Shoe Dog is an autobiography about building a business but, man oh man, this book hits different. As so many people pointed out, the storytelling is phenomenal. This is how you tell a story. Phil Knight is competitive and I am not surprised that he connected with storytelling master J.R. Moehringer to help him with this book. Moehringer notably collaborated with Andre Agassi to write Open, a book which I would say has the same level of nuanced storytelling as this one.
Apart from the storytelling, I keep asking myself why I thoroughly enjoyed this book, and why I got very emotional in some parts. It then hit me. It is the hero’s journey. The entrepreneur’s journey. The hero, the entrepreneur, overcomes adversity and achieves the impossible. Phil Knight imported shoes from Japanese shoe company Onitsuka, and sold these shoes from his car. From this humble beginning, Knight created his brainchild, his shoe startup called Blue Ribbon. Blue Ribbon was Knight’s side hustle as he worked a full-time job as an accountant and then later as an accounting professor at Portland State. Sales eventually reached hundreds of thousands of dollars, then the millions. Nevertheless, the big problem was that Blue Ribbon’s cash reserves were always close to zero, which means that the company could go out of business at any time. On top of that, Onitsuka later decided it no longer wanted to supply Blue Ribbon with shoes. Furthermore, Blue Ribbon’s bank also terminated their account reasoning that their low cash reserves was risky. Apparently, banks in the 70’s were very risk-averse. I never knew that! Crisis after crisis, Phil Knight and his motley crew of misfits and obsessives survived and eventually created the legendary shoe company called Nike.
I learned a ton from this book on how to build a company. First, I would say that retail is very difficult. I never knew how difficult retail was until I read this book. There will be many fires to put out. But as Phil Knight story tells us, survival is possible with a great team. Knight had the legendary coach Bill Bowerman as a co-founder and mentor. Through Bowerman’s mentorship and tinkering, Nike was able to ship out innovative technologies in the shoe game. Then there is Nike employee # 2 Jeff Johnson (Knight’s sister was employee # 1) who kept Blue Ribbon running while Knight was working full-time. It seems to me that during the early days, Blue Ribbon would not have survived without Johnson because he was the marketing, logistics and sales. More importantly, Phil Knight’s wife, Penelope, was there to support Knight from day one.
Some of the business lessons I learned from this book:
- Fail fast
- Create a team obsessed with the company and mission
- Do things that don’t scale
- Sometimes you have to work a full-time job while you pursue your dream
- Do not micromanage. “Don’t tell people how to do things, tell them what to do and let them surprise you with their results (pg. 90)”
When it came to advertising, our approach was primitive and slapdash. We were making it up as we went along, learning on the fly, and it showed.
Like books, sports give people a sense of having lived other lives, of taking part in other people’s victories. And defeats. When sports are at their best, the spirit of the fan merges with the spirit of the athlete, and in that convergence, in that transference, is the oneness that the mystics talk about.
It’s hard enough to invent and manufacture and market a product, but then the logistics, the mechanics, the hydraulics of getting it to the people who want it, when they want it—this is how companies die, how ulcers are born.
Fear of failure, I thought, will never be our downfall as a company. Not that any of us thought we wouldn’t fail; in fact we had every expectation that we would. But when we did fail, we had faith that we’d do it fast, learn from it, and be better for it
We were undergoing an explosion in assets, and inventory, which put enormous strains on our cash reserves. With any growth company, this is the typical problem. But we were growing faster than the typical growth company, faster than any growth company I knew of. Our problems were unprecedented. Or so it seemed
I refused to even consider ordering less inventory. Grow or die, that’s what I believed, no matter the situation. Why cut your order from $3 million down to $2 million if you believed in your bones that the demand out there was for $5 million? So I was forever pushing my conservative bankers to the brink, forcing them into a game of chicken. I’d order a number of shoes that seemed to them absurd, a number we’d need to stretch to pay for, and I’d always just barely pay for them, in the nick of time, and then just barely pay our other monthly bills, at the last minute, always doing just enough, and no more, to prevent the bankers from booting us.
The difference from one shoe to another, he said, nine times out of ten, is the factory. Forget design, forget color, forget all the other things that go into a shoe, it’s all about factories.