Book review: “Shoe Dog – A Memoir by the Creator of NIKE” – Phil Knight
“Shoe Dog” is the memoir of Phil Knight’s early years as founder and CEO of NIKE.
As a University track runner, he got the idea to import sport shoes from Japan. Without much preparation he flew to Japan and actually managed to get the importer contract for the Japanese Tiger brand.
The first shoes he sold on track & field competitions literally out of the trunk of his car. For the first years, he worked as a CPA at day and financed the shoe business with his salary. The creation of the NIKE brand was more or less a “forced coincidence” when the Japanese company tried to kick them out of their deal.
As the company was founded with very little equity, (only 1000 USD, with his former coach as 49% partner), the company was for many years always on the brink of bankruptcy and was saved once by the parents of an employee and another time by a Japanese trading company.
I was very surprised how well the book is written. I am not sure but I think most of the memoir is written by Phil Knight himself. The book reads much more like a Thriller than like a (somewhat boring) “How I did it” memoir. For the first 200 pages or so I couldn’t put the book down. Although the end of the story is well know it is nevertheless fascinating to read how the first 10 years or so they limped from one near death experience to the other.
What I also find interesting is that Phil Knight mostly describes the mistakes he made. If you read the book you get the impression “What the hell did he actually do ?” for NIKE to become so succesful. In his descriptions it is almost always his employees or his former partner who came up with the best ideas. His leadership style seemed to be very team oriented and “Hands off”, a nice contrast to the “maniac detail obsessed” guys like Bezos and Jobs. My interpretation is that he basically was responsible for the general direction and strategy and let his employees do whatever they thought was the right thing to do.
My learnings from the book:
- Those days were great days for banks. They were the kings and start-ups like Nike the ones begging for money. Raising money back then was really difficult, capital was scarce.
- A value investor woul dhave never invested in this company as it was debt only, free cash flow negative and with little observable competitive advantages for the first 10-15 years.
- Nike was actually saved by a Japanese trading company which funded the expansion after the bank refused to finance a strongly growing but cashflow negative company
- The brand “Nike” and the “swoosh” were much more coincidence than strategic planning
- Nike and Knight were at the right place at the right time. When people started to wear sneakers as everyday shoe, Nike was just there. They didn’t foresee it and didn’t plan for it.
- Phil Knight’s leadership style seems to have been very “hands-off”, much less detail obsessed than for instance Jobs or Bezos. A good example that a founder doesn’t need to be an egomaniac asshole to be succesful.
- Amazon these days is able to charge more for the Kindle copy than for the paperback. Remarkable.
- From a personality point of view the founders and initial team seem to have been “outsiders”. A guy in a wheelchair, an obese guy and a more or less autistic running freak were the first employees and later also the top management. Not your typical Fortune 500 top management.
Overall I can only recommend this book. I think it makes a perfect and surprisingly “thrilling” read especially for the summer holidays.
great book, thank you for the recommendation. I just finished it.
A few questions (financial) remained unanswered. From the top of my head:
* what happened to the convertible debenture holders?
* how did the loan of some thousand dollars (from Woodell’s family) become “worth” $1.6m in the IPO? I understood it was a loan, even without any interest.
* After the episode with the bank (the $1m check bouncing), Knight doesn’t really mention anymore what happened in the business relationship with Nissho Iwai (now Sojitz) other than “best partners you’ll ever have”. The relationship must have changed a lot after the IPO.
* How could they finance the $9m settlement with customs if they badly needed money from the IPO which they delayed because of the customs case?
I never had any Nike shoes. As a kid, they were way too expensive, and then I always thought they were for show-offs. “Look, I have the Nike Air Jordan shoes”. I thought these stupid kids were laughable and ridiculous.
The book has changed my view somewhat. But I still don’t understand why they can charge hundreds of $$$ for a friggen sneaker. As Bowerman apparently said in his “jogging” book: any shoe will do. And he was right. I also enjoy doing my jogging rounds in $20 no-name trainers.
The biggest question that I would love to have answered is this:
Almost all of the early business partners or employees of Phil Knight/Nike were runners. And they were apparently very good. I was left wondering. Were they so good because they did/sold what they loved (running/shoes) or were they so good because they were athletes and therefor competitive in nature?
It is interesting to find out if athletes are good salesmen.
I’m pretty sure they were good because they sold a product of which they were convinced and that they used themselves – and they had credibility in their clientele. It’s easy to sell something that you own and use yourself and that you obviously like and enjoy to a friend or acquaintance.
Knight himself said he didn’t think himself a good salesman (selling encyclopedias or IOS funds obviously didn’t work that well for him).
Thanks for that – just finished reading it.
Best book this year so far for me. It reminded Richard Branson’s Losing My Virginity, which I read 15 odd years ago.
Equally just placed an order for a pair of Tigers Mexico 66 on Amazon 🙂
Bought it. Indeed it is a great book.
Great book. Shows how important your colleagues are.
I tried to affiliate with them once but they refused and didn’t tell me why.
It is a lost opportunity if you don’t affiliate with Amazon on your book reviews.