Shake up your life: Start before you are ready! : Phil Knight
Recently, I read the autobiography of Nike's founder Philip 'Phil' Knight, 'Shoe Dog'. It is an inspirational story of overcoming challenges to grow a company as fast as possible. You'll learn real-world business lessons that only Nike's founder can teach you. Phil Knight is brutally honest about the extreme difficulties they had to overcome. How he competed with formally based shoe brands and made an imperishable brand.
Shoe Dog is the most loved and best-selling autobiography, it has quoted by business giants like Bill Gates and Warren Buffet. This book is all about roller coaster ride of building the world's leading brand Nike from the scratch. He started by selling shoes from the back of his car, and today sports icons like Michael Jordan and Tiger Woods proudly wear Nike shoes. Not to mention tens of millions of people around the world who have bought his shoes. Probably you might have one.
The first chapter of the book is Start before you're ready, When it was 1962, Phil Knight was shy and a terrible salesperson that was fresh out of business school. His crazy idea was that Japanese shoes could also become very popular in America in the near future. He spent months writing his final college paper about this idea. After finishing up his college, he travelled across the world, but he had that idea back in the mind, that's why he got to Japan. He wasn’t sure what he might achieve, but he was determined to see if something could be done about his crazy idea.
Phil arrived in Japan and called a shoe company called Onitsuka that makes Tiger shoes and set up a meeting. He was just graduated and had no business experience. The company thinks Phil represents an established American company when really he’s just some kid that went to Japan alone. Figuring he was already there, young, and had nothing to lose, he made a cold call to the CEO, Mr Onitsuka, who agreed to meet with him – and gave him the distribution rights for the western United States to sell Onitsuka Tiger shoes. Startled by his own success, Phil randomly blurted out “Blue Ribbon,” when Onitsuka asked him for the name of his company. And just like that, he was in business.
For several months he sold Tiger shoe in his car closet. While sealing the initial deal had been as simple as showing up at Mr Onitsuka’s door, getting the initial samples weren’t. The first 300 pairs took over a year to be delivered, during which Phil worked as an accountant. When Phil finally got the shoes, one of the first people he mailed two pairs to was Bill Bowerman, his former running coach at the University of Oregon, hoping to get a sale and a powerful testimonial.
To Phil’s surprise, Bill didn’t stop at that and instead offered to become his partner and take care of product design. Having his mentor now as a partner and seeing that he too believed in Phil’s idea was one of the things that gave Phil the confidence to create the company exactly as he saw fit – and that’s what made it the honest, hard-working, caring brand we know today. The first year, Phil sold the shoes out of the trunk of his car, a green Plymouth Valiant, at track meetups across the country and grossed $8,000 in 1963. Bill didn’t just help with encouragement though. Soon it would become clear that Bill’s skill set would be crucial for the company’s success too.
Phil knew that starting a business was risky. The risk was unavoidable. So instead he made it his mission to charge at the risk head-on. It’s extremely important if you want to be successful. People with a growth mindset believe failure is usually just a learning experience. When you fail, you gain valuable wisdom that will help you succeed in the future. Phil always wanted to let people be themselves. And Bill? He was a true shoe dog. He was obsessed with shoes and making them better. When Phil was running for Bill, Bill would always use him as a guinea pig to test new shoe materials, tweaks and improvements. Bill would tear apart a shoe, piece it back together, and try to make it lighter, better and more of an asset to the runner, rather than a necessary liability.
He even built a shoe with fish skin instead of leather once! At the time, Bill also started coaching popular runners and future Olympians, helping to sell more shoes, and when Phil mailed Bill’s first modified shoe prototype, the Cortez, to Onitsuka, suggesting they manufacture it, they landed their first big, commercial hit. This hands-off management style would continue to add to Blue Ribbon and then Nike’s success. Hiring great people and letting them do their thing is one of the core parts that made Nike, well, Nike.
Phil made almost no profit from Nike for the first several years. Instead, he reinvested every penny of profit to buy more shoes to sell. He saw a small window of opportunity to make Nike huge and that’s why he wanted to grow as fast as possible. In fact, Phil even took a full-time job at an accounting firm for a few years to provide a stable income for his new wife and kids. This was while he was growing Nike! Most of Phil’s early employees and teammates felt as passionate as he did. They were athletes, runners or misfits who either loved running or felt they would never fit into a regular corporate job. So they put their heart and soul into their work. This is unlike many corporate employees who always have one eye on the clock and can’t wait for the weekend. Growing a business is almost like raising a child. For the first few years, it takes a back-breaking amount of work, time and energy. But over time it grows bigger and starts giving back to you. And people put in the work because of how meaningful their life feels as a parent. His lines describing it are just awesome:
Few ideas are as crazy as my favorite thing, running. It’s hard. It’s painful. It’s risky. The rewards are few and far from guaranteed. When you run around an oval track, or down an empty road, you have no real destination. At least, none that can fully justify the effort. The act itself becomes the destination. It’s not just that there’s no finish line; it’s that you define the finish line.
When he told his father about what he was doing, His father was unhappy, of course, every parent would prefer to have a safe future for their child rather selling shoe in the car closet. His dad didn’t see much promise in Phil’s crazy shoe idea. (Although he did lend Phil some money in the beginning.) It was only decades later when his dad saw top athletes wearing Nike shoes that he started to seem proud of what Phil had achieved.
After a couple of years, Japanese Tiger shoes started to become very popular. And Phil was trying to grow Nike as fast as possible. As soon as they sold one shipment of shoes, he used all the profits to order even more shoes. Each order was bigger than the last one. Nike’s sales were skyrocketing, sometimes doubling year after year. Nike was like a train with no brakes. And it was accelerating faster and faster. Phil’s biggest problem was managing the company’s growth as it was exploding in size. And Phil’s bankers always argued with him. They told Phil how reckless it was to spend all their money ordering more shoes. They told him to slow down the growth and set some money aside in case something bad happened like a bad sales year. Phil didn’t listen to them. He wanted to grow Nike as fast as possible even though it made his life more stressful and difficult. Why? Because his philosophy was that
Life is growth. You grow or you die.
Phil had to overcome one seemingly impossible challenge after another, to grow Nike into what it is today. A famous historian once said that life is just “one damn thing after another” and that’s how I felt reading this book. First, he flew to Japan to sign that contract with Onitsuka when he had no business experience or money. A few years later, his relationship with Onitsuka came crashing down. And suddenly they didn’t have someone to make their shoes. They had to quickly design their own shoes, find new factories around Asia to make the shoes, and bring them to America. Thankfully, they pulled it off. A few years after that, Nike’s competitors found a way to twist government regulations and Phil had to yet again fight for Nike’s survival. For a couple of years, Phil was fighting for survival against the US government. There are not many challenges more frustrating than that. Here’s a shortlist of the problems Nike faced in just one year:
In (1976) we were struggling with a number of unusually stressful problems.
We needed to find a larger warehouse on the East Coast.
We needed to transfer our sales-distribution center from Massachusetts (…) to New Hampshire, which was sure to be a nightmare.
We needed to hire an advertising agency to handle the increasing volume of print ads.
We needed to either fix or get rid of our underperforming factories.
We needed to hire a director of promotions.
We needed to approve new products(…)
And we needed to decide on a new logo.
Yet Phil doesn’t regret the challenges, he says that
Even with all the problems life was a joy. Why? Because he believes that when something isn’t challenging, then it’s not interesting.
Phil loved to read books about war, especially books written about great generals and leaders. He didn’t like wars or violence, but he loved to learn lessons about leadership. He wanted to know how did someone stay in control in an extreme situation like war? Phil tried to be a very hands-off leader at Nike. He allowed people to solve problems by themselves. Some of his past employees say he took this strategy too far when he didn’t reply to many of their letters and memos! This made them want to pull their hair out. Yet his strategy of telling people what to do, but not HOW, has clearly paid off. But I don’t think you can do this with just anyone. One important part of Phil’s strategy was choosing to hire people who were as passionate about running as he was. This made them feel passionate about Nike’s mission.
Before Nike, Phil had a job for a few months selling mutual funds. He wasn’t very good at it and he didn’t make many sales commissions. But later when he sold Nike shoes from the back of his car, he was great at convincing people to buy. What changed? Phil realized selling his shoes was different because it didn’t feel like selling. He truly believed that if more people ran, the world would be healthier and better. And he believed his shoes were the best to help people run.
Well, Phil had the problem with selecting brand name and logo though. After years of selling the Japanese “Tiger” shoes, Phil wanted to create his own brand. He needed a name and logo. For weeks he and his team argued about which name was best Phil didn’t like Nike’s name and logo in the beginning, but it didn’t affect Nike’s success. Nike grew because of its leadership, incredible employees, marketing, product design, and so on. All the other parts of the business made the company what it is today. That's why Your Business Name or Logo Don’t Matter, what matters is product/service and ethics.
Phil believes that oneness is what he was really seeking his whole life. It’s what everybody is really seeking. Phil says that he and billions of other people love sports because it gives them a feeling of oneness. Oneness is why people cheer for sports teams. It’s why people feel proud of their country. It’s why people love their family. They want that feeling of being connected to something bigger. They are hungry for that feeling of unity. In 1980 Phil was thinking about going public with Nike. This means letting anybody to invest money and buy a piece of Nike. But he had some doubts. One the one hand, Phil didn’t want to lose control of his company. On the other hand, he knew he could unleash Nike’s growth if it became a public company. What really pushed him over the edge was realizing that his whole life had been about “going public.” From his year-long backpacking trip to see the world… to building a close-knit team at Nike… to getting married… his life had been all about reaching out to the world and seeking oneness.
The story of the shoe giant Nike came from humble beginnings and ‘’crazy’’ ideas. The company’s rising fame in the world is evidence for that if you believe in your ideas, think outside the box and continue to adhere to their values; you have no limit so you can accomplish everything. Surround yourself with believers. Starting a successful business requires you to be surrounded by people who believe in you and your ide, and; they’re supposed to be together not just for money, but because they want you. Employees with real passion will be the most relevant team members for you and will remain committed to you even when things get tough.