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Authors: Phil Knight

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The next day I boarded a train to Tokyo. It was time, at last, to ascend into the clouds.

ALL THE GUIDEBOOKS
said to climb Mount Fuji at night. A proper climb, they said, must culminate with a view of sunrise from the summit. So I arrived at the base of the mountain promptly at dusk. The day had been muggy, but the air was growing cooler, and right away I rethought my decision to wear Bermuda shorts, a T-shirt, and Tigers. I saw a man coming down the mountain in a rubberized coat. I stopped him and offered him three dollars for his coat. He looked at me, looked at the coat, nodded.

I was negotiating successful deals all over Japan!

As night fell hundreds of natives and tourists appeared and began streaming up the mountain. All, I noticed, were carrying long wooden sticks with tinkling bells attached. I spotted an older British couple and asked them about these sticks. “They ward off evil spirits,” the woman said.

“There are
evil spirits
on this mountain?” I asked.

“Presumably.”

I bought a stick.

I then noticed people gathering at a roadside stand and buying straw shoes. The British woman explained that Fuji was an active volcano, and its ash and soot were guaranteed to ruin shoes. Climbers therefore wore disposable straw sandals.

I bought sandals.

Poorer, but properly outfitted at last, I set off.

There were many ways down Mount Fuji, according to my guide
book, but only one way up. Life lesson in that, I thought. Signs along the upward path, written in many languages, said there would be nine stations before the summit, each offering food and a place to rest. Within two hours, however, I'd passed Station 3 several times. Did the Japanese count differently? Alarmed, I wondered if thirteen western states might actually mean three?

At Station 7 I stopped and bought a Japanese beer and a cup of noodles. While eating my dinner I fell to talking with another couple. They were Americans, younger than me—students, I assumed. He was preppy, in a ridiculous sort of way. Golf slacks and tennis shirt and cloth belt—he was all the colors of an Easter egg. She was pure beatnik. Torn jeans, faded T-shirt, wild dark hair. Her wide-set eyes were brown-black. Like little cups of espresso.

Both were sweating from the climb. They mentioned that I wasn't. I shrugged and said that I'd run track at Oregon. “Half-miler.” The young man scowled. His girlfriend said, “Wow.” We finished our beers and resumed climbing together.

Her name was Sarah. She was from Maryland. Horse country, she said. Rich country, I thought. She'd grown up riding, and jumping, and showing, and still spent much of her time in saddles and show rings. She talked about her favorite ponies and horses as if they were her closest friends.

I asked about her family. “Daddy owns a candy bar company,” she said. She mentioned the company and I laughed. I'd eaten many of her family's candy bars, sometimes before a race. The company was founded by her grandfather, she said, though she hastened to add that she had no interest in money.

I caught her boyfriend scowling again.

She was studying philosophy at Connecticut College for Women. “Not a great school,” she said apologetically. She'd wanted to go to Smith, where her sister was a senior, but she didn't get in.

“You sound as if you haven't gotten over the rejection,” I said.

“Not even close,” she said.

“Rejection is never easy,” I said.

“You can say that again.”

Her voice was peculiar. She pronounced certain words oddly, and I couldn't decide if it was a Maryland accent or a speech impediment. Whichever, it was adorable.

She asked what brought me to Japan. I explained that I'd come to save my shoe company. “Your
company
?” she said. Clearly she was thinking about the men in her family, founders of companies, captains of industry. Entrepreneurs. “Yes,” I said, “my company.” “And did you . . . save it?” she asked. “I did,” I said. “All the boys back home are going to business school,” she said, “and then they all plan to become
bankers
.” She rolled her eyes, adding: “Everyone does the same thing—so boring.”

“Boredom scares me,” I said.

“Ah. That's because you're a rebel.”

I stopped climbing, stabbed my walking stick into the ground. Me—a rebel? My face grew warm.

As we neared the summit, the path grew narrow. I mentioned that it reminded me of a trail I'd hiked in the Himalayas. Sarah and the boyfriend stared.
Himalayas?
Now she was really impressed. And he was really put out. As the summit came slowly into view, the climb became tricky, treacherous. She seized my hand. “The Japanese have a saying,” her boyfriend shouted over his shoulder, to us, to everyone. “A wise man climbs Fuji once. A fool climbs it twice.”

No one laughed. Though I wanted to, at his Easter egg clothing.

On the very top we came to a large wooden torii gate. We sat beside it and waited. The air was strange. Not quite dark, not quite light. Then the sun crept above the horizon. I told Sarah and her boyfriend that the Japanese place torii gates at sacral borderlands, portals between this world and the world beyond. “Wherever you pass from the profane to the sacred,” I said, “you'll find a torii gate.” Sarah liked that. I told her that Zen masters believed mountains “flow,” but that we can't always perceive the flow with our limited
senses, and indeed, in that moment, we did feel as if Fuji was flowing, as if we were riding a wave across the world.

Unlike the climb up, the climb down took no effort, and no time. At the bottom I bowed and said good-bye to Sarah and the Easter egg.
“Yoroshiku ne.”
Nice meeting you. “Where you headed?” Sarah asked. “I think I'm going to stay at the Hakone Inn tonight,” I said. “Well,” she said, “I'm coming with you.”

I took a step back. I looked at the boyfriend. He scowled. I realized at last that he wasn't her boyfriend. Happy Easter.

WE SPENT TWO
days at the inn, laughing, talking, falling. Beginning. If only this could never end, we said, but of course it had to. I had to go back to Tokyo, to catch a flight home, and Sarah was determined to move on, see the rest of Japan. We made no plans to see each other again. She was a free spirit, she didn't believe in plans. “Good-bye,” she said.
“Hajimemashite
,”
I said. Lovely meeting you.

Hours before I boarded my plane, I stopped at the American Express office. I knew she'd have to stop there, too, at some point, to get money from the Candy Bar People. I left her a note: “You've got to fly over Portland to get to the East Coast . . . why not stop for a visit?”

MY FIRST NIGHT
home, over dinner, I told my family the good news. I'd met a girl.

Then I told them the other good news. I'd saved my company.

I turned and looked hard at my twin sisters. They spent half of every day crouched beside the telephone, waiting to pounce on it at the first ring. “Her name is Sarah,” I said. “So if she calls, please . . . be nice.”

WEEKS LATER I
came home from running errands and there she was, in my living room, sitting with my mother and sisters. “Surprise,” she said. She'd gotten my note and decided to take me up on my offer. She'd phoned from the airport and my sister Joanne had answered and shown what sisters are for. She promptly drove out to the airport and fetched Sarah.

I laughed. We hugged, awkwardly, my mother and sisters watching. “Let's go for a walk,” I said.

I got her a jacket from the servants' quarters and we walked in a light rain to a wooded park nearby. She saw Mount Hood in the distance and agreed that it looked astonishingly like Fuji, which made us both reminisce.

I asked where she was staying. “Silly boy,” she said. The second time she'd invited herself into my space.

For two weeks she lived in my parents' guestroom, just like one of the family, which I began to think she might one day be. I watched in disbelief as she charmed the uncharmable Knights. My protective sisters, my shy mother, my autocratic father, they were no match for her. Especially my father. When she shook his hand, she melted something hard at his core. Maybe it was growing up among the Candy Bar People, and all their mogul friends—she had the kind of self-confidence you run across once or twice in a lifetime.

She was certainly the only person I'd ever known who could casually drop Babe Paley and Hermann Hesse into the same conversation. She admired them both. But especially Hesse. She was going to write a book about him one day. “It's like Hesse says,” she purred over dinner one night, “happiness is a
how
, not a
what
.” The Knights chewed their pot roast, sipped their milk. “Very interesting,” my father said.

I brought Sarah down to the worldwide headquarters of Blue Ribbon, in the basement, and showed her the operation. I gave her a pair of Limber Ups. She wore them when we drove out to the coast. We went hiking up Humbug Mountain, and crabbing along the
scalloped coastline, and huckleberry picking in the woods. Standing under an eighty-foot spruce we shared a huckleberry kiss.

When it was time for her to fly back to Maryland, I was bereft. I wrote her every other day. My first-ever love letters.
Dear Sarah, I think about sitting beside that torii gate with you . . .

She always wrote back right away. She always expressed her undying love.

THAT CHRISTMAS, 1964,
she returned. This time I picked her up at the airport. On the way to my house she told me that there had been a terrible row before she got on the plane. Her parents forbade her to come. They didn't approve of me. “My father screamed,” she said.

“What did he scream?” I asked.

She imitated his voice. “You can't meet a guy on Mount Fuji who's going to amount to anything.”

I winced. I knew I had two strikes against me, but I didn't realize climbing Mount Fuji was one of them. What was so bad about climbing Mount Fuji?

“How did you get away?” I asked.

“My brother. He snuck me out of the house early this morning and drove me to the airport.”

I wondered if she really loved me, or just saw me as a chance to rebel.

DURING THE DAY,
while I was busy working on Blue Ribbon stuff, Sarah would hang out with my mother. At night she and I would go downtown for dinner and drinks. On the weekend we skied Mount Hood. When it was time for her to return home, I was bereft again.
Dear Sarah, I miss you. I love you.

She wrote back right away. She missed me, too. She loved me, too.

Then, with the winter rains, there was a slight cooling in her
letters. They were less effusive. Or so I thought. Maybe it's just my imagination, I told myself. But I had to know. I phoned her.

It wasn't my imagination. She said she'd given it a lot of thought and she wasn't sure we were right for each other. She wasn't sure I was sophisticated enough for her. “Sophisticated,” that was the word she used. Before I could protest, before I could negotiate, she hung up.

I took out a piece of paper and typed her a long letter, begging her to reconsider.

She wrote back right away. No sale.

THE NEW SHIPMENT
of shoes arrived from Onitsuka. I could hardly bring myself to care. I spent weeks in a fog. I hid in the basement. I hid in the servants' quarters. I lay on my bed and stared at my blue ribbons.

Though I didn't tell them, my family knew. They didn't ask for details. They didn't need them, or want them.

Except my sister Jeanne. While I was out one day she went into the servants' quarters and into my desk and found Sarah's letters. Later, when I came home and went down to the basement, Jeanne came and found me. She sat on the floor beside me and said she'd read the letters, all of them, carefully, concluding with the final rejection. I looked away. “You're better off without her,” Jeanne said.

My eyes filled with tears. I nodded thanks. Not knowing what to say, I asked Jeanne if she'd like to do some part-time work for Blue Ribbon. I was pretty far behind, and I could sure use some help. “Since you're so interested in mail,” I said hoarsely, “maybe you'd enjoy doing some secretarial work. Dollar and a half an hour?”

She chuckled.

And thus my sister became the first-ever employee of Blue Ribbon.

1965

I
got a letter from that Jeff Johnson fellow at the start of the year. After our chance meeting at Occidental, I'd sent him a pair of Tigers, as a gift, and now he wrote to say that he'd tried them on and gone for a run. He liked them, he said. He liked them a whole lot. Others liked them, too. People kept stopping him and pointing at his feet and asking where they could buy some neat shoes like those.

Johnson had gotten married since I last saw him, he said, and there was already a baby on the way, so he was looking for ways to earn extra cash, apart from his gig as a social worker, and this Tiger shoe seemed to have more upside than Adidas. I wrote him back and offered him a post as a “commissioned salesman.” Meaning I'd give him $1.75 for each pair of running shoes he sold, two bucks for each pair of spikes. I was just beginning to put together a crew of part-time sales reps, and that was the standard rate I was offering.

He wrote back right away, accepting the offer.

And then the letters didn't stop. On the contrary, they increased. In length and number. At first they were two pages. Then four. Then eight. At first they came every few days. Then they came faster, and faster, tumbling almost daily through the mail slot like a waterfall, each one with that same return address, P.O. Box 492, Seal Beach,
CA
90740, until I wondered what in God's name I'd done in hiring this guy.

I liked his energy, of course. And it was hard to fault his enthu
siasm. But I began to worry that he might have too much of each. With the twentieth letter, or the twenty-fifth, I began to worry that the man might be unhinged. I wondered why everything was so breathless. I wondered if he was ever going to run out of things he urgently needed to tell me, or ask me. I wondered if he was ever going to run out of stamps.

Every time a thought crossed Johnson's mind, seemingly, he wrote it down and stuck it into an envelope. He wrote to tell me how many Tigers he'd sold that week. He wrote to tell me how many Tigers he'd sold that day. He wrote to tell me who'd worn Tigers at which high school meet and in what place they'd finished. He wrote to say that he wanted to expand his sales territory beyond California, to include Arizona, and possibly New Mexico. He wrote to suggest that we open a retail store in Los Angeles. He wrote to tell me that he was considering placing ads in running magazines and what did I think? He wrote to inform me that he'd placed those ads in running magazines and the response was good. He wrote to ask why I hadn't answered any of his previous letters. He wrote to plead for encouragement. He wrote to complain that I hadn't responded to his previous plea for encouragement.

I'd always considered myself a conscientious correspondent. (I'd sent countless letters and postcards home during my trip around the world. I'd written faithfully to Sarah.) And I always
meant
to answer Johnson's letters. But before I got around to it there was always another one, waiting. Something about the sheer volume of his correspondence stopped me. Something about his neediness made me not want to encourage him. Many nights I'd sit down at the black Royal typewriter in my basement workshop, curl a piece of paper into the roller, and type, “Dear Jeff.” Then I'd draw a blank. I wouldn't know where to begin, which of his fifty questions to start with, so I'd get up, attend to other things, and the next day there'd be yet another letter from Johnson. Or two. Soon I'd be three letters behind, suffering from crippling writer's block.

I asked Jeanne to deal with the Johnson File. Fine, she said.

Within a month she thrust the file at me, exasperated. “You're not paying me enough,” she said.

AT SOME POINT
I stopped reading Johnson's letters all the way to the bottom. But from skimming them I learned that he was selling Tigers part-time and on weekends, that he'd decided to keep his day job as a social worker for Los Angeles County. I still couldn't fathom it. Johnson just didn't strike me as a people person. In fact he'd always seemed somewhat misanthropic. It was one of the things I'd liked about him.

In April 1965 he wrote to say he'd quit his day job. He'd always hated it, he said, but the last straw had been a distressed woman in the San Fernando Valley. He'd been scheduled to check on her, because she'd threatened to kill herself, but he'd phoned her first to ask “if she really was going to kill herself that day.” If so, he didn't want to waste the time and gas money driving all the way out to the valley. The woman, and Johnson's superiors, took a dim view of his approach. They deemed it a sign that Johnson didn't care. Johnson deemed it the same way. He
didn't
care, and in that moment, Johnson wrote me, he understood himself, and his destiny. Social work wasn't it. He wasn't put here on this earth to fix people's problems. He preferred to focus on their feet.

In his heart of hearts Johnson believed that runners are God's chosen, that running, done right, in the correct spirit and with the proper form, is a mystical exercise, no less than meditation or prayer, and thus he felt called to help runners reach their nirvana. I'd been around runners much of my life, but this kind of dewy romanticism was something I'd never encountered. Not even the Yahweh of running, Bowerman, was as pious about the sport as Blue Ribbon's Part-time Employee Number Two.

In fact, in 1965, running wasn't even a sport. It wasn't popu
lar, it wasn't unpopular—it just was. To go out for a three-mile run was something weirdos did, presumably to burn off manic energy. Running for pleasure, running for exercise, running for endorphins, running to live better and longer—these things were unheard of.

People often went out of their way to mock runners. Drivers would slow down and honk their horns. “Get a horse!” they'd yell, throwing a beer or soda at the runner's head. Johnson had been drenched by many a Pepsi. He wanted to change all this. He wanted to help all the oppressed runners of the world, to bring them into the light, enfold them in a community. So maybe he was a social worker after all. He just wanted to socialize exclusively with runners.

Above all, Johnson wanted to make a living doing it, which was next to impossible in 1965. In me, in Blue Ribbon, he thought he saw a way.

I did everything I could to discourage Johnson from thinking like this. At every turn I tried to dampen his enthusiasm for me and my company. Besides not writing back, I never phoned, never visited, never invited him to Oregon. I also never missed an opportunity to tell him the unvarnished truth. In one of my rare replies to his letters I put it flatly: “Though our growth has been good, I owe First National Bank of Oregon $11,000. . . . Cash flow is negative.”

He wrote back immediately, asking if he could work for me full-time. “I want to be able to make it on Tiger, and the opportunity would exist for me to do other things as well—running, school, not to mention being my own boss.”

I shook my head. I tell the man Blue Ribbon is sinking like the
Titanic
, and he responds by begging for a berth in first class.

Oh well, I thought, if we do go down, misery loves company.

So in the late summer of 1965 I wrote and accepted Johnson's offer to become the first
full-time
employee of Blue Ribbon. We negotiated his salary via the mail. He'd been making $460 a month as a social worker, but he said he could live on $400. I agreed. Reluc
tantly. It seemed exorbitant, but Johnson was so scattered, so flighty, and Blue Ribbon was so tenuous—one way or another I figured it was temporary.

As ever, the accountant in me saw the risk, the entrepreneur saw the possibility. So I split the difference and kept moving forward.

AND THEN I
stopped thinking about Johnson altogether. I had bigger problems at the moment. My banker was upset with me.

After posting eight thousand dollars in sales in my first year, I was projecting sixteen thousand dollars in my second year, and according to my banker this was a very troubling trend.

“A one hundred percent increase in sales is
troubling
?” I asked.

“Your rate of growth is too fast for your equity,” he said.

“How can such a small company grow too fast? If a small company grows fast, it
builds up
its equity.”

“It's all the same principle, regardless of size,” he said. “Growth off your balance sheet is dangerous.”

“Life is growth,” I said. “Business is growth. You grow or you die.”

“That's not how we see it.”

“You might as well tell a runner in a race that he's running too fast.”

“Apples and oranges.”

Your head is full of apples and oranges, I wanted to say.

It was textbook to me. Growing sales, plus profitability, plus unlimited upside, equals quality company. In those days, however, commercial banks were different from investment banks. Their myopic focus was cash balances. They wanted you to never, ever outgrow your cash balance.

Again and again I'd gently try to explain the shoe business to my banker. If I don't keep growing, I'd say, I won't be able to persuade Onitsuka that I'm the best man to distribute their shoes in the West. If I can't persuade Onitsuka that I'm the best, they'll find some other
Marlboro Man to take my place. And that doesn't even take into account the battle with the biggest monster out there, Adidas.

My banker was unmoved. Unlike Athena, he did not admire my eyes of persuasion. “Mr. Knight,” he'd say, again and again, “you need to slow down. You don't have enough equity for this kind of growth.”

Equity. How I was beginning to loathe this word. My banker used it over and over, until it became a tune I couldn't get out of my head. Equity—I heard it while brushing my teeth in the morning. Equity—I heard it while punching my pillow at night. Equity—I reached the point where I refused to even say it aloud, because it wasn't a real word, it was bureaucratic jargon, a euphemism for cold hard
cash
, of which I had none. Purposely. Any dollar that wasn't nailed down I was plowing directly back into the business. Was that so rash?

To have cash balances sitting around doing nothing made no sense to me. Sure, it would have been the cautious, conservative, prudent thing. But the roadside was littered with cautious, conservative, prudent entrepreneurs. I wanted to keep my foot pressed hard on the gas pedal.

Somehow, in meeting after meeting, I held my tongue. Everything my banker said, I ultimately accepted. Then I'd do exactly as I pleased. I'd place another order with Onitsuka, double the size of the previous order, and show up at the bank all wide-eyed innocence, asking for a letter of credit to cover it. My banker would always be shocked.
You want
HOW
much?
And I'd always pretend to be shocked that he was shocked.
I thought you'd see the wisdom . . .
I'd wheedle, grovel, negotiate, and eventually he'd approve my loan.

After I'd sold out the shoes, and repaid the borrowing in full, I'd do it all over again. Place a mega order with Onitsuka, double the size of the previous order, then go to the bank in my best suit, an angelic look on my face.

My banker's name was Harry White. Fiftyish, avuncular, with a voice like a handful of gravel in a blender, he didn't seem to want to be a banker, and he particularly didn't want to be
my
banker.
He inherited me by default. My first banker had been Ken Curry, but when my father refused to be my guarantor, Curry phoned him straightaway. “Between us, Bill, if the kid's company goes under—you'll still back him, right?”

“Hell no,” my father said.

So Curry decided he wanted no part of this father-son internecine war, and turned me over to White.

White was a vice president at First National, but this title was misleading. He didn't have much power. The bosses were always looking over his shoulder, second-guessing him, and the bossiest of bosses was a man named Bob Wallace. It was Wallace who made life difficult for White, and thereby for me. It was Wallace who fetishized equity and pooh-poohed growth.

Squarely built, with a thuggish face and Nixonian five o'clock shadow, Wallace was ten years my senior, but somehow thought himself the bank's boy wonder. He was also determined to become the bank's next president, and he viewed all bad credit risks as the main roadblock between him and that goal. He didn't like giving credit to anyone, for anything, but with my balance hovering always around zero, he saw me as a disaster waiting to happen. One slow season, one downturn in sales, I'd be out of business, the lobby of Wallace's bank would be filled with my unsold shoes, and the holy grail of bank president would slip from his grasp. Like Sarah atop Mount Fuji, Wallace saw me as a rebel, but he didn't think of this as a compliment. Nor, in the end, come to think of it, had she.

Of course, Wallace didn't always say all this directly to me. It was often conveyed by his middleman, White. White believed in me, and in Blue Ribbon, but he'd tell me all the time, with a sad head shake, that Wallace made the decisions, Wallace signed the checks, and Wallace was no fan of Phil Knight. I thought it was fitting, and telling, and hopeful, that White would use that word—“fan.” He was tall, lean, a former athlete who loved to talk sports. No wonder we saw eye to eye. Wallace, on the other hand, looked as
if he'd never set foot on a ball field. Unless maybe to repossess the equipment.

What sweet satisfaction it would have been to tell Wallace where he could shove his equity, then storm out and take my business elsewhere. But in 1965 there was no elsewhere. First National Bank was the only game in town and Wallace knew it. Oregon was smaller back then, and it had just two banks, First National and U.S. Bank. The latter had already turned me down. If I got thrown out of the former, I'd be done. (Today you can live in one state and bank in another, no problem, but banking regulations were much tighter in those days.)

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