Shoe Dog

I came to Shoe Dog expecting a victory lap. A billionaire founder, decades after the fact, telling me how smart he was all along. That is what most business memoirs turn out to be, and I had already read enough of them to feel cautious. What surprised me is how little winning there is in most of this book. For chapter after chapter, Phil Knight is losing. He is losing money, losing suppliers, losing bankers, losing sleep. Nike survives the sixties and seventies the way a distance runner survives the middle miles, by refusing to stop rather than by pulling ahead.

Knight was always an odd candidate for fame. He built one of the most recognized brands on earth while avoiding reporters and cameras for most of his career. He ran Nike as chief executive from its 1964 founding until 2004, and stayed on as chairman for years after that, and through all that time the public barely knew his voice. This memoir, published in 2016, was the first time he told the whole story himself, from a college track in Oregon to a company that now sells shoes in practically every country. It reads less like a management book and more like an adventure serial where the hero keeps escaping by inches.

One warning before we start. This is a summary of a memoir, which means it is one man's version of events. Knight remembers conversations from fifty years earlier in full sentences, and his rivals tend to come off worse than his friends. I will flag the spots where his account feels thinnest. But the backbone of the story, the failed shipments, the lawsuits, the bank fights, the public offering, matches the public record, and it is a better story than I had any right to expect.

The crazy idea

The seed of Nike was a school paper. At Stanford Business School in the early sixties, Knight wrote about the possibility of importing Japanese running shoes into the United States. At the time, the logic was borrowed from cameras: the Japanese were making excellent cameras cheaply, so why not shoes? His classmates and professors mostly shrugged. Knight did not shrug. After graduation he decided to see Japan for himself.

He was twenty-four, restless, and determined not to take a normal corporate job. He traveled through Asia, and in Kobe he did something audacious. He walked into the offices of Onitsuka, a Japanese shoemaker whose Tiger running shoes had a good reputation, and introduced himself as representing an American company called Blue Ribbon Sports. There was no such company. He invented it on the spot because he needed to sound legitimate. The Onitsuka executives liked the brash young American, showed him around, and gave him distribution rights for the western United States. He left with an agreement and a load of sample shoes, running on nerve.

The money came from his father. Knight borrowed fifty dollars from his dad to get the venture moving, a detail he returns to with real feeling, because his father was a practical newspaper man who thought the whole scheme was shaky. That fifty dollars is the most famous small loan in shoe history. Knight ordered his first shipment of Tigers and waited, and when they arrived he started selling them out of the trunk of his lime green Plymouth Valiant at track meets around Oregon. The publisher's own summary of the book gives the first year figure: eight thousand dollars in sales in 1963. That number matters because it is so small. The future Nike began as a kid with a car full of shoes.

Blue Ribbon and Bowerman

Knight could not have done it without his old coach. Bill Bowerman was the legendary track coach at the University of Oregon, a tinkerer who was always cutting up and rebuilding his runners' shoes in search of something lighter and faster. Knight had run for him. In 1964 the two men shook hands on a partnership, each putting in a modest stake, and Blue Ribbon Sports became real. Bowerman brought the product genius. Knight brought the selling and the importing. Neither brought much money.

The early chapters are my favorite part of the book because they are so scrappy. Knight drove from meet to meet with shoes in the trunk. He talked coaches into trying Tigers. His first full-time employee, Jeff Johnson, turned out to be a find: obsessive, literary, full of energy, the kind of guy who wrote long soulful letters to customers and treated a shoe store like a clubhouse. Johnson opened Blue Ribbon's first retail store and wrote its early ads, and his fingerprints are all over the company's voice. Around the same time Knight hired a young bookkeeper named Penny Parks. She kept the chaotic accounts straight, and later she became his wife.

Bowerman, meanwhile, kept experimenting. The most famous story in the book, and one of the most famous in all of business lore, is the waffle iron. Bowerman ruined one of his wife's waffle irons by pouring rubber into it, trying to mold a sole with little square studs that would grip without spikes. Out of that ruined appliance came the waffle sole, the grip pattern that made Nike trainers feel different underfoot. Knight tells it with genuine affection. Bowerman was difficult, stubborn, and cheap in the way of men who grew up in the Depression, but Knight clearly worshipped him, and the coach's amateur-inventor spirit set the tone for everything the company later did.

Growth came slowly, then less slowly. Shoes like the Cortez, a cushioned road shoe built for the running boom, started to move. Runners told other runners. By the end of the sixties Blue Ribbon was selling real volume, though as Knight keeps stressing, volume and cash are different things. Every order from Japan had to be paid for long before American stores paid Blue Ribbon, so the faster they grew, the broker they felt. That gap between sales and cash nearly kills the company half a dozen times in this book.

The divorce and the swoosh

The middle of the memoir is a breakup story. By the early seventies the relationship with Onitsuka was falling apart. Shipments arrived late or fell short. Knight believed the Japanese were holding back his best designs and quietly lining up other American distributors to cut him out. The Onitsuka side had its own complaints, including that Blue Ribbon was not paying fast enough and was getting too big for its place. Knight flew to Japan again and again for tense meetings that went nowhere. Lawyers got involved. Both sides prepared for a court fight over who owned the designs and the American market.

Knight made the boldest decision of his life in the middle of that fight. He started making shoes without Onitsuka. Through a Japanese trading company, Nissho Iwai, he arranged financing and factory space for an independent line of shoes. If the gamble failed he would have no supplier at all. He describes those months as pure dread, waking up at night doing arithmetic that never worked, and I believe him, because the whole plan depended on money he did not have.

A company needs a name and a mark, and here two of the book's best scenes arrive back to back. The naming session was a mess. Knight's own favorite was Dimension Six, which tells you founders should not always trust their taste. Johnson claimed the Greek goddess of victory had come to him in a dream and pushed for Nike. Everyone was tired, the shoe boxes were already being printed, and Nike won mostly by exhaustion. Then a design student at Portland State named Carolyn Davidson, who had been doing odd freelance work for the company, sold them a checkmark-like design for thirty-five dollars. Knight admits he was not wild about it at first. That thirty-five dollar sketch became the swoosh, one of the most valuable logos ever drawn. Years later, when the company could afford gratitude, Knight gave Davidson shares to make up for the small original fee.

The first Nike-branded shoes reached stores in the early seventies while the Onitsuka lawsuit ground on. Knight writes about those years with a tangle of guilt and defiance. He had been the Japanese company's golden boy and became its enemy. The courts took years to sort out the claims, and Knight's telling favors his side throughout, so a careful reader should take the moral coloring with salt. But the business outcome is not in dispute: Blue Ribbon became Nike, and the Tigers went their own way.

Always almost broke

If there is one theme Knight hammers, it is that Nike lived on the edge of bankruptcy for its first decade and more. This is the part of the book every founder should read twice. Sales climbed from thousands into the millions across the late sixties and seventies, and the company still could not pay its bills on time. Growth ate cash. Each bigger order from Asia required bigger borrowing at home, and the borrowing had limits.

The villain of this stretch is a bank. Blue Ribbon's Oregon bank, which had extended the credit lines the company lived on, decided the shoe peddlers were overextended and moved to cut them off. Knight writes about his banker with a fury that is still warm decades later. He scrambled from lender to lender and found no takers, because on paper the bank was right: the company owed more than it comfortably could cover. What saved Nike was trade financing from its Japanese partner, which advanced the money for production against future sales. Knight calls those weeks the closest he ever came to losing everything, and the relief in his telling feels honest. He had built a company whose shoes people wanted, and the reward was a threat to shut him down.

Oregon track culture carried them through. Steve Prefontaine, the brash distance star from the University of Oregon, raced in Nikes and gave the brand a swagger it could never have bought. The 1972 Olympic trials, the crowds, the singlets, the sense that running belonged to rebels: Knight captures all of it, and you can feel how much he loved that world. The waffle-soled trainers sold because runners trusted what fast men wore. The company kept doubling, kept borrowing, kept surviving by narrower margins than anyone outside a handful of insiders understood.

I want to note something Knight mostly glides past. His account makes the cash crises sound like acts of weather, but some of it was choice. He kept ordering more shoes than the company could afford because he believed demand would keep rising. He was right, which makes it wisdom in hindsight, but at the time it was a bet with other people's money, including his employees' livelihoods. Dozens of people worked for modest pay through years when one bad quarter could have wiped them out. Knight thanks them warmly in these pages. A harder book would ask more sharply whether they were given a real choice about the risks taken in their name.

Going public and growing teeth

By the end of the seventies Nike was no longer a scrappy importer. It was a real footwear company with factories, athletes, and enemies, and Knight had to learn a new game. In December 1980 the company sold shares to the public for the first time. Overnight, early employees who had worked for little became wealthy on paper, and Knight himself became rich in a way that changed every relationship around him. He writes about the offering with mixed feelings. The money secured the company's future, but he hated the new attention, the quarterly judgments, the sense that strangers now owned a piece of his band of misfits.

The eighties brought the giants. Adidas dominated the sportswear world, and Nike had to fight for every shelf and every athlete. Knight describes the move beyond running, into basketball and tennis and training shoes, as a series of arguments inside the company as much as battles outside it. The deal he is proudest of from that era, signing a young Michael Jordan to a shoe contract when Jordan was still just a promising rookie, gets a full fond chapter. Knight knew at once the kid was different. The shoe line built around him changed sports marketing, though Knight is honest enough to admit that luck played its part. Nobody in that room knew what Jordan would become.

Marketing grew up too. Nike hired a tiny Portland agency, Wieden and Kennedy, and gave it room to be strange. The agency's work gave Nike its voice: aggressive, funny, a little confrontational. The three-word slogan the agency delivered in the late eighties, Just Do It, turned the whole brand into an attitude. Knight's telling of the advertising years is enjoyable, full of arguments and last-minute saves, though it mostly stays at the level of anecdote. Readers hoping for a theory of branding will not find one here. His theory, to the extent he has one, is to hire odd talented people and let them run.

Through all of this the company kept the culture of its early days, or tried to. Knight describes a headquarters full of ex-athletes and arguers, intramural games, shouting matches that ended in handshakes. Some of it sounds wonderful and some of it sounds exhausting, and Knight seems aware of both. He wanted a company that felt like a team and a business that performed like a machine, and the tension between those two wishes never really resolves in the book.

What it cost, and what he skips

The last part of the memoir turns personal, and it is the section that stayed with me. Knight stepped down as chief executive in 2004, the same year his son Matthew died in a diving accident abroad. He writes about Matthew with a restraint that is more moving than any outpouring would be. The boy had struggled to find his place, had quarreled with his father, had finally seemed to be steadying, and then he was gone. Knight does not dress it up or draw lessons from it. He simply sets it down, and the grief sits underneath everything that follows, including his decision to hand the company to new leadership while staying on as chairman.

He closes with advice he says he gives to young people, and since the publisher's own discussion guide quotes it, I will too:

I'd tell men and women in their midtwenties not to settle for a job or a profession or even a career. Seek a calling.

It is a good line, and it fits the book, because Knight's own calling was obvious to everyone except him for years. But it is also the advice of a man who could afford to follow it. Knight had educated parents, a Stanford degree, a father who could lend seed money and a coach who could lend credibility. He worked brutally hard and took real risks, and none of that should be discounted. Still, when he tells twenty-somethings to chase a calling, I wish he spent one more paragraph on what that chase costs people without his safety net. The memoir is weakest whenever luck and privilege enter the frame. They barely enter it at all.

That is the fair criticism, and it has three parts. First, this is history written by the winner, so competitors arrive as obstacles rather than people, and Knight's own mistakes get softer lighting than other people's. Second, the overseas labor controversies that dogged Nike in the nineties, when critics accused its contractors of running sweatshops, get far less space than the bank fights of the seventies. Whatever you think of those charges, they were the biggest moral test the company faced, and Knight moves past them quickly. Third, the finances stay foggy. For a book about a company that almost died of money problems, there is surprisingly little hard accounting, and a reader who wants to understand the actual economics will leave hungry.

Even so, I recommend Shoe Dog to just about anyone who likes a good founding story. It is funny, fast, and unusually honest about fear. Knight never pretends he had a plan when he was improvising, and he gives his early crew their full due: Bowerman the inventor, Johnson the believer, his wife Penny the ballast, the runners who made the shoes mean something. It will not teach you how to run a company. It will show you what it felt like to build one before anyone knew how the story ended, when every order could be the last and every morning started with arithmetic that did not work. For a man who spent his life avoiding microphones, that is a generous gift, and I finished the book liking him more than I expected.