Financial Planning & Wealth Management

Shoe Dog

I recently read ‘Shoe Dog’ by Philip Knight. He recounts the fascinating story of the founding of Nike. Nike is named after the Greek winged goddess of victory.

 

His story is the typical ‘Great American Tale’ – an underdog from humble beginnings has an idea and takes on the world (Puma and Adidas at that time).

 

It’s a reflection on the true nature of entrepreneurship – messy, chaotic, perilous, plagued with failure and near-death experiences. Only grit and perseverance saw him through.

 

Knight was an athlete in his university days. He ran the mile in 4 minutes 13 seconds under his soon to be famous coach Bill Bowerman (also the co-founder of Nike).

 

After completing college and doing 1 year of active military service in the army, he enrolled in the Stanford Graduate School of Business in 1959 where he went on to complete an MBA.

 

During his MBA he attended a small business class on entrepreneurship where he’d written a research paper on shoes, which he says developed into an ‘all out obsession’.

 

He’d been impressed at how Japanese cameras had made deep cuts the US camera market, which had once been dominated by the Germans. He had thus argued in his paper that Japanese running shoes might do the same thing.

 

He gave a presentation on the paper to his class who ‘reacted with boredom’. There wasn’t a single question. His professor graded him an A.

 

On completing the MBA, he wasn’t quite sure what do to. He had a great education and was a qualified accountant, although he hated the idea of becoming an accountant.

 

One morning, he woke before sunrise and went for a run –

 

As I began to clip off one brisk six-minute mile after another, as the rising sun set fire to the lowest needles of the pines, I asked myself: What if there were a way, without being an athlete, to feel what athletes feel? To play all the time, instead of working?…This led, as always, to my Crazy Idea. Maybe, I thought, just maybe, I need to take one more look at my Crazy Idea. Maybe my Crazy Idea just might… work?

 

Maybe.

 

No. No, I thought, running faster, faster, running as if I were chasing someone and being chased all at the same time. It will work. By God I’ll make it work. No maybes about it.

 

I was suddenly smiling. Almost laughing. Drenched in sweat, moving as gracefully and effortlessly as I ever had, I saw my Crazy Idea shining up ahead, and it didn’t look all that crazy. It didn’t even look like an idea. It looked like a place. It looked like a person, or some life force that existed long before I did, separate from me, but also part of me. Waiting for me, but also hiding from me. That might sound a little high flown, a little crazy. But that’s how I felt back then.

 

In 1962, at the tender age of 24, shortly after the second world war, Knight booked a flight out to Japan. No cellphone. No googlemaps. No Uber. No Airbnb.

 

He recalls the suburbs as largely rubble and mostly in darkness. He somehow locates a manufacturing company of a shoe called Tigers (these later became Asics) and manages to secure a meeting with their executives.

 

He presents himself as a great American businessman (keep in mind he is 24, has no company, and his country had recently been at war with Japan). He repeats verbatim the ‘Shoe Presentation’ from his Stanford class. The executives are impressed, and he consequently secures distribution rights of their shoes for the western United States.

 

How bold. Fortune favours the brave, as they say.

 

And that was the beginning of Nike. 50 years later, Nike is a $150 billion company.

 

Why do these stories always seem to happen in America? Maybe it’s a coincidence. Maybe not. In any case, I like owning their companies.

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 MattFin is a blog that focuses on wealth management, investments, financial markets and investor psychology. I build financial plans and portfolios for families and individuals

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