Shoe Dog
by Phil Knight
Lessons:
Start Before You’re Ready
Phil was finishing university and needed to do a project for his entrepreneurship class. And he had a simple idea, which he called his ‘Crazy Idea’:
Phil believed that Japanese shoes could become more popular than European shoes in America, just as Japanese cameras had overtaken German ones recently.
This idea turned into an obsession. Phil spent weeks in the library, learning everything about importing and trade laws. He really began to believe his idea could change the sports world forever. Finally, he presented the project to his classmates, filled with passion and enthusiasm. But they only reacted with yawns and bored looks.
After graduating in 1962, Phil wanted to travel the world. And he planned to stop by Japan so he could try to make his crazy idea into a reality.
For a few months, he surfed Hawaiian beaches, admired classic European cities, experienced Asian cultures…
And even stopped by Greece to admire the Temple of Athena Nike, the goddess of victory.
Then in Japan, Phil set up a business meeting with a shoe company named Onitsuka because they made shoes he liked under the brand Tiger.
When they ask Phil what company he represents, he realizes that he doesn’t have a name! In the moment, he blurts out “Blue Ribbon” because he remembered the blue ribbons hanging in his room back home from his old races.
Sell Enthusiasm: It’s easy to sell something you believe in
In 1963, Phil waited months and months for the first sample shoes to arrive from Japan. Onitsuka simply told it would take ‘a little more time.’
Suddenly, at the beginning of 1964, twelve sample pairs of shoes finally arrived.
Phil immediately sent two pairs to his old university running coachBill Bowerman. was highly respected in the world of running and he had always been obsessed with improving his athlete’s shoes. Surprisingly, Bowerman liked the sample shoes so much that he offered to be Phil’s business partner! Phil and Bowerman agreed to be co-founders of the new company Blue Ribbon Sports.
Resist Conformity: Parents and society push us towards security
Seek a Calling, Not a Career: The key to remaining motivated despite setbacks
I’d tell men and women in their mid-twenties not to settle for a job or a profession or even a career. Seek a calling. Even if you don’t know what that means, seek it. 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.
In fact, for the first 5 years of Blue Ribbon, Phil continued to work full-time as an accountant. He sold shoes in the evenings and on weekends. And he reinvested all their early profits back into ordering more shoes.
In 1964, Phil began hiring people. Many of his early employees felt similar passion and his salespeople were all ex-runners:
Jeff Johnson, the first sales employee, was a fellow runner that Phil had seen at track meets many times. He became ultra-devoted, creating an extensive database of his shoe customers, designing his own advertising for Tiger shoes, and even opening their first retail store in Santa Monica in 1966.
Bob Woodell, a runner whose legs were paralyzed in an accident. He was hired for sales, but quickly rose to the important position of Operations Manager, organizing many parts of the business.
Grow or Die: Get comfortable with life’s constant change
Phil overcame countless complex challenges to keep his company alive:
Getting kicked out of one bank, and then another (bankers didn’t like Phil’s obsession towards growth, seeing it as too risky),
Fighting legal battles that stretched on for months, first against Onitsuka and then the US government,
Opening stores all over the US and building new relationships with foreign companies, which required understanding complex international business laws,
And getting home late every night just in time to read a bedtime story to his two young sons. Vowing to spend more time with them, but often feeling that he wasn’t around enough.
Fail Fast: We gain valuable wisdom even when we fail
Build a Brand: Gaining control by making his own Nike shoes
After several years, Blue Ribbon had made the Japanese Tiger shoes a lot more popular in America and they had made Onitsuka a lot of money.
However, tensions were beginning to grow between Blue Ribbon and Onitsuka. Phil suspected that Onitsuka was looking to sign a contract with a larger distribution company. That would put Blue Ribbon out of business because they would have no products to sell!
And so in 1969 Phil was feeling very insecure about the future of his business, even though sales were rising fast and they were moving into larger offices. But Phil would often tell his wife Penny that if it all failed tomorrow, then he could always go back to accounting.
By 1971, Phil knew what they needed to do: Create their own brand of shoes! This would finally give Blue Ribbon control over their own product and destiny, rather than being at the mercy of Onitsuka’s decisions.
Experiment Constantly: Always be testing new product ideas
Nike shoes were introduced to the world for the first time at a big sports show in Chicago. They were a huge hit with the salespeople there. However, Phil was disappointed in the quality of those first shoes, he even said “this is the worst the shoes will ever be” and he vowed to improve the quality standards fast.
In the same way, Nike encouraged their employees to take risks:
Bill Bowerman, the other cofounder, was eating breakfast one day. Looking at the waffle iron in his kitchen, he suddenly wondered if shoes with a waffle pattern at the bottom could provide a better grip. Bowerman broke a couple of waffle makers to create the first prototype, but eventually his ‘waffle trainer’ became one of Blue Ribbon’s best sellers.
M. Frank Rudy, a former aerospace engineer, had invented special pressurized air bags to put inside shoes. Adidas rejected his idea, but Nike took a shot with it. The first time they included the air bags in a shoe was a disaster. The shoes had too many defects and needed to be recalled. But the idea was eventually successful in Air Max, a line of Nike shoes that was truly unique.
Don’t Micromanage: Tell people what to do, let them figure out how
If they needed to open a new store, then Phil would assign the responsibility to an employee without giving them too many limits or directions.
Or if they needed to find a good factory in a foreign country, Phil would find a great local expert, then allow them to make most of the decisions. (They relied on separate experts in Japan, then Taiwan and China.)
Go Public: Seeking greater connection is what life is about
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