Shoe Dog (37 page)

Of course we were served many Mao tais. After all my trips to Taiwan, I was prepared. My liver was seasoned. What I wasn't prepared for was how much Hayes would like them. With each sip he smacked his lips and asked for more.

Near the end of our visit we took a nineteen-hour train ride to Shanghai. We could've flown, but I insisted on the train. I wanted to see, to experience the countryside. Within the first hour the men were cursing me. The day was dripping hot and the train was not air-conditioned.

There was one old fan in the corner of our train car, the blades barely moving the hot dust around. To get cool, Chinese passengers thought nothing of stripping down to their underwear, and Hayes and Strasser thought this gave them license to do the same. If I live to be two hundred years old, I won't forget the sight of those leviathans walking up and down the train car in their T-shirts and
BVD
s. Nor will any Chinese man or woman who was on the train that day.

Before leaving China we had a final errand or two in Shanghai. The first was to secure a deal with the Chinese track-and-field federation. This meant securing a deal with the government's Ministry of Sports. Unlike the Western world, where every athlete made his own deal, China itself negotiated endorsement deals for all its athletes. So, in an old Shanghai schoolhouse, in a classroom with seventy-­five-year-old furniture and a huge portrait of Chairman Mao, Strasser and I met with the ministry representative. The first several minutes the representative lectured us on the beauties of communism. He kept saying that the Chinese like to do business with “like-minded people.” Strasser and I looked at each other. Like-minded? What gives? Then the lecture abruptly stopped. The representative leaned forward and in a low voice that struck me as a Chinese version of uber agent Leigh Steinberg he asked: “How much you offering?”

Within two hours we had ourselves a deal. Four years later, in Los Angeles, the Chinese track-and-field team would walk into an
Olympic stadium for the first time in nearly two generations wearing American shoes and warm-ups.

Nike
shoes and warm-ups.

Our final meeting was with the Ministry of Foreign Trade. As with all previous meetings, there were several rounds of long speeches, mainly by officials. Hayes was bored during the first round. By the third round he was suicidal. He started playing with the loose threads on the front of his polyester dress shirt. Suddenly he became annoyed with the threads. He took out his lighter. As the deputy minister of foreign trade was hailing us as worthy partners, he stopped and looked up to see that Hayes had set himself on fire. Hayes beat on the flame with his hands, and managed to put it out, but only after ruining the moment, and the speaker's mojo.

It didn't matter. Just before getting on the plane home we signed deals with two Chinese factories, and officially became the first American shoemaker in twenty-five years to be allowed to do business in China.

It seems wrong to call it “business.” It seems wrong to throw all those hectic days and sleepless nights, all those magnificent triumphs and desperate struggles, under that bland, generic banner: business. What we were doing felt like so much more. Each new day brought fifty new problems, fifty tough decisions that needed to be made, right now, and we were always acutely aware that one rash move, one wrong decision could be the end. The margin for error was forever getting narrower, while the stakes were forever creeping higher—and none of us wavered in the belief that “stakes” didn't mean “money.” For some, I realize, business is the all-out pursuit of profits, period, full stop, but for us business was no more about making money than being human is about making blood. Yes, the human body needs blood. It needs to manufacture red and white cells and platelets and redistribute them evenly, smoothly, to all the right places, on time, or else. But that day-to-day business of the human body isn't our mission as human beings. It's a
basic process that enables our higher aims, and life always strives to transcend the basic processes of living—and at some point in the late 1970s, I did, too. I redefined winning, expanded it beyond my original definition of not losing, of merely staying alive. That was no longer enough to sustain me, or my company. We wanted, as all great businesses do, to create, to contribute, and we dared to say so aloud. When you make something, when you improve something, when you deliver something, when you add some new thing or service to the lives of strangers, making them happier, or healthier, or safer, or better, and when you do it all crisply and efficiently, smartly, the way everything should be done but so seldom is—you're participating more fully in the whole grand human drama. More than simply alive, you're helping others to live more fully, and if that's business, all right, call me a businessman.

Maybe it will grow on me.

THERE WAS NO
time to unpack. There was no time to get over our post-China jet lag, which was profound. As we returned to Oregon, the process of going public was in full swing. Big choices needed to be made. Especially: who was going to manage the offering.

Public offerings don't always succeed. On the contrary, when mismanaged, they turn into train wrecks. So this was a critical decision right out of the blocks. Chuck, having worked at Kuhn, Loeb, still had strong relationships with their people, and thought they'd be best. We interviewed four or five other firms but in the end decided to go with Chuck's instincts. He hadn't steered us wrong yet.

Next we had to create a prospectus. It took fifty drafts, at least, to get it looking and sounding the way we wanted.

Finally, at the tail end of summer, we handed all our paperwork to the Securities and Exchange Commission, and at the start of September we released the formal announcement. Nike will be creating 20 million shares of class A stock and 30 million shares of class B.
The price of the stock, we told the world, would be somewhere between eighteen and twenty-two dollars a share.
TBD
.

Of 50 million shares, total, almost 30 million would be held in reserve, and about 2 million class Bs would be sold to the public. Of the roughly 17 million remaining class A shares, the preexisting shareholders, or insiders, meaning me, Bowerman, the debenture holders, and the Buttfaces, would own 56 percent.

I personally would own about 46 percent. It needed to be that much, we all agreed, because the company needed to be run by one person, to speak with one firm and steady voice—come what may. There could be no chance of alliances or breakaway factions, no existential struggles for control. To the outsider the division of shares might have seemed disproportionate, unbalanced, unfair. To the Butt-faces it was a necessity. There wasn't a word of dissent or complaint. Ever.

WE HIT THE
road. Days before the offering we went out to sell potential investors on the worthiness of our product, our company, our brand. Ourselves. After China, we weren't in any mood to travel, but there was no other way. We had to do what Wall Street calls a dog-and-pony show. Twelve cities, seven days.

First stop, Manhattan. Breakfast meeting with a roomful of hard-eyed bankers, who represented thousands of potential investors. Hayes rose first and said a few introductory words. He summed up the numbers succinctly. He was quite good. Forceful, sober. Johnson then stood and spoke about the shoes themselves, what made them different and special, how they'd come to be so innovative. He was never better.

I closed. I talked about the company's origins, its soul and spirit. I had a note card with a few words scribbled on it, but I didn't look at it once. I had no uncertainty about what I wanted to say. I'm not
sure I could've explained myself to a roomful of strangers, but I had no trouble explaining Nike.

I started with Bowerman. I talked about running for him at Oregon, then forming a partnership with him as a kid in my mid-­twenties. I talked about his brains, his bravery, his magic waffle iron. I talked about his booby-trapped mailbox. It was a funny story, and it never failed to get a laugh, but it had a point. I wanted to let these New Yorkers know that though we hailed from Oregon, we were not to be trifled with.

The cowards never started and the weak died along the way. That leaves us, ladies and gentlemen. Us.

That first night we gave the same presentation at a formal dinner, in Midtown, before twice as many bankers. Cocktails were served beforehand. Hayes had one too many. This time, when he stood to speak, he decided to improvise, to free-style. “I've been around these guys a
long
time,” he said, laughing, “the core of the company, you might say, and I'm here to tell you, haha, they're all chronic unemployables.”

Dry coughs.

A throat in the back was cleared.

A lone cricket chirped. Then died.

Somewhere, far off, one person laughed like a loon. To this day I think it was Johnson.

Money was no laughing matter to these people, and a public offering of this size was not the occasion for jokes. I sighed, looked down at my note card. If Hayes had driven a bulldozer through the room, it could hardly have been worse. Later that night I took him aside and told him I thought it was best if he didn't speak anymore. Johnson and I would handle the formal presentations. But we'd still need him for the Q and A sessions.

Hayes looked at me, blinked once. He understood. “I thought you were going to send me home,” he said. “No,” I said, “you need to be part of this.”

We continued to Chicago, then Dallas, then Houston, then San Francisco. We went on to Los Angeles, then Seattle. At each stop we grew more tired, almost weepy with fatigue. Johnson and I especially. A strange sentimentality was stealing over us. On the airplanes, in the hotel bars, we talked about our salad days. His endless letters.
Please send encouraging words.
My silence. We talked about the name Nike coming to him in a dream. We talked about Stretch, and Giampietro, and the Marlboro Man, and all the different times I'd jerked him back and forth across the country. We talked about the day he was almost strung up by his Exeter employees, when their paychecks had bounced. “After all that,” Johnson said one day in the back of a town car, headed to the next meeting, “and now we're the toasts of Wall Street.”

I looked at him. Things do change. But he hadn't. He now reached into his bag, took out a book, and began to read.

The road show ended the day before Thanksgiving. I vaguely remember a turkey, some cranberries, my family around me. I vaguely remember being aware that it was an anniversary of sorts. I'd first flown to Japan on Thanksgiving Day, 1962.

Over dinner my father had a thousand questions about the public offering. My mother had none. She said she'd always known it would happen, ever since the day she bought a pair of seven-dollar Limber Ups. They were understandably feeling reflective, congratulatory, but I quickly hushed them, begged them not to be premature. The game was still on. The race was afoot.

WE CHOSE A
date for the offering. December 2, 1980. The last remaining hurdle was settling on a price.

The night before the offering Hayes came into my office. “The guys at Kuhn, Loeb are recommending twenty dollars per share,” he said.

“Too low,” I said. “It's insulting.”

Well, it can't be too high, he cautioned. We want the damn thing to sell.

The whole process was crazy-making, because it was imprecise. There
was
no
right
number. It was all a matter of opinion, feeling, selling.
Selling
—that's what I'd been doing for much of these last eighteen years, and I was tired of it. I didn't want to sell anymore. Our stock was worth twenty-two dollars a share. That was the number. We'd earned that number. We deserved to be on the high end of the price range. A company called Apple was also going public that same week, and selling for twenty-two dollars a share, and we were worth as much as them, I said to Hayes. If a bunch of Wall Street guys didn't see it that way, I was ready to walk away from the deal.

I glared at Hayes. I knew what he was thinking. Here we go again.
Pay Nissho first.

THE NEXT MORNING
Hayes and I drove downtown to our law firm. A clerk showed us into the senior partner's office. A paralegal dialed Kuhn, Loeb in New York, then clicked a button on a speaker in the middle of the big walnut desk. Hayes and I stared at the speaker. Disembodied voices filled the room. One of the voices grew louder, clearer. “Gentlemen . . . good morning.”

“Good morning,” we said.

The loud voice took the lead. It gave a long and careful explanation of Kuhn, Loeb's reasoning on the stock price, which was jabberwocky. And so, the loud voice said, we can't go any higher than twenty-one dollars.

“No,” I said. “Our number is twenty-two.”

We heard the other voices murmuring. They came up to twenty-­one-fifty. “I'm afraid,” said the loud voice, “that's our final offer.”

“Gentlemen, twenty-two is our number.”

Hayes stared at me. I stared at the speaker.

Cracking silence. We could hear heavy breaths, pops, scrapes. Papers being shuffled. I closed my eyes and let all that white noise wash over me. I relived every negotiation in my life to that point.

So, Dad, you remember that Crazy Idea I had at Stanford . . . ?

Gentlemen, I represent Blue Ribbon Sports of Portland, Oregon.

You see, Dot, I love Penny. And Penny loves me. And if things continue in this vein, I see us building a life together.

“I'm sorry,” the loud voice said angrily. “We'll have to call you back.”

Click.

We sat. We said nothing. I took long deep breaths. The clerk's face slowly melted.

Five minutes passed.

Fifteen minutes.

Sweat ran down Hayes's forehead and neck.

The phone rang. The clerk looked at us, to make sure we were ready. We nodded. He pressed the button on the speaker.