You're listening to Book Insights, brought to you by Memode, finding and simplifying the world's most powerful ideas to fit into your lifestyle. Each episode is a deep dive into a non-fiction bestseller that can change your life or make you think. In around 30 minutes, you'll learn all about a book that offers wisdom for your life, career, or business. Get ready to live and work smarter, better, and happier with Book Insights.
On a foggy morning, Phil Knight went out for a run. It was 24 years old, introverted, and socially awkward. Yet rebellious and highly competitive, he was unsure about his future. He didn't feel like an adult. He told him to aim for money, marriage, kids, a house, and success, whatever that meant. But Phil Knight wanted more. He was a runner in his college days. He was excellent at it, with a personal best mile run time of 4 minutes and 13 seconds. But he wasn't good enough, not if he wanted to run for a living. He was competitive, he was excellent, but not the best.
During that misty morning run, he reflected on his life. He had returned to living in his childhood bedroom after a brief military career. He carried a newly printed MBA. His family and friends were all pursuing success, but Knight was the only one who didn't know what success was. He asked himself, what if there were 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. Knight needed excitement, and maybe more importantly, meaning. He needed to latch on to some improbable dream. He needed to chase it with focused dedication and a sense of purpose. He wanted to feel the same buzz of an athletic challenge and to do work that didn't feel like working. Phil Knight wanted to play.
This is the story of the man who created Nike. We all share a sense of adventure, but how many of us are brave or crazy enough to act on it? Phil Knight started with a $50 loan from his father and wound up with a Leviathan that made him into a billionaire. He's one of the greatest successes in the history of business. How many people all over the world recognize the swoosh? How many people can say in a hundred languages, just do it?
Shoe Dog, a memoir by the creator of Nike, begins at Knight's foggy morning run at age 24 and ends in 1980 when Nike went public. It's the story of the humble beginnings of a shoe giant, but it's also the story of passion. After all, Phil Knight is a shoe dog. 25 words or less, a shoe dog is somebody that really loves shoes. And that was me, that I was a runner. There's no such thing as a ball and a mile that all you really care about are the shoes. That's the man himself, Phil Knight, talking to David Rubenstein. Whether you're only in it for the shoes or for the entrepreneurial lessons, shoe dog shares what happens when you stop playing by society's rules and decide to follow your heart.
In this book in sight, we'll focus on a few key themes. This crazy idea, his entrepreneurial journey, his philosophical journey, and the butt faces. We'll end with some thoughts on the controversies that have descended on Nike and consider Knight's responses and his legacy.
People say, oh, I hear what Knight's doing to the Stanford MBAs peddle in the Japanese track shoes. That was a pretty big joke at the time. I wanted it, so I said, I got to try it. I got to try it. That's Knight talking to CBS. He's talking about his then seemingly crazy idea. 24-year-old Knight wanted to import Japanese running shoes to sell in the US. It was his obsession. Others didn't get the business plan. His own father told him to quit jackassing around with shoes. Despite the massive pressure to do something respectable with his life and his education, Knight was driving to track meets, selling trainers out of his car. It was painful trying to explain his wacky dream to his disbelieving friends and family.
Knight's idea didn't seem that crazy to him. It was born out of a research paper submitted for his MBA. He combined two of his biggest interests, running in business, and came up with an idea, which now seems obvious. However, at the time, nobody else could have or would have dreamed it up.
On the other side of the planet, the Japanese economy was rapidly recovering from the Second World War. Its technological innovations were beginning to lead the world. Japanese cameras invaded the US, conquering the market previously dominated by the Germans. Here is Knight again on the Late Show, describing what he felt was the next logical step. I wrote a paper. The US shoe market was being dominated by German shoe companies, Edith and Puma, and it didn't make sense to me that you make shoes in Germany. So I said, why don't you make shoes in Japan like the camera business? Knight saw a gap in the market. Japanese running shoes. The research paper for which Knight received an A was more than the means to a good grade. It became his passion. The paper became the blueprint for Knight's new company.
Knight started to travel the world, an experience that would shape his life. Here is Knight in a talk with Indigo. When I went to Japan, I went in a sporting goods store, then the Anitsika company had made a shoe called the brand called Tiger, which seemed to have the most promise. So I called him up. Knight shipped the Anitsika Tiger shoes to America. Then using his knowledge and contacts, he promoted and encouraged fellow athletes to go Tiger.
While this seems obvious now, keep in mind, Knight didn't know a single thing about managing a business. He didn't even have any money to his name. He just did it. His company, called Blue Ribbon Sports, started with a $50 loan from Knight's dad. The name was something he made up on the way to meeting with the Anitsika top brass. Here he is talking with Indigo about the meeting that started everything. They walked through the accounting department before you get to the conference room and there were 20 Japanese people in the accounting department and they all stood up and bowed. And I thought, oh boy, they think I'm a big shot.
This was the start of his adventure. And the beginning of all his problems, success would rely on two factors. The first was quality. Knight cared deeply about the quality of his products. He wasn't a shoe dog for aesthetics alone. His customers deserve the best performing and best looking shoes on the market. The solution to this quality concern was Bill Bowerman, Knight's old running coach at the University of Oregon. Bowerman was a legend of the 1950s and 60s, working as the regular coach to the US Olympic team. Here's Knight describing his early relationship with Bowerman to Indigo. When I was a runner there, he used me to experiment with on shoes a lot. But it was safer than using them on Jim Grello, who was our best runner. Bowerman saw Knight as a guinea pig for his side passion, deconstructing and reassembling running shoes. Good running shoes were hard to find in the 1960s.
With Bowerman on board, Knight was able to deliver on Blue Ribbon's promise of quality and innovation. The two of them signed a 50-50 deal when the company was formed. This would later change to a 51-49 deal in Knight's favor. On its accented shoes, Bowerman would suggest improvements which the Japanese company would follow. The result? A rapidly expanding shoe company where demand always exceeded supply. US sales of Tiger shoes boomed when Bowerman redesigned the Tiger for a larger American foot. 1967 was a good year for Blue Ribbon with revenue of $84,000. Still, it wasn't enough to pay a full-time salary for Knight. At 29, he took a job teaching accounting at Portland State. With ours more flexible than his previous day job as an accountant, Knight was finally able to devote himself to Blue Ribbon.
There was, however, another reason why Knight wanted to spend more time on his company. He was in love with his new bookkeeper, Penelope Parks. The couple married in 1968. Knight felt as nervous about his wedding as he did about his business, but sales kept climbing. It was $150,000 in 1968, then $300,000 in 1969. When Penny got pregnant, Knight wondered if he should go back to a stable job. He mulled it over and decided, life is growth, you grow, or you die.
Bill Knight didn't walk into his first sports store with some gimmick to sell shoes. He was heavily involved in running. His idea was born out of his passion. He knew what shoes were comfortable and which performed well or didn't. Combined with his business degree, his research paper and his accounting skills, Knight was as close to being an expert on his product and market as anyone.
Bill Knight并不是带着一些把戏来卖鞋子走进他的第一家运动用品店的。他深深地投入于跑步。他的想法源自他的热情。他知道哪种鞋子舒适,哪种鞋子性能好或不好。加上他的商业学位、他的研究论文和他的会计技能,Knight对于他的产品和市场几乎可以说是专家级的了。
Your crazy idea won't just fall into your lap, totally unrelated to your areas of interest. It more likely already exists in one of your current passions. Chris Gillabow's entrepreneurial book, The $100 Startup, confirms this. Here's Gillabow sharing about how passion fits into your crazy idea. If you have a dream, if you have this crazy idea, you must believe in it, even if no one else does. He interviewed hundreds who launched a successful business on under $100. One snowboarding enthusiast lost his job at a restaurant, then launched an online course providing snowboarding tutorials. A music teacher overwhelmed with administration created online software, allowing other teachers to manage their booking schedules and other affairs. A pair of graphic designers, bored with their day job, started an innovative map-creating company designed to help tourists get the most out of their vacations. Crazy ideas occur in fields you're already involved in. Big, deep enough to find yours. Like Knight, be strong enough to resist societal pressure telling you it's too risky to pursue.
When we return, we'll examine the rise of Knight and his little shoe company. We'll look at the immense outer struggles his team endured, and then we'll look at the spiritual side that led him through his problems and into the clearing. Enjoying this episode of Book Insights? If so, keep listening and learning. There's a collection of over 100 titles you can read or listen to now at MemoedApp.com slash insights.
Well, a shoe dog is when I got into the business of this shoe dog is basically a shoemaker. And they had a way they figured out that normal human being, life expectancy will walk 275 million steps and shoe makers were part of their journey and part of their humanity. And I always sort of like that story. That was Phil Knight, the founder of Nike, explaining shoe dogs to Stephen Colbert on the Late Show. We're continuing the story of the man who brought running shoes to America. Although he's one of business's greatest success stories, Knight has only recently told his story. He wouldn't let anybody tell it except himself. There's a mystical edge to Knight's journey. If not predestination, the man had a preternatural instinct for good business. From hawking trainers out of his trunk, to becoming one of the most recognizable brands in the world, something seemed to guide him. Symbols and numbers repeated. And Nike isn't just a four-letter word to the man who founded the company. Shoe Dog, a memoir by the creator of Nike, is Knight's own perspective on the beginning of Nike. At the start, Knight had no money and knew even less about running a business. His little shoe company would go on to be worth roughly $100 billion today. As we'll learn in this part, Knight might attribute this success to a higher calling.
Previously, we learned that Knight had a crazy idea, bringing Japanese running shoe products to Western markets. He partnered with his old coach, Bill Bowerman, and they founded Blue Ribbon Sports, the precursor to Nike. This time we'll look at two methods of viewing Phil Knight's entrepreneurial journey. The first will go through the business challenges that eventually forced the creation of a new company called Nike. Then we'll look at the journey below the surface. We'll explore the man's personal philosophies and discuss the metaphysical purpose behind this incredible adventure.
Knight is fond of quoting General MacArthur's line, You Are Remembered For The Rules You Break. Or in other words, Knight never cared much for business convention. For almost 20 years, Knight ran a company that did over a million a year in turnover on very little equity. The banks hated him, but Knight held to his creed of growth at any cost. Cash balances sitting around doing nothing made little sense to him. It would have been the cautious, conservative, prudent thing to keep that money in the business's pocket, but in Knight's words, the roadside was littered with cautious, conservative, prudent entrepreneurs. He kept his foot pressed hard on the gas pedal.
Growth at all costs meant Blue Ribbon was forever low on cash. All the money they made went straight back into buying larger orders. All's revenue came in, enabling them to pay off the bank and their debts, but then they placed an even larger order for shoes from Japan. There was no float or backup fund to secure the company during turbulent times. Knight didn't even pay himself a salary until 1969, five years after he founded the company. Running his business in this manner brought Knight into conflict with multiple bank managers. This during an era when banking practices were far more conservative, they cut his credit.
Despite Blue Ribbon almost doubling in size year upon year, banks considered Knight's business method too risky. Credit troubles were just the start of Blue Ribbon's many trials and tribulations. Their Japanese partners, Onitsuka, quickly forced them to change or die. First, Onitsuka went back on their exclusivity deal with Knight. They allowed an east coast distributor of Tiger shoes to gain a foothold in America. Then, Onitsuka attempted an aggressive takeover of Blue Ribbon. When this failed, it plotted to pursue legal action as well as cut off the company's supply of shoes. Knight recollects how that final interaction with Onitsuka went on the David Rubenstein show. When Tiger just basically gave us an ultimatum that said either sell us 51% of your company at book value or we're going to set up other distributors no matter what this piece of paper says. So that kind of gave us an idea that we may be better changed manufacturers. They didn't have a lot of time.
Knight and his team whipped up their first original shoes in a Japanese office over a weekend and Blue Ribbon became Nike. That fire put out. Knight wasn't in the clear yet, their next adversary was the US government. Nike came under FBI investigation, revealing an arcane trading law they appeared to have breached. The company had to pay $25 million in back taxes. This was long before the brand was valued in the billions of dollars. Michael Jordan wouldn't put on his Air Jordans until more than a decade later. This should have buried the company. He's in dominant will and belief in a solution to every problem kept the ship afloat. To understand how he could have pulled such a miracle, let's refer to Steve Jobs at a D5 conference in 2007. People say you have to have a lot of passion for what you're doing and it's totally true. The reason is because it's so hard that if you don't any rational person would give up. It's really hard and you have to do it over a sustained period of time. So if you don't love it, if you're not having fun doing it, you don't really love it, you're going to give up.
When business gurus discuss the importance of passion, it's typically in the context of inspiration and product creation. In other words, you need to enjoy what you're doing in order to have innovative market capturing ideas. While this might be the case, Jobs identifies a less appealing and perhaps more salient reason why passion is so important. It gets you through the tough times. Knight had this passion. He could have thrown in the towel, declared bankruptcy and gone back to his accounting job. But he pulled along because he believed in what he was doing. After all, despite the financial and legal worries, Knight was having fun. He got to play.
No analysis of Knight's entrepreneurial journey would be complete without mentioning some of the technical innovations his company brought to shoe design. In the late 1970s, eccentric inventor M. Frank Rudy approached Knight with an idea. Rudy was injecting air into the soul of running shoes. Confused, Knight dismissed the idea as gimmicky. However, the inventor persisted and managed to convince Knight to demo the air soul with a six-mile run. Upon testing them, Knight was convinced. The eccentric inventor was onto something. Knight agreed to include his design in upcoming models. This would become Nike Air, a brand within the brand that would send Nike's sales into the stratosphere in the 1980s and 90s.
It helped them become the number one shoe and sports apparel company in the world. Rudy had previously pitched this to Adidas, the number one athletic shoe brand at the time. Like Nike, Adidas initially rejected his idea. However, Adidas did not have a runner as their CEO. When Knight laced up those early Nike Airs and tested them, he knew he'd struck gold. He knew only because he knew running. Adidas and his other rivals at the time were run by people hell-bent on making a profit. Knight, on the other hand, wanted to advance the sport of running. He had a runner's mindset, and this enabled him to understand the needs of his fellow athletes. Aspiring entrepreneurs, bear this in mind. If you don't possess a nerd-like knowledge of your product, you might be in the wrong industry. When your competitors care more, you're the one who's going to be left behind.
While almost every entrepreneur will claim a deeper motivation than profit alone, few come across as genuine. There's no mention in shoe dog of Knight spending on luxuries or a fleet of cars. He mentions buying a house for his family. All the money earned from early sales was stuffed back into the business.
During his Blue Ribbon days, Knight had two children with his wife Penelope. He calls Nike his third child. It's clear something more than money motivated him. Knight once claimed he didn't start Blue Ribr on to get rich. It's easy to believe him.
During the difficult fledgling years, Knight could have returned to accounting or teaching. He would have worked less hours and experienced less stress. It was a growing sense of restlessness that wouldn't let him settle for a life of relative security. With Nike, it wasn't about what he could get out of the business. It was about what he could bring into the world.
For him, it seemed wrong to call it a business. It seemed wrong to lump all those hectic days and sleepless nights, all those magnificent triumphs and desperate struggles under that bland, generic banner of business. What they were doing felt like so much more. According to Knight, anytime you create something that makes people happier, healthier, safer, or better, you're participating more fully in the whole grand human drama. More than simply alive, you're helping others to live more fully.
Although never explicitly mentioned, it can be deciphered that Knight felt chosen to walk this path. He toured the world before setting up Blue Ribbon. Of all the sites he visited, a trip to the Acropolis in Greece moved him the most. He'd lost track of time staring up at the temple there. What captivated him was a marble freeze of Athena, the goddess cast as the bringer of victory. She's also known as Nike. Athena was bending down to adjust the strap of her shoe. He felt like he'd been there before.
This mysticism goes further, no matter which Nike office you're in throughout the world. The phone number ends with the same four digits. 6453, this spells Nike on the keypad. When you reverse the numbers, its early Nike-sponsored athlete Steve Pufontaine's personal best for the mile. Some of Nike's most popular-sponsored athletes, like Michael Jordan and Tiker Woods, dropped parallels with his own journey. Knight visited the River Jordan during his life-changing world tour at 24. The first ever line of trainers he released were called Tigers.
Here is Dave Rubenstein on his show, sharing a startling coincidence between Knight, Nike, and shoes. Now you're from Oregon and I think I read that the first fossil we have of a shoe that ever existed is 9,000 years old and it was in came from Oregon. Those ancient shoes were also discovered in the year Knight was born. In 1938, Knight builds towards the idea that his journey was preordained. Even the company name spills over into this belief. Jeff Johnson, Blue Ribbon's first full-time employee, came up with the name Nike. It came to him in a dream. Only later did Knight remember his experience at the Temple of Athena. Knight ponders the possibility of divine intervention. He questions if he could be forgiven for thinking or hoping that the universe or something else guided him.
Mysticism and patterns aside, there was nothing guaranteeing his success. On many occasions, his family's financial stability was at risk. He questioned the validity of his quest. There were even times when he considered foregoing his passion and giving up his crazy idea. The universe may have been speaking to him, but he made a choice to listen and act on his calling.
In this part, we covered Knight's physical and metaphysical journey. Banks repeatedly cut his credit lines since he kept reapplying equity into larger purchases. His Japanese manufacturer turned on Blue Ribbon and forced Knight's team to form a new company, Nike. Then the US government required Nike to pay millions of dollars in back taxes. The company only survived due to Knight and his team's indomitable passion.
In the next, and final discussion on Phil Knight's Shudog, a memoir by the creator of Nike, will cover the quote unquote, but faces, then will wrap on a consideration of his own. The odds of success are not high. When I graduated from business school, the stats were that 26 out of every 27 new businesses fail, and I think the odds might be worse now.
That's Phil Knight, founder of Nike, on Indigo. He would know better than most what it takes to build a company from a crazy idea into a billion dollar brand as famous all over the world as Coca-Cola. Knight didn't achieve this by being the savviest or the smartest or the toughest. His knowledge and skills weren't what got his company through corporate betrayal, government interference and financial tumult. He's simply a Shudog, or someone who loves shoes, he loves running and he loves contributing to his world. It was never about money, always about the love of play.
Shudog, a memoir by the creator of Nike, is Phil Knight's book and story. Though, characteristically of the famous philanthropist, he devotes a fair chunk of the book to saluting the many people who made Nike into a great company. Here is Knight again, in an interview with Indigo talking about the butt faces. I don't know if they were geniuses or near geniuses, but they had all the emotional baggage of genius.
The butt faces were Blue Ribbon and Nike's core team. The name came from the firm's biannual retreats where, amidst some hijinks, the team would throw around ideas for the company's future. They were an odd bunch of obsessive, hard-drinking, slightly unhinged young men. All ferociously tribal about the company, and brutal with each other. They were clearly not above harmless potty humor or name-calling. It was this collective of butt faces that turned Nike into a multi-billion dollar company.
Among the misfits, there's Jeff Johnson, a running enthusiast and Blue Ribbon's first full-time employee. An even bigger running geek than Knight, Johnson's obsessive enthusiasm for the product helped build Blue Ribbon's loyal customer base during the early years. Johnson even famously maintained male correspondence with over 100 customers. Here's Knight reflecting on the oddness of Jeff Johnson, who he calls the world's greatest salesman. Then it is odd to this day, living as a hermit. He makes Jay de-Solinger look social.
Then there's Bob Woodell. Again, Knight selected an athlete. But one whose career was cut tragically short after a freak accident left him paralyzed from the waist down. A combination of sympathy and loyalty towards a fellow Stanford athlete caused Knight to hire him. But Woodell quickly became an operational manager whose value to the business is almost as great as Knight's own. Bob Woodell was an outstanding long jumper on his team who had broken his back in a freak accident and would be confined to a wheelchair the rest of his life. And he was thinking about being a track coach. I don't think that's going to work. How about giving him a job?
Two 300-pound men formed the remainder of the butt faces, haze and accountant, and Strasser, a lawyer. Both are eccentrics who probably wouldn't have fit into any other company. The manner in which Knight selected the butt faces is interesting. He sought razor sharp minds but also outsiders. He wanted people with their own ideas who didn't need micromanaging. Knight quotes his hero, General Patton, don't tell people how to do things, tell them what to do and let them surprise you with their results. This less-a-fair management style allowed his talented core group to flourish. None of the butt faces were in awe of Knight. All of them made fun of him and sometimes questioned his decisions.
Ironically, given Nike's status today, the butt faces were staunchly anti-corporate. For this reason, the company resisted going public for as long as possible. As early as 1976, they were discussing the idea as they needed more cash to grow. However, the possibility of losing control and the subsequent impact this would have on the culture made them hold out. Ultimately, Nike did go public. The memoir leads up to and ends with this moment. However, even in taking this step, Knight was keen to maintain as much control over the move as possible and in doing so, preserve the spirit of Nike. As a compromise, Nike issued two classes of stock. The public got Class B and titling them to one vote per share. Knight, the butt faces and debonshire holders got Class A's which enabled them to name three-quarters of the board of directors.
Which Bowerman was too respected to be a butt face, but his presence felt throughout the book as an innovative genius in steady rock in the company's turbulent years. Knight gave Bowerman whatever he needed to keep innovating on shoe design. And with good reason, Bowerman invented the waffle-sold shoe that became one of Nike's best sellers during the 70s. This memoir reinforces the importance of assembling a strong team around your vision. He even goes so far as to say there was a bond of love between the butt faces. Bowerman and the butt faces became multi-millionaires upon Nike's flotation in 1980. But the riches were only the bonus. The camaraderie was what made their years working together so meaningful and satisfying.
Nike's present-day image stands a bit of a contrast to Knight's ideals in Shoe Dog. Today we see a highly polished multinational corporation paying athletes hundreds of millions of dollars to wear their shoes and clothes while apparently failing to pay their workers a living wage.
Knight's credit addresses these issues. In the insightful final chapter, he discusses the two biggest controversies in Nike's history, the poor working conditions in their factories, and the exploitation of their workforce. He holds his hands up when discussing the conditions in the factories. At one point in time, he admits they weren't good enough. One of the problems was cancer-creating fumes caused by the rubber soles being bonded with the upper part of the shoe. To resolve this, Nike invented a water-based bonding agent that eliminated 97% of the carcinogens in the air.
Not only did they install this technology in their own factories, they gave it to their competitors for free. These improvements, while unnoticed in the media, have gone some way towards rectifying the situation. The United Nations has even declared that Nike is the gold standard by which we measure all apparel factories.
The issue of wages is harder to unpack. Knight claims the decision isn't up to him. He recalls one example of a country where he tried to raise wages but was confronted by local politicians protesting that they were disrupting the country's economy. They told Knight it wasn't right that a shoe worker should make more than a doctor.
Despite the controversies, one can't doubt the genuine nature of Phil Knight himself, as a man who cares about people. Knight and his wife Penny have donated hundreds of millions to the universities of Oregon and Stanford for cancer research and to further girls' education.
Knight set out to make a difference. He never claims to be superhuman. Through Shoe Dog, a memoir by the creator of Nike, we are left with the impression that, given a similar level of industry knowledge, anyone could walk the same path. Perhaps this is Knight's greatest gift. He says if he could do it, anyone can.
Here's David Rubenstein on The David Rubenstein Show posing a question on everybody's mind. Your best time, as I remember, was four minutes and ten seconds for a mile. Four thirteen minutes. Suppose I told you today that you had these choices. You could either have built Nike or run a 3.56 mile, which would you have preferred?
Yes. I'll take Nike. Okay. But I did pause. All right. Okay. All right.
是的,我会选Nike。好的。但是我确实停顿了一下。没问题。好的。没问题。
Thank you for listening to Book Insights. Check out the rest of our content at memo.com. Please keep in mind that the information provided in or through our Book Insights episodes is for educational and informational purposes only. It's not intended to be a substitute for advice given by qualified professionals and should not be relied upon to disregard or delay seeking professional advice.