Phil Knight at Nike (FD, Tuesday, Week 11)
founders-dilemmasyear-twoTheories for why some people start massive, profitable companies and still retain control of them (rich and king):
-- Luck
-- Lightning strikes (something unusual about the opportunity that they were uniquely equipped to exploit)
-- Great founder (just something different/superior about Gates, Jobs, Knight, and a few others)
-- Creative decisions (somehow avoided the typical rich vs. king tradeoff)
-- Structural (specific industry characteristics that enable rich and king)
Equity splits between partners:
"51% / 49%" is not a tenable capital structure, and should set off warning bells. How will the 51% guy retain control when the firm must issue new equity for employees or investors? How readily will he give up control?
Phil Knight basically retained majority/near-majority stake in Nike by bullying a series of early employees into selling their equity to him at shockingly discounts.
Homophily is sometimes a strength.
Nike's early success was built on the back of unique insight into elite running. But that makes it harder to adapt when the world changes: junior employees foresee the rise of Reebok and aerobics, but can't effectively communicate to Nike leadership.