Shoe Dog (19 page)

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Authors: Phil Knight

BOOK: Shoe Dog
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I sighed. “I don't love it. Maybe it will grow on me.”

We sent it to Canada.

Now we just needed a name to go with this logo I didn't love.
Over the next few days we kicked around dozens of ideas, until two leading candidates emerged.

Falcon.

And Dimension Six.

I was partial to the latter, because I was the one who came up with it. Woodell and everyone else told me that it was god-awful. It wasn't catchy, they said, and it didn't mean anything.

We took a poll of all our employees. Secretaries, accountants, sales reps, retail clerks, file clerks, warehouse workers—we demanded that each person jump in, make at least one suggestion. Ford had just paid a top-flight consulting firm $2 million to come up with the name of its new Maverick, I announced to everyone. “We haven't got $2 million—but we've got fifty smart people, and we can't do any worse than . . .
Maverick
.”

Also, unlike Ford, we had a deadline. Canada was starting production on the shoe that Friday.

Hour after hour was spent arguing and yelling, debating the virtue of this name or that. Someone liked Bork's suggestion, Bengal. Someone else said the only possible name was Condor. I huffed and groused. “Animal names,” I said. “
Animal
names! We've considered the name of just about every animal in the forest.
Must
it be an animal?”

Again and again I lobbied for Dimension Six. Again and again I was told by my employees that it was unspeakably bad.

Someone, I forget who, summed up the situation neatly. “All these names . . . suck.” I thought it might have been Johnson, but all the documentation says he'd left and gone back to Wellesley by then.

One night, late, we were all tired, running out of patience. If I heard one more animal name I was going to jump out a window. Tomorrow's another day, we said, drifting out of the office, headed out to our cars.

I went home and sat in my recliner. My mind went back and forth, back and forth. Falcon? Bengal? Dimension Six? Something else? Anything else?

THE DAY OF
decision arrived. Canada had already started producing the shoes, and samples were ready to go in Japan, but before anything could be shipped, we needed to choose a name. Also, we had magazine ads slated to run, to coincide with the shipments, and we needed to tell the graphic artists what name to put in the ads. Finally, we needed to file paperwork with the U.S. Patent Office.

Woodell wheeled into my office. “Time's up,” he said.

I rubbed my eyes. “I know.”

“What's it going to be?”

“I don't know.”

My head was splitting. By now the names had all run together into one mind-melting glob.
Falconbengaldimensionsix.

“There is . . . one more suggestion,” Woodell said.

“From who?”

“Johnson phoned first thing this morning,” he said. “Apparently a new name came to him in a dream last night.”

I rolled my eyes. “A dream?”

“He's serious,” Woodell said.

“He's always serious.”

“He says he sat bolt upright in bed in the middle of the night and saw the name before him,” Woodell said.

“What is it?” I asked, bracing myself.

“Nike.”

“Huh?”

“Nike.”

“Spell it.”

“N-I-K-E,” Woodell said.

I wrote it on a yellow legal pad.

The Greek goddess of victory. The Acropolis. The Parthenon. The Temple. I thought back. Briefly. Fleetingly.

“We're out of time,” I said. “Nike. Falcon. Or Dimension Six.”

“Everyone
hates
Dimension Six.”

“Everyone but me.”

He frowned. “It's your call.”

He left me. I made doodles on my pad. I made lists, crossed them out. Tick, tock, tick, tock.

I needed to telex the factory—now.

I hated making decisions in a hurry, and that's all I seemed to do in those days. I looked to the ceiling. I gave myself two more minutes to mull over the different options, then walked down the hall to the telex machine. I sat before it, gave myself three more minutes.

Reluctantly, I punched out the message.
Name of new brand is . . .

A lot of things were rolling around in my head, consciously, unconsciously. First, Johnson had pointed out that seemingly all iconic brands—Clorox, Kleenex, Xerox—have short names. Two syllables or less. And they always have a strong sound in the name, a letter like “K” or “X,” that sticks in the mind. That all made sense. And that all described Nike.

Also, I liked that Nike was the goddess of victory. What's more important, I thought, than victory?

I might have heard, in the far recesses of my mind, Churchill's voice.
You ask, What is our aim? I can answer in one word. It is victory.
I might have recalled the victory medal awarded to all veterans of World War II, a bronze medallion with Athena Nike on the front, breaking a sword in two. I might have. Sometimes I believe that I did. But in the end I don't really know what led me to my decision. Luck? Instinct? Some inner spirit?

Yes.

“What'd you decide?” Woodell asked me at the end of the day. “Nike,” I mumbled. “Hm,” he said. “Yeah, I know,” I said. “Maybe it'll grow on us,” he said.

Maybe.

MY BRAND-NEW
RELATIONSHIP
with Nissho was promising, but it was brand new, and who would dare predict how it might evolve? I'd once felt the relationship with Onitsuka was promising, and look where that stood. Nissho was infusing me with cash, but I couldn't let that make me complacent. I needed to develop as many sources of cash as possible.

Which brought me back to the idea of a public offering. I didn't think I could withstand the disappointment of a second failed offering, so I plotted with Hayes to ensure that this one would work. We decided that the first offering hadn't been aggressive enough. We hadn't sold ourselves. This time we hired a hard-driving salesman.

Also, this time we decided not to sell stocks, but convertible debentures.

If business truly is war without bullets, then debentures are war bonds. The public loans you money, and in exchange you give them quasi-stock in your . . . cause. The stock is quasi because debenture holders are strongly encouraged, and incentivized, to hold their shares for five years. After that, they can convert the shares to common stock or get their money back with interest.

With our new plan, and our gung-ho salesman, we announced in June 1971 that Blue Ribbon would be offering two hundred thousand shares of debentures, at one dollar per, and this time the shares sold fast. One of the first to buy was my friend Cale, who didn't hesitate to cut a check for ten thousand dollars, a princely sum.

“Buck,” he said, “I was there at the start, I'll be there at the bitter end.”

CANADA WAS A
letdown. The factory's leather football shoe was pretty, but in cold weather its sole split and cracked. Irony upon irony—a shoe made in a factory called Canada, which couldn't take
the cold. Then again, maybe it was our fault. Using a soccer shoe for football. Maybe we were asking for it.

The quarterback for Notre Dame wore a pair that season, and it was a thrill to see him trot onto that hallowed gridiron at South Bend in a pair of Nikes. Until those Nikes disintegrated. (Just like the Irish did that year.) Job One, therefore, was finding a factory that could make sturdier, more weather-resistant shoes.

Nissho said they could help. They were only too happy to help. They were beefing up their commodities department, so Sumeragi had a wealth of information about factories around the world. He'd also recently hired a consultant, a bona fide shoe wizard, who'd been a disciple of Jonas Senter.

I'd never heard of Senter, but Sumeragi assured me the man was a genuine, head-to-toe shoe dog. I'd heard this phrase a few times. Shoe dogs were people who devoted themselves wholly to the making, selling, buying, or designing of shoes. Lifers used the phrase cheerfully to describe other lifers, men and women who had toiled so long and hard in the shoe trade, they thought and talked about nothing else. It was an all-consuming mania, a recognizable psychological disorder, to care so much about insoles and outsoles, linings and welts, rivets and vamps. But I understood. The average person takes seventy-­five hundred steps a day, 274 million steps over the course of a long life, the equivalent of six times around the globe—shoe dogs, it seemed to me, simply wanted to be part of that journey. Shoes were their way of connecting with humanity. What better way of connecting, shoe dogs thought, than by refining the hinge that joins each person to the world's surface?

I felt an unusual sympathy for such sad cases. I wondered how many I might have met in my travels.

The shoe market just then was flooded with knockoff Adidas, and it was Senter who'd unleashed the flood. He was the knockoff king, apparently. He also knew everything worth knowing about Asia's legitimate shoe trade—factories, importing, exporting. He'd helped
set up a shoe division for Mitsubishi, Japan's largest trading company. Nissho couldn't hire Senter himself, for various reasons, so they'd hired Senter's protégé, a man named Sole.

“Really?” I said. “A shoe guy named Sole?”

Before meeting Sole, before going any further with Nissho, I considered if I was walking into another trap. If I partnered with Nissho, I'd soon be into them for a lot of money. If they also became the source of all our footwear, I would then be even more vulnerable to them than I had been to Onitsuka. And if they turned out to be as aggressive as Onitsuka, it would be lights out.

At Bowerman's suggestion I talked it over with Jaqua, and he saw the conundrum. Quite a pickle, he said. He didn't know what to advise. But he knew someone who would. His brother-in-law, Chuck Robinson, was
CEO
of Marcona Mining, which had joint ventures all over the world. Each of the big eight Japanese trading companies was a partner in at least one of Marcona's mines, so Chuck was arguably the West's leading expert on doing business with these guys.

I finagled a meeting with Chuck at his office in San Francisco and found myself wildly intimidated from the moment I walked in the door. I was agog at his office's size—bigger than my house. And at its view—windows overlooking all of San Francisco Bay, with enormous tankers gliding slowly to and from the world's great ports. And lining the walls were scale models of Marcona's tanker fleet, which supplied coal and other minerals to every corner of the globe. Only a man of enormous power, and brains, could command such a redoubt.

I stammered through my presentation, but Chuck still managed to quickly get the drift. He boiled my complicated situation down to a compelling précis. “If the Japanese trading company understands the rules from the first day,” he said, “they will be the best partners you'll ever have.”

Reassured, emboldened, I went back to Sumeragi and told him the rules. “No equity in my company. Ever.”

He went away and consulted with a few people in his office. Upon
returning he said, “No problem. But here's our deal. We take four percent off the top, as a markup on product. And market interest rates on top of that.”

I nodded.

Days later Sumeragi sent Sole to meet me. Given the man's reputation, I was expecting some kind of godlike figure with fifteen arms, each one waving a wand made out of shoe trees. But Sole was a plain, ordinary, middle-age businessman, with a New York accent and a sharkskin suit. Not my kind of guy, and I wasn't his kind, either. And yet we had no trouble finding common ground. Shoes, sports—plus an abiding distaste for Kitami. When I mentioned Kitami's name, Sole scoffed. “The man's an ass.”

We're going to be fast friends, I thought.

Sole promised to help me beat Kitami, get free of him. “I can solve all your problems,” he said. “I know factories.” “Factories that can make Nikes?” I asked, handing him my new football shoe. “I can think of five off the top of my head!” he said.

He was adamant. He seemed to have two mental states—adamant and dismissive. I realized that he was selling me, that he wanted my business, but I was willing to be sold, and more than ready to be wanted.

The five factories Sole mentioned were all in Japan. So Sumeragi and I decided to go there and look them over in September 1971. Sole agreed to be our guide.

A WEEK BEFORE
we were to leave, Sumeragi phoned. “Mr. Sole has suffered a heart attack,” he said. “Oh no,” I said. “He's expected to recover,” Sumeragi said, “but traveling at this time is impossible. His son, who is very capable, will take his place.”

Sumeragi sounded as if he was trying to convince himself, more than me.

I flew alone to Japan, and met Sumeragi and Sole Jr. at Nissho's office in Tokyo. I was taken aback when Sole Jr. stepped forward, hand
outstretched. I assumed he'd be young, but he looked like a teenager. I had a hunch he'd be dressed in sharkskin, like his father, and he was. But his suit was three sizes too big. Was it in fact his father's?

And like so many teens, he started every sentence with “I.” I think this. I think that. I, I, I.

I shot a glance at Sumeragi. He looked gravely concerned.

THE FIRST OF
the factories we wanted to see was outside Hiroshima. All three of us went there by train, arriving midday. A cool, overcast afternoon. We weren't due at the factory until the next morning, so I felt it important to take the extra time and visit the museum. And I wanted to go by myself. I told Sumeragi and Sole Jr. I would meet them in the hotel lobby the following morning.

Walking through those museum rooms . . . I couldn't take it all in. I couldn't process it. Mannequins dressed in singed clothes. Clumps of scorched, irradiated—jewelry? Cookware? I couldn't tell. Photos that took me to a place far beyond emotion. I stood in horror before a child's liquefied tricycle. I stood, open-mouthed, before the blackened skeleton of a building, where people had loved and worked and laughed, until. I tried to feel and hear the moment of impact.

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