Business lessons from a sneaker

Million-dollar sponsorship deals for athletes are commonplace today, and one book brings the past to life and explains how it all started. Sneaker Wars by Barbara Smit tells the fascinating true story of the enemy brothers behind Puma and Adidas. Their feud fed the ambitions of many entrepreneurs and shaped sports sponsorships forever.

Adi and Rudi Dassler started their shoe business in their mother’s laundry room and found near instant success. Smit researches the story of their split and how it evolved into two of the biggest global brands. The book received many accolades and been thoroughly reviewed by The New York Times.

The struggles of these two companies divided a family and an entire German town. After years of nasty maneuvers, Adidas had the lead and had even become known as the aristocrat of the sport shoe and garment industry. Entire resorts were built just to entertain and sign contracts with athletes to wear the three-striped shoes.

Adidas hid these payments for years, as the shoe manufactures passed money to amateur athletes behind closed doors in unmarked, manila envelopes. As recently as the 1984 Olympics, Adidas set aside $15 million for sponsorships; much of this was in the form of cash placed in a local bank’s vault to be distributed to amateur athletes so that payments not show up on bank statements.

What worked in the past doesn’t always work in the future. Nike had a running shoe that was taking off in the U.S. known as the Waffle. Bill Bowerman, a former coach, designed the shoe in his kitchen using a waffle iron to press the sole of the shoe. Nike was leading the jogging phenomena of the seventies.

While Adidas sat laughing at the shoe made on a waffle iron, Phil Knight of Nike set out in 1984 to claim that Olympic games. It wasn’t done with cash payments. Instead, Nike set up spectacular displays throughout the host city, including a mural of Carl Lewis, the American runner, that stretched across two buildings. While Adidas lieutenants stayed at the Hilton to schmooze with scores of Olympic officials, Phil Knight’s team raided the beach for an impromptu beach party.

Adidas athletes reaped 259 medals against 53 for Nike. Converse had even paid $5 million to sponsor the games, but despite the medal count, by all accounts everyone could only talk about Nike. They had clearly hijacked the games.

Nike, Inc. is now the largest manufacturer of athletic footwear and apparel worldwide by sales. This book inspires the David sized start-up to go head to head with Goliath brands and entertains with stories of ambitious athletes and business people.

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photo by Katrina Snaps

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