SHOE DOG

A MEMOIR BY THE CREATOR OF NIKE

Phil Knight

Phil shares the inside story of Nike’s startup days, The founding team didn’t have a success formula,
showing us how a group of misfits overcame inspiring vision nor winning strategy. They endured chaos,
seemingly-impossible odds and crushing setbacks to countless mistakes and obstacles with their burning
build the Nike we know today. passion, willingness to learn and a never-say-die attitude.

THE NIKE STORY

6 5 4 3 2 1

START

1962: Start of a Crazy Idea 1963: A Stable Job 1964: In Business

At 24, Phil wanted to see the
world and pursue his Crazy Idea to
bring Jap running shoes to the US.
With his shoes thesis and a loan
from his dad, he flew to Japan. He
claimed he was from “Blue Ribbon
Sports” (BR) and secured an
agreement to distribute Onitsuka’s
Tiger running shoes. He spent
another 6 months traveling the
world.
Phil returned to Oregon but the
shoe samples from Japan hadn’t
arrived.
Meanwhile, he got a CPA and
got a job with a small
accounting firm, working 70
hours a week for $500 a month.
The samples finally arrived. Bowerman,
Phil’s former coach, came on board with a
51-49 split. They bought 300 pairs of
shoes for $1,000. Phil sold shoes at
track-meets and ordered more shoes with
a bank loan.
Then, a wrestling coach claimed he had
exclusive US distributorship rights from
Onitsuka. Phil flew to Japan to appeal his
case and kept the rights for track shoes for
13 Western states.

1967: More Growth
BR hired more staff, including
former track star Woodell.
Bowerman created a superior
training shoe Cortez, and his
new book sparked a hub in LA. Phil had no time/energy to reply or
movement that popularized
running. BR moved its HQ to a
large (but cheap) space with
thin walls & broken windows.
Johnson set up the new East
Coast office in Wellesley,
Boston.
1966: Growth Amidst Chaos
Johnson worked 24x7. He wrote nonstop to
Phil (about sales, clients, shoes, ads) and
worked even when he broke his skull in an
accident. He created the first-ever runner’s
visit the store.
The wrestling coach started to sell Tigers now
that BR had done the hard work. Phil met with
Kitami from Onitsuka. To get exclusive US
distributorship for Tiger’s track-and-field line,
Phil lied that BR already had offices on both
East & West coasts. He then sent Johnson to
the East Coast to set up & run the office. Track
coach Borg took over West Coast ops.
1965: Staying Afloat
Sales kept doubling but all the cash
was used for inventory. The bank
pressured Phil on BR’s zero cash
balance. Phil took an accounting job
to ease the finances.
Bowerman started experimenting
with ways to customize Tiger for
Americans; he sent his findings and
designs to Japan. Phil also hired BR’s
first full-time staff Johnson—a
fanatic who believed running could
become a hobby.

1968: New Job, New Ties
Phil switched to teaching to free
up time for BR. One of his
students, Penny, became his wife.
Relations with Katami deepened.
Phil was invited to their company
picnic and made a new friend,
Fujimoto. Boston, another shoe
with a new midsole cushion, was
created.
1969: Full Steam Ahead
BR could now pay Phil a salary &
he quit his job. Woodell was
promoted and Phil gladly left
operations to him. Phil sensed
something wrong with Onitsuka
but couldn’t pinpoint what it was.
Penny single-handedly managed
the household, helped with BR
and delivered a baby boy.
Bowerman had also become a
legendary coach.
1970: Turmoil
The bank refused to give new credit until BR
put cash in their account. Phil borrowed
from everyone he knew to pay the bank. Jap
trading company Nissho was ready to give a
loan, but Onitsuka didn’t give the green
light.
Shipments from Japan were constantly late,
with the wrong sizes/models/quantities.
Then, Phil got news that Onitsuka was
exploring new US distributors to replace BR.

1973: Pushing Ahead
Bowerman retired from
coaching and Pre was hired
to promote Nike. Despite
record sales, BR still made a
loss and investors were
unhappy. Phil’s 2nd son
Travis was born.
Onitsuka filed a suit in Japan
while BR filed a suit in the
US. The legal battle began.
1972: Fighting for Survival
Nike was launched at a key industry
event. The shoe quality was
disappointing, but people trusted BR
and were willing to give Nike a shot.
Onitsuka voided BR’s contract. They
only had Nike left, but could finally
build their own brand, on their own
terms.
Phil was inspired by Oregon’s
home-grown track star, Pre, and
vowed to keep fighting. Nike got its
1st first celebrity athlete endorser,
and an Oregon football team won a
match in Nike shoes. Phil was full of
pride.
1971: A Race Against Time
BR invited Kitami to the US in hope of winning
him over. Kitami insulted the bank executives
and BR, met with other US distributors, then
gave BR the ultimatum to sell 51% shares to
Onitsuka or lose the distributorship. Later, the
bank terminated BR’s account. Desperate, BR
turned to Nissho for credit. Hayes (Phil’s ex
accounting boss) also helped to raise
$200,000 via a public offering.
BR had to secretly find other suppliers. Thru’
Nissho’s contacts, BR found quality
manufacturer Nippon Rubber. They decided
on a new name Nike with a “swoosh” logo.
They added Bowerman’s breakthrough waffle
insole to the new Nikes.

1974: Multi-front Battles 1975: At the Brink of Death 1976: A New Chapter

In the US trials, BR won the rights
to Boston and Cortez with
$400,000 in damages. Strasser was
hired as in-house counsel.
BR was also battling supply/
logistics issues and rising
manufacturing costs. They decided
to set up a new factory. Johnson
was asked to relocate again to
handle the project.
Cashflow was a daily struggle. One
day, they had to deplete their
accounts to pay Nissho. All other
checks bounced, including pay-
checks, bank & investor checks. It
was mayhem. The bank froze BR’s
funds and reported them to the FBI.
BR had no bank and no cash.
Frantic, Phil went to Nissho. After
auditing BR’s books, Nissho repaid
its bank debt in full. BR found
another bank that’d extend credit
and was back in business.
Bowerman’s waffle trainers were so
revolutionary that they became a
lifestyle shoe. Nike was now a
household brand and BR was
incorporated as Nike, Inc. The team
decided that Nike was about
“winning”.
Nike added factories in Taiwan. Sales
doubled to $14mil but they were still
short of cash. Yet, they dared not go
public lest they lose control.

1980: New Victories
Nike started an ad campaign against
Customs and filed an antitrust suit against
its rivals. The fine was reduced to $9mil.
Nike also successfully entered China and
signed deals with its factories and
track-and-field federation. They also found
a way to go public while retaining control.
Reflecting on the journey, Phil realized that
business wasn’t just about money or
solving problems; it was about adding value
to others so they lived fully. So, even with a
huge business and lots of money, Phil
continued to work as if nothing had
changed.
1978-79: Hits & Misses
As Nike fought the battle with
Customs, life went on. They went
into apparel, improved quality,
launched (and recalled) another
new shoe, added more factories
and moved to a larger HQ.
The team was approaching
burnout. Still, Phil pushed himself
to juggle the issues and travel
to/from Washington to lobby the
politicians.
1977: An Unexpected Crisis
Nike kept innovating; fans appreciated
their efforts even if new shoes failed.
They also decided to adopt a crazy
engineer’s invention—the air sole. Nike
kept growing with endorsement deals,
publicity and supply partnerships.
Then, the U.S. Customs levied $25mil
import duties on Nike (urged by their
rivals). This alone could bankrupt Nike.
Phil went berserk. His relationship with
his sons also suffered from this
constant absence from home; both
sons wanted nothing to do with sports.
6 5 4 3 2 1

CLOSING MESSAGES

Push Your Limits Seek Your Calling

Phil believes that Nike’s success came Phil wrote this memoir to remind young
from total effort & commitment, entrepreneurs to never give up. He
pushing ahead despite repeated failure, urges each of us to think hard about
constantly learning/improving and what we want to do, and to seek our
having belief in people. calling no matter what.

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