14th February 2021: Happy Valentines Day

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For nearly all athletes, there’s a gear that is extremely crucial.

If you’re a batsman, your bat is crucial.

If you’re a tennis player, your racket might be crucial.

But nearly all athletes that play a sport standing up agree on one gear being
extremely crucial: shoes.

(Just in case you’re wondering which sport isn’t played standing up: it’s
swimming, cycling, and a few more).

Great shoes haven’t been around for more than a century.

One of the biggest problems with shoes is that the bottom foam gets compressed
over time.

It affects the performance of athletes.

This was a problem, but it wasn’t a super big problem.

Big athletes could just buy new shoes every single day.

Frank Rudy was an aerospace engineer in the US.

He was drafted into the army in 1945 and later worked in the aerospace industry.

Frank was an avid inventor. He had over 250 patents to his name.

The engineer had an idea - an idea that would solve the shoe problem mentioned

He approached a couple of companies with this idea.

His idea would prevent the sole of the shoes from deforming.

They all turned him down.

He kept pursuing different companies until one of them agreed.

Frank’s idea was to get rid of the foam.

Balloons don’t deform when stressed. Footballs don’t deform. Car tires don’t

Air, doesn’t deform.

Instead of foam that deforms over time, he wanted to use a small bag of air in
the shoes.

And thus was born, Nike Air.

Nike makes many shoes. The Nike Air line has a cult-like following that many
other shoe lines of Nike don’t enjoy.

This was the mid-1970s.

A couple of years later, a designer had the grand idea to make the airbag
visible from the side of the shoe.

It added to the cool factor immensely.

Pretty fast, Nike Air became a shoe tech widely accepted and greatly praised.

Nike’s bet on air cushioning tech had paid off.

This was something Nike’s rivals had failed to capitalize on even though Frank
had approached many of them before reaching Nike.

What did Nike see in Frank’s tech that the other companies didn’t?

Well, we don’t know what Nike saw.

What Nike does is something nearly all great investors do as well.

Have you heard of Nike Shox?

These are shoes that have a spring-like mechanism in them.

They sort of caught on. But not much.

Not all investments catch on.

If you go down Nike’s history, you’ll find tons of lines of shoes.

Very few of them become super successful.

Some are absolute failures.

Many are somewhere in between.

And it’s anyone’s guess, they all would cost similar to develop.

If a shoe line fails, Nike loses the money it spent on development. And then it
moves on.

If the shoe line does average, it recoups its initial cost and moves on.

If the shoe line succeeds, they print money by the bucketloads.

Experimentation costs them a small amount. Success brings a ton of money.

The highest possible loss they can suffer is whatever amount they invested.
That’s it.

The highest gain they could make is multiple times their investment.

That’s how you should plan your investment.

No matter how good things are, certain investments will only give you so much in
return. But some will climb up like there was no upper limit.

Of all your investments, which are likely to go to zero and stop? All of them?

But which are likely to go up to a certain limit and stop? Some of them are. But
not all.

Make sure you invest in such investments too.

Source: Groww Digest

Originally posted by Nirmal Sarkar on Facebook
link: facebook.com/groups/1079275949256269/user/100001999362287/