“The best book I read last year was Shoe Dog, by Nike’s Phil Knight.” Warren Buffett, 2016 Letter to Berkshire Hathaway Shareholders
Shoe Dog is written by Phil Knight, one of the founders of Nike, who also happens to be an accountant. Knight completed an MBA and in a course on entrepreneurship he was tasked with coming up with a business idea. At the time Japan was producing great cameras, TVs and cars – why not look into importing some running shoes from Japan as well? He presented his idea. No one in his class got excited but Knight couldn’t let go of his Crazy Idea.
He begged his dad to fund a trip to Japan, which then turned into an around the world adventure. He stopped in Hawaii, Japan, India, Nepal and many other countries. When in Japan he managed to secure a supplier of Tiger running shoes. The Crazy Idea was becoming reality. “The accountant in me saw risk, the entrepreneur saw the possibility. I split the difference and kept moving forward”
You should read the book. Here are some lessons that I took from it:
- Entrepreneurship is problem solving. The book focusses on the Nike early years – stopping in the 1980s. It is the ultimate inside track to problem solving. Running out of cash. Getting a customs bill the size of your annual revenue. Having a member of the management team leave for Adidas. Knight presents all of these problems and describes how through hard work and luck, Nike kept moving. Knight founded the company with his former running coach, Bill Bowerman. He was the genius who tinkered with the shoes, wrecking his waffle maker in the process. Bowerman didn’t describe himself as a university running coach but as a “Professor of Competitive Responses” – he was teaching his runners the ability to respond to whatever life threw their way. This is a skill they could use for the rest of their lives and Knight clearly was paying attention.
- Tell the truth. Knight describes two big legal battles and many negotiations with nervous bankers (they had their accounts closed three times!). The company learnt that it didn’t pay to try and hide. Full disclosure was their policy. It created a culture, and came in very handy when a batch of Nike shoes were ordered by salesmen even though the samples were not of a high quality. Intrigued by this, Knight asked a buyer why he was still ordering so many even though quality was low, “We’ve been doing business with you… guys for years and we know that you guys tell the truth… you guys always shoot straight. So if you say this new show, this Nike, is worth a shot, we believe.”
- Hire the right people and let them go for it. Hire the right people and then “Don’t tell people how to do things, tell them what to do and let them surprise you with their results.”
- Work is a calling. In the final pages Knight draws some themes together. “I’d tell men and women in their midtwenties 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.”
Read the book. Generate that Crazy Idea. Just do it.