#109 Adi Dassler Adidas

Summary Notes


In the world of sports business, the Dassler family feud between Adi and Rudolph Dassler, founders of Adidas and Puma respectively, played a pivotal role in shaping the industry. As Barbara Smith's "Sneaker Wars" reveals, their rivalry after a bitter split not only fueled innovation but also ushered in an era of commercialism and corruption in sports. Adi, the meticulous craftsman, focused on producing high-quality specialized sports shoes, while Rudolph's Puma competed fiercely. Their battle allowed for the rise of American giants like Nike, which capitalized on the Dasslers' internal conflicts and their underestimation of the burgeoning jogging trend. The Dassler legacy, marked by both triumph and tragedy, demonstrates how intense personal vendettas and divergent business philosophies can impact a family enterprise and alter the landscape of an entire industry.

Summary Notes

Early Days of the Dassler Family Business

  • The Dassler family's transition from weaving to shoemaking was necessitated by the obsolescence of weaving due to the Industrial Revolution.
  • Adi Dasler's father, Christoph, switched to shoe production, while his mother, Paulina, ran a laundry service to supplement income.
  • The Dassler brothers were known as "the laundry boys" due to their role in delivering clean wash around town.
  • Adi Dasler was determined to establish his own shoe production in the laundry shed after the impact of World War I on the family's livelihood.

"When it was established in the 1920s, the brother's shoe business put an end to their family's many years in the weaving industry."

This quote explains the shift in the Dassler family business from weaving to shoemaking, marking the beginning of what would become Adidas and Puma.

Adi Dasler's Resourcefulness and Ingenuity

  • Adi Dasler demonstrated exceptional resourcefulness by scavenging materials from army debris to create shoes post-World War I.
  • He invented a leather trimmer powered by a bicycle to compensate for the lack of electricity.
  • Adi focused on crafting sturdy, long-lasting shoes, a testament to his dedication to quality and craftsmanship.

"Adi spent many days scouring the countryside, picking up all sorts of army utensils left behind by retreating soldiers."

This quote highlights Adi Dasler's resourcefulness in sourcing materials for his shoe-making business during a time of scarcity in post-war Germany.

The Dassler Brothers' Partnership and the Rise of Adidas and Puma

  • Adi and Rudolph Dassler initially worked well together despite contrasting personalities, with Adi focusing on product quality and Rudolph on sales.
  • The brothers' partnership began to strain due to their differing priorities and approaches to business.
  • The rise of Nazism in Germany inadvertently boosted the Dassler brothers' shoe business due to the regime's emphasis on promoting German sports.

"Three years into his venture, in 1923, Rudolph stepped in. The partnership between the two brothers worked smoothly at the beginning."

This quote describes the early stages of collaboration between Adi and Rudolph Dassler, which eventually led to the creation of Adidas and Puma.

The Dassler Family Feud and Its Impact on the Sports Business

  • The feud between Adi and Rudolph Dassler had a profound influence on the sports business, including the introduction of corruption and financial stakes.
  • The rivalry between Adidas and Puma dominated the sports business for decades, with their shoes becoming iconic in sports history.
  • The Dassler cousins' internal disputes allowed for the rise of American competitors like Nike, which eventually overtook both Adidas and Puma in the U.S. and sought to dominate the European market as well.

"Their feud shaped the modern sports business, giving rise to corruption and ever increasing financial stakes."

This quote encapsulates the significant impact of the Dassler family feud on the evolution of the sports business, including the rise of financial interests and corruption.

The Legacy of Adi Dasler and the Evolution of Sports Shoes

  • Adi Dasler was an athlete himself and recognized the need for specialized sports shoes for improved athletic performance.
  • His vision led to the innovation of creating dedicated shoes for specific sports, a concept that has become standard today.
  • The early struggles and eventual success of the Dassler brothers' shoe business reflect the perseverance and innovation that characterized Adi Dasler's approach.

"Adi Dossler himself was an accomplished and active athlete. He was also a precise observer. He recognized that the athletes of each discipline lack specialized shoes."

This quote underscores Adi Dasler's personal connection to sports and his pioneering insight that specialized footwear could enhance athletic performance, which remains a cornerstone of sports shoe design.

Early Growth and Expansion of Adidas

  • Adi Dasler started Adidas from humble beginnings, initially producing a very limited number of shoes.
  • The company expanded to a small factory, increasing production to 100 pairs of shoes per day.
  • The expansion included the installation of more machinery and the hiring of 25 people.

"Now they have a small factory, and they're going to start making about 100 pairs of shoes."

This quote highlights the growth of Adidas from a very small operation to a slightly larger production capacity with a small factory and team.

Leveraging the Olympics for Business Growth

  • Adidas capitalized on the global attention on sporting events, particularly the Olympics, to grow their business.
  • Adi Dasler believed specialized shoes could enhance athletic performance.
  • The success of athlete Lena Rodkey in the 1928 Summer Olympics, wearing Adidas shoes, validated Adi's theory and garnered international attention.

"Adi gave the German distance runner Lena Rodkey a pair of shoes he had developed. She won the race and became the new world record holder."

The quote emphasizes the strategic use of the Olympics as a platform to demonstrate the effectiveness of Adidas shoes and how it contributed to the company's growth.

Continuous Learning and Improvement

  • Adi Dasler was committed to continuous learning and improving his expertise in shoemaking.
  • Despite the success of his business, he attended a technical school to deepen his knowledge.
  • He is compared to other successful entrepreneurs like Jeff Bezos, who also invested time in learning even after establishing their businesses.

"In 1932, his business already booming, he's already having success. This is what he does. He decides to attend the shoe technical school in, it's a town called like permissins."

This quote illustrates Adi's dedication to learning and self-improvement, which is a trait observed in many successful entrepreneurs.

Geographical Influence on Industry Success

  • Certain regions can have a profound impact on the success of industries and individuals within them.
  • Adi Dasler benefited from being in a location known for its shoemaking expertise.
  • The concept of a 'shoe town' is compared to Enzo Ferrari's success, which was also influenced by his location.

"But then the second thing is there's a shoe town, right? And that made me think of Enzo Ferrari."

The quote draws a parallel between Adi Dasler's and Enzo Ferrari's success, suggesting that their respective industries were influenced by the geographical areas they were associated with.

The Dasslers and the Nazi Regime

  • Adi and Rudolph Dassler felt pressured to join the National Socialist German Workers' Party to keep their business running and protect their employees.
  • Adi Dasler was not politically active and focused on supporting athletes of all backgrounds.
  • He demonstrated his values by hiding Jewish people and supporting Jesse Owens, an African American athlete, during the 1936 Olympics.

"Adi was unimpressed by the so-called movement and was never politically active. To him, it was athletic competition that mattered most."

This quote highlights Adi Dasler's focus on athletics over politics and his efforts to support athletes regardless of their background, even under the Nazi regime.

Adi Dasler's Passion and Innovation

  • Adi Dasler was deeply involved in understanding the needs of athletes by actively participating in sports.
  • He developed specialized shoes for various sports, leading to numerous innovations and patents.
  • His approach was characterized by ambition, creativity, and tireless dedication to improving sports technology.

"Using this knowledge, he developed shoes for track and field athletes, football players, tennis players, skiers, boxers, basketball players, bowlers, fencers, and many more."

This quote conveys Adi Dasler's extensive contributions to sports technology, driven by his hands-on approach and passion for understanding athletes' needs.

The Dassler Brothers' Relationship and WWII

  • The relationship between the Dassler brothers was strained by their differing personalities and the impact of WWII.
  • Rudolph Dassler's harsh demeanor is contrasted with Adi's modesty and focus on craftsmanship.
  • The war brought significant challenges to the business, including shortages and the threat of destruction by Allied forces.

"While Adi was clearly regarded as the linchpin of the company, his brother strove to impose himself as the company's leader."

The quote reflects the internal conflict between the Dassler brothers, with Rudolph seeking more recognition and control within the company amidst the difficulties of the war.

Inevitable Separation of Adi and Rudolph Dassler

  • The tension between Adi and Rudolph Dassler led to their separation in April 1948.
  • Their separation resulted in the creation of two distinct companies: adidas and Puma.
  • The split of the companies was influenced by personal betrayals and the division of the staff.

"Says the separation between the two brothers was completed in April 1948. It paved the way for the registration of two separate companies."

This quote marks the definitive point of separation between the two brothers, which led to the foundation of two now-famous sportswear companies.

Origins of adidas and Puma

  • Adi contracted his name and last name to form "adidas."
  • Rudolph took a different approach and named his company "Puma."
  • The division of labor between the companies was uneven, with Rudolph taking most administrative and sales staff, and Adi taking the technical staff.

"The youngest of the brothers then contracted his name, Adi, and his last name, dos. And that's where you get adidas from Adi, his first name, Das."

This quote explains the etymology of the brand name "adidas," which is derived from the founder's name, Adi Dassler.

  • Adidas utilized stripes on their shoes to strengthen them, but they were initially not visible.
  • Adi Dassler decided to paint the stripes white to make them stand out, which helped to distinguish adidas from competitors.

"But Adi Dazzler figured that if the stripes were painted white, they could be used to make his spikes stand out from afar."

This quote highlights Adi Dassler's innovation in making adidas' products more recognizable, which was a strategic move in brand differentiation.

Business Philosophies of Adi and Rudolph Dassler

  • Adi preferred to work behind the scenes, focusing on technical aspects and had little tolerance for sloppiness or ignorance.
  • Rudolph had a more volatile approach to management, with mood swings that impacted his employees' work environment.

"Adi was still at most at ease behind his desk, poring over technical drawings."

This quote depicts Adi's preference for the technical side of the business, contrasting with Rudolph's more outgoing personality.

Horst Dassler's Role in adidas' Growth

  • Horst Dassler, Adi's son, played a significant role in adidas' marketing and growth.
  • Horst's approach to marketing was innovative for the time, such as giving away free adidas shoes at the Melbourne Olympics, which paid off in publicity and sales.

"Horst Dassler is the only son of to Rudolph's going to have sons that work in the business as well."

This quote introduces Horst Dassler, indicating the continuation of the family business and the ongoing feud between the brothers.

Horst Dassler's Personality and Management Style

  • Horst was driven and understood the importance of speed in business success.
  • He was hands-on and became a prototypical sports agent, but his workaholic nature led to personal unhappiness and strained family relationships.

"Horst Dossler proudly informed his parents that more than 70 of them had been won in Adidas."

This quote showcases Horst's pride in adidas' success at the Melbourne Olympics, demonstrating his effective marketing strategies.

Armin Dassler's Efforts to Expand Puma

  • Armin Dassler, Rudolph's son, sought to modernize Puma and expand into the American market.
  • Armin's methods were discreet and focused on exploiting opportunities in contrast to his father's conservative approach.

"Armin discreetly exploited openings to sell puma products in the United States."

This quote indicates Armin's strategic approach to expanding Puma's market presence, particularly in the lucrative American market.

The Dassler Family Feud and Its Impact on Business

  • The Dassler family feud continued through the generations, affecting both adidas and Puma.
  • Internal conflicts within the family businesses created vulnerabilities that competitors like Phil Knight of Nike could exploit.

"They both die with the relationship in tatters. Same thing for their sons."

This quote underscores the lasting impact of the feud between Adi and Rudolph Dassler, which persisted through their sons and affected their businesses.

Phil Knight's Early Vision and the Birth of Nike

  • Phil Knight experienced uncertainty about life at 24, a common phase for many during that age.
  • Knight's company, Blue Ribbon Sports, was the precursor to Nike.
  • He was critical of American reliance on expensive German athletic shoes.
  • Knight's business plan from his Stanford paper proposed competing with German shoes using Japanese sports shoes.
  • He drew inspiration from the success of Japanese cameras over German cameras in the market.

"What if I just pursue my crazy idea? And that decision led to Nike is remarkable."

This quote encapsulates the pivotal moment when Phil Knight contemplated pursuing what would become Nike, highlighting the importance of following one's entrepreneurial vision.

"Can Japanese sports shoes do to German sports shoes what Japanese cameras did to German cameras?"

Knight's strategic question compares industries to envision disrupting the athletic shoe market, illustrating the use of cross-industry insights to innovate.

Adidas's Complacency and Nike's Rise

  • Adidas underestimated Nike's new technology and innovations.
  • Nike capitalized on the jogging boom, while Adidas dismissed jogging as a non-sport.
  • Nike's "futures" program transferred financial risk to retailers in exchange for guaranteed delivery and discounts, contrasting Adidas's poor logistics.
  • Adidas's dismissiveness and supply issues allowed Nike to gain a foothold in the American market.

"The waffle shoe... provoked outright hilarity... They inspected the sample as if it was a piece of dirt."

Adidas technicians ridiculed Nike's waffle shoe design, failing to recognize its potential and innovation, indicating a lack of vision in recognizing disruptive technologies.

"Yet the dearth of Adidas supplies played strongly into the hands of Nike."

Adidas's inability to meet demand opened the market for Nike, demonstrating how logistical shortcomings can provide opportunities for competitors.

The Dassler Family Feud and Puma's Challenges

  • The Dassler family feud led to a split between Adidas and Puma.
  • Horst Dassler's focus on sports marketing and broadcasting rights spread his attention thin, affecting Adidas's competitiveness.
  • Armin Dassler took over Puma after Rudolph's death, leading to growth but also unprofitable expansion.
  • Puma eventually lost control to banks, illustrating the dangers of losing focus on core business.

"Horse Dazzler was equally guilty of aloofness when it came to Nike."

Horst Dassler's lack of concern about Nike's growth reflects a dangerous underestimation of competitors, especially those with a singular business focus.

"Adi just wanted to make the best shoes... Adidas is about shoes, and swimmers don't wear any."

This quote shows the original focus of Adidas on shoe quality and Adi's resistance to diversifying into other sports apparel, emphasizing the importance of product specialization and brand identity.

Adi Dassler's Legacy and Entrepreneurial Focus

  • Adi Dassler was dedicated to continual improvement and innovation in shoe design.
  • He maintained a focus on craftsmanship and customer needs, even for high-profile clients like Muhammad Ali.
  • Despite the company's growth, Adi Dassler remained uninterested in fame or corporate expansion, preferring to focus on product quality.

"Adi continued to walk around with his notepad and to tinker in his workshop."

Adi Dassler's relentless pursuit of improvement and hands-on approach to his craft showcases the dedication required for sustained innovation and success.

"Adidas was of such undeniably superior quality that the East Germans were prepared to turn a blind eye to its capitalistic origins."

The quote reflects the power of product quality to transcend political ideologies, underscoring the universal appeal of well-crafted goods.

Conclusion and Reflections on Entrepreneurship

  • The story of Adidas, Puma, and Nike offers lessons on the importance of innovation, focus, and understanding market trends.
  • Entrepreneurship can be a force for good, but losing sight of core values and goals can turn a business into a liability.
  • The Dassler family's internal conflicts and the subsequent rise and fall of their businesses serve as a cautionary tale about the complexities of family-run enterprises.

"Entrepreneurship should be a force for good. If you have a business that makes you miserable, somewhere along the line, you lost the plot."

This concluding thought stresses that while entrepreneurship has great potential, it should not come at the cost of personal well-being or family harmony.

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