The book that I ranked the 3rd best book that I read in 2017 is the only autobiography that I read last year. I plan to read more of them this year because they provide an insight into how a person thinks and how they overcame challenges in their life. Also, they’re just fascinating.
If there’s a phrase that accurately describes Nike co-founder Phil Knight in the early years of his company, it would be: “Just Do It.”
In 1962, fresh out of business school, Phil Knight had what he called, his “crazy idea” of importing Japanese running shoes to America. There was one brand in particular that he really liked and it was Tiger, manufactured by the Japanese company Onitsuka.
He had been a runner while in college at Oregon and had a dream of owning a business that would allow him to feel the sense of play an athlete feels while running his business.
After getting his Dad’s blessing, he talked his friend Carter to make the trip around the world with him. As part of the trip, he planned to stop in Japan and get a meeting with the people at Onitsuka.
He didn’t expect the pitch to be a success, but when the Onitsuka CEO told him that his timing was perfect and asked him the name of the company with which he would be working, Phil was stunned. Completely unprepared, he blurted out the name, “Blue Ribbon.” They then agreed to send him 300 pairs of Tiger shoes to start him off.
He got his start in business by selling Japanese shoes out of the trunk of his car. Just Do It!
Years later, Knight came across a play written by ancient Greek playwright Aristophanes called “The Knights.” In it. a warrior gifts the king a new pair of shoes –in the Temple of Nike.
Many people have someone in their lives who inspire them, and whose respect they value. For Phil Knight, this person was his former running coach, Bill Bowerman. Bill’s approval gave Knight the confidence to proceed with his dreams. Bill was a “shoe dog.”
A “shoe dog” is an industry term for someone who is shoe-obsessed. They are obsessed with making shoes better and understanding how shoes work.
Bowerman used Knight as his shoe guinea pig. Bill was always experimenting with changes to shoes to see if he could affect the performance of his athletes. He would tear shoes apart and put them back together using whatever materials he thought would make the shoe an asset. His primary goal was to make the shoes as light and comfortable as possible.
When Phil returned from Japan, he asked Bowerman to partner with him. He agreed. The timing couldn’t have been more perfect because Bowerman’s career was taking off. He was training future Olympians. He gave the brand more exposure which helped to sell more shoes.
Phil sent Bowerman’s first modified shoe prototype which he named, the Cortez, to the folks at Onitsuka, suggesting that they manufacture the shoe. They agreed to manufacture it and it was Blue Ribbon’s first shoe success.
Team of Misfits
The people that Phil hired to help him with his new company weren’t your typical employees. They were instead a bunch of brilliant misfits who worked well together.
They probably worked so well together because they were misfits. They could look past each other’s quirks.
One of the misfits was Jeff Johnson. He would continually send Phil letters with subjects that ranged from advertising to poems and jokes. The name Nike came to Johnson in a dream and Phil went with it, remembering the impression the Temple of Nike in Athens had made on him.
Growing Too Fast
Nike was growing so fast that it rarely had cash on hand. They had to continually rely on banks for loans to get them through. Even though they were a worldwide company and had great exposure from Olympic and pro athletes wearing and pushing their shoes, it was a hard sell to the banks to get the next loan.
The cash crunch was exacerbated by a lawsuit brought by the federal government alleging that Nike owed $25 million. This was brought about by Nike’s competitors, Keds and Converse, who worked together to uncover an obscure customs law called the American Selling Price law which said that certain types of shoes would incur significantly higher customs duties. They accused Nike of violating it and lobbied the government to have them punished.
Nike eventually settled the suite for $9 million.
This pushed Nike to have to go public which Phil didn’t want to do. He was afraid that the company would lose it culture and he would lose control of it.
Phil Knight demanded integrity from all his employees. It’s one thing that has kept customers so loyal.
One thing that Nike has done is to work hard to set better labor standards for its factory workers. They even invented a water-based bonding agent to attach shoe uppers to the soles of the shoe. This cut out over 97% of the carcinogens that workers came in contact with. They also shared it with other shoe companies so they could use it in their factories.
Like I said at the beginning, this was a fascinating story. I remember, as a kid, always wanting a pair of Nike shoes. It’s really interesting to hear the stories of what was going on behind the scenes during those early years.
One of my takeaways from the book is that starting a successful business requires surrounding yourself with people who believe in you and your idea. Folks that aren’t in it just for the money. These are the people that will stick with you when the going gets tough.