Shane Parrish

People didn't buy the shoes because they were perfect.

They bought them because they believed in the people behind them.

So Nike was born, but the worst crisis was still coming.

Nishu provided financing when American banks wouldn't, buying shoes from the factories up front so Nike could use his cash to actually run the business.

Their incentives were perfectly aligned.

The more shoes that Nike sold, the more Nishu earned.

It was a true partnership.

But then the Bank of California pulled the plug.

They'd had enough of his aggressive borrowing.

They fired Nike as a client.

And then they did something worse.

They referred the account to the FBI because they suspected fraud.

Without bank financing, the company would collapse within weeks, and now Knight might base criminal charges on top of it.

He had one option, Nishu.

But there was a problem.

He had been using Nishu's money to secretly fund a factory in New Hampshire.

He built it to reduce his dependence on Japanese manufacturers, and it was a smart long-term move, but it was also a clear violation of his agreement with Nishu.

He gambled he could get away with it, and now he'd have to get caught.

So Knight walked into Nishu's offices and sat across from a terrifyingly stoic executive that he privately called the Iceman, and he confessed everything.

The bank had fired them, the FBI might investigating, and oh, by the way, he'd been secretly diverting their money into an unauthorized factory.