley, with an array of bulldozers and construction equipment to play with. Woodell (the man in the wheelchair) becomes head of Port of Portland, a licensed pilot, and shareholder of a microbrewery. Johnson, employee #1, lives in New Hampshire, reading thousands of books he’s collected.
Phil watches the film The Bucket List and muses on what he has left to do. He and Penny are giving away $100 million each year. They’ve created the new Matthew Knight basketball arena at U of Oregon, with Matt’s name in the center logo. He’s visited all the places he can think of.
Phil settles on wanting to tell the story of Nike. He wants to share the experience, all the ups and downs, so that young entrepreneurs can press on, comforted that even a great titan of a company as Nike started somewhere. He wants to tell people to think hard about how to spend their next forty years, to follow a calling and not to settle for a job.“If you’re following your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you’ve ever felt.”
So Phil starts writing.
Take the time to think about what you've learned.
What’s your major takeaway from how Phil Knight built Nike? How will you apply this to your life?