Phil Knight
Nike's original "shoe dog" who built the world's most successful sports brand
Phil Knight co-founded Nike in 1968 with his running coach Bill Bowerman. At college he trained hard in pursuit of a 4 minute mile, but not quite making it, he started selling imported Tiger running shoes out the back of his truck. He trained as an accountant at Coopers & Lybrand, but soon had an entrepreneurial urge. He headed back to Japan, to form a partnership that produced his first Nike shoes, the swoosh created for $35 by a girlfriend. The business grew rapidly into the world's most successful sports brand.
When I was 10 years old, I joined the school running club. Mike Henry, the teacher at Thomlinson Middle School in Rothbury, had a love of running and took a group of 15-20 of us for a 3 mile run every Monday, Wednesday and Friday lunchtime. Along the country lanes we would go, passed the Whitton Tower farm, and to the turning point at Carterside Farm. For the first year, I was always at the back of the group, struggling to keep pace with my more talented peers. On my feet were a pair of Adidas trainers, more like tennis shoes, and probably the cause of many injury problems in future years!
After a while I got fitter, and discovered an aptitude and ultimately a lifelong passion for running. In September 1978 my first ever race was on the horizon. I’d been selected to run for the school, against other local schools in the Morpeth area. Mike suggested I should invest in some new footwear. It would be a hilly course and I really needed some proper running shoes. He told me about the Wally Waffle. A specialist children’s running shoe from a new American sportswear company called Nike. That Saturday, I persuaded my parents to part with the £9.99 for my first shoes with a swoosh. I loved them. They were light and fast. And I even saw my hero Brendan Foster wearing similar shoes on television. For the last 40 years (Is it really that long?!) I have continued to run, and worn nothing but Nikes though that time. I must have bought over 100 pairs of Nike trainers, racers, and spikes over the years!
I didn’t know that much about the Nike founder Phil Knight until I read his autobiography, Shoe Dog. It was quite incredible to think that at the same time I was buying my first Wally Waffles, Phil and his maverick team of “shoe dogs” in Beaverton Oregon were desperately trying to grow their start-up company, Blue Ribbon Sports, into an international operation. Having started as an importer of Tiger shoes from Japan, then falling out with them and creating their own line with a $35 swoosh logo, they were desperately trying to balance cashflows, product innovations, internal relationships, and lawsuits too. To me they were just cool trainers, but now I realise what went in to making them a reality.
Phil Knight’s Shoe Dog is addictive as both autobiography and business book, and then as an economics book, it is both educating and inspiring.
It is a first-person chronicle of Phil Knight’s founding of Nike, or rather its predecessor Blue Ribbon Sports in 1962, ending with Nike’s initial public offering in 1980, mixing insight and inspiration, and stories about fire drills that involved jumping out of his bedroom window with a bedsheet while his mother timed him.
As way of a quick summary, here are a few anecdotes from the story of Oregon-trail entrepreneurialism which became a cut-throat international business.
Knight’s running talent: Frustrated by his own inability to break 4 minutes for the mile whilst at the University of Oregon, Knight turned to business. More strictly, he first trained to be an accountant, getting a job with what is now PriceWaterhouseCoopers. He also lectured on finance at the local college, which is where he met his wife Penny.
Bowerman’s waffle iron: USA track coach and Knight’s co-founder Bill Bowerman was always tinkering with shoes. His famous waffle-iron inspiration for a studded sole actually emerged because of his obsession with creating a authentic running track. Knight described getting the waffle sole patented as the most magical moment in Nike’s history.
Nike v Adidas: Of the 1970s, Knight writes, “I was developing an unhealthy contempt for Adidas. Or maybe it was healthy. That one German company had dominated the shoe market for a couple of decades, and they possessed all the arrogance of unchallenged dominance. I despised them.” Today Nike is twice as big as Adidas.
Inspired by Japan: His frequent business trips to Japan in the ’60s and ’70s endeared him to its people and culture … “I sat, contemplative, reverent, beneath swaying ginkgo trees, beside a beautiful torii gate.” He started by importing Tiger (now Asics) shoes, and eventually developed his own brand (Nike) made in Japanese factories, financed by Japanese trading companies.
Nike or Dimension Six: The name “Nike” came to Jeff Johnson, Blue Ribbon Sports’ first full-time employee, in a dream (“Any good brand should be short with a click in it – like a K or X”). But it took an enormous effort by everyone else to convince Knight that his preferred brand name, “Dimension Six,” was “unspeakably bad.”
The annual Buttface: Knight held a regular retreat called “the Buttface” for his close team, a few days of problem solving and planning the future (alongside “some serious drinking and partying”). Apart from these days, he largely left his people to work on their own, focusing on the outputs not how they did it. He always worried about his leadership style being too hands off, but his people thrived on it.
Here are a few small but magical extracts from the book:
1. Crazy ideas can change the world
“History is one long processional of crazy ideas. The things I loved most—books, sports, democracy, free enterprise—started as crazy ideas.
So that morning in 1962 I told myself: Let everyone else call your idea crazy. Just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to “where” is.”
2. Do something that adds meaning to your life.
“I wanted to build something that was my own, something I could point to and say: I made that. It was the only way I saw to make life meaningful.
When you make something, when you improve something, when you deliver something, when you add some new thing or service to the lives of strangers, making them happier, or healthier, or safer, or better, and when you do it all crisply and efficiently, smartly, the way everything should be done but so seldom is—you’re participating more fully in the whole grand human drama. More than simply alive, you’re helping others to live more fully, and if that’s business, all right, call me a businessman. Maybe it will grow on me.”
3. Act first, apologise later
“Somehow, in meeting after meeting, I held my tongue. Everything my banker said, I ultimately accepted. Then I’d do exactly as I pleased. I’d place another order with [Knight’s Japanese supplier], double the size of the previous order, and show up at the bank all wide-eyed innocence, asking for a letter of credit to cover it. My banker would always be shocked. You want how much? And I’d always pretend to be shocked that he was shocked. I thought you’d see the wisdom . . . I’d wheedle, grovel, negotiate, and eventually he’d approve my loan.
4. In sales, belief is irresistible.
“Driving back to Portland I’d puzzle over my sudden success at selling. I’d been unable to sell encyclopedias, and I’d despised it to boot. I’d been slightly better at selling mutual funds, but I’d felt dead inside. So why was selling shoes so different? Because, I realized, it wasn’t selling. I believed in running. 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. People, sensing my belief, wanted some of that belief for themselves. Belief, I decided. Belief is irresistible.”
5. Fail fast.
“But my hope was that when I failed, if I failed, I’d fail quickly, so I’d have enough time, enough years, to implement all the hard-won lessons. I wasn’t much for setting goals, but this goal kept flashing through my mind every day, until it became my internal chant: Fail fast.”
6. Front runners work the hardest and risk the most.
“I went for long runs, musing on every detail while racing the wild geese as they flew overhead. Their tight V formations—I’d read somewhere that the geese in the rear of the formation, cruising in the backdraft, only have to work 80 percent as hard as the leaders. Every runner understands this. Front runners always work the hardest, and risk the most.”
7. When you’re starting out, you have to make do with the second best.
“We couldn’t afford to fix the broken glass, so on really cold days we just wore sweaters.
Woodell occupied an office that was hardly deluxe. It sat on the top floor of an old shoe factory, and a water tower directly overhead was caked with a century’s worth of pigeon poop. Plus, the ceiling beams were gapped, and the building shook every time the die cutters stamped out the uppers. In other words, throughout the day a steady rain of pigeon poop would fall on Woodell’s hair, shoulders, desktop. But Woodell would simply dust himself off, casually clear his desk with the side of his hand, and continue with his work. He also kept a piece of company stationery carefully draped over his coffee cup at all times, to ensure it was only cream in his joe.
The first time I ever sent Bob Woodell to a trade show, the airline lost his wheelchair. And when they found the wheelchair, the frame was bent like a pretzel. No problem. In his mutilated chair, Woodell attended the show, ticked off every item on his to-do list, and came home with an ear-to-ear mission-accomplished smile on his face.”
8. If you don’t grow, you die.
“Our cozy apartment was now completely inappropriate [for my newborn son]. We’d have to buy a house, of course. But could we afford a house? I’d just started to pay myself a salary. And in which part of town should we buy? Where were the best schools? And how was I supposed to research real estate prices and schools, plus all the other things that go into buying a house, while running a start-up company? Was it even feasible to run a start-up company while starting a family? Should I go back to accounting, or teaching, or something more stable? Leaning back in my recliner each night, staring at the ceiling, I tried to settle myself. I told myself: Life is growth. You grow or you die.”
9. Persist in the face of failure.
“The following Sunday, sitting over breakfast with his wife, Bill Bowerman’s gaze drifted to her waffle iron . He noted the waffle iron’s gridded pattern. It conformed with a certain pattern in his mind’s eye, a pattern he’d been seeing, or seeking, for months, if not years. He asked Mrs. Bowerman if he could borrow it. He had a vat of urethane in his garage, left over from the installation of the track. He carried the waffle iron out to the garage, filled it with urethane, heated it up—and promptly ruined it. The urethane sealed it shut, because Bowerman hadn’t added a chemical releasing agent. He didn’t know from chemical releasing agents. Another person would have quit right then. But Bowerman’s brain also didn’t have a releasing agent. He bought another waffle iron, and this time filled it with plaster, and when the plaster hardened the jaws of the waffle iron opened, no problem. He took the resulting mold to the Oregon Rubber Company, and paid them to pour liquid rubber into it. Another failure. The rubber mold was too rigid, too brittle. It broke right away. But Bowerman felt he was getting closer.
I look back over the decades and see him toiling in his workshop, Mrs. Bowerman carefully helping, and I get goosebumps. He was Edison in Menlo Park, Da Vinci in Florence, Tesla in Wardenclyffe. Divinely inspired. I wonder if he knew, if he had any clue, that he was the Daedalus of sneakers, that he was making history, remaking an industry, transforming the way athletes would run and stop and jump for generations. I wonder if he could conceive in that moment all that he’d done. All that would follow. I know I couldn’t.”
10. Honesty is crucial in life and in business
“I gazed around the convention center, at the thousands of sales reps swarming the booths, the other booths. I heard them oohing and aahing at all the other shoes being introduced for the first time. I was that boy at the science fair who didn’t work hard enough on his project, who didn’t start until the night before. The other kids had built erupting volcanoes, and lightning machines, and all I had was a mobile of the solar system made with mothballs stuck to my mother’s coat hangers.
They gave us business. They actually placed orders with us. By the end of the day we’d exceeded our grandest expectations. We were one of the smash hits of the show. At least, that’s how I saw it.
The man laughed. “We’ve been doing business with you guys for years,” he said, “and we know that you guys tell the truth. Everyone else bullshits, you guys always shoot straight. So if you say this new shoe, this Nike, is worth a shot, we believe.”
11. Doubt, pain, and uncertainty are part of everyone’s creative process.
“More than once, over my first cup of coffee in the morning, or while trying to fall asleep at night, I’d tell myself: Maybe I’m a fool? Maybe this whole damn shoe thing is a fool’s errand?
Michelangelo was miserable while painting [the ceiling of the Sistine Chapel]. His back and neck ached. Paint fell constantly into his hair and eyes. He couldn’t wait to be finished, he told his friends.”
12. Reject micro-management.
“My management style wouldn’t have worked for people who wanted to be guided, every step, but this group found it liberating, empowering. I let them be, let them do, let them make their own mistakes, because that’s how I’d always liked people to treat me.”
13. Do more than what you’re comfortable with.
“I tried to be nonchalant as I signed the papers and placed an order for five thousand more shoes, which would cost twenty thousand dollars I didn’t have. Kitami said he’d ship them to my East Coast office, which I also didn’t have. I promised to wire him the exact address.”
14. Focus on the spirit behind the product, not the product itself.
“The ad showed a single runner on a lonely country road, surrounded by tall Douglas firs. Oregon, clearly. The copy read: “Beating the competition is relatively easy. Beating yourself is a never-ending commitment.” Everyone around me thought the ad was bold, fresh. It didn’t focus on the product, but on the spirit behind the product, which was something you never saw in the 1970s.”
15. Invest in your employees
“I complained about my business. Even after going public, there were so many problems. “We have so much opportunity, but we’re having a terrible time getting managers who can seize those opportunities. We try people from the outside, but they fail, because our culture is so different.” Mr. Hayami nodded. “See those bamboo trees up there?” he asked. “Yes.” “Next year . . . when you come . . . they will be one foot higher.” I stared. I understood.”
16. Being a rebel puts a bulls-eye on your back
“I’d like to warn the best of them, the iconoclasts, the innovators, the rebels, that they will always have a bull’s-eye on their backs. The better they get, the bigger the bull’s-eye. It’s not one man’s opinion; it’s a law of nature.”
17. Dominance brings arrogance
“I was developing an unhealthy contempt for Adidas. Or maybe it was healthy. That one German company had dominated the shoe market for a couple of decades, and they possessed all the arrogance of unchallenged dominance.”
18. The Oregon Trail
“The cowards never started, and the weak died along the way. That leaves us.”