Shoe Dog
By Phil Knight
Dawn
wakes up for a run — why is it always so hard to get started
speaks on his hometown of Oregon and all the schooling he did to end up back to his home town where he didn’t really rebel
doesn’t know who he wants to be or will become
all he knew was that he wanted to have a meaningful, purposeful and creative life and above all a different one — to play, to feel what athletes feel
the world is made up of crazy ideas, but just keep going, don’t even think about stopping until you get there and don’t give much thought to where ‘there’ is. Whatever comes, just don’t stop
Part 1:
1962
starts to think about telling his father about this crazy idea
he took a entrepreneurial class at Stanford and he did it on running shoes and thinking about Japan imports/exports
he wanted to go to the country first and see, explore first
this was 1962 where not many people left their city, so this idea was unheard of
his father was a respected man, and he liked being admired. But he has his own fear of inner chaos
his father let him go on the trip and lended some of his cash
his grandmother was scared for him as the peal harbour war recently finished
rest of family didn’t mind too much as his mother even had some pride
wanted a companion on this wild trip, asked his friend from Stanford, Carter. Carter laughed when Phil told him but was laughing in amazement as he wanted in — he always was the one to see an opportunity and shoot his shot
took a one way ticket to Hawaii, went to Waikiki beach and jumped into the water. Phil decides to stay in Hawaii and both of them got jobs there
just went surfing for most of the day and sold encyclopedias door to door
ended up getting a place with Carter but had a difficult time selling
he wasn’t great at dealing with rejection either, ever since high school where he got cut from the baseball team
not everyone in this world is going to like you — ended up getting a sales job and did well in the first couple of weeks
the world was planning for world war 3 at that time and what other better place to be than Hawaii
Phil tells Carter that it’s time to go but Carter wants to stay as he met a Hawaiian girl
inner voice tells Phil to go back home and get a normal job, but also heard another voice ‘keep going. Don’t stop’
Phil on his way to Japan, realized some of the land destroyed from the bombings
next day went to United Press International where American guys worked that knew his father they told him about talking to the monthly magazine company
reality is non linear, all is now
you cannot travel the path until you have become the path yourself
he saw Mount Fuji — you climb it for celebration
met the guys at importer magazine and got to know each other stories
they advised him to go seek help/ deal with the shoe company tiger and must take time to negotiate as in Japan it’s different than America
expect nothing, seek nothing, grasp nothing
his appointment was in the morning, too excited to sleep, you are capable, you are confident, you can do this
he went to the showroom rather than the factory — half an hour late
Phil presented to the executives of Onitsuksa and brought out his idea of undercutting adidas
the executives left after the presentation and came back with samples and they made the deal where Phil told them to send samples back home and he can get started.. also lied about the company he is representing “blue ribbon”
Phil wanted to go home and start his business with the sample shoes but decided to explore the world instead
went to China then Philippines, saw the great Buddha — why am I here? What is my purpose?
went to Vietnam and got sick — lead me from the unreal to the real
went to Kathmandu and noticed their shoes, started to look at peoples shoes often
went to India, Kenya, Cairo, Jerusalem
Istanbul — what you most want will come to you then. Warmed by a sun inside you’ll see wonders
Rome where again saw shoes where putting the right one first before left brought prosperity and good luck
Florence days seeking Dante — David and Goliath then Milan to see the art, Venice
Paris and on the last day went up champs-élysées — don’t tell people how to do things, tell them what to do and let them surprise you with their results
flew to Munich, Berlin, Vienna — walked where Beethoven discovered he was dead
London was his last stop then reflected on Greece being the one place most excited about
remembered the temple of Athena Nike — victory, in the play the warrior gives the king a gift of a pair of new shoes
finally Phil went back home and family greeted him, took a nap and saw his father asked if the shoes came in
1963
Phil still waiting for the shoes to arrive, sent a letter back and they replied that they will come soon, dad tells him that $50 is long gone
Phil didn’t know what to do with his career or life, talks to some people and decides to go back to school
after finishing the 9hr of schooling, started working at an accountant firm
it was a lot of work, as the firm was a satellite firm to a larger one, he didn’t really have time to enjoy the process or learn
that was mainly it that whole year… work.
1964
the shoes finally came in after a year, 12 pairs of shoes, he sent 2 right away to his old track coach as he was a shoe fanatic
his track coach that was seen as the god, actually reached out back saying he was going to be in Oregon and should meet up
had lunch and coach Bowerman wanted to be part of the shoe company 50-50
when they agreed, Bowerman told Phil to meet with his lawyer to get it in writing.
met with his lawyer and got a deal done with 51-49 as Bowerman doesn’t want to be in charge
Phil now needed some money to start up even with Bowerman In on the deal
Phil went through with it and bought $1000 worth of shoes and became the executive seller in the west of America
quit his job and that spring just sold shoes
realized the selling was not the same as selling encyclopedias before, the shoes he believed in and believed in running — people sensed that and wanted some is that belief too
mid summer Phil sold all his first shipment and went with $3000 worth for the next
wanted to expand by getting others to help sell the shoes and work for him in California but didn’t have the money to fly down, used military gear to get a flight to LA
life was good for Phil until he received a letter from Mr Manhasset which was a previous model for Marlboro and current wrestling coach in New York and stated that Phil needs to stop selling as he’s the American exclusive distributor
Phil decides to go to Japan to personally talk to the executives, realized that the person he talked to last year is no longer there and now explained the situation to the new person
the world is without beauty when you lose
phone rang that morning and Mr Onitsuka wishes to see Phil
had a large meeting and Mr Onitsuka himself said that Phil reminds him when he was younger and decides to let Phil keep the western states and the wrestling coach stays on east
Phil then signs a 3500$ worth of shoes
it was time he climb Mount Fuji, met friends along the way as he climbed up, one girl and her boyfriend
mountains flow but we can’t always perceive the flow with the limited senses
at the bottom Sarah asked where Phil was going and realized the guy isn’t her boyfriend
got along very well but didn’t really make plans after but Sarah wrote a note at the American Express to visit him, Phil got back home — happiness is a how, not a what
Sarah took Phil’s note and was at his house, stayed for 2 weeks and got along well
she visited again and letters were sent back a forth but just didn’t workout
Phil’s sister Jeanne helped him out during the time and ended up being his first employee
1965
Phil sent shoes to Jeff Johnson and he was willing to sell shoes for phil with a commission
but Jeff would send many letters to Phil about updates and questions
Jeff ended quitting his regular job and asked Phil to work full time for him and Phil agreed even though it could be a risk but also he saw possibilities
had some troubles with banker as the banker is saying that the rate of growth of company is too fast. Phil thinks life is growth, business is growth
banker says he doesn’t have enough equity for the kind of growth
Phil still did large orders and sold a lot of shoes but the order were late most of the times and now Phil feels he needs to have another job if it goes bust
ended up at price Waterhouse as a accountant
spent a lot of time with a guy named Hayes as he was known to be really good with numbers but also was overweight and drank a lot and Phil found himself with Hayes a lot during work trips on the road
Phil realize that Bowerman was his asset as he recently went to the 1964 Olympics in Japan to coach and ended speaking to Onitsuka and became friends
Bowerman started to send prototypes for American tigers and ended up getting one — start to play around with sports drinks too
1966
waiting for contract renewal with tigers, only got letters from Johnson, didn’t like micromanaging
realized that Johnson have been keeping in touch with all customers and made his own twist to the shoe like Bowerman
Johnson mails Phil about his divorce and a bad car accident, asks Phil about the future of blue ribbon — if Phil failed he wanted to fail fast as he could apply all his learning to the next
Phil told Johnson that if he can sell 3,250 pairs of tigers at the end of June 1966 he can open a retail store
so he did it and made it into a runner’s paradise not just a shoe store
then the Marlboro man was back as he realized that Johnson was poaching on the east
Phil decides to go meet again in Japan to tell them about the news and was about to get time off work by saying it was an emergency
there was a new export manger Kitami, they meet and Phil wanted to be the exclusive US distributor, but Kitami said it wouldn’t be possible as they wanted east coast office
Phil lied and said he has a east coast office and so Kitami gave Phil a 3 year contract for all of US — placed an order for 5,000 pairs
1967
talked to a long distance runner that also coaches at a high school to take over for Johnson as he’ll be going out east
Johnson did no like that idea as he lived the west coast
Johnson finally agreed, and Phil realized what type of person he is and the investment into blue ribbon — he showed to be a true team player
Johnson then threaten to quit as he felt he was doing a lot of work, wanted more money or be a partner
Phil couldn’t do it so he negotiated for a pay raise and Johnson accepted
Bowerman asked Phil to hire on another employee then another one
Phil met with both Hollister and Woodell and got along nicely, couldn’t pay for lunch but that’s part of the process
would open up second location on the west coast, Woodell would be there
Bowerman able to get this prototypes going and Onitsuka sent them and called them Cortez as adidas threatened to sue as they had a line coming out named Aztec’s
Bowerman’s book on jogging came out and sparked a movement for running, but stated that any shoe would be good?
Phil questions why they even have this company
Phil needed more space as his apartment was just filled with shoes, so rented out a space and got Woodell there too to sell at front and storage at the back
on the east coast Johnson decided with Wellesley Boston and called the house blue ribbon and lived there too, Phil didn’t reply
1968
if Phil wanted all work no play then he wanted work to be play — as he was always working either at price or with blue ribbon
decided to switch to assist professor to open more hours for blue ribbon — he was excited as he had more time and felt like he was in track
Phil enjoyed teaching accounting and found it ironic that he is teaching what he was told to him at the bank and how his business does not follow those rules
had a young lady in his class that didn’t speak or participate often but did very well on assignments, she asked if Phil can be her advisor but Phil offered her a job
she did amazing at the office and did it with care and Phil ended up asking her out
they went to the zoo, Phil explain why blue ribbon — basically didn’t want to work for someone else, to build something that was his own
started to go on more dates with Penny as they got to know each other better
Phil asks penny mother to take her to Sacramento to watch the track meet, she said no at first then second time said yes
Phil had to go to Japan to solidify the deal and believed that when he got back things had to be more serious with Penny so he mentioned marriage
she said yes and it felt different — the single easiest way to find out how you feel about someone, say gooodbye
Phil met with Kitami several times and each time felt like they got closer and he loved the new designs
his life is starting to mix with Johnson, Woodell, Penny and the family at Onitsuka
at the dinner he sat beside an older man Fujimoto, he lost his home from typhoon and started over. Still couldn’t replace his bike
Phil got home and sent money right away to Fujimoto and he sent the money back cause his supervisors didn’t let him keep it but if sent to his home then yes, he did and a vital partnership had begun
Phil and Penny got married
1969
Phil able to hire more people as the company grew and on commission based
quit Portland state and went full time on the business just before 31st birthday
last week on campus, he overheard a girl that she couldn’t afford to take a class on oil painting, Phil offered her a job for design/advertising
Bowerman finished up at the Olympics and notice people training in tigers but not competing in them — just no good enough = money
Bowerman has second thoughts on Kitami and his intension, so Phil asks Fujimoto to spy on the company and him
Phil gets into a routine with marriage and Penny starts to pick up Phil’s way of always trying to win
life is growth, you grow or you die
Penny started to feel poor in the morning and found out she was pregnant
Phil and Penny brought a new house in Beaverton and blue ribbon needed to keep going up or house loan would not be in place
Phil and Woodell would have deep conversations during work and he learned that things could be a lot worse so enjoy the moment
Phil and Woodell decides to move offices to Tigard Portland and shared some space with investment company
Phil gives Woodell a new position as operation manger and not sales
Penny gave birth to a boy and Phil is now a father
Bork one of the mangers of the other location demanded a raise and more meaning to the company
Woodell handled the situation and got Bork back on board but need the warehouse to be organized cause it was too much for Bork
decides to bring Woodell’s mother to organize that
1970
Phil went to Japan again to secure a new contract, got a 3 year deal but wanted 5, Ontisuka response was 3 and promoted Kitami
Phil had problems with the bankers again as he is asking for 1.2mill
as new shipments come in from Japan blue ribbon does not have the cash for it — attempting to sell some shares are get cash upfront, nothing
Woodell’s parents decides to loan the company 5000$ and another 3000$ they were at zero and said they trusted the company that their son is working for
Phil found other investment companies that are willing to do deals with blue ribbon but wanted to get clearance from Ontisuka
no response and then got a message from someone on the east coast saying they were going to become the US distributor
found out through Fujimoto that Kitami was planning to cut blue ribbon, Phil needed to show what the company is all about
1971
Kitami came to the west coast for a visit and Phil showed him around and treated him well
however Kitami was disappointed with sales and the company, did not like how things were going for blue ribbon
Phil took a folder from his briefcase and it was a list of potential U.S distributors and meeting times
Kitami was planning to find new companies for distribution
as they met with Kitami for dinner, Woodell was able to slide the folder back in the suitcase
with the dinner in place, Phil realized that this whole thing wasn’t about blue ribbon and shoes it was about Kitami
finally when Kitami came back from other visits, he offered Phil to sell his company to Onitsuka
in disbelief Phil told him he’ll have to talk to his partner Bowerman
first national bank will be ending their relationship with blue ribbon and won’t fulfill any more order after the last shipment
Phil had to scramble to find a new bank, got a short term deal but always thought back to Nissho
Nissho believed that they can get much more out of blue ribbon than Onitsuka and are willing to search for other Japanese importing shoes
with all that is going on with Onitsuka, Phil went to a Mexican manufacturer where adidas did their shoes for the 1968 Olympics, signed a deal right there for futbol shoes and needed a logo and name
no names were sticking, then Woodell came in and told Phil that Johnson had a dream about the name — Nike
the Mexican manufacturer was a bust as the shoes would tear in cold weather
now dealing with Nissho, not sure if they should partner up, so now Phil is dealing with a guy named Sole (a shoe dog) he knows a lot about shoes and factories, introduces Phil to different factories in Japan
went on a trip with Sole and others from Nissho to see all the different show factories
found one that did the sampling in a couple of days and Phil created all the names for the shoes
Phil flew Penny out for the last bit of Japan, they visited Ontitsuka and Kitami did not bring up the offer he had before
when Phil went back home to discuss the state of the business with Bowerman and Woodell, Bowerman started creating new ideas
1972
in Chicago every year there’s the national sporting good show
this was an important time as it will be the first time Phil and the team will be introducing Nike in their orange boxes
the shoes itself wasn’t the greatest but people bought because of the trust they had with blue ribbon
Ontisuka still does not know, news went out and Kitami came into Phil’s office asking about the Nike
Phil had to cover up but Kitami found out that they were selling Nike too on the side through Bork and later found out Bork quit and started working for Kitami
Kitami wanted a meeting with blue ribbon, decided to cut and terminate contract and stop sending shoes, now they only have Nike
Phil decides to rally the team and go for it with Nike
Olympic trials for track and field was in Oregon and they got some athletes to wear their Nike shoes and gear
next targeted athlete was hometown Pre as he won the long distance race
at the 1972 Olympics Bowerman went to coach but there masked men that scaled the back wall of the Olympic village and kidnapped 11 Israeli athletes
Bowerman saved one Israeli athlete but U.S counsel didn’t not like the risk but Jesse Owen’s supported him and did not get into trouble
Bowerman retired from coaching soon after
a Romanian tennis player Ilie Nastase was wearing Nike’s and Phil made his first athlete endorsement deal with Nastase for $10,000 and he celebrated with them
1973
Pre was devastated with his 4th place finish but got back on his feet with Nike that Bowerman custom made for him
eventually Phil hired Pre and got him working as a director of public affairs meaning he was another athlete endorsement
investors were looking into the company but the first time they at a net loss
Kitami was suing them in Japan and so Phil had to sue back in U.S
Penny expecting another child
Phil had cousin Houser to deal with case as he didn’t really have the funds to pay and Houser brought on a young lawyer named Rob Strasser
Strasser got a long well with Phil and shared many similarities
had some trouble with supply and demand and shipments, but once the new shoe models started to roll out retails were signed on
then their new baby arrived and it was another boy, a pair of sons
1974
the trial was under way and Phil did not perform on stand very well, the judge was known to be strong, Phil was not himself on the stand
Nike shoes kept gaining more ground as the Cortez sold out and sales were high
during the court case Kitami was on stand and wanted a translator yet he spoke perfect English, he had a couple of lies
cased ended and the final word = blue ribbon was just more truthful as the judge knew what was Kitami was doing with the translator
Phil and the team won the case, they signed all papers and the money was rewarded
Strasser agreed to be blue ribbon in house counsel after some convincing from Phil and the team
‘one of us’ to have work be okay but meaningful play — to create a brand but also a culture, to sell an idea and a spirit
then another problem came as the Japanese currency yen was fluctuating a lot and suppliers in Japan were uneasy they had to find somewhere else
decided to get materials from Porto Rico and have a factory on the east coast in New England
got a deal done and bought an old factory where a guy named Giampietro would fix it all up for shoe production
Phil asked Johnson again to move back out east to overlook the factory, Johnson again accepted — willingness to do whatever was necessary to win
will use Nissho for the money to buy the factory
1975
Phil had to keep paying Nissho first and keeping them happy as they were the main investors
as sales grew, more orders will go out and they were having some difficulties paying off the bank and loaners
then one day they owed Nissho 1 million and were $75000 short, had to take all the funds from all locations for this one payment — these are the moments
but days later employees of Johnson got their checks bounced — they didn’t have any money left
had a meeting with the bank of California and said they no longer want their business at the bank
they broke the news to Nissho and they wanted to see their books before they can give them more money as they still owe them the million
when Phil got home he got a message from the bank about fraud — many meetings and all faith in hands of Nissho as they look through the financial books and would realize what they have been doing with their money and the factory
when the men at Nissho came back after the audit, Sumeragi admitted to Phil that he held back some invoices causing more problems
Ito understands now the problems and see why Phil had to use the money for the factory
Ito went to the bank with Phil and Hayes and wrote a check to cover all owing and called off the FBI along with cutting off ties with Nissho with the bank
Ito covered blue ribbon for everything and Phil realized how important Nissho was
Part Two:
1975
Phil and the team got a new bank — First State Bank of Oregon
next morning Phil and Penny left to Eugene to watch Pre run in an invitational and he ended up winning, saw him at the after party and went home
next morning Phil gets a call from bank of California but it was about Pre — told him that he died in a car accident the night of the after party
Phil later found out that Pre got into an accident and died at 24
1976
Phil had this feel for winning, money wasn’t really the end goal but the more money then the bigger company can be
thought of going public, but decided not to then Bowerman decided to bow out as he didn’t want to take on more risk
Phil bought him out but kept him on as Vice President
as the waffle trainer took off, they decided to make them in blue to transition the shoe to everyday wear and it worked
got so big that they had to change the company to Nike Inc
as things grew they needed another production place, made the move to Taiwan with Jim Gorman
toured Taiwan and had a call from Jerry Hsieh where Phil had met before — made a deal where Hsieh will show them the best factories in Taiwan
back in America, the next Olympic trials occurred and the top 3 finishers wore Nikes and now everyone talking about them
but at the Olympics the main athlete to win the event wore tigers
the team had many meetings and called the meetings/get together ‘buttfaces’ — the company needed along to grow even more
don’t tell people how to do things, tell them what to do and let them surprise you with their results
Phil found himself during this year a lot where he questioned his leadership style as not hands on or hands off, let the people make their own mistakes
also thought of his kids as they didn’t see him that often, would question that too
1977
Frank Rudy was a former aerospace engineer and pitched to Nike about adding air into shoes for extra cushion
Phil at first was skeptical, but the moment Frank said that he pitched it adidas and they were skeptical too Phil knew he needed to make a move — asked for a pair of soles
Phil got Strasser on the negotiating terms with Frank and sent him to the east coast with Johnson
as that was going on Phil and Strasser got on well with the college basketball teams that expanded to football where they were signing athlete deals everywhere
as more and more famous athletes and now movie stars wearing Nike they needed more factories and products, got some in Korea as they were making knockoffs that looked exactly the same — Phil ended up threatening them, then signed a contract with them
problems kept coming so they kept building momentum, rolled our new ad campaign “there is no finish line”
John Brown took that role and had an ad up with a runner all alone on a road that wrote “beating the competition is relatively easy. Beating yourself is a never-ending commitment”
Phil got in a meeting with Chuck Robinson a person that really knows business
he looked at all the financial statements and suggested going public to fix the cash flow problem
Phil then invited him to be on the BOD, said yes — now Phil took that back to the team
then one day a letter came in the mail saying that Nike owed the government 25 million for customs fee
in the mist of all this chaos with the government, Phil decided to move into a bigger home for the kids — they are starting to grow up and getting stubborn traits
1978
Strasser was on the case, so he got help from a guy named Richard Werschkul
in the meantime Woodell and Hayes were on the east attempting to buy more factories
the company was growing fast, 140 million projected in sales but still had the customs problem
now thinking of a apparel line — and Phil started to really get on the team about what they wore
ended up just giving Woodell the job to handle all apparel
near end of 1978 the tailwind was released as the first air filled shoes — but it was recalled as it didn’t work out
Phil and the team was all feeling the burnout, and Phil decides to just go deal with the customs problems
1979
Phil met with the person that have been sending the 25 million bill
the man didn’t care about Phil case and just wanted the job done with 25 million
Phil not giving up and will see every congressman and senator
Werschkul got an appointment with one of Oregon’s senators, they rehearsed the meeting but realized that the senator knew about the case and was wondering how he can help
during this time Nike got even bigger and once again they had to get a new bigger office
they needed to expand more on their productions and this time it’s for China — got introduced to a guy named David Chang and he knew China well
1980
Phil really wanted to get the custom thing out so they did a couple of ads and fired back so they tried to settle but Phil wanted it to be at $0
so now the idea of going public is on the table again, but this time Hayes was talking about having a class A and B where they will still get the cash they need with the control they don’t want to lose
Phil cut the check for 9 million to the government and they settle that
now they were on with China to get a deal going there as they toured around
they got a deal with the track and field federation where all the athletes would be wearing Nike also got 2 deals with factories to be the first American shoemaker to do business with China
with this business it was more: to create, contribute, stay aloud. When you make something, when you improve something, when you deliver something, when you add something to lives of strangers making them happier or healthier or safer or better — that’s what’s the business is
once back from China they got right onto going public and releasing class A and B stocks
they had to hit the road and present to potential investors — 12 cities in 7 days
came back and needed to settle on the worth of the stock, Phil felt $20 was too less and wanted $22
the day came where at the office they had Nike at $21.50 which was their final offer. But then Phil said $22 is the number. Ended the call and they phone back and accepted and will have the stocks ready the next day
Phil went home that day not sure what he was feeling, regret maybe? But he was worth 178 million
Night
fast forward to 2007, Phil and Penny bump into Bill Gates and Warren Buffet at the movies
now Phil is worth about 10 billion, the other 2 are probably x5 that — lead me from the unreal to the real
Phil stepped down as CEO as sales were much higher than Adidas
Phil still goes into the office and the buildings are temples to him
Phil recalls many special moments with great athletes like Lebron, Jordan, Tiger, Agassi etc
then the story of his son Matthew where he was finally finding himself as he did charity work in El Salvador — took a break one day to go scuba diving and had an accident
it was devastating to the family and all Nike athletes reached out — Phil recalls his parents relationship as it may have been strained but they cared for their kids as their legacy, that’s their lasting victory
“you measure yourself by the people who measures themselves by you”
that brings Phil back to the reason he went around the world In 1962 — a transference, camaraderie, sort of connection wth others
to study the self is to forget the self, mi casa, su casa
Phil recalls Bowerman death in 1999, and Strasser’s death in 1993 where they had a falling out as Strasser was the man on the job to get Jordan on board then he quit to go to Adidas
recalls the sweatshop controversy, and how he changed the way factories ran and gave the water binding method to other companies
even got factories in Vietnam after all that happened with the Vietnam war, even met with the general that was in charge of it all
how did he do it? “Professor of the jungle”
when the money started to roll in — didn’t really affect them as they weren’t driven by it
but that’s the nature of money — whether you have it or not, whether you want it or not, whether you like it or not, it will try to define your days. Our task as human beings is not to let it
Phil thinks about his own bucket list — done a lot of things, but wants to share his story now the ups and downs, the dreams and drive, how people want to spend their time and with whom
he would tell people 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, seek it as the highs will be like nothing you’ve ever felt
end of the day: have faith in yourself, but also have faith in faith as you define it, as faith forms itself in your heart