Shane Parrish

It works on grass, on track, on pavement, all without adding weight.

It's the kind of idea that seems obvious after someone else does it, but nobody had done it.

It took a guy who looked at his wife's kitchen appliance and thought, running shoes.

And the sole becomes the foundation for the waffle trainer, which helps fuel the running boom in the 1970s.

It's their first product that isn't borrowed from somebody else's factory.

And years later, that destroyed waffle iron is recovered from a garbage pit.

And today it sits on a display case at Nike headquarters, proof that innovation doesn't require an expensive lab or a big budget.

Now, here's where the story gets dark.

Throughout the late 60s and early 70s, Blue Ribbon grew fast.

Sales doubled every year.

They can't keep up with demand.

Phil Knight's philosophy is life is growth, you grow or you die, but growth is killing them.

The business model is brutal.

Knight has to pay for shoes from Japan months before he can sell them in America.

So he's constantly borrowing, placing orders he can barely afford, and then scrambling to sell enough to pay back the loans before the next shipment arrives.

It's a treadmill, and it's speeding up.

Meanwhile, his supplier turns hostile.

Onitsuka sees how well he's doing and starts asking the obvious question, why do we need a middleman?

They begin looking for ways to cut Blue Ribbon out entirely.

And the banks are done.