It’s Not A Lie If Your Word Comes True

What is your personality archetype? Personality archetypes form part of the collective unconscious, according to Carl Jung. We share certain symbolic images and themes across cultures. These are recognizable patterns inherited by all humans. It’s helpful to know your archetype. Why? So you can recognize what yourself and other people are like. Understanding this helps you work with other people who are strong where you’re weak.

It’s relevant to suggest that Knight, Bowerman, and Johnson embody certain archetypes. Knight being the Commander. Bowerman as the nurturing Coach. Johnson could be the persistent unlucky-lucky archetype.

In last week’s Methods of Prosperity, Phil Knight faced significant challenges. His company, Blue Ribbon, lacked equity, relying on bank credit. His banker, Bob Wallace, was reluctant to extend Blue Ribbon’s credit. Wallace considered Knight too high-risk. In 1965, Knight worked his day job at Price Waterhouse. He served in the US Army Reserves. This was on top of getting Blue Ribbon off the ground.

Bill Bowerman, Knight’s partner, met with their Japanese supplier, Onitsuka. Still slow to deliver, Onitsuka was unresponsive to his innovative shoe designs. Meanwhile, Jeff Johnson, another key figure, worked on marketing and customer relations. Johnson received no encouragement from Knight.

Phil Knight and company faced financial struggles and supplier issues. They faced personal setbacks. Johnson managed to meet Knight’s sales challenge. He opened a community-focused retail store for runners in Santa Monica. Knight continued to balance his demanding life. It was overwhelming. That’s when Johnson’s discovery of competition hinted at further challenges ahead. The Marlboro Man was back.

Part 67. Phil Knight (continued)

You can find this week’s TL;DR here.

Key Lessons:

• Go where your customers are.

• Don’t let your opponent win.

• Have congruent branding.

• As you speak you create.

• Ask for what you want.

• Don’t give up equity.

• Create an enemy.

• Be consistent.

Now there’s a collectible version of this newsletter! Methods of Prosperity newsletter number 30 is available to collect as of September 19, 2024. If you’re so inclined you can permanently own it!

Johnson had been poaching the Marlboro Man’s customers on the East Coast. Johnson had done all the ground work. No one promoted Tigers like he did. Now the Marlboro Man placed an ad in Track & Field News. How dare he attempt to poach Johnson’s poaching! Phil flew to Johnson’s LA bachelor pad. They made a plan. They had to stop the Marlboro Man. Johnson urged him to go to Japan.

Phil decided to take care of business and make another trip to Onitsuka headquarters. He had to take two weeks off of work. It was urgent. His boss assumed Phil got a girl pregnant. Phil didn’t correct him. He needed the time off. His boss at Price Waterhouse granted him the time off. “Good luck!” he said. Phil booked the next flight to Japan. He put it on his credit card.

This time, Phil let Onitsuka’s executives know he was coming. They replaced Phil’s previous contact, Morimoto. Their new export manager’s name was Kidami. They had a new conference room. Mr. Onitsuka was unavailable. Phil convinced Kidami and the other executives of Blue Ribbon’s success. In 1966 their revenue was $44,000. Every order sold out. Projected revenue for 1967 was $84,000. The Santa Monica store was doing well. Exclusive distribution by Blue Ribbon for Onitsuka’s track and field shoes would do well. That’s what Phil wanted, and he asked Kidami for it. This wouldn’t be possible, Kidami said, unless Blue Ribbon Sports had an East Coast office.

“But... but we do!” Phil lied. “We do have offices on the East Coast. Yes. We’re on the West Coast, the East Coast, and soon we’ll be in the Midwest. We can handle distribution. No question.”

This changed the outcome. It wasn’t exactly a lie. Phil spoke into existence a new reality. With his words, he pulled the future into the present. Kidami awarded Phil exclusive US distribution rights. Blue Ribbon now had a three year contract. Phil placed an order for 5,000 more shoes. It would cost $20,000 he would have to borrow. Kidami would ship them to Blue Ribbon’s east coast office which didn’t exist yet. Phil promised to wire him the address.

Phil hired someone to manage Blue Ribbon’s soon to be real east coast office. The guy backed out. Johnson was the best man for the job, but he was operating the Santa Monica store. Phil needed to hire someone to cover that store before he could send Jeff Johnson. The new hire showed up and announced to Johnson that he was his replacement. Johnson had no idea. Phil didn’t tell him.

No one but Johnson could handle the expected shipment to the east coast from Onitsuka. Also, no one else could set up the new office. Johnson didn’t want to leave California. He talked himself into going. Only, where was he going? After some consideration, they decided that Boston was a good location. That’s where their east coast customer base was.

Before shipping out to Boston, Johnson had second thoughts. He sent Phil a letter. He took credit for much of their success. Being in charge of the move would make him responsible for their continued success. This was an ultimatum. He demanded to be a full partner in Blue Ribbon. He demanded a pay raise to $600 per month, plus a third of all profits.

Phil Knight deferred to Bill Bowerman. Their employee was staging a mutiny. Bowerman considered all the facts before giving his verdict. “F – him.” Phil wasn’t sure that was the best strategy. What if they compromised? No. That would require giving up equity. F – him, they decided. Don’t give up equity. Phil gave Johnson a $50 raise.

It was 1967. Johnson moved to the east coast. Bowerman asked Phil to hire two more employees. They were two of his best runners. Geoff Hollister and Bob Woodell. Bob Woodell became paralyzed from an accident. Phil offered him a job to open their second retail store and a $400 salary.

Bowerman designed the ultimate distance training shoe. It would be in direct competition with Adidas. They were the enemy. Phil hated that this German company was so far ahead of Blue Ribbon Sports. Onitsuka gave Bowerman’s design the name Aztec. Adidas had a product of a similar name and threatened to sue. Cortés led the Spanish conquest against the Aztec Empire in the early 16th century. That inspired Bowerman to name their shoe Cortez.

Bowerman had written a book about jogging. He co-authored Jogging in 1966 with cardiologist W.E. Harris. His book was a 90-page guide. It played a significant role in popularizing jogging in the United States. Jogging sold over a million copies. He wrote it in a way that worked against marketing and advertising for Blue Ribbon Sports. The message was that there was no need to buy any particular brand of shoes. If that were true, why bother selling Tigers?

To be continued…

I like you,

– Sean Allen Fenn

Methods of Prosperity newsletter is intended to share ideas and build relationships. To become a billionaire, one must first be conditioned to think like a billionaire. To that agenda, this newsletter studies remarkable people in history who demonstrated what to do (and what not to do). Your feedback is welcome. For more information about the author, please visit seanallenfenn.com/faq.