Shoe Dog

Shoe Dog is the memoir of one of the founders of Nike. The author talks about his life and the early days of Nike, respectively Blue Ribbon Sports, as the company was called at the beginning.

My impression of Shoe Dog is mixed. On the one hand, I found it very fascinating to read about the ups and downs during the early days, and the struggles to stay in business. And I often had to laugh about some of the situations the author describes. On the other hand, I was disappointed that the book basically ends with the going public of Nike in 1980. And while the author mentions some things that happened afterwards in the final chapter, it still feels to me like there are almost 40 years of the story missing. Or maybe there will be a Shoe Dog 2 about the author's time at Nike after its going public?

My notes

In the beginner's mind there are many possibilities, but in the expert's mind there are few.

Dawn

If I tended to dwell on all the things I wasn't, the reason was simple. Those were the things I knew best. I'd have found it difficult to say what or who exactly I was, or might become. Like all my friends I wanted to be successful. Unlike my friends I didn't know what that meant. Money? Maybe. Wife? Kids? House? Sure, if I was lucky. These were the goals I was taught to aspire to, and part of me did aspire to them, instinctively. But deep down I was searching for something else, something more. I had an aching sense that our time is short, shorter than we ever know, short as a morning run, and I wanted mine to be meaningful. And purposeful. And creative. And important. Above all... different. I wanted to leave a mark on the world. I wanted to win. No, that's not right. I simply didn't want to lose.

But the ultimate dream was always to be a great athlete. Sadly, fate had made me good, not great. At twenty-four I was finally resigned to that fact.

So that morning in 1962 I told myself: 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. That's the precocious, prescient, urgent advice I managed to give myself, out of the blue, and somehow managed to take. Half a century later, I believe it's the best advice – maybe the only advice – any of us should ever give.

Part One

1962

So we got jobs. Selling encyclopedias door to door. Not glamorous, to be sure, but heck. We didn't start work until 7:00 p.m., which gave us plenty of time for surfing. Suddenly nothing was more important than learning to surf.

Life was sweet. Life was heaven. Except for one small thing. I couldn't sell encyclopedias. I couldn't sell encyclopedias to save my life. The older I got, it seemed, the shier I got, and the sight of my extreme discomfort often made strangers uncomfortable. Thus, selling anything would have been challenging, but selling encyclopedias, which were about as popular in Hawaii as mosquitoes and mainlanders, was an ordeal.

If my shyness made me bad at selling encyclopedias, my nature made me despise it. I wasn't built for heavy doses of rejection.

Don't tell people how to do things, tell them what to do and let them surprise you with their results.

1963

-

1964

It's possible that everything I did in those days was motivated by some deep yearning to impress, to please, Bowerman. Besides my father there was no man whose approval I craved more, and besides my father there was no man who gave it less often. Frugality carried over to every part of the coach's makeup. He weighed and hoarded words of praise, like uncut diamonds. After you'd won a race, if you were lucky, Bowerman might say: "Nice race". [...] More likely Bowerman would say nothing. He'd stand before you [...] and nod once.

Perhaps nothing ever revealed my mother's true nature like the frequent drills she put me through. As a young girl she'd witnessed a house in her neighborhood burn to the ground; one of the people inside had been killed. So she often tied a rope to the post of my bed and made me use it to rappel out of my second-floor window. While she timed me. What must the neighbors have thought? What must I have thought? Probably this: Life is dangerous. And this: We must always be prepared. And this: My mother loves me.

Days later came a letter from Mr. Miyazaki. Yes, he said, you can be the distributor for Onitsuka in the West. That was all I needed. To my father's horror, and my mother's subversive delight, I quit my job at the accounting firm, and all that spring I did nothing but sell shoes out of the trunk of my Valiant.

My sales strategy was simple, and I thought rather brilliant. After being rejected by a couple of sporting goods stores ("Kid, what this world does not need is another track shoe!"), I drove all over the Pacific Northwest, to various track meets. Between races I'd chat up the coaches, the runners, the fans, and show them my wares. The response was always the same. I couldn't write orders fast enough.

Driving back to Portland I'd puzzle over my sudden success at selling. I'd been unable to sell encyclopedias, and I'd despised it to boot. I'd been slightly better at selling mutual funds, but I'd felt dead inside. So why was selling shoes so different? Because, I realized, it wasn't selling. I believed in running. I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in. People, sensing my belief, wanted some of that belief for themselves.

Belief is irresistible.

Sometimes people wanted my shoes so badly that they'd write me, or phone me, saying they'd heard about the new Tigers and just had to have a pair, could I please send them, COD? Without my even trying, my mail order business was born.

In fact, the shoes sold so well, I decided to hire another salesman. Maybe two. In California. The problem was, how to get to California? I certainly couldn't afford airfare. And I didn't have time to drive. So every other weekend I'd load a duffel bag with Tigers, put on my crispest army uniform, and head out to the local air base. Seeing the uniform, the MPs would wave me onto the next military transport to San Francisco or Los Angeles, no questions asked.

[...] happiness can be dangerous. It dulls the senses.

People reflexively assume that competition is always a good thing, that it always brings out the best in people, but that's only true of people who can forget the competition. The art of competing, I'd learned from track, was the art of forgetting, and I now reminded myself of that fact. You must forget your limits. You must forget your doubts, your pain, your past. You must forget that internal voice screaming, begging, "Not one more step!" And when it's not possible to forget it, you must negotiate with it.

1965

In fact, in 1965, running wasn't even a sport. It wasn't popular, it wasn't unpopular – it just was. To go out for a three-mile run was something weirdos did, presumably to burn off manic energy. Running for pleasure, running for exercise, running for endorphins, running to live better and longer – these things were unheard of. People often went out of their way to mock runners. Drivers would slow down and honk their horns. "Get a horse!" they'd yell, throwing a beer or soda at the runner's head.

To have cash balances sitting around doing nothing made no sense to me. Sure, it would have been the cautious, conservative, prudent thing. But the roadside was littered with cautious, conservative, prudent entrepreneurs. I wanted to keep my foot pressed hard on the gas pedal.

Everything my banker said, I ultimately accepted. Then I'd do exactly as I pleased. I'd place another order with Onitsuka, double the size of the previous order, and show up at the bank all wide-eyed innocence, asking for a letter of credit to cover it. My banker would always be shocked. You want HOW much? And I'd always pretend to be shocked that he was shocked. I thought you'd see the wisdom... I'd wheedle, grovel, negotiate, and eventually he'd approve my loan. After I'd sold out the shoes, and repaid the borrowing in full, I'd do it all over again. Place a mega order with Onitsuka, double the size of the previous order, then go to the bank in my best suit, an angelic look on my face.

He didn't like giving credit to anyone, for anything, but with my balance hovering always around zero, he saw me as a disaster waiting to happen.

It was never enough to just drink with Hayes [his boss at Price Waterhouse]. He demanded that you match him drop for drop. He counted drinks as carefully as he counted credits and debits. He said often that he believed in teamwork, and if you were on his team, by God you'd better finish that damn drink.

1966

He'd constructed a makeshift photo studio in his house, and he'd pose the shoes seductively on the sofa, against a black sweater. Never mind that it sounded a bit like shoe porn, I just didn't see the point of placing ads in magazines read exclusively by running nerds. I didn't see the point of advertising, period. But Johnson [the first employee] seemed to be having fun, and he swore the ads worked, so, fine, far be it from me to stop him.

One lesson I took from all my home-schooling about heroes was that they didn't say much. None was a blabbermouth. None micromanaged.

Each new customer got his or her own index card, and each index card contained that customer's personal information, shoe size, and shoe preferences. This database enabled Johnson to keep in touch with all his customers, at all times, and to keep them all feeling special. He sent them Christmas cards. He sent them birthday cards. He sent them notes of congratulation after they completed a big race or marathon. [...] Most wrote him back. They'd tell him about their lives, their troubles, their injuries, and Johnson would lavishly console, sympathize, and advise. Especially about injuries. Few in the 1960s knew the first thing about running injuries, or sports injuries in general, so Johnson's letters were often filled with information that was impossible to find anywhere else. [...] Some customers freely volunteered their opinion about Tigers, so Johnson began aggregating this customer feedback, using it to create new design sketches.

My first-ever bachelor pad was filled from floor to ceiling with shoes.

If Blue Ribbon [the original name of Nike] went bust, I'd have no money, and I'd be crushed. But I'd also have some valuable wisdom, which I could apply to the next business. Wisdom seemed an intangible asset, but an asset all the same, one that justified the risk. Starting my own business was the only thing that made life's other risks – marriage, Vegas, alligator wrestling – seem like sure things. But my hope was that when I failed, if I failed, I'd fail quickly, so I'd have enough time, enough years, to implement all the hard-won lessons. I wasn't much for setting goals, but this goal kept flashing through my mind every day, until it became my internal chant: Fail fast.

I thought my apartment was filled with shoes, but Johnson basically lived inside a running shoe. Shoved into every nook and cranny, spread across every surface, were running shoes, and more running shoes, most in some state of deconstruction.

1967

I was developing an unhealthy contempt for Adidas. Or maybe it was healthy. That one German company had dominated the shoe market for a couple of decades, and they possessed all the arrogance of unchallenged dominance. Of course it's possible that they weren't arrogant at all, that to motivate myself I needed to see them as a monster. In any event, I despised them. I was tired of looking up every day and seeing them far, far ahead. I couldn't bear the thought that it was my fate to do so forever.

We couldn't afford to fix the broken glass in the other windows, so on really cold days we just wore sweaters.

As I gradually moved my inventory out of my apartment, into my new office, the thought crossed my mind that it might make more sense to give up the apartment altogether, just move into the office, since I'd basically be living there anyway. When I wasn't at Price Waterhouse, making the rent, I'd be at Blue Ribbon, and vice versa. I could shower at the gym. But I told myself that living in your office is the act of a crazy person.

1968

I was putting in six days a week at Price Waterhouse, spending early mornings and late nights and all weekends and vacations at Blue Ribbon. No friends, no exercise, no social life – and wholly content. My life was out of balance, sure, but I didn't care.

I wanted to quit Price Waterhouse. Not that I hated it; it just wasn't me. I wanted what everyone wants. To be me, full-time. But it wasn't possible. Blue Ribbon simply couldn't support me. Though the company was on track to double sales for a fifth straight year, it still couldn't justify a salary for its cofounder. So I decided to compromise, find a different day job, one that would pay my bills but require fewer hours, leaving me more time for my passion. The only job I could think of that fit this criterion was teaching.

I wanted to build something that was my own, something I could point to and say: I made that. It was the only way I saw to make life meaningful.

1969

The next morning we all flew to Portland so they could meet the gang at Blue Ribbon. I realized that in my letters to Onitsuka, not to mention my conversations with them, I might have overplayed the grandeur of our "worldwide headquarters". Sure enough I saw Kitami's face drop as he walked in. I also saw Mr. Onitsuka looking around, bewildered.

1970

[...] I remember feeling that at any moment I might cut loose a bloodcurdling scream. Here I'd built this dynamic company, from nothing, and by all measures it was a beast – sales doubling every year, like clockwork – and this was the thanks I got? Two bankers treating me like a deadbeat?

My credit was maxed out, he said. Officially, irrevocably, immediately. He wasn't authorizing one more cent until I put some cash in my account and left it there. Meanwhile, henceforth, he'd be imposing strict sales quotas for me to meet. Miss one quota, he said, by even one day, and, well... He didn't finish the sentence. His voice trailed off, and I was left to fill the silence with worst-case scenarios.

1971

Even though it was in central Mexico, the factory was called Canada. Right away I asked the managers why. They chose the name, they said, because it sounded foreign, exotic. I laughed. Canada? Exotic? It was more comic than exotic, not to mention confusing.

For her many hours of work [on the logo], we gave Carolyn our deepest thanks and a check for thirty-five dollars [...].

I'd done such a poor job thinking up a name for my new brand – Dimension Six? Everyone at Blue Ribbon still mocked me. I'd only gone with Nike because I was out of time, and because I'd trusted Johnson's savant-like nature.

1972

"This is the moment we've been waiting for. Our moment. No more selling someone else's brand. No more working for someone else. Onitsuka has been holding us down for years. Their late deliveries, their mixed-up orders, their refusal to hear and implement our design ideas – who among us isn't sick of dealing with all that? It's time we faced facts: If we're going to succeed, or fail, we should do so on our own terms, with our own ideas – our own brand. [...] Let's not look at this as a crisis. Let's look at this as our liberation. Our Independence Day."

It's one thing to watch a sporting event and put yourself in the players' shoes. Every fan does that. It's another thing when the athletes are actually in your shoes.

1973

For all my belief that business was war without bullets, I'd never felt the full fury of conference-room combat until I found myself at a table surrounded by five lawyers. They tried everything to get me to say I'd violated my contract with Onitsuka.

1974

He [Johnson] didn't know anything about running a factory, but he was willing to try. To learn. 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.

1975

It wasn't easy paying anyone. 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.

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.

Part Two

1975

-

1976

Like most companies, we had role models. Sony, for instance. Sony was the Apple of its day. Profitable, innovative, efficient – and it treated its workers well. When pressed, I often said I wanted to be like Sony. At root, however, I still aimed and hoped for something bigger, and vaguer. I would search my mind and heart and the only thing I could come up with was this word – "winning". It wasn't much, but it was far, far better than the alternative. Whatever happened, I just didn't want to lose.

But I also remember feeling shocked that these were the men I'd assembled. These were the founding fathers of a multimillion-dollar company that sold athletic shoes? A paralyzed guy, two morbidly obese guys, a chain-smoking guy?

Undoubtedly we looked, to any casual observer, like a sorry, motley crew, hopelessly mismatched. But in fact we were more alike than different, and that gave a coherence to our goals and our efforts.

My management style wouldn't have worked for people who wanted to be guided, every step, but this group found it liberating, empowering. I let them be, let them do, let them make their own mistakes, because that's how I'd always liked people to treat me.

1977

Of all the negotiations in my life, those with my sons have been the most difficult.

My life was about sports, my business was about sports, my bond with my father was about sports, and neither of my two sons wanted anything to do with sports.

1978

The years of stress were taking their toll. When you see only problems, you're not seeing clearly. At just the moment I needed to be my sharpest, I was approaching burnout.

I did seem to hire nothing but accountants. And lawyers. It wasn't that I had some bizarre affection for accountants and lawyers, I just didn't know where else to look for talent. [...] We needed to hire people with sharp minds, that was our priority, and accountants and lawyers had at least proved that they could master a difficult subject. And pass a big test. Most had also demonstrated basic competence. When you hired an accountant, you knew he or she could count. When you hired a lawyer, you knew he or she could talk. When you hired a marketing expert, or product developer, what did you know? Nothing. You couldn't predict what he or she could do, or if he or she could do anything. And the typical business school graduate? He or she didn't want to start out with a bag selling shoes. Plus, they all had zero experience, so you were simply rolling the dice based on how well they did in an interview. We didn't have enough margin for error to roll the dice on anyone.

I was transitioning him from legal to marketing, moving him out of his comfort zone, as I liked to do with everyone now and then, to prevent them from growing stale.

1979

-

1980

It seems wrong to throw all those hectic days and sleepless nights, all those magnificent triumphs and desperate struggles, under that bland, generic banner: business. What we were doing felt like so much more. Each new day brought fifty new problems, fifty tough decisions that needed to be made, right now, and we were always acutely aware that one rash move, one wrong decision could be the end. The margin for error was forever getting narrower, while the stakes were forever creeping higher – and none of us wavered in the belief that "stakes" didn't mean "money".

Night

I hear someone behind us whisper, "Hey, look, Buffett and Gates – who's that other guy?"

You measure yourself by the people who measure themselves by you.

When it came rolling in, the money affected us all. Not much, and not for long, because none of us was ever driven by money. But that's the nature of money. Whether you have it or not, whether you want it or not, whether you like it or not, it will try to define your days. Our task as human beings is not to let it.

Other regrets go deeper. [...] Not being a good enough manager to avoid layoffs. Three times in ten years – a total of fifteen hundred people. It still haunts. Of course, above all, I regret not spending more time with my sons.

Seek a calling. Even if you don't know what that means, seek it. If you're following your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you've ever felt.

And those who urge entrepreneurs to never give up? Charlatans. Sometimes you have to give up. Sometimes knowing when to give up, when to try something else, is genius. Giving up doesn't mean stopping. Don't ever stop.

Luck plays a big role. Yes, I'd like to publicly acknowledge the power of luck. Athletes get lucky, poets get lucky, businesses get lucky. Hard work is critical, a good team is essential, brains and determination are invaluable, but luck may decide the outcome.