TIP655: Hustle, Trust, and Cash Flow: Nike’s Genesis w/ Kyle Grieve

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 25 August 2024

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

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Summary

On today’s episode, Kyle Grieve discusses a wonderfully well-written autobiography, “Shoe Dog” by Phil Knight, the founder of Nike. He discusses the importance of identifying and pursuing true happiness while ensuring a stable income as a fallback, the value of hustle, the importance of trust with your suppliers, why focus is so vital to business success, the hidden downsides of issuing equity, the importance of maintaining cash reserves, the complexities of growing a business, and a whole lot more! IN THIS EPISODE YOU’LL LEARN: 00:00 - Intro 02:30 - The importance of being aware of what will make you happy in life, and pursuing it with deep focus 07:37 - Why happiness can't be fulfilled based purely on increased earnings power 09:42 - Why hustle and unconventionality is so important to getting a nascent business off of the ground 15:36 - The difficulties of aligning incentives between lenders and borrowers in fast-growing businesses 23:29 - The importance of creating an enemy in business to help motivate executives to continue innovating and improving 25:31 - Why focused business leaders are so important, and why you want to avoid CEOs doing excessive side projects 28:56 - The aspects of cloning Phil took to increase exposure for the Nike brand 32:49 - Why maintaining positive cash balances is so important to the health of a business 47:23 - Why public businesses use dual share structures so management can maintain control 47:58 - Why IPO's have misaligned incentives for investors And so much more! Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members. Buy Shoe Dog here. Follow Kyle on Twitter and LinkedIn. Check out all the books mentioned and discussed in our podcast episodes here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: River Toyota Range Rover Vacasa AT&T The Bitcoin Way Public American Express Onramp SimpleMining Fundrise Shopify USPS HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.0	When I think about some of the most powerful brands in the world, it's hard to mention Nike not being very close to the top.
0:08.0	Like other great brands such as Coca-Cola, Apple, and McDonald's, the brand spends a lot of time at the top of its customer's mind.
0:15.8	And it's easy to see why.
0:17.8	These juggernauts spend billions of dollars on advertising each year.
0:21.3	Additionally, Nike has generated vast amounts of wealth for its
0:24.4	shareholders. Over the last four decades, Nike has compounded its share price at
0:29.0	17% per annum since 1984 versus the S&P 500s 11.7%. So today I want to go into the early days of Nike
0:38.0	before they spent much of anything on advertising and before Nike even existed as its own entity.
0:43.0	We'll go over the peaks and valleys that Nike founder, Phil Knight, had to endure to even get Nike off the ground and to continue its succeeding into the future.
0:51.0	We'll touch on why understanding a business's relationships with its suppliers
0:55.2	is just so important and why the wrong relationship can cause vast amounts of pain on a business.
1:00.5	We'll discover the importance of cash flow on young growing businesses and why
1:04.9	growth at any cost can actually be a detriment when you require large amounts of
1:08.9	capital to grow. And we'll look at incentives through various levels of business all the way from the
1:14.8	salesman to the IPO process.
1:17.6	Incentives are always underappreciated and understanding them at a deep level will help you
1:21.5	make better decisions, invest in higher quality businesses,
1:24.4	and improve your analytical skills when looking at potential investments.
1:28.0	Additionally, we'll go over what happiness meant to Phil Knight, why his approach was so unconventional but rational in his own reality.
1:36.0	Phil wrote this book very well, and it's highly entertaining, vivid and raw while not holding
1:41.1	much back.
	...

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