An Entrepreneur’s Story

What if we all get a chance to observe an Entrepreneur working?

  • How he/she thinks?
  • What conditions (external & internal) triggered the entrepreneur bug in her?
  • How she responds to a crisis?
  • How she celebrates?
  • How she takes failure?
  • How she works with a Team?
  • What is the importance she gives to money, and to power?
  • How she shares — be it wealth or wisdom.

If such a chance is hard to come by, a candid book on this subject can give some answers to all these questions. It is Phil Knight’s Shoe Dog, the founder of Nike.

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The book is a memoir of Phil Knight on his years between 1962 to 1980. The culmination of which is the brand he co-founded — NIKE. If you use Nike products and love them, you will not like the fact that the book ends at 1980, though. However, a tip: watch Netflix Series “Abstract”. A particular episode explores design of shoes and this episode can fill you in with some events at Nike since 1980s!

This is a story that happened in times most of us are not yet born. Be the lack of options for raising funds, the limited number of channels for marketing, and other unique situations around then in USA, the book is a fresh breeze to read and for a change, nothing to do with Silicon Valley Entrepreneurship.

Here are some events narrated in the book that I will want to reconstruct in my head if I have to tell the story.

  1. A Quote — The cowards never started. And the weak died along the way
  2. Phil Knight graduated from a good college. And did Masters from Stanford. Worked for an year in the Army. Sounded like a good foundation.
  3. Like all young men fresh out of college, he says he had the same thoughts. What is success? Money, Wife, Kids, and a House? Sure, if one is lucky. But he wanted more.
  4. What it means when you want it to be more than that? Meaningful, purposeful, and creative? And important.
  5. Above all … different? Want to win … or rather not want to lose.
  6. And he wanted his life to be — Play. He wanted his daily life to be like the half second before the runner nears the finish line.
  7. His ultimate dream was to be a great athlete. Sadly, he says fate made him good, but not great. And he resigned to that fact.
  8. What if there was a way, without being an athlete, to feel what athletes feel? To play all the time, instead of working? Or else to enjoy work so much that it becomes essentially the same thing?
  9. At 24, he writes a research paper about shoes, for a seminar on Entrepreneurship while at Stanford. Being a runner, he knew something about running shoes. Being a business buff, he knew that Japanese cameras had made deep cuts into the camera market, which had once been dominated by Germans. He argues in his paper that Japanese running shoes might do the same thing. The idea interests him, then inspires, and finally captivates him. For him, it seemed so obvious, so simple, so potentially huge.
  10. So in 1962, he tells himself: Let everyone else call your idea crazy … just keep going. Don’t stop. 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.
  11. That’s the precocious, prescient, urgent advice he manages to give himself.
  12. So, goes to Japan. And while at it, why not do a World Trip? Hawaii, Tokyo, Hong Kong, Rangoon, Calcutta, Bombay, Saigon, Kathmandu, Cairo, Istanbul, Athens, Jordan, Jerusalem, Nairobi, Rome, Paris, Vienna, West Berlin, East Berlin, Munich, London.
  13. Before the trip, Phil tries a job selling Encyclopedias’. He couldn’t sell even one. If his shyness makes him bad at selling them, his nature makes him despise it. He says he wasn’t built for heavy doses of rejection. He says even a small setback in High School usually used to knock him sideways.
  14. But he realizes he is successful selling Mutual Funds.
  15. What it is like to travel to Tokyo in 1968? When you are just 24 years old? And when your country has just fought with the Japanese?
  16. He meets makers of Tiger brand in Kobe.
  17. He gets a crash course from local American contacts on doing business with Japanese.
  18. And after a agreement with Tiger to sell there shoes in a part of USA, travels the rest of world.
  19. His highlight? Greece.
  20. 1963: Comes back to USA. Waits for demo shoes. Finishes course in Accounting. Starts work at an Accounting firm. Is Accounting an important subject to know for all Entrepreneurs, anyway?
  21. 1964: Association with the famous Coach Bowerman. Letting him on as a partner. Phil feels this is the best thing he did. As his story unfolds, the reader also ends up feeling how important such an association was to what will eventually be Nike. This is even when the Coach has nothing to do with the day to day operations and endless tense situations as the company grew.
  22. Phil gets exclusive distributorship for Tiger Shoes in Western America.
  23. Spends USD 1000 for first order of shoes (importing from Tiger, Japan). Less than 5 USD per pair.
  24. Sales strategy? Drives to various track meets. Between races, chats up with coaches, the runners, the fans, and show them the wares. Response was always the same. He couldn’t write orders fast enough.
  25. Why was selling shoes different from Encyclopedias? Because, he realized, it wasn’t selling. He believed in running. He believed that if people got out and ran a few miles everyday, the world would be a better place, and he believed these shoes were better to run in. People, sensing his belief, wanted some of that belief for themselves.
  26. Next order to Japan? 3000 USD. With a bank loan.
  27. A venerable partner (Coach Bowerman). A legitimate bank. And a product that was selling itself. He was on a roll.
  28. First crisis. With Tiger Shoes, the Japanese Manufacturer. Sale rights lost to someone but a visit to Japan and meeting the Founder solves the issue.
  29. Trek up Mt Fuji. Meeting Sarah. But no — not the wife-to-be.
  30. Time to hire his first salesmen.
  31. 1965: Jeff Johnson joins as commissioned salesman.
  32. Trouble with Bank: your rate of growth is too fast for your equity.
  33. Equity — how he begins to loathe that word!
  34. To have cash balances sitting around doing nothing made no sense to him. Phil always wanted to keep his foot pressed hard on the gas pedal.
  35. Trouble getting higher bank loans.
  36. Late shipping of shoes from Japan — to make things difficult.
  37. Joins Price Waterhouse as Accountant to make ends meet.
  38. Coach Bowerman — after Japan Olympics — starts sending in bunch of ideas and modifications to Tiger products.
  39. 1966: Jeff works hard. Places ads. Makeshift photo studio at his home. Index cards for every customer he has. 100’s of correspondence with customers. It’s probably committed people like Jeff who make or break a company?
  40. Hardships. Contract not renewed by Tiger. Phil vIsits Japan. Comes back with 3 year contract.
  41. 1967: Sets up base in East Coast. A warehouse and store there. And sudden raise in new full-time employees. Adidas threatens to sue when they want to name a shoe Aztec. Coach Bowerman changes it to Cortez (the guy who kicked the shit out of Aztecs in Greek Mythology!). Ends the year with 85k USD revenue.
  42. And should all Entrepreneurs always face the law some point in their career? How many can actually stomach it and survive and come out well?
  43. Moves to a new place from Apartment operations finally! Contemplates living in his office to avoid Apartment rent. And continues to work at Price Waterhouse to make ends meet — this when there are some full time employees on roll too!
  44. 1968 — Quits PWH and takes up a Teaching job to get more time. And ends up meeting who will be his wife. Offers her a job at his company. Typing, book keeping, scheduling, invoicing. And makes a good trip to Japan to meet his partner there. Posts 150k USD sales in the year.
  45. 1969 — Wakes up to advertising. And publicity — both wanted and un-wanted. Adidas and Puma scandals. Paying athletes to sport your shoes.
  46. 1970 — Renewed contract with Tiger Shoes. But shipment woes. Delays. Wrong no of shoes. Wrong sizes. Wrong models. And cash woes. Idea of a public offering mooted to address financial woes. Also, the time VC’s are born in Northern California. A Japanese Trading Company comes to rescue. Nissho Iwai.
  47. 1971 — A takeover bid from the Japanese Supplier! Finishes with 1.3 million USD sales. Search for own factory starts. And a search for a new logo. Nike and Swoosh born!
  48. 1972 — Importance of Chicago Sporting Goods Association Show for Shoe Industry. Show-off with Tiger Shoes. Eventual lawsuit.
  49. 1973 — How one athlete can make or break sales! And how a lawsuit can break you! Obsession about the trial. A sales innovation — commitments from biggest retailers for discounted sales.
  50. 1974 — Case with Tiger Shoes — Nike wins! A big relief! Factory in Taiwan.
  51. 1975 — Comes close to bankruptcy. Power Banks had then!!! Hope, not anymore these days and times!
  52. 1976–1980 — Recovers. And Nike never looks back.

As you read the story, you cannot help but notice that Phil spends a fair portion of his startup life in debt. Feeling of waking up each day owing many people a sum far greater than he could repay. Add to it, lawsuits, accounting woes, people problems and more.

Experience all these as you read Phil’s memoir!