Ever wonder what it takes to navigate the unpredictable waters of entrepreneurship? How does one build a business from the ground up, manage relationships, and adapt to changing circumstances? What role does resilience, creativity, and learning from setbacks play in carving a path to success? Dive into this captivating narrative of perseverance, adaptability, and determination in the face of skepticism and adversity.

Shoe Dog

It was dawn in Oregon, a serene morning in 1962. Phil Knight, the author, pulled on his green running shoes and slipped out into the foggy, deserted street. Oregon, calm and green, always had his back. 

Yet, despite its beauty, some saw it as a place where nothing big ever happened. His teacher, a man of grit and wisdom, often spoke of the pioneer spirit that blazed the Oregon Trail. He'd say, "The cowards never started, and the weak died along the way—that leaves us". But as Knight stood there, recently returned after seven years away, still feeling like that shy, rail-thin kid, he wondered what his own trail would be.

Knight had credentials—a degree from the University of Oregon, a master's from Stanford, and a stint in the U.S. Army—but he felt untested by life. He craved something different, something meaningful. His mind raced faster than his legs on that foggy road, pondering his Crazy Idea—the one about importing Japanese running shoes. Inspired by the success of Japanese cameras, he had written a paper on how Japanese shoes could take on the American market, a notion that had become an obsession.

One evening, Knight broached the topic with his father, expecting skepticism. Instead, his father surprised him with support. With his blessing and a loan, Knight set off on a global journey, aiming to pitch his Crazy Idea to Japan's Onitsuka company, the makers of Tiger shoes.

Arriving in Tokyo, the war's scars were everywhere, but the city's resilience was palpable. Guided by American ex-soldiers who loved Japan, Knight learned the art of Japanese business negotiations: be respectful, indirect, and patient. Armed with this advice, he traveled to Kobe to meet with Onitsuka executives.

Nervous yet determined, Knight pitched his idea, promising that their shoes could conquer the American market. To his astonishment, they were interested. They discussed potential models, and he committed to a partnership. He sent a frantic request to his father for fifty dollars to secure the deal.

With business underway, Knight continued his journey, exploring Hong Kong, the Philippines, Bangkok, Vietnam, and India, absorbing cultures and seeking enlightenment. Each place offered new insights and challenges, from the bustling markets of Bangkok to the serene peaks of the Himalayas.

In Greece, standing before the Acropolis, Knight felt a profound connection to history. The Parthenon and the Temple of Athena Nike, the goddess of victory, resonated deeply. He realized that his quest was about more than just business; it was about finding a place in the world where he could play, work, and live with purpose.

The journey took him through Europe—Rome's ruins, Florence's art, Vienna's history, and London's grandeur—each stop a chapter in his expanding worldview. Finally, Knight returned to Oregon, hair long and beard scruffy, greeted by his family's warmth.

As he settled back into his routine, Knight asked his father the question that had been burning in his mind: "Did my shoes come?" His Crazy Idea was no longer just a notion—it was becoming a reality. And with that, he took the first steps on a path that would lead to something extraordinary.

Could Importing Japanese Running Shoes Have Sparked the Birth of Nike?

In 1963, Knight's father hosted a neighborhood gathering, showcasing Knight's travel slides of the pyramids and the Temple of Nike. But Knight's thoughts were elsewhere—specifically on the shoes he was anxiously awaiting from Onitsuka after a pivotal meeting with their executives. Four months had passed, and still, no shoes. Knight fired off a letter to Onitsuka and finally received a reply: "Shoes coming."

During this waiting period, Knight's new rugged look—bushy hair and beard—was too much for his family, leading him to shave and declare, "It's official. You’re back." Yet, part of him had changed permanently. His mother called him "worldly," a notion that felt alien. 

Needing cash, Knight considered returning to Dean Witter firm, but his father suggested talking to his friend, Don Frisbee, CEO of Pacific Power & Light. Frisbee’s advice was to get accountant certification (CPA) to secure a stable income base. Knight grudgingly enrolled in accounting classes at Portland State.

After earning the necessary credits, Knight joined accounting firm Lybrand, Ross Bros. & Montgomery. The work was intense, and the workload heavy, especially after President Kennedy’s assassination, when his boss denied him a day off to mourn. Knight's consolation was his new car, Plymouth Valiant in sea-foam green, which his friends called "vomit green."

In early 1964, the long-awaited shoes arrived—beautiful, white with blue stripes. Knight sent a couple of pairs to his old track coach, Bill Bowerman, who had a passion for shoe design. To Knight's surprise, Bowerman proposed a partnership. They met Bowerman's lawyer, John Jaqua, and agreed on a 51-49 split, giving Knight control.

Despite his father’s skepticism, Knight's mother showed her support by buying a pair of shoes herself. Knight sold shoes out of his Valiant’s trunk, leveraging his passion for running to drive sales. He met Jeff Johnson at a track meet. Intrigued but not ready, Johnson initially declined to join Knight, only to later accept a commission-based position.

Bank troubles ensued due to rapid growth and lack of equity, leading Knight to take a job at Price Waterhouse to stabilize finances. There, he met Delbert J. Hayes, a brilliant but self-destructive accountant who became a mentor of sorts. The Vietnam War loomed over them, adding stress and uncertainty.

Meanwhile, Bowerman continued experimenting with shoe designs, drawing inspiration from everyday items like octopus legs and even working on a book about jogging. Despite all odds, their small company, Blue Ribbon, pushed forward, driven by belief and relentless effort.

From Pyramids to Sneakers: Phil Knight's Journey to Founding Blue Ribbon

In 1966, as Knight's contract with Onitsuka neared its end, he anxiously awaited a renewal letter. Daily, he also hoped for a change of heart from Sarah or dreaded his bank's rejection. Yet, all he received were letters from Johnson, his tireless employee. Johnson's letters were a mix of jokes, hand-drawn illustrations, and endless updates on shoe sales, often closing with pleas for encouragement, which Knight never sent.

Johnson, despite being a constant correspondent, was a dynamo. His dedication to Blue Ribbon was unparalleled, working seven days a week and maintaining meticulous customer records. He even innovated shoe designs based on customer feedback, like adding cushioning to Tiger flats, which became a standard in modern training shoes.

As Blue Ribbon grew, Knight moved into a one-bedroom apartment, soon filled with shoes. Johnson's relentless creativity culminated in opening their first retail store in Santa Monica, a sanctuary for runners. However, a letter from a high schooler revealed that their competitor, the Marlboro Man, was encroaching on their territory. Johnson insisted Knight confront Onitsuka in Japan.

Despite his reservations, Knight flew to Japan, negotiated hard, and secured exclusive U.S. distribution rights. Back home, he faced the challenge of opening an East Coast office. Johnson, though reluctant to leave California, eventually agreed to move to Boston. His dedication was further tested when he demanded a partnership and a raise, leading to intense negotiations with his father. Ultimately, Johnson stayed, driven by his passion for Blue Ribbon.

Meanwhile, Bowerman, Knight's mentor, continued to innovate. He suggested combining features of different Tiger models, resulting in the creation of the Cortez, a shoe that would become legendary. Bowerman's book, "Jogging," also fueled a running boom, indirectly boosting their sales despite its downplay of brand importance.

By 1967, Blue Ribbon's revenue soared, necessitating a new office space. Knight recruited Geoff Hollister and Bob Woodell, each bringing unique strengths to their growing team. Johnson's East Coast office thrived, and he chose Wellesley, Massachusetts, for its running culture and historical charm.

Despite all odds and the looming presence of Adidas, Blue Ribbon was on the rise. Driven by a mix of desperation, innovation, and relentless effort, they forged ahead, each step bringing them closer to their dream.

Could Blue Ribbon's Rise Against Adidas Have Been Predicted in 1966?

In 1968, Knight was juggling a demanding job at Price Waterhouse and his true passion, Blue Ribbon, a budding shoe company. His life was all work and no play, but he was content. He longed to quit Price Waterhouse and devote himself entirely to Blue Ribbon, but financially, it wasn’t viable. He compromised by taking a part-time job teaching accounting at Portland State University.

Knight's first day teaching was a challenge. The students were uninterested, except for one: Penelope Parks. Despite her initial shyness, she turned out to be the star student. Knight offered her a job at Blue Ribbon, and she quickly became indispensable, handling everything from bookkeeping to dealing with sales reps with remarkable ease and a positive spirit. Penny Parks soon became both a personal and professional partner, and they got engaged.

As Blue Ribbon grew, so did their need for more hands. Knight hired more sales reps and a graphic artist named Carolyn Davidson to improve their advertising. Despite their successes, they faced ongoing financial difficulties. Their bank, First National, with its strict banker Wallace, was unyielding. A venture capital attempt failed miserably, and Knight had to rely on loans from family and friends, including a significant and humbling loan from his operations manager Jeff Johnson’s parents.

The financial strain was compounded by unreliable shipments from their Japanese supplier, Onitsuka. Knight visited Japan to secure a new contract but felt uneasy about Onitsuka's long-term commitment to them. Meanwhile, their star product, the Cortez, was in high demand, but they struggled to meet it due to shipment delays.

In a desperate move, Knight explored Japanese trading companies and found potential with Nissho Iwai, but needed Onitsuka’s approval. Around this time, he received alarming news that Onitsuka was considering other U.S. distributors. He reached out to an insider, Fujimoto, who confirmed his fears but also hinted there was still hope.

To salvage the relationship, Knight invited Kitami from Onitsuka to the U.S. for a visit, hoping to remind him of Blue Ribbon’s value and secure their future.

Juggling Dreams and Reality: The Birth and Growth of Blue Ribbon

In 1971, Phil Knight received a visit from Kitami, an executive from their Japanese supplier Onitsuka. Determined to impress Kitami, Knight and his wife Penny hosted him in Oregon, giving him a taste of their best hospitality. 

However, Kitami's visit soon turned tense. At a critical bank meeting meant to secure more credit, Kitami unexpectedly berated the bank officials, jeopardizing Blue Ribbon's financial standing. He later criticized Blue Ribbon's sales, leading Knight to secretly inspect Kitami's briefcase, discovering a list of meetings with other U.S. distributors—a clear sign of betrayal.

Despite the tension, Knight continued to focus on expanding Blue Ribbon. He sought to diversify their supply chain and, inspired by his relentless co-founder Bill Bowerman. Bill experimented with creating better shoe soles using a waffle iron and Knight turned to new manufacturing partners. In a bold move, he launched the Nike brand at the 1972 National Sporting Goods Association Show in Chicago. Despite initial skepticism, the unique design and Knight's honest reputation led to surprising success.

Meanwhile, Knight's personal life intertwined with his business challenges. His wife Penny, after enduring a panic attack due to the immense stress, joined him in Japan, where they navigated delicate negotiations with Onitsuka. Back in the U.S., Knight faced Kitami's aggressive maneuvers but stood firm, ultimately preparing for a legal showdown.

As the year progressed, Blue Ribbon's resolve only strengthened. They signed top athletes like Ilie Nastase, enhancing Nike's credibility. The company also capitalized on the 1972 Olympic trials and the fervor surrounding local hero Steve Prefontaine, who embodied the spirit of relentless pursuit and passion.

The year ended on a high note with the University of Oregon Ducks, wearing Nike shoes, defeating their rivals, the Oregon State Beavers. This victory symbolized a hopeful turn for Nike, setting the stage for its future dominance in the athletic footwear industry. Knight's journey, marked by innovation, confrontation, and a relentless quest for victory, mirrored the very essence of the Nike brand.

Did a Waffle Iron and a Betrayal Spark the Rise of Nike?

In the aftermath of the 1972 Olympics,  long-distance runner Steve Prefontaine, nicknamed Pre, was a shadow of his former self, haunted by the terrorist attacks and his performance where he finished fourth. 

Despite being the fourth-best in the world, Pre knew he could have done better if not for his stubborn all-out approach. His archrival, Lasse Viren, took gold, adding salt to the wound. Though Oregon still adored him, Pre retreated into isolation with his German Shepherd puppy, Lobo. Months later, with a renewed fire, he emerged, training hard and reclaiming his dominance by setting an American record of 13min in Scandinavia, this time wearing Nike.

Nike wasn't just a shoe brand for Pre; it was a symbiotic partner in his recovery. Bill Bowerman, even in retirement, continued to coach Pre, pushing the development of the waffle shoe. Pre's indomitable spirit was making Nike a symbol of rebellion and iconoclasm, and Nike, in turn, supported him financially and emotionally.

Pre's dreams of redemption at the 1976 Olympics in Montreal were threatened by the looming Vietnam draft, his clashes with Bowerman over training methods, and the rigid amateur athletic rules that kept him broke. To help, Nike gave him a Public Affairs job, a modest salary, and a beach condo. Pre bought a butterscotch MG car with his new earnings, embodying the Nike spirit as he sped around town.

Despite having only a few conversations with Pre, Phil Knight saw him as the living embodiment of Nike. Pre's presence at the office turned everyone, including Penny Knight, into a fan. He was an artist, much like Oregon's literary lion, Ken Kesey, viewing each race as a work of art.

Phil's company, Blue Ribbon, faced a battleground of its own. Onitsuka had filed a lawsuit, prompting Blue Ribbon to counter-sue for breach of contract and trademark infringement. Cousin Houser took the case on contingency, with fresh-out-of-law-school Rob Strasser joining the team. Strasser, massive and passionate, was a perfect fit for Blue Ribbon's underdog spirit.

Amid the legal battles, Blue Ribbon's sales strategy evolved with the "Futures" program, securing non-refundable orders from retailers to stabilize finances. Meanwhile, the yen's fluctuation forced them to look beyond Japan for manufacturing. They found a bridge in Puerto Rico and laid plans for a factory in Exeter, New Hampshire, managed by Jeff Johnson.

Despite setbacks, including being outmaneuvered by Jimmy Connors' agent after his Wimbledon and U.S. Open victories, Nike's spirit remained unbroken. Phil Knight's belief in his team, from Pre to Johnson to Strasser, kept them moving forward, always ready to face the next challenge.

Racing Against Odds: Steve Prefontaine, Nike and the Spirit of Rebellion

In 1975, prioritizing financial obligations was critical, with specific emphasis on maintaining a strong relationship with Nissho, a key Japanese trading partner. The company's rapid growth strained cash reserves, necessitating a delicate balancing act between aggressive inventory orders and timely payments to creditors. The strategy involved pushing the limits of banking relationships and managing cash flow to ensure Nissho was always paid first, even if it meant starting each month with zero in the accounts.

The company's reliance on Nissho was challenged when a change in personnel introduced a new, less familiar financial manager, Ito, whose approval became essential for continued credit and growth. The company's aggressive growth strategy and reliance on the Futures program, which guaranteed sales, were both a strength and a source of unprecedented problems.

A financial crisis arose when a significant payment to Nissho coincided with an overdrawn bank account, leading to a scramble for funds and a temporary inability to cover checks. The situation escalated when the bank decided to sever ties with the company, freezing funds and threatening the company's survival.

In response to the crisis, the company's leadership had to navigate tense negotiations with both the bank and Nissho. The resolution came when Nissho, recognizing the company's potential and driven by a personal connection to the brand, agreed to cover the company's debt to the bank, effectively saving the business.

The company's culture was characterized by a relentless pursuit of growth, a willingness to take calculated risks, and a deep belief in the demand for its products. This culture was tested by the financial challenges and the need to maintain strong relationships with key partners like Nissho.

The company's leadership, particularly the founder, was deeply invested in the success of the business, often blurring the lines between personal and professional life. This was exemplified by the founder's hands-on approach to problem-solving and his personal relationships with key figures like Sumeragi and Ito at Nissho.

The company's financial struggles were compounded by the need to adapt to changing circumstances, such as shifts in personnel at partner companies and the fluctuating financial landscape. These challenges required a combination of strategic foresight, personal diplomacy, and a willingness to endure short-term pain for long-term gain.

Can a Key Business Partnership Save a Company from Financial Ruin?

In 1977, a former aerospace engineer named M. Frank Rudy proposed a revolutionary idea: injecting air into running shoes for greater cushioning and support. Despite initial skepticism, the concept was tested and found to provide a unique running experience. 

This led to the development of the first-ever line of Nike apparel, which was initially met with laughter due to its poor design and quality. However, the company learned from this failure and improved the line, gaining respect in the industry. 

Despite these advancements, the company faced numerous challenges. The launch of the Tailwind, a shoe featuring twelve product innovations, was initially successful but later resulted in mass returns due to a fatal design flaw. This failure led to a period of burnout among the team, with the head of marketing falling into depression. 

In addition to internal struggles, the company also faced external pressures. Despite expanding its manufacturing base to include factories in Taiwan, Korea, Puerto Rico, and Exeter, Nike struggled to meet demand. The company also faced issues with knockoff products in Korea, leading to a contract with a Korean factory to prevent further theft. 

Despite these challenges, Nike continued to innovate and grow. The company launched a new ad campaign with the slogan "There is no finish line," capturing the spirit behind the product. The company also began giving Nikes to Hollywood stars, further boosting its brand image. 

However, the company's financial struggles remained a significant concern. Despite industry watchers pointing to new factories and sales as signs of success, few realized that the company was broke. The founder and president found himself sitting in a giant baseball mitt with a long face, symbolizing the company's struggles. Despite these challenges, the company remained committed to innovation and growth, embodying the spirit of its new slogan: "There is no finish line."

From Air Cushions to Hollywood Stars: The Revolutionary Rise and Struggles of Nike

In 1979, Phil Knight found himself in a tiny office at the Treasury Department, facing a bureaucrat he dubbed the "bureau-kraken." This man was demanding $25 million from Nike, a company Knight had nurtured from its infancy. 

Armed with a memo from Treasury that should have exonerated Nike from such fees, Knight tried to reason with the bureau-kraken. His pleas fell on deaf ears.

Despite the bureaucrat’s stonewalling, Knight wasn’t deterred. His resolve led him to Washington, where he met with senators like Mark O. Hatfield and Bob Packwood. These powerful allies helped Knight push back against the unfair penalties, though it required countless political maneuvers and personal sacrifices.

Through relentless lobbying and strategic moves, including launching a knockoff shoe line to manipulate customs duties, Knight finally broke the bureaucratic chokehold. But this was just one battle in a larger war. Nike was also facing rising production costs in Asia, pushing Knight to explore opportunities in China. Guided by Chuck and advised by the savvy David Chang, Knight managed to secure a foothold in the Chinese market. This move was fraught with challenges, from navigating outdated factories to overcoming cultural misunderstandings.

However, Nike’s success wasn’t without controversy. The company came under fire for its overseas factories, accused of running sweatshops. This criticism hit Knight hard, as he had always believed in Nike’s potential to do good. The backlash forced Nike to reinvent itself, improving factory conditions and launching initiatives like the Girl Effect, which aimed to empower young girls in impoverished regions.

Despite the public offering that made Nike a global powerhouse, Knight's journey was far from over. Reflecting on his life, he thought of his son Matthew, lost to a tragic diving accident, and the many friends and colleagues who had shaped his path. He pondered on the nature of business, the role of luck, and the importance of faith in oneself and one’s mission.

Knight’s story is a testament to resilience and vision. From battling bureaucrats to transforming Nike into a cultural icon, his journey underscores the relentless drive to innovate and the profound impact of believing in a Crazy Idea. 

As he sits in quiet reflection, he considers sharing his experiences, hoping to inspire future entrepreneurs to seek their own callings and to persevere through their own challenges. 

Did Nike's Battle Against a $25 Million Bureaucratic Impasse Pave the Way for its Success in China?

In the early 1960s, Phil Knight, a young man from Oregon, had a "Crazy Idea" to import Japanese running shoes into the American market. Even though he had a degree from the University of Oregon, a master's from Stanford, and a stint in the U.S. Army, he felt untested by life and craved something meaningful. 

With his father's support, he set off on a global journey to Japan to pitch his idea to the Onitsuka company, the makers of Tiger shoes. Despite initial nerves, the company was interested, and this marked the beginning of a transformative journey. 

Knight explored different countries, absorbing cultures, and seeking enlightenment. Along the way, he realized that his quest was about more than just business; it was about finding a place in the world where he could play, work, and live with purpose. On his return to Oregon, he eagerly awaited the arrival of his shoes from Onitsuka. 

Knight faced numerous financial struggles, which led him to take on various jobs to stabilize his finances. Finally, the long-awaited shoes arrived, and he began selling them out of his car's trunk. The company, Blue Ribbon, faced intense growth and bank troubles. Despite this, they continued to push forward, driven by belief and relentless effort.

As Blue Ribbon grew, Knight decided to diversify their supply chain and launch the Nike brand. Despite initial skepticism, the unique design and Knight's reputation led to surprising success. To solve financial crises and to maintain growth, Knight had to navigate through tense negotiations with both the bank and Nissho, a key Japanese trading partner. 

By 1977, Nike had developed the first-ever line of apparel and a revolutionary shoe design that involved injecting air into running shoes for greater cushioning and support. Despite numerous challenges and financial struggles, Nike continued to innovate and grow, embodying the spirit of its slogan: "There is no finish line."

In the late 1970s, Nike faced a $25 million demand from the Treasury Department. Through relentless lobbying and strategic moves, Knight managed to break the bureaucratic chokehold. The company then faced rising production costs in Asia, pushing Knight to explore opportunities in China. 

Despite Nike becoming a global powerhouse, Knight's journey was far from over. He faced personal losses and public backlash, forcing Nike to reinvent itself. Knight's story is a testament to resilience and vision, underscoring the relentless drive to innovate and the profound impact of believing in a Crazy Idea.

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Shoe Dog

Phil Knight

Ever wonder what it takes to navigate the unpredictable waters of entrepreneurship?

How does one build a business from the ground up, manage relationships, and adapt to changing circumstances?

What role does resilience, creativity, and learning from setbacks play in carving a path to success?

Dive into this captivating narrative of perseverance, adaptability, and determination in the face of skepticism and adversity.

Key Ideas

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