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Lessons from the Shoe Dog
Flyby Biographies - Issue #1
Welcome to the first issue of Flyby Biographies!
This post covers the lessons I learned from reading "Shoe Dog by Phil Knight." A memoir by the creator of NIKE.
This post is an 18-minute read and took me around 30+ hours to create. I hope you find some value in it, and please let me know what you think using the comments or feedback buttons below.
Let's dive into it.
Just like the brand, this book is ICONIC. Growing up in the 90s, to me, just the word Nike conjures up images of Air Jordan, Space Jam, the iconic red swoosh, and VHS-era footage. Reading this book took me back. Learning about one of my favorite brands growing up was super inspiring. In a way, it was a bit like the prequel to the movie "Air," which was also fun. But this book has way more lessons in it.
I'd go so far as to say that this was one of the best books I've read in a long time, and the amount of lessons in there is wild.
Phil has a very similar philosophy to my own (rooted in the teachings of Zen), and this book discussed many of the topics I've written about before.
The writing is also beautiful, if not poetic, and the book flows perfectly into a page-turner that is hard to put down.
I highly recommend reading it for any entrepreneur, creator, artist, inventor, or even a sports, running, or Nike fan.
In this post, I'll cover the lessons I learned. I don't want to give away the whole story or just summarize the book. It's worth a read, and there's no way I'd be able to do it justice. So, I'll cover lessons I learned from my own perspective.
There are still some spoilers below, so watch out. If this book was already on your list to read in the next couple of days, then maybe read it first and come back here once you are done.
Otherwise, without further ado …
Here's what I learned from the Shoe Dog:
Build your Calling
“The cowards never started and the weak died along the way—that leaves us.”
Right at the start of this book, we can see the founder was deeply passionate about two things — running and shoes. He was obsessed with both and on the quest to bring better running shoes to America. Being a student of business, he noticed that Japanese cameras were making waves in the USA, out-pacing German-designed ones that used to dominate the market. He thought it could be the same with shoes, which at the time were also dominated by German-designed ones (e.g., Adidas). So, he decided to import Japanese shoes and sell them in the USA to put this to the test.
After a tour of the world and a trip to Japan, he settled on Onitsuka Tiger after meeting with the executives. He placed an order for $50 worth of shoes, which he loaned from his Dad to import and sell Tigers in the USA.
This spawned a life-changing partnership with his high school track coach, Bill Bowerman, who wanted to get in on the deal. They started a company together called Blue Ribbon Sports. His coach himself was as passionate (if not more) about shoes and running and initially sparked Phil's curiosity in both.
Aside from the two co-founders, the rest of the Nike founding team was also made up of passionate people. They all had a passion for shoes, running, and sports. This is what it means to follow your heart. That is, finding the few things that interest you the most and combining them into some unique product that scratches your own itch. Then, find like-minded people to market it to, or in this case, hire.
Passionate people make passionate products. That's who you want on your side.
Business is an Art
The founding team all had ikigai about shoes and running. A Japanese term that means "a motivating force; something or someone that gives a person a sense of purpose or a reason for living." They saw shoes as an art form and went all in. Obsessed with details and eventually molding them into a worldwide brand that we would come to know as Nike. It was their passion, canvas, vision. Starting with the founder.
Here's how Phil described the first set of shoes which arrived from Japan:
"Twelve pairs of shoes, creamy white, with blue stripes down the sides. God, they were beautiful. They were more than beautiful. I'd seen nothing in Florence or Paris that surpassed them. I wanted to put them on marble pedestals or in gilt-edged frames. I held them up to the light, caressed them as sacred objects, the way a writer might treat a new set of notebooks, or a baseball player a rack of bats."
That's it right there— Art. Love. Ikigai.
"Then I sent two pairs to my old track coach at Oregon, Bill Bowerman.
I did so without a second thought, since it was Bowerman who'd first made me think, really think, about what people put on their feet. Bowerman was a genius coach, a master motivator, a natural leader of young men, and there was one piece of gear he deemed crucial to their development. Shoes. He was obsessed with how human beings are shod."
Reading this book made me realize that anything can be an art form. It's about whatever you can't stop thinking about and draws your curiosity. We later encounter Hayes, an accountant who saw Art in the numbers. To some, this would be the boring side of business, but with the right lens, anything can be seen as a work of Art. Even the numbers.
“I'd met other accountants who knew numbers, who had a way with numbers, but Hayes was to the numbers born. In a column of otherwise unspectacular fours and nines, he could discern the raw elements of Beauty. He looked at numbers, the way the poet looks at clouds, the way the geologist looks at rocks.” … “Day after day I watched Hayes do something I’d never thought possible. He made accounting an art.”
Business is also Business
As far as the business goes, Bowerman was the inventor in the story (but also much more), and Phil was handling more of the business side of things. This right here is a powerful combination. One needed for groundbreaking innovation at scale.
Inventing/Innovating/Design on one side and Marketing/Sales/Expansion on the other. If you are flying solo, then you'll need to cultivate both these skills and strike your own balance of how far you want to go in each dimension.
That's the path I'm going for. It's, of course, twice as much work, but if you are passionate about learning how things work, then it will all feel like play. I used to be more of a pure maker, but now I've slowly grown to love the business side of things as well and am starting to see it as Art myself.
Otherwise, if some area doesn't speak to you, it would make sense to find the balance externally. The book E-myth Revisited discusses this in great detail. Check out the book club review if you haven't already.
Paul Graham also has an excellent article on how to balance these two personalities when you are handling both sides of being the maker and the manager yourself. Paul's approach was to do the manager-type things (leadership, meetings, etc.) during the day when everyone else was asking for his time and then do maker-type things (coding) at night. I do the opposite, maker-type things (coding, writing) in the morning when I have peak focus and then businessy stuff in the evening. Sometimes, I even alternate days by dedicating a whole day or two to business-type stuff. Still, I always have my maker power hour in the morning. That's non-negotiable.
Another famous example of this duality in action would be Steve Jobs (entrepreneur) and Steve Wozniak (inventor). Can you think of some more?
Keep Control & Build Leverage
You might have noticed, however, that there was one big red flag in this initial strategy of importing shoes. They didn't have control of the brand and thus no leverage. They were just importing and selling someone else's shoes in a different country. While this can get you some sales and profits, it's really just building someone else's brand and not a great long-term strategy (unless you diversify and build a storefront, e.g., Footlocker, Walmart, Amazon, etc.). They even helped Onitsuka design better shoes without any stake in the core asset! Later in the book, this comes back to bite them. After a fallout with Onitsuka, they lost distribution rights and had to go through a fierce legal battle to regain control of the trademarks.
They had started creating their own I.P. by that time, the Nike brand, which was able to bail them out of the pickle. This was the real asset. But the lesson here is to build control and leverage into your products and not build a business on top of someone else's brand, which can be shaky ground.
All this work with Tigers did give them something extremely valuable, however — Experience. So, whatever path you take in life, you are always building skills. The one time worth switching pronto, in my opinion, is when you are sure you aren't learning anything.
They had one more area that was always a thorn in their operations and one I see as a lack of control or leverage— Finance!
Being a retail business, both importing and manufacturing shoes were cash guzzlers. Importing the shoes required Blue Ribbon to get huge bank loans and credit lines. Back then, the banks weren't very friendly towards risky growth businesses. Nike was a growth company, similar to how venture-backed tech companies are run. Focusing on aggressive growth rather than cash flow and equity reserves. They were always at the mercy of the bank and had to play by their rules. Phil described it as having a boss breathing down your neck. Definitely not my cup of tea.
Balance the Equation
This brings us to the fundamental accounting equation mentioned multiple times in the book. As a quick aside, Phil got his CPA and worked as an accountant in a firm while the importing business was taking off (this gave him valuable experience on the finance side of things and a side income to pursue his entrepreneurial ventures). He followed this by switching to teaching accounting at a local college once his business started picking steam. This allowed him to work fewer hours and was also where he met his wife! As I mentioned, every experience counts. This also shows you don't have to go all in right at once, and it can also make sense to taper off into your own venture over time. See the three pathways to entrepreneurship for more on this.
Back to the fundamental accounting equation:
Assets = Liabilities + Equity
Equity is the cash reserves, of which Blue Ribbon had very little, and without their own brand, there wasn't much else in the asset column. They were always riding the forefront of growth and reinvesting profits into purchasing more inventory. For the banks, this was a red flag and caused Phil a lot of headaches and explaining to do over the years.
I'm more conservative, too, and would focus on building cash flow and keeping the equity side up to prevent the trap of running out of money and having to borrow funds (Liabilities). This is what keeps happening here in the story. They never really had much leverage and were constantly stuck on a treadmill of either pleasing the bank, Onitsuka, and later the Japanese trading company that was funding them. Playing it so close to the edge always got them into trouble.
This is also the main reason I'm bootstrapping: to be able to set my own direction, schedule, and have control. Mine is a tech business, and I'm building the product myself, so this probably isn't as easy on the retail side, where there is an upfront cost to manufacture or import the goods. Reading this book did give me great insight into the perils of a retail business, and having a physical product, though. Certainly not my cup of tea at the moment. Everything is much cleaner if you can build a digital product yourself without external costs. Cuts out a lot of the messy middle of credit, invoicing, collections, manufacturing, storage, delivery, etc.
Also beats having your apartment full of shoes, like most of the early Blue Ribbon team had :)
But, again, it's not my passion, or ikigai (as of now, *wink*). For those who have it, I'm assuming much of this would just be part of the grind. Phil even seemed to weirdly enjoy parts of it. It's really about finding what feels like play to you and work to others. That's where your unique edge and unfair advantage come from. Can't compete with that.
Be open to receiving
Nike is one of the most iconic brands on the planet. So, it was fascinating for me to learn that both the name and logo were just accidental innovations.
The name "NIKE" came to Employee #1 Jeff Johnson in a dream. The founder himself was lukewarm to it. The iconic swoosh logo was designed by a student as a rough sketch, followed by several iterations, which the founder also didn't "love." The “Air Soles” were pitched by an inventor named Rudy, and Phil rejected them initially. Then he found out that Adidas wasn't interested either and suddenly got curious, or should I say, competitive. Heck, even the brand itself only came together after they found out that Onitsuka was trying to find other U.S. distributors to replace Blue Ribbon. It was a hedge to prevent them from going out of business!
Even more, Phil was against advertising from the beginning and wanted to go entirely with word of mouth and social proof (Athlete Endorsements). He felt that the product should speak for itself and only reluctantly agreed to advertise based on his employees (mainly Jeff) pestering him. NIKE also happens to have had some of the most iconic ad campaigns over the years.
Point is— Innovation can hit from various sources: internal, dreams, partners, colleagues, external, going with the flow, the universe, wherever. You just need to be open to receiving it. I've started practicing doing this more myself.
But what wasn't accidental was the spirit. This was present from day one. Branding is much more than just logos, names, and designs. It's what the brand stands for, the emotions it evokes, and how it makes people feel and see themselves. It's about the identity and the spirit of it. Nike, just like Apple, stood for rebellion, victory, pushing the boundaries of what's possible, and challenging the status quo. That was always intentional and is indeed what you can find in their ads as well.
In short, focus more on the essence and the spirit. The rest will fall together from there as long as you don't stop and keep improving. See writing your own story for more on this.
A lot of this book was about relationships. The first full-time employee at Blue Ribbon, Jeff Johnson, was known to have cultivated friendly relationships with every single customer he sold a shoe to. He created a mailing list of all of his customers with their shoe preferences and maintained friendly contact with them (this was before email, so he was physically mailing them!). Sending them Christmas cards, birthday cards, tips on shoe maintenance, running, and even just discussing day-to-day stuff. Talk about customer service. Jeff Johnson was shown throughout the book to go the extra mile and develop strong relationships, generating huge amounts of word of mouth and trust for Blue Ribbon in the early days. I could do a separate post on this character itself (perhaps I will). This is an area I definitely need to work on improving, and if I ever decide to build a team and start hiring, it will start with someone like Jeff.
Next, when Phil started to lose control of the Onitsuka deal, the Japanese trading company Nissho decided to help him out by finding factories in Japan simply because Onitsuka was rude to them, whereas Phil had been nice. They also got Blue Ribbon out of trouble with the banks. The lesson here is: Be nice; it will come back to help! (And also, build leverage. See above.)
And it did. When their first batch of Nike shoes arrived, it had all kinds of flaws. All the trust and relationships they had built over the years came back to help them out big time. At a sporting goods convention, here's what the response was when Jeff asked a big sales representative why they were readily buying a not-so-market-ready product:
The man laughed. "We've been doing business with you Blue Ribbon guys for years," he said, "and we know that you guys tell the truth. Everyone else bullshits, you guys always shoot straight. So if you say this new shoe, this Nike, is worth a shot, we believe."
Later in the book, we see the same with Sonny Vaccaro, who was friends with most basketball coaches in the country. This was imperative in helping Nike break into the Basketball market.
There's another excellent Paul Graham article that talks about this concept, "Do things that don't scale." In short, focus on cultivating the little things and the relationships that require individual effort and time. This is what drives the big growth down the line and builds trust and word of mouth. AirBnb is a famous example of this. The founders went directly to the homes of early hosts to help them improve their listings and make them look more professional. This generated word of mouth and also made their website look more professional. Win-Win.
The one relationship the founder regrets not spending more time on, however, was his own family. This is common in many founder biographies: getting so obsessed with the business at the cost of getting out of balance in other areas. Something to keep in mind and avoid as you go along your journey. Phil mentioned this as one of his biggest regrets towards the end.
There were also several times in the book when Phil was getting out of shape himself. This is the relationship with yourself that is also often neglected. His solution was always the same — go for a run and break the rut. 6 miles to be exact.
As a side note, this book made me want to start running again.
Follow the Source
Speaking of relationships, it's not just the big brand that needs building. Opportunity is everywhere. You can see this in full flight throughout this book.
Pick any product and take a look at the middle. You'll find suppliers, dealmakers, designers, and inventors all taking a cut of the final pie. At the start, when Phil was importing Tiger shoes, he was, in fact, a middleman, getting a cut of each pair sold in the USA. While this is someone else's asset, he could have turned Blue Ribbon into a department store-like brand and imported other shoes and apparel. That's another way to build leverage, but also a whole different beast.
There's a more interesting example later in the book, though— an inventor named Rudy who licensed his "Air Sole" technology to NIKE for around 15 cents per pair sold. That's an insane business model for an inventor — licensing. Invent the product once, license it to a company, and get royalties as long as they use it.
There were also several other examples of this in the book, like a factory expert taking a cut just for making introductions when Nike was entering a new market (Taiwan). Deals were everywhere. You don't just have to go for the big brand. You can also follow the trail and serve the middle, depending on where your strengths and interests lie.
This is also an opportunity for B2B products and software. For example, if you've worked in any job, you'll intimately know what the pain points were. Turn those into a B2B product that your former self would have loved to use while working there. I started going down this route at one point but couldn't keep myself interested in building the B2B product. Still, the market need for it was solid. If you are more interested in entrepreneurship and business for the sake of it or the scientific approach, this can be a worthwhile avenue. For me, I'm interested in serving the customers and also being a customer myself. So, my interests lie in building consumer-facing brands, and that’s what I’m doing now.
Study the Terrain
Many times throughout the book, the founder and his team had to step out of their comfort zone to learn everything they needed to do to get the job done. At the start, Phil shares his process when he is looking into importing shoes:
"I'd moved into the library, devoured everything I could find about importing and exporting, about starting a company."
Johnson had the same head-first approach when tasked with running a new factory, something he knew nothing about.
It's about learning everything there is to know about your product or industry and becoming a master on whatever it is that you need to know about what you are building. This is why it helps to have the passion for your product. If you are going all in on something, it might as well be something you are interested in, right?
That's what the founder of Nike did and is common with many inventors. Or, as I like to say - Learn, Apply, Grow, Repeat. He also mentioned reading about history and biographies to better understand the world. That's exactly what we are doing here.
I'm always studying the terrain with my own stuff and this project as well. Since this is an entrepreneurship “newsletter”, I'm getting my hands on everything I can to be able to increase my understanding of things and create works of Art. While my apartment might not be filled with shoes, it's definitely filled with books and very much starting to look like a library.
The secret to building something other people love is to fall in love with it yourself and keep improving it till you get there (and beyond).
Or, as Phil implies in the book— Become a professor of your domain.
Think outside the box
When it comes to innovation and inventing, thinking outside of the box is where it's all at. The co-founder and inventor behind NIKE, Bill Bowerman, was always experimenting with improving the quality and performance of shoes for his runners. This was true even before Nike was born. He did this in his days as a college coach, which is also where he met Phil.
The craziest story, however, is that of the waffle trainer. Bill took some kind of cocktail of rubber and other materials and poured it into his waffle iron to create a mold for the shoe. This one fell apart (and broke the waffle maker), but after several iterations, he was able to perfect the waffle trainer. A groundbreaking innovation that allowed track runners to run like rabbits. This was one of Nike's best sellers, and I believe it is still around today.
"I look back over the decades and see him toiling in his workshop, Mrs. Bowerman carefully helping, and I get goosebumps. He was Edison in Menlo Park, Da Vince in Florence, Tesla in Wardenclyffe. Divinely Inspired. I wonder if he knew, if he had any clue, that he was the Daedalus of sneakers, that he was making history, remaking an industry, transforming the way athletes would run and stop and jump for generations. I wonder if he could conceive in that moment all that he'd done. All that would follow. I know I couldn't."
This is really how innovation works. Start with an idea, build it, then iterate it, evolve it, and turn it into something you and other people love. We saw this in The Lean Startup last month, but that was more about iterating in public based on feedback from your users. Inventors, designers, and artists like to iterate in private, but the thousands of experiments are, no doubt, always present.
You can read the biographies of any person whose contributions you admire. There will likely be a boatload of iteration, experiments, and failures there. As Michael Jordan once said:
"I've missed more than 9000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."
The challenges were indeed all around, and you can experience them head-on throughout this book. Phil compares starting a business to the physical process of running:
"For that matter, 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. Whatever pleasures or gains you derive from the act of running, you must find them within. It's all in how you frame it, how you sell it to yourself."
The act itself becomes the destination — That really summarizes everything neatly. It's the process, the journey, the moments between the start and the stop. That's what makes it all so worthwhile.
The amount of trials and challenges described in the book is fascinating. Phil mentions the following mindset multiple times:
"… 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."
One thing you can see throughout the book is the resilience of the founder and the brand and how they keep coming back from the ashes. This is how something great is forged.
This isn't the same as "don't give up”. Sometimes, it's worth switching direction and pivoting; in this case, you want to fail fast. But the key point is to keep going and never stop running, building, evolving, and becoming better. As Phil says:
“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.”
Build your Calling
Finally, at the end of the book, Phil ends with the following advice (amongst other golden nuggets) —
“I'd tell men and women in their mid-twenties not to settle for a job or a profession or even a career. 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.”
There you have it — follow your heart. It'll make everything else much easier. Entrepreneur, athlete, painter, or novelist - "It's all the same drive. The same dream."
“The cowards never started and the weak died along the way. That leaves us, ladies and gentlemen. Us.”
Thank you for reading all the way. These were my top lessons from the book.
The book is packed with them, and I could come up with countless more. But somehow, I just ended up with these for now. Maybe in a few years, I'll reread this book and come up with completely different insights (very likely). But for now, I hope you enjoyed this post, and if you found anything interesting or are a fan of the brand, definitely read the book (and send this post to your friends!). It's a master class and a roller coaster at the same time. I wouldn't be surprised if it gets turned into a movie soon.
Check it out, and happy building. Feel free to hit reply if you have any questions. I'll get the Jeff Johnson in me to respond! :)
I'll be back with the next book club review soon. Till then, stay tuned, and here's the gist once more:
Follow your heart and make something people love.
Don't stop till you get there.
Don't ever stop.
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