Shoe Dog: A Memoir by the Creator of Nike

Summary and book review of “Shoe Dog“: In this autobiography, Phil Knight, tells the incredible story of Nike, the company he founded and directed from 1964 to 2004: the entrepreneur brings us along his inspiring journey, from the first 50 dollars borrowed from his father and the few athletic shoes stored in the trunk of his car to the fortune and the worldwide reputation of his brand.

By Phil Knight, 2018, 550 pages

Book review and summary of “Shoe Dog” :

Dawn

1962: Phil Knight returns to his parents’ in Oregon, his native region, after 7 years of exile. He had just spent a year in the military and, after several years of study, obtained an MBA from Stanford’s excellent business school.

At the age of twenty-four, the young man has doubts. Of course, like all his friends, he wants to succeed, but not necessarily with the same goals of being married and having money, children, and a house…

“These were the goals I had been taught to achieve, and part of me aspired to them, instinctively. However, deep inside me, I was looking for something else, something more. I had the acute sense that life was short, and I wanted mine to have meaning, and that it be passionate, creative, important, and above all… different.”

Passionate about sports, especially running, Phil Knight dreams of becoming a great athlete. That said, fate wanted him to be “a good athlete, not a great athlete”. Therefore, he abandons the idea of an athlete’s career and turns to entrepreneurship to get a sense of fulfillment.

“I wanted to leave a mark in history. I wanted to win. At least, I definitively did not want to lose.”

Chapter 1 – 1962

1.1 – The crazy idea 

What Phil Knight calls his “Crazy Idea” comes to him, for the first time, during his studies, doing a research paper about shoes and participating in a seminar on entrepreneurship. This “crazy idea” turns quickly to obsession. The young man begins to study anything that could help him with his project.

Then, when he returns to Oregon, Phil Knight says he has some kind of vision during a jog. The powerful vision is transformed into a certainty: he must at all costs attempt to carry out his “Crazy Idea” project!

Phil Knight’s “Crazy Idea” is, in fact, setting up a company to sell in the United States, good quality, but cheap, athletic shoes imported from Japan.

To carry out this “Crazy Idea”, Phil Knight knows that he has to go to Japan. Once in Japan, he will have to convince a company to send him shoes to his home in Oregon.

Thus, the young man, who also dreams of exploring the most beautiful places on the planet to “better understand humanity”, plans to undertake a long backpacking trip around the world, with a stop in Japan, all for his “crazy idea”.

1.2 – Trip around the world

After getting approval and financial help from his father, 24-year-old Phil Knight flies off to Hawaii, accompanied by a friend from college.

The two friends find Honolulu to be a paradise, so much so that they decide to stay. They rent a boarding house, surf, and party. Phil finds a job selling encyclopedias, then is hired as a financial products salesman. He earns enough money and enjoys his bohemian lifestyle. However, he is eager to get back to traveling.

Consequently, Phil quits his job and buys an “open” airline ticket, valid for one year with any company and for any destination. As for his travel companion, he prefers to stay with a young Hawaiian woman he met on the island.

And so, Phil Knight embarks alone for Japan.

1.3 – Tokyo and the visit to Onitsuka

When he lands in Tokyo, the young traveler takes several days to adapt. First, because Japan’s war with the United States spared nothing: the country is still nothing but desolation. Next, he must immerse himself I the places and the Japanese culture that fascinate him.

Two former US GIs, based in Japan, who run a magazine on importing, brief young Phil on how the Japanese do business. Phil then goes to Kobe to meet the leaders of a shoe manufacturing company named, Onitsuka.

After visiting the factory, Phil Knight is received by a group of executives. He then recites the rehearsed scene many times in his head. Thanks to research done during his studies on the subject, he creates an illusion of eloquence that impresses the Onitsuka leadership. The latter assail him with questions while showing him different models of shoes. When asked about the name of his company, Phil Knight is thrown off:

“I felt a surge of adrenaline in my blood, which triggered a flight response. I wanted to run and hide in what was for me the safest place in the world: my parents’ house.”

And while he visualizes the house’s interior (his room full of ‘holy’ things, etc.), an idea suddenly comes to him:

“I had also covered a wall in blue ribbons, which I won from track, the only thing in my life of which I was deeply proud. And I blurted, ‘Blue Ribbon. Gentlemen, I represent Blue Ribbon Sports from Portland, Oregon’.”

The Onitsuka team ends up accepting the ”deal”. Phil Knight makes a first order of $ 50, but, without a penny, finds himself ultimately asking his father to make a transfer of this amount to Onitsuka.

1.4 – Greece: the trip’s climax

Young Phil continues his travels in Hong Kong, the Philippines, Bangkok, Vietnam, Calcutta, Kathmandu, Mumbai, Kenya, Cairo, Jerusalem, Istanbul, Rome, Florence, Milan, Venice, Paris, Munich, Vienna, London.

However, for Phil Knight, the climax of the journey is, without a doubt, Greece. Along with presenting his “Crazy Idea” to the Japanese, the prospect of seeing the Acropolis was, before his departure, what excited him the most. While climbing the stairs of the monument, he has the feeling, he says, that “this is where it all begins”:

“Seeing these astonishing columns, I felt an invigorating shock, the kind of shock that one feels in front of a great beauty, but I also had a strong feeling of… “déjà-vu”? […] It was as if I had already come to this place.”

Phil Knight mentions here three points, as if to underline the coincidences, when we know that his company will take, later, the name of Nike (and even of Athena in Taiwan) without him having looked for a connection to all of it:

• This feeling of “déjà vu” occurs a few meters from the temple of Athena Nike (the goddess Athena is considered to bring the victory, the Nike in Greek).
• The marble façade of the temple is decorated with several sculptures, the most famous being the goddess adjusting the strap of her shoe.
• In Aristophanes’ play, entitled “Knights” in English, like the name of this entrepreneur, a warrior offers a gift to the king in the temple of Nike: it is a pair of new shoes.

Chapter 2 – 1963

Back at his parents’ house, Phil Knight spends almost a year hoping to receive his shoes from Japan. Meanwhile, he gets an accounting degree, CPA, and works for an accounting firm. With the money he earns, he buys a car.

Chapter 3 – 1964

3.1 – Phil Knight and Bill Bowerman: two partners in sales of the first Tigers

More than ten months pass before Phil Knight receives the shoes from Japan. Certain that the shoes have the potential and have everything needed to appeal to his former track-and-fieldcoach, Bill Bowerman, Phil Knight sends him two of the twelve pairs received.

Bowerman was, at that time, the most famous track coach in America. He takes an immediate interest in the shoes called Tigers and in Phil Knight’s proposal.

Thus, in January 1964, the two men team up for the project. Phil Knight, happy to be associated with the all-powerful Bowerman, orders 300 pairs of additional shoes. He asks Onitsuka to become the exclusive distributor of Tigers shoes in the Western United States. It is his father, although lukewarm about the idea, who will help him pay the $ 1,000 bill for the order.

3.2 – The beginnings of Blue Ribbon

Phil Knight is content. He quickly manages to sell off his merchandise, selling his athletic shoes:

• To the coaches, runners and spectators of the many track-and-field events in the region.
• Through mail.

A few months later, he makes a new order, 900 pairs this time, for $ 3,000.

“I had a true partner, a bank worthy of the name and a product that sold like hotcakes. I was on top of the world.”

3.3 – First entrepreneurial challenges

While having the time of his life, Phil Knight will experience his first entrepreneurial challenges: a wrestling coach (nicknamed “Malboro Man” by Phil Knight for being the face of Malboro commercials) claims to have met Onitsuka. The latter had designated him as the exclusive distributor of Tigers in the United States. As a result, he considers that Blue Ribbon is not within its rights and orders Phil to stop selling shoes.

After going through a phase of despair, Phil Knight decides to fight. He goes to Japan to directly resolve the problem with his suppliers. He emerges victorious because, at the end of the trip, it is agreed that Phil Knight will continue to sell shoes throughout the western United States (13 states in total). As for Marlboro Man, he will be able to sell his wrestling shoes everywhere in the United States but can only sell running shoes on the East side.

Chapter 4 – 1965

4.1 – The first brush-ups with the bank: equity

“Mr. Knight, you have to slow down. You do not have enough equity for this kind of growth.”

Phil Knight’s strategy is as follows: he puts back into the company every dollar that is not used to repay his loan, regardless of his bank’s warnings. He doesn’t think it makes any sense to not use the money earned:

“Was it too careless? Not using available cash did not make sense to me. This would probably have been a more cautious and conservative strategy, but too many cautious and conservative entrepreneurs had failed. I wanted to keep my foot on the accelerator. That said, I kept silent during the exchanges with my banker.”

However, the situation remains a real challenge on a daily basis: Onitsuka’s shipments are always late; the time between the shoes sales and the repayment of his loans is significantly reduced.

4.2 – An accountant position in parallel with his company

As Phil Knight recruits his first full-time employee, Jeff Johnson, he decides to find a job in parallel with his shoe sales business in the event that his business goes awry. Thus, Phil is hired as an accountant at Price Waterhouse. This then allows him:

• To invest a large part of his salary in the bank account of Blue Ribbon, thus adding to the equity of the company.
• To observe, through auditing the operation of the various clients of Price Waterhouse, what causes businesses to succeed or fail.

In addition, Phil Knight continues to serve in the US Army Reserve (a seven-year engagement) in the evenings during the week, from 7 pm to 10 pm.

Chapter 5 – 1966

5.1 – First managerial questions and first retail outlet

“At the time, I read everything I could find about generals, samurai and shoguns, in addition to the biographies of my three main heroes: Churchill, Kennedy and Tolstoy. I had no admiration for the violence, but I was fascinated by leadership in the most extreme conditions. War is by definition the most extreme situation, but there is a parallel with the business community. One day, someone, somewhere, said that business was a war without bullets. I tended to agree.”

Phil Knight recounts here the first managerial challenges he faces with his employee, Johnson, who constantly seeks Phil out. Contrary to Johnson’s demands, the young entrepreneur adopts a distant and “cold” managerial style, without ever responding to any of his requests.

Yet, despite this, Johnson continues to display boundless creativity and energy. He works seven days a week to make extraordinary sales and to promote Blue Ribbon. Impressed, Phil Knight finally allows Johnson to run the athletic shoe store he has been dreaming of opening for several weeks. This very first retail outlet is in Santa Monica:

There had never been such a sanctuary for runners in the world before. It was not just a place where shoes were sold, it was a place where runners were celebrated.

5.2 – Exclusive distribution rights in the United States

Once again, Phil Knight faces a problem of distribution rights with the famous “Marlboro Man”.

To fix the problem definitively and become the exclusive distributor of running shoes in the United States, Phil Knight once again goes to Japan. To resolve the situation, the young entrepreneur must commit to managing distribution nationally, that is to say, that Blue Ribbon must have offices on the West Coast, but also establish itself on the East Coast and in the Midwest.

Onitsuka and Blue Ribbon sign a three-year commercial partnership contract.

Chapter 6 – 1967

Several recruitments followed: in addition to Johnson, who now runs the store on the East Coast, the company recruits Bork (to manage the Santa Monica store), Geoff Hollister (a former runner under Bowerman) and Bob Woodell (a track-and-field star known throughout Oregon, but now in a wheelchair following an accident).

At the end of 1967, Bowerman releases his book, “Jogging”.  It is a “preaching exercise for a nation that has rarely heard such a sermon before”. The book is a hit. One million copies are sold.

Blue Ribbon’s sales, meanwhile, continue to grow at a rapid pace. Phil Knight decides to move his company’s office from his apartment to Wellesley, near Boston.

Chapter 7 – 1968

7.1 – How to devote more time to Blue Ribbon

Phil Knight now wants to focus full time on the only thing that really matters to him: Blue Ribbon. However, even if the company is on track to double its turnover for the fifth year in a row, it cannot afford to pay his salary.

He then decides to change jobs and becomes an assistant professor of accounting at the University of Portland. The job allows him to pay his bills while giving him more time for his passion.

7.2 – A happy marriage

It is at the university that the professor falls in love with the brightest student of his class: Penelope Parks.

In no time, Penelope is hired at Blue Ribbon for accounting. In addition to being appreciated by other employees, she is involved in the company beyond reason and provides very high-quality work. Over time, Phil and Penelope develop a strong complicity. When leaving for Japan, the young man reveals:

“She was more than a fiancée, a lover or a friend. She was my partner. I never said goodbye to someone who really mattered to me before and it really had an impact on me. I told myself that saying goodbye was the surest way to know how you feel about someone.”

Their relationship is made official by their wedding on September 13, 1968 in Portland!

Chapter 8 – 1969

In a very short time, Blue Ribbon gains momentum:

• The company is now running well enough to justify paying a full-time salary to its founder ($ 18,000 a year).
• Following the Mexico City Olympics, Bowerman, assistant coach of the United States team, who played a decisive role in the record for the number of gold medals, becomes more than a celebrity: he is a legend.
• Blue Ribbon recruits a spy: Fujimoto, an employee of Onitsuka’s export department, with whom Phil Knight has developed special ties during his stays in Kobe. The author states that the espionage system is rooted and completely accepted in all Japanese business networks.
• Blue Ribbon moves to Tigard in South Portland on clean, almost luxurious, premises.

It’s not only Phil Knight’s business that is growing, but his family as well: Penelope gives birth to Matthew, the first son of the couple. Moreover, since the apartment is way too small to accommodate a child, Phil and Penny buy a house in Beaverton.

This period is also marked by the beginning of a beautiful friendship between Woodell and Phil:

“I can hardly remember it. I close my eyes and try to think back, but all these precious moments – countless conversations, endless laughter, revelations, confidences – have left my memory forever. And I only remember sitting up half of the night, talking about the past and making plans for the future. I remember that we talked about what our business was, what it could become and what pitfalls to avoid. How I wish I would have used a tape recorder during those nights. Or kept a journal, like during my trip around the world.” 

Chapter 9 – 1970

In the year 1970, many shipping problems accumulate: inaccurate number of shoes, wrong sizes and models. It turns out, in fact, that Onitsuka prioritizes the orders of its local distributors and puts the shipments abroad on the back burner. These mistakes eventually clog the warehouse and annoy the salespeople of Blue Ribbon.

Furthermore, Phil Knight has to fight with the banks that put him under more and more pressure. His company is dynamic (its turnover doubles every year and very regularly), but delays in shipment lead to shorter and shorter deadlines to repay his loans.

Thanks to loans from his friends and his family in particular, the entrepreneur painstakingly manages to raise $ 20,000 to handle his orders that are increasingly bigger. However, his relations with the bank are deteriorating and tensions are increasing.

Finally, while he has just signed a three-year contract with his Japanese supplier, Phil Knight secretly learns that Onitsuka is trying to break their commitment. Actually, Onitsuka was already in contact with several other distributors in the United States to replace Blue Ribbon…

Chapter 10 – 1971

10.1 – Onitsuka’s proposal to buy out Blue Ribbon

Phil Knight invites Onitsuka to the United States for a “friendly” visit. For Kitami, the man of Onitsuka who’s in charge of the collaboration with Blue Ribbon, this visit has to be “one of the best moments of his life”. The goal is to make him not want to do business with anyone else except Blue Ribbon after the visit.

However, the visit goes poorly. Indeed, Kitami:

• Magnifies the mistakes by the bank.
• Expresses dissatisfaction with Blue Ribbon’s numbers and accuses employees of not doing enough.
• Refuses all the financial solutions proposed for the development of the activity, especially that mentioned in a telegram a few months earlier, to finance orders through a Japanese trading house such as Nissho Iwai.

Finally, Kitami, before leaving, proposes to buy the company, otherwise threatens to work with better distributors.

Phil Knight thinks that, despite being hurt and angry, the best strategy is to keep good relations with Onitsuka and convince Kitami not to abandon them. Without an alternative solution or way out, Phil Knight needs time. Therefore, it’s necessary that Onitsuka continues to send him shoes as long as possible.

10.2 – The bank puts an end to the collaboration with Blue Ribbon

At this same time, the First National Bank, the bank of Blue Ribbon, announces that it no longer wishes to do business with the company. Without a bank for three weeks, Blue Ribbon ends up finding a temporary solution with the Bank of California:

“It was only a short-term solution. Regardless of our turnover, Bank of California would soon be alarmed by our cash balance close to zero. […] I had to prepare right away for that fateful day.”

10.3 – Nissho and counterattack

To appease his bankers, Phil Knight turns to the Japanese trading house, Nissho Iwai. It agrees to lend Blue Ribbon funds in addition to its bank loans. It also proposes to introduce it to many producers of quality shoes in Japan.

Phil Knight now knows that whatever happens, Blue Ribbon and Onitsuka will go separate ways. He develops a plan:

• Step 1: Scare all distributors that Onitsuka has targeted to replace him by threatening to sue them if they do not respect the contract signed with Onitsuka.
• Step 2: Find a replacement for Onitsuka.

Thus, by maintaining his collaboration with Onitsuka while finding new supply sources, he could manage the breakup.

Everything then goes relatively quickly: Phil Knight visits a factory in Guadalajara that he has heard about. While the agreement with Onitsuka states that Blue Ribbon cannot import running shoes, it does not say that the company is not allowed to import football shoes. Consequently, Blue Ribbon orders 3,000 pairs of leather football shoes from the factory.

10.4 – The creation of the “swoosh”, the logo

Football shoes must be different from Onitsuka shoes and Adidas bands. Therefore, they need their own logo.

To do this, Phil Knight contacts Carolyn Davidson, a desperate, penniless young artist whom he met as a university professor and offered to work $ 2 an hour for Blue Ribbon. He asks her to develop a logo that evokes movement. Among the different creations she offers them, one drawing stands out:

“It looked like a wing, one of us thought. It looked like a whoosh of air, another thought. And it also looked like what a runner might leave in his wake. We all agreed that it was timeless.”

Blue Ribbon gives her a check for thirty-five dollars for the work done. She goes on her way. Phil Knight reveals:

“I sighed, ‘I don’t find it exceptional. But maybe it will grow on me’.”

10.5 – How the name of Nike is born

They also have to find a name to go along with the logo. The members of Blue Ribbon spend hours debating and weighing the pros and cons of each name – Falcon, Dimension Six, Bengal, Condor – only to conclude that all the names are bad.

Finally, when the day of the decision arrives, the Blue Ribbon team receives a call from Jeff Johnson, who now manages the company’s offices on the East Coast. Phil Knight recounts when his team informs him of the content of the call:

• “Johnson called first thing this morning. Apparently, a new name came to him in a dream last night.
• A dream? I blurted, incredulously.
• He’s serious.
• He’s always serious.
• He says he jumped out of his bed in the middle of the night and saw the name before him.
• And what is it? I asked, sitting up in my chair.
• Nike.
• Excuse me?
• Nike.
• Spell it for me.
• N-I-K-E.”

I wrote the name on my notepad. The Greek goddess of victory. The Acropolis. The Parthenon. The Temple. I thought back to all this.”

Phil Knight reflects on Johnson’s vision all day long:

“Johnson had pointed out to me that all the seemingly emblematic brands had short names. Two syllables or less. Moreover, these names still had a strong sound, a letter like “K” or “X”, which stuck in the mind. Nike fit this description. I also liked the fact that Nike is the goddess of victory.”

So, that night, Phil Knight makes the decision to call the brand of his shoes, Nike.

10.6 – Production of the first Nike shoes

The first football shoes out of the Mexican factory, called Canada, are disappointing. The quality is bad. Blue Ribbon needs to find a factory that can produce shoes that are more durable and more resistant to adverse weather conditions.

Thanks to the help and through Nissho, Blue Ribbon chooses to entrust its production to a huge factory located in the southern islands of Japan, named Nippon Rubber. The shoes then become much better quality.

10.7 – Shoes with waffle soles

Sitting at the table with his wife for breakfast, Bowerman stared at their waffle iron, especially its grid pattern. This was the pattern for which he had been looking for months, if not years.

Something clicked with this pattern: Nike’s unique insole design was born! After creating a sample of shoes with embossed soles, Bowerman presents it to Phil Knight, who immediately sends it to the new Nippon Rubber factory.

The following year, when Phil Knight filed a patent application on Bowerman’s “embossed” shoe, it was a moment of pride for both partners.

Speaking of Bowerman, the author wonders:

“I wonder if he knew he was writing history by revolutionizing an industry and transforming the way athletes would run and jump for generations.”

Chapter 11 – 1972

11.1 – The first sales of “Nike”

It’s at the Chicago Sporting Goods Show that Blue Ribbon decides to introduce Nike to the rest of the world for the first time. Despite a first series of shoes of poor quality, many orders are placed. The new Nike shoes become the attraction of the show!

11.2 – Blue Ribbon loses Onitsuka, its first supplier

But news travels fast… Blue Ribbon tries to “hide” the Nike shoes sales from Onitsuka, but they end up discovering the truth!

The Japanese company informs Phil Knight of the breach of his contract with Blue Ribbon and demands from him $ 17,000. Since Onitsuka refuses any amicable solution, the case goes into legal proceedings.

11.3 – End of Bowerman’s career

In the summer of 1972, Bowerman is pleased to lead the US track-and-field team to the Olympic Games in Germany. However, these Olympic Games turn to tragedy: during the second week of the trials, eight armed men kidnap eleven Israeli athletes. Bowerman returns deeply shocked and dispirited. He ends his coaching career.

Chapter 12 – 1973

12.1 – Two sports celebrities wear Nike

• Romanian tennis champion, Ilie Nastase, aka “Nasty” signs a contract with Nike

Blue Ribbon signs a contract in good standing with Nastase for $ 10,000. It costs a fortune for the company, but Nike now has a famous champion on its side.

• Prefontaine becomes an official partner of Nike

At that time, Prefontaine is more than just an athlete: everyone calls him Pre. He is a real rockstar. Journalists regularly compare him to James Dean, Mick Jagger or Mohamed Ali.

When Prefontaine breaks the US record in the 5,000 meters, he is wearing Nike shoes!

Blue Ribbon then decides to hire the athlete. The agreement between the shoe company and Pre is win-win: it generates thousands of dollars in advertising and makes the Nike brand a symbol of rebellion and rejection of tradition. In return, Blue Ribbon helps him find his A game. Pre has a salary of $ 5,000 a year and an apartment and no longer has to “damage himself” at work. The idea is to have him meet fans while wearing Nike t-shirts everywhere he goes. He also agreed that his foot would serve as a model for all Bowerman’s shoe experiments.

“Pre preached Nike as others preach the gospel, which attracted thousands of new pilgrims to our church.”

12.2 – Between legal problems and supply problems, the risk of losing everything

At the end of 1973, Blue Ribbon’s turnover increased by 50% to 4.8 million. Yet between legal troubles and his supply worries, Phil Knight fears losing everything.

The court case with Onitsuka

As Onitsuka files lawsuits in Japan, Blue Ribbon, in turn, sues them in the United States for breach of contract and trademark infringement. Phil Knight doesn’t have the financial means to pay for a lawyer. It is his cousin, Houser (who agreed to be paid for the results) and his collaborator, Strasser, who defend Blue Ribbon.

The court case will bring Phil closer to his father:

“The last thing I did every night was to call my dad. […] ‘We’ll win, Buck.’ This magical pronoun ‘us’, which he always used, made me crazy. It’s possible that we had never been closer than at this time, perhaps because our relationship was focused on what was most fundamental: the father wanted to protect his son, who was leading the fight of his life.”

Supply concerns

In 1973, the supply and demand problems facing the sports shoe industry were particularly difficult and even unsolvable. The whole world suddenly starts to want running shoes, and the supply just can’t keep up. There are never enough shoes in production.

Chapter 13 – 1974

13.1 – The trial with Onitsuka

In this part, Phil Knight explains the whole process of the trial between Blue Ribbon and Onitsuka. He tells how, on April 14, 1974, his statement is trying, while those of other participants are sometimes brilliant, botched, or poorly prepared.

At the end of the trial, the court is more convinced by Blue Ribbon’s version of events and announces the verdict: Blue Ribbon won the lawsuit!

So, Phil Knight’s company:

• Keeps all rights on Boston and Cortez shoes.
• Will receive damages as the company suffered a loss of turnover and there was misappropriation of the brand.

13.2 – Relocation of production and purchase of a plant in New England

“We were trying to build a brand but also a culture, we were fighting against conformism and boredom. More than a product, we wanted to sell an idea, even a state of mind.”

With the fluctuation of the yen and the rising cost of labor in Japan, it becomes very difficult for Blue Ribbon to continue to produce almost all of its shoes in Japan: the company has to find other factories in other countries.

Blue Ribbon considers Taiwan, but the country is not ready. In the meantime, Phil Knight decides therefore to take semi-finished products from Puerto Rico and send them to New England for final assembly in a factory purchased for this purpose.

Chapter 14 – 1975

14.1 – Banking problems and serious consequences

In 1975, the size of the assets and stocks explodes, putting once again the cash reserves of Blue Ribbon under pressure. In fact, this problem is typical of high growth companies. However, Phil Knight refuses to place smaller orders. For him:

“Not growing was to die. […] For most observers, this must have been an extremely careless and dangerous way of running a business, but I was convinced that the demand for our shoes still far exceeded our sales.”

However, the cash problems of Blue Ribbon become really problematic for the company’s bank. The Bank of California then makes the decision to no longer collaborate with Blue Ribbon. This decision has enormous consequences for Phil Knight, who has to deal with the payment of salaries, creditors and Nissho. In addition, the bank threatens to contact the FBI, thinking that Blue Ribbon has committed fraud.

It is finally thanks to the intervention of Nissho that the company gets out of trouble: the Japanese company lends Blue Ribbon an additional million dollars. After Nissho has repaid all of Blue Ribbon’s debt to the Bank of California, the company finds a new bank: The First State Bank of Oregon.

Here, Phil Knight mentions a phrase he will repeat several times:

“You are remembered for the rules you break.”

14.2 – The death of Prefontaine

A tragic event happens that year: Prefontaine dies at the age of 24, in a road accident.

Chapter 15 – 1976

15.1 – Blue Ribbon becomes Nike, Inc. and continues to grow

In the year 1976, the company continues to grow:

• Blue Ribbon becomes Nike, Inc.
• Nissho lends millions of dollars to Blue Ribbon. The relationship between the two companies strengthens.
• Blue Ribbon looks again for new ways of financing. The team thinks about taking the company public for a while – this can bring in large amounts of money very quickly – but ultimately refuses because Phil Knight does not want to lose control of the company or be accountable to shareholders or investment companies.
• In 1976, observing the success of the Waffle shoe model, Phil Knight came up with the idea of transforming his athletic shoes into everyday wear.

“Retailers and salespeople were on their knees begging us to provide as many Waffles as possible. The takeoff of our sales figures was transforming our business, even our industry itself. Our good numbers led us to reconsider our long-term goals, because they offered us something we had always lacked: an identity.”

• Nike therefore chooses to install new production facilities in Taiwan.

15.2 – Buttface seminars

It was at this time that Phil Knight began organizing seminars with Woodell, Strasser, Haye and Johnson. These retreats are called buttfaces. The problems addressed during these retreats are stressful and multiple. The company still has no cash even though its turnover has doubled. They must therefore manage the commercial, logistical, marketing, etc. problems. However:

“These Buttface seminars were a real treat. Of all the hours spent at Sunriver, not a single minute felt like work. It was us against the rest of the world and we complained about the rest of the world.”

Thus, Phil Knight loves to share these retreats (and his festive evenings) with his team, according to him, “formidable”, “full of antics and eccentricities”.

“Each of us had been marked by failures encountered very early in our lives. […] I identified with the born loser in each of the ‘Buttfaces’, and vice versa, and I knew that together we would become winners.”

The author remembers here with humor, emotion and nostalgia the feeling of pride and friendship that connected him to his colleagues:

“Sometimes, after cathartic laughter, I looked around the table and was overwhelmed by emotion. I was moved by all this comradeship, loyalty and all this recognition. One could even feel some form of love. I was shocked to realize that it was me who had gathered these people around my project and that they were part of the founders of a multi-million-dollar company…specializing in athletic shoes. This team was unlikely: a paraplegic, two obese individuals, a guy who smoked like a chimney…”

15.3 – Father and manager

At this time, Phil Knight keeps wondering about:

His management style

Our entrepreneur reveals:

“I had total confidence in them (his employees) and did not police them: it created a strong loyalty that went both ways. My management style would not have worked with people needing to be guided at every step, but the group I had with me found it liberating and empowering. I let them be as they were; I let them do things as they pleased; and I let them make their own mistakes because that was how I had always liked people to treat me.”

Moreover, several times throughout his anecdote, the entrepreneur repeats the following sentence:

“Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”

His father role

Phil Knight had a second child in 1973, Travis. The father therefore feels guilty about the time he does not spend with his two sons:

“Matthew never understood me, and Travis always understood me. […] Matthew seemed to harbor an innate resentment towards me while Travis seemed to be loyal to me from birth. […] Keeping boys, A and B happy while keeping boy C, Nike, afloat was a much more complex challenge than getting midsoles from point A to point B.”

Chapter 16 – 1977

16.1 – Innovations and building an identity

We were more than just a brand; we were a means of expression.

Indeed, at Nike, advertising does not focus on the product but on the spirit of the product. This is new in the 1970s. In addition, Nike introduces innovations, and these are generally recognized as modern and visionary.

Phil Knight tells about the birth of one of these innovations. In 1977, the company boss is visited by Frank Rudy and Bob Bogert, who presents him with a pair of insoles containing injected air bubbles. While Knight first believes it’s a joke, he ends up being convinced of the potential of the shoe and embarks on the project.

By the way, that year, Nike:

• Signs several new collaboration contracts with athletes, coaches and teachers;
• Expands its manufacturing base to meet growing demands (Japan, Taiwan, Korea, Puerto Rico, Exeter);
• Has to manage counterfeit issues.

16.2 – A $ 25 million bill!

At the end of 1977, Phil Knight receives a bill from the United States Customs Service demanding from him $ 25 million!

It is, in fact, unpaid taxes for three years. At the root of the case: Nike’s US competitors convinced the customs authorities to impede the brand by implementing an archaic law called American Selling Price.

Phil Knight asks Richard Werschkul to take charge of Nike’s case against US Customs.

16.3 – Lifestyle adjustments

This new event very much affects Phil Knight, who feels increasingly guilty about not spending more time with his children. To avoid falling into depression, he promises to change, to meditate and to run twenty kilometers a night. The couple also buys a bigger house.

“It was strange to do this in the middle of an apocalyptic battle with the government. But I liked the idea that we were leading our lives as if things were going to get better.”

Phil Knight adopts a new schedule in which he prioritizes athletics, and in particular the teaching of athletics to his children. However, they are not very receptive:

“On New Year’s Eve 1977, I felt like there was deep crack in the base of my existence. My life was centered around athletics, my company was centered around athletics, the relationship with my father was centered around athletics, but my two sons did not want to have anything to do with athletics. […] I found that unfair.”

Chapter 17 – 1978

17.1 – A Nike clothing line

In the year of 1978, Nike’s sales continue to skyrocket. The quality of the products improved considerably. The company is at the forefront of innovation:

In short, besides our war against the government, we were in excellent shape. If we forgot that we were on death row, our life was magnificent.

The company moves to a 3,700 square meter building in Beaverton.

A new project is born: Nike decides to develop a clothing line. This should allow:

• To approach better athletes by offering larger contracts, as Adidas does.
• To diversify supply in case the company decides to go public.

Positioned on the clothing project, Woodell sets up a clothing line that immediately gains attention and respect in the community.

17.2 – The launch of the Tailwind with air injected soles

At the end of 1978, Nike releases the Tailwind:

Imposing, shiny, silver-colored, incorporating the famous Rudy air injected soles, the Tailwind includes no less than twelve innovations.

It is, for Phil Knight, more than just a shoe: it is “a genuine postmodern work of art”. Although ultimately full of flaws, the Tailwind becomes a monstrous commercial success.

Chapter 18 – 1979

Since Werschkul has completely lost control of the case with customs, Phil Knight has no choice but to lead the fight himself.

Therefore, he travels often to Washington to meet with politicians, lobbyists, consultants, bureaucrats or anyone else who can help him. For months, he immerses himself in the bizarre inside political life and reads everything he can find to understand the codes.

At the same time, Nike:

• Opens a 325squaremeter shop in downtown Portland, immediately taken by storm.
• Relocates again to a building measuring nearly 4,300 square meters.

Chapter 19 – 1980

19.1 – Opening of two Nike factories in China

In 1980, Nike plans to open factories in China. That said, entering China is extremely difficult and the process is laborious.

Eventually, Nike will be able to sign agreements with two Chinese factories, officially becoming the first US shoe manufacturer to be allowed to do business in China.

19.2 – The end of the case with customs and going public

Finally, the negotiations led by Phil Knight pay off. Nike lawyers and government officials agree on a settlement: $ 9 million.

However, this case reignites the idea of taking the company public. However, this time, it seems that there is finally the possibility of doing so without losing control of the company. Indeed, by issuing two types of shares (class A and B shares), the company will be able to raise huge sums of money, accelerate its growth significantly, while ensuring that Phil Knight keeps its control.

For the founder of Nike, this idea is an epiphany! This will finally solve the cash flow problem of his company once and for all.

Voted unanimously, the process of going public is launched: Phil Knight will own 46% of the class actions, so that the company can be led by one person, and therefore “speak with one firm and steady voice – come what may”. To find potential investors, the team embarks on what Wall Street calls a “dog-and-pony show”. The IPO took place on December 2, 1980. The company’s assets are worth $ 178 million at that time.

Night

The story of Phil Knight’s business life ends here: in 1980.

In this last chapter, the author makes a leap of about 40 years: we find ourselves, in fact, at the night that Phil Knight decided to write his autobiography. At that time, he has a wealth of 10 billion dollars and rubs shoulders with the wealthiest people on the planet.

Phil Knight goes on then to remember, throughout the night, his childhood, his career, the milestones of the past forty years and the coincidences he has lived…

His childhood

Phil Knight remembers, with nostalgia, precise episodes of his childhood. He evokes the habit of his grandfather buying him doughnuts:

“I see myself dangling my bare feet over his truck bed, feeling the fresh wind on my face, licking glaze off a warm doughnut. Could I have risked as much, dared as much, walked the razor’s edge, oscillating between safety and disaster, without the early foundation of that feeling, that feeling of contentment and freedom? I don’t think so.”

The impressive evolution of his company

Phil Knight leaves his position as CEO of Nike after forty years in the company. However, as chairman of the board, he goes to his office almost every day:

• Nike’s turnover in his last year of work in 2006 is $ 16 billion.
• The brand’s shoes and clothing are available in 5,000 stores around the world. In total, 10,000 employees work for Nike.
• The 5,000 employees at Beaverton’s global headquarters are housed on an idyllic university campus, with 80 acres of woodland, Japanese gardens, streams, and ball fields.

His trip around the world

“I often think of this decisive trip that I made when I was twenty-four years old. I see myself on the heights of Athens, admiring the Parthenon, and I always feel the sensation of time folding in on itself.”

Phil Knight conjures up coincidences here like the company’s phone number ending in 6453, which is the touch of the dial spelling ‘Nike’ but also Pre’s best time in the mile…

The death of his son, Matthew

Phil Knight recounts, in a very touching way, the death of his eldest son Matthew, in a diving accident:

“I think back to his long and difficult quest for meaning and identity. In his quest for an absent father. […] At forty-five meters deep, my son lost consciousness. […] “I got a call from El Salvador…” Penny collapsed. Travis helped her up. He held his mother inhis arms, and I staggered away, tears streaming down. I remember seven strange words that came to me spontaneously and that I repeated again and again in my head, like a fragment of a poem: ‘So this is the way it ends’.”

His father

Throughout his story, Phil Knight recounts the strong, defining and ambiguous relationship he had with his father during all these years. It took a lot of time for him to take his son’s business seriously. Nevertheless, his father was very present in Phil Knight’s life and supported him daily in his challenges as an entrepreneur.

Who has since died (as has his mother, 27 years after him), Phil Knight tells his father’s last months of life:

“During his last six months, I managed to take my father on a long journey, to know once and for all if he was proud of me and to show him that I was proud of him. We went around the world; we saw Nike in every country we visited and there were stars in his eyes at the sight of every swoosh.”

After reading this anecdote, the sentence he uses here makes sense:

“This is the story of fathers and sons since the dawn of time.”

Those who built Nike and are no longer with us

Phil Knight tells us here that Bowerman passed away on Christmas Eve 1999, and that Strasser died of a heart attack in 1993.

Criticism of working conditions in factories and improvements made

Here, Phil Knight talks about what has been called the controversy of sweatshops. These are the criticisms that Nike has been subjected to regarding working conditions in its factories abroad.

Having experienced these criticisms as an injustice, Phil Knight explains that he has decided to make his factories exemplary. He has thus used many improvements and inventions to eradicate as much as possible carcinogens from his production plants. Nike has also launched a program, the Girl Effect, in partnership with the United Nations and other private and public actors to fight poverty in the most disadvantaged regions of the world.

International trade and the Vietnam War

“I constantly think about the poverty I saw while traveling the world in the 1960s. At the time, I knew that the only answer to such a scourge was entry-level jobs. It is necessary to initiate a change. […] International trade is always, truly always, beneficial to the two trading nations. […] Although I am known to have said that business is a war without bullets, it is in fact a marvelous bulwark against the war. Trade is the path to coexistence and cooperation. Peace feeds on prosperity.”

In 1997, Nike has four factories in Saigon. Phil Knight learns that Nike will be honored and celebrated by the Vietnamese government as one of the five most important currency producers in the country. The founder of Nike tells his unusual meeting, during his stay in Vietnam, with the man who defeated the Japanese, French, Americans and Chinese: General V. Nguyen Giap, then 86 years old.

Nissho

Phil Knight describes former Nissho CEO Masuro Hayami as arguably the wisest man he has ever met.

His continued learning with universities that chose Nike as a subject for study

For nearly 30 years, Harvard and Stanford universities have decided to use Nike as a subject of study. This allowed Phil Knight to take part in many academic discussions around the world and continue to learn.

What became of Hayes, Woodell and Johnson

• Hayes now lives on a forty-five-acre farm in the Tualatin Valley, “with a ridiculous collection of bulldozers and other heavy equipment.”
• Woodell lives with his wife in Oregon; although many thought he was incapable with his disability, he flew his own plane for years.
• Johnson lives “in the middle of a poem by Robert Frost, somewhere in the wilderness of New Hampshire.” Divorced twice, he has transformed an old barn into a five-star mansion: he has filled the site with thousands of books and leaves this place lit and open 24 hours a day for all those who need a place to read and think.

The beginnings of his wealth

Phil Knight says that when they started making a lot of money, he and his co-workers all changed one way or another, “but not much and not for long” because none of them have ever really been driven by money:

“It’s the essence of money: whether we have it or not, whether we want it or not, whether we like it or not, it tends to define the way we live. Our job as humans is to make sure that it does not become overly important.”

Phil Knight donates $ 100 million a year. Almost all of his wealth will be donated to charity after his death.

The idea of this autobiography

It’s after seeing the movie “The bucket list” (a bucket list is a list of things to do before dying) that Phil Knight, unable to sleep, has the idea of telling the story of Nike:

“Lying in the dark, I ask myself again and again what’s on my list. The pyramids? Done. The Himalayas? Done. Ganges? Done. So, I have nothing to do? I think about the last things I want to do before leaving this world. Help some universities change the world. Help find a cure for cancer. I think that’s about it… It might be a good idea to tell the story of Nike.”

So, for this entrepreneur, writing this autobiography is a fabulous way to share his experience with the new generation. The young people could then find “inspiration or comfort” and be warned of certain dangers.

The life lessons he would like to pass on

Phil Knight’s advice would be:

• It is essential to stop for a moment, think long and hard about how you want to use your time, and with whom you want to spend the next forty years.
• “When you follow your calling, fatigue becomes easier to bear, disappointments are a fuel and the highs will be like nothing you’ve never felt” Therefore, it is good not to be content with a job, a profession or even a career, but to seek your calling, even if you don’t really know what that means.
• There will always be a bully’s-eye on your back, especially if you are better, iconoclastic, innovative or rebellious, because according to the author, the better you are, the bigger the bull’s-eye.
• America is not the entrepreneurial Shangri-La that people imagine.
• Those who urge entrepreneurs to never give up are “charlatans”: you must know how to give up, but never stop:

“Sometimes finding the right moment to give up and try something else is a kind of genius. To give up does not mean to stop. Don’t ever stop.”

• Luck plays a big role:

“Hard work is essential, having a good team is essential, reflection and determination are crucial, but t luck may decide the outcome. Some call it otherwise: Tao, Logos, Jñ na, Dharma, Spirit or God.”

• Have faith in yourself:

“Have faith in yourself, but also have faith in faith. Not faith as others define it. Faith as you define it yourself. Faith as you define it in your heart.

Ultimately, everything is a question of will and determination”

Book critique of “Shoe Box” :

The story of this passionate young entrepreneur is mesmerizing

The story Phil Knight tells us in “Shoe Dog” is exciting and full of twists and turns. If you did not know the outcome (because we all know the global success of Nike), you would be hanging on as each chapter goes by wondering when everything will fall apart for the young entrepreneur.

Indeed, the first twenty years of Nike played out on a razor’s edge. That’s when we follow the fight led by this man, with courage and passion, to realize his entrepreneurial dream. We experience with him all his pitfalls, his anxieties, his heavy responsibilities, all the risks taken, the betrayals, the despair, the moments of happiness shared with his team, his few mistakes and his many successes and triumphs.

The author’s humorous, realistic and modest tone is touching

“Shoe Dog” is a reading that mixes humor, seriousness and emotions. The author recounts a story full of sincerity and humility that reveals, in the end, beautiful life lessons. The last part is particularly touching. We get a sense of a man, a human being who has gone through his life and who looks back on it with nostalgia, modesty and wisdom.

The success story contains many lessons that are inspiring

Today, Nike is a reference, a symbol, a global brand whose logo, the famous, “swoosh”, is one of the few icons that is recognized around the world. Getting there through the journey of Nike’s founder, punctuated with ups and downs, is a valuable learning experience. His book, “Shoe Dog“, shows us that the success and fulfillment of one’s dreams doesn’t come easy and that it involves sacrifices.

Strong points:

• The exciting and extraordinary tale of a man who fought to achieve his dream and build a company with a unique identity.
• Everything you learn from the author’s experience: real life lessons about risk taking, passion, leadership, management, entrepreneurship, a behind the scenes in the business world…
• The wisdom that emerges from a man at the end of his story, which gives pause to reflect on the meaning that one gives to one’s professional and personal life.
• With a style sometimes humorous, sometimes touching, this autobiography reads like a novel; even the more business-oriented passages can be read very easily.

Weak points:

• Somewhat lengthy, which, however, reflects the reality of the author’s career: Phil Knight’s company was not built in one day…
• It’s regrettable that there is only one chapter recounting the events between 1980 and 2018.

My rating :   

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