Book Summary: Shoe Dog by Phil Knight

A Memoir By The Creator of NIKE

📖 The Book in 3 Sentences

1. Fresh out of Stanford business school, Phil Knight inspired from his entrepreneurship research paper started Blue Ribbon Sports to import high-quality, low-cost running shoes from Japan with 50 dollars borrowed his father
2. Upon his journey of building up Blue Ribbon Sports, Phil details the many challenges and setbacks that he faces with dealing with Onitsuka, hostile bankers, supporters and detractors
3. With Phil's former track coach Bill Bowerman and the the foundational team Phil built up at Blue Ribbon Sports, learn to work together to navigate these challenges and give birth to what we know as the global sports brand Nike

🖼 Impressions

Shoe Dog tells the tale of Nike's beginnings as Blue Ribbon Sports born in Portland, OR and born from founder Phil Knights entrepreneurship class.  It's a wonderful story of individuals driven by their passion for running and sports footwear and recounts the challenges and adversity faced by the organization in it's early days.

👥 Who should read it?

Anyone with an interest in entrepreneurship and the story of Nike should read this book.

💡 How the book changed me

• Gave me a strong appreciation for Phil's early life by traveling the unconventional path of entrepreneurship and how he took big risks early on in his life
• Phil's attitude and mindset for every challenge and adversity he faced - every time he worked through each problem by also enlisting a strong team and never giving up

✍️ My Top 3 Quotes

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 believe 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.

“He says he sat bolt upright in bed in the middle of the night and saw the name before him,” Woodell said. “What is it?” I asked, bracing myself. “Nike.” “Huh?” “Nike.” “Spell it” “N-I-K-E,” Woodell said. I wrote it on a yellow legal pad.  The Greek Goddess of Victory. The Acropolis.  The Parthenon.  The Temple.

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 nothing like you've ever felt.

📒 Summary + Notes

Part One - 1962

• Wrote a research paper about shoes in his entrepreneurship class at Stanford
• Phil’s mother’s parents - Mom and Pop Hatfield
• Phil’s twin sisters - Jeanne and Joanne, four years younger than Phil
• Phil decides to travel the world with Stanford friend Carter
• Plan was to see Hawaii, Tokyo, Hong Kong, Rangoon, Calcutta, Bombay, Saigon, Kathmandu, Cairo, Istanbul, Athens, Jordan, Jerusalem, Nairobi, Rome, Paris, Vienna, West Berlin, East Berlin, Munich, London
• Goes to Hawaii first, ends up staying and selling Encyclopedias
• Had a second job with Investors Overseas Services headed by Bernard Cornfield
• Travels to Tokyo and meets some Americans at United Press International that his father knew
• Meets two American GI’s who run a monthly magazine called the Importer to learn about selling shoes
• Learns cultural approach to business to make an appointment with Onitsuka in Kobe, Japan and meets Ken Miyazaki and places a $50 order for samples
• Names his company “Blue Ribbon Sports of Portland, OR”
• Continues to travel the world and visits Hong Kong, Manila, Bangkok, Vietnam, Calcutta, Bombay, Kenya, Cairo, Jerusalem, Instanbul, Rome, Florence, Milan, Venice, Paris, Munich, Vienna, London, Greece

Part One - 1963

• Returns to Portland OR
• Goes back to Portland State for 3 accounting classes
• Gets a job as an accountant at Lybrand, Ross Bros & Montgomery

Part One - 1964

• Samples arrive from Japan
• Old track coach Bill Bowerman receives two pairs. has significant obsession about improving footwear and asks to go 50/50 in Phil’s venture
• Bill’s lawyer is John Jaqua and he agrees to 49/51 split where Phil still has controlling interest
• Asks Onitsuka to be exclusive distributor in the United States and orders $1k for 300 pairs and Phil had to convince his father for the loan
• Phil became the exclusive Onitsuka distirbutor for the Western US
• He quit his job at the accounting firm to focus on selling shoes out of the trunk at track meets in the Pacific Northwest - despite not doing well with encyclopedias and mutual funds. Phil loved shoes because he was also a runner at heart
• 2 months in, Blue ribbon receives a cease and desist to selling Onitsuka from Mr. Manhaset, one of the original Malboro men
• Phil goes to Japan to talk to Onitsuka and deals with a new representative, Mr. Morimoto and manages to gain back control of 13 Western states with an agreement from Onitsuka and ordered $35k worth of shoes and a 3 year contract
• Phil meets Sarah whilst climbing Mt Fuji and she becomes his girlfriend but the relationship doesn’t work out
• Phil’s sister Jeanee becomes the first employee of Blue Ribbon to do secretarial work

Part One - 1965

• Phil hires Jeff Jonson as a commissioned salesperson and once he got started began to write to Phil on a very frequent basis. Jeff goes full-time in summer 1965.
• Had difficulty securing capital from banker due to lack of cash reserves/equity
• Banker, Harry White at First National Bank with boss Bob Wallace being the final sign off
• Passed all four parts of CPA and secured a job at Price Waterhouse Coopers and built a relationship with accountant Delbert J Hayes
• Served in the Army Reserves
• Bowerman went to the 1964 Japan Olympics and received a tour of Onitsuka’s facilties
• Bowerman was very experimental with modifying and improving shoes

Part One - 1966

• Blue Ribbon expands into a one bedroom apartment downtown
• First employee johnson gets into a car accident and has a divorce but was still managing to build customer relationships and sell Tigers to customers
  Phil stated if Johnson could sell 3250 pairs of shoes by June 1966 - he would authorize the opening of a retail outlet and Johnson hit this sales figure
• A small retail space was leased at 3107 Pico Boulevard
• At this point in time Phil was working at PWC still, doing the reserves and running Blue Ribbon putting him at the edges of exhaustion
• Johnson expands the customer base beyond the 13 states to the point where he convinces Phil to go back to Onitsuka and ask for US wide distribution
• A new export manager at Onitsuka is Kitami
• $40k sales in 1966 and projected to hit $80k in 1967, Phil Knight was able to convince Kitami to be the exclusive US distributor with the assumption Blue Ribbon had offices on the US East Coast with a 3 year contract

Part One - 1967

• Johnson moves to the East Coast to run Blue Ribbon there whilst new employee John bork takes over the retail store in Santa Monica - the office location was Wellesley, Boston
• Johnson demanded to be made full partner with a salary raise - Phil offered a $50 raise
• Two new employees Geoff Hollister and Bob Woodell
• Second retail store in Eugene, OR run by Bob Woodell
• Onitsuka produced a shoe with the Limber Up’s outer sole and Spring Up’s midsole which was the basis for the new Aztec but Adidas sued so it became the Cortez, because Cortez kicked the Aztec’s arse
• Jim Grelle was the fastest runner in Oregon and Phil the second fastest in high school
• Phil expanded Blue Ribbon from the one bedroom apartment to a large room on the east side of Portland

Part One - 1968

• Phil quits PWC to teach at Portland State university so he can spend more time running Blue Ribbon sports
• Teaches Accounting 101 and meets Penelope Parks and hires her to join Blue Ribbon to conduct administrative and book keeping activities
• Phil asks Penny out and they begin dating and introduce each other to their families - Phil explains his relationship with Penny’s mother Dot - Penny and Phil get married
• Phil returns to Japan to secure the future for Blue Ribbon and attends Onitsuka’s employee picnic where he meets a man named Fujimoto who lost his home and bicycle during Typhoon Billie
• Kitami explains that he will be visiting the United States in October

Part One - 1969

• $150k sales in 1968 and just under $300k in 1969
• Right before 31st birthday Phil quit his Portland State teaching job
• Phil overhears a conversation of artists standing around an easel lamenting the cost of an oil painting class where he interrupts and offers one of them a job - that artist was Carolyn Davidson
• Kitami and Mr Onitsuka attended the Olympic games in Mexcio City and flew to Los Angeles afterwards. Phil flew down from Oregon to meet them and they all went back to Portland to see Blue Ribbon Sports’ operations
• Phil and Penny navigate their marriage as the business becomes all consuming and living on a shoe string budget
• Penny becomes pregnant and they decide to move to a house in Beaverton
• The business was expanding to the point where a new office was needed - Phil worked with Woodell to find a new office in Tigard
• Phil and Penny celebrate the arrival of their son Matthew
• Bork became dissatisfied with Phil and asked for a payrise, Johnson was sent over to smooth things over

Part One - 1970

• Phil had to return again to Japan before Christmas to sign a new deal with Kitami at Onitsuka for an additional 3 years
• Onitsuka’s supply was usually late and often contained the wrong shoes and wrong sizes
• Phil also had difficulties with the bank especially Wallace who was not supportive of Blue Ribbon even with their proven track record and trajectory of sales
• Phil subsequently had to raise capital from family and friends where Woodell’s family comes to the rescue with $8k
• Steve Prefontaine - fastest middle distance runner alive from Oregon
• Phil comes across Japan’s sosa shoga - trading companies
• Their roles were not clear but they functioned as importers, scouring the globe and acquiring raw materials for companies that didn’t have the means to do so. Other times they were exporters, representing those same companies overseas. Sometimes they were private banks, providing all kinds of companies with easy terms of credit. Other times they were an arm of the Japanese government.
• The Bank of Tokyo in Portland directed Phil to Nissho Iwai was one of the trading companies that had offices in Portland which had $100bn in sales. Phil met Cam Murukami but wanted to checked in with Kitami
• A shoe distributor on the East coast called Phil to inform him he’d been approached by Onitsuka to be it’s new US distributor. Phil confirmed this with Fujimoto that Onitsuka was indeed looking for new candidates

Part One - 1971

• Kitami came to Portland to visit and had a companion Hiraku Iwano where they gave him a warm welcome
• Kitami was introduced to Henry White at First National Bank and also toured Blue Ribbon’s new offices where he explained to Phil that sales numbers were disappointing
• Phil also came to learn Kitami was going to also review 18 different distributors as possible replacement for Blue Ribbon
• Kitami makes an offer to buy out Blue Ribbon
• First National terminate their relationship with Blue Ribbon
• Phil goes to Nissho Iwai and meets Tom Sumeragi - informs him a delegation went to Onitsuka in Kobe and was kicked out. Sumeragi suggests that he can introduce other quality sports shoe manufacturers in Japan.
• Phil sets up a meeting with a factory called “Canada” in Guadalajara where Adidas manufactured shoes for the 1968 Olympics located in Mexico and signed a contract to produce three thousand pairs of leather soccer shoes.
• Branding had to be established where Phil engaged Carolyn to design the legendary “swoosh” logo. A name also had to be decided and after much deliberation between Falcon, Bengal and Dimension Six, Phil picked “Nike” because it was the Greek Goddess of Victory. The Acropolis. The Parthenon. The Temple.
• Jonas Senter was a shoe consultant hired by Sumeragi to learn about different factories around the world. For various reasons Nissho Issai could not hire Senter himself so they hired his protoge, a man called Sole.
• Sole had a heart attack so Sole Jr. took his place and with Sumeragi they toured a few shoe factories, one run by Bridgestone Tire Company called Nippon Rubber. The factories made a number of samples
  Bowerman was experimenting with an iron and urethane to create the waffle sole

Part One - 1972

• Nike attended the National Sporting Goods Association Show in Chicago.
  Onitsuka announced they had acquired Blue Ribbon Sports to the suprise of Nissho and Tom Sumeragi.
• At the show Blue Ribbon sold both Onitsuka and Nike products produced by Nippon Rubber however the quality was not to the same standard as the samples they had received.
• Kitami from Onitsuka finds out about the Nike brand and asks for updates
  Phil has also managed to get the Portland Trailblazers to wear Nike when they beat the Knicks 133-86.
• Kitami goes to check the store and also finds the Nike’s in the store and on the spot Blue Ribbon employee who manages the Nike store John Bork quits to work for Kitami
• Kitami asks for a meeting with Blue Ribbon’s team including Bowerman, Jaqua to discuss termination of the Onitsuka relationship and $17k owed for shoes delivered.
• Phil asks Johnson to meet in person with the entire Blue Ribbon team and explain the situation that Onitsuka is terminating the relationship with Blue Ribbon. Nike has issues with quality from Nippon Rubber however Onitsuka is planning to take Blue Ribbon to court over breach of contract.
• Blue Ribbon started to continue building brand awareness by seeking out athletes to wear Nike t-shirts and shoes. Ilie Nastase was one of Nike’s first celebrity endorsements and Blue Ribbon employee Geoff Hollister had convinced Oregon’s head coach to wear Nike Waffle soled shoes.

Part One - 1973

Steve Prefontaine’s coached by Bowerman ran in Nike’s and continued to improve his performance over time looking to target the 1976 Olympics.  He pushed himself so hard physically that to prevent him from injuring himself Phil hired him into Blue Ribbon as the second celebrity endorser of Nike shoes

Phil decides to switch Woodell and Johnson so they could focus their strengths based on the organization's needs

Blue Ribbon Sports posts a loss after the launch of Nike where stockholders are informed

Onitsuka files suit in Japan and Blue Ribbon responds by filing suit in the US for breach of contract and trademark infringement

Up to this point I stopped taking notes - I found myself literally documenting historical events and enjoying the tale told by Phil itself hence there are no entries for the remainder of this book.

Part One - 1974

Part One - 1975

Part Two - 1975

Part Two - 1976

Part Two - 1977

Part Two - 1978

Part Two - 1979

Part Two - 1980

Night