
The Greatest Running Shoe Never Sold - waitwhat
http://www.businessweek.com/magazine/the-greatest-running-shoe-never-sold-01122012.html
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biot
One thing that didn't bode well for him:

    
    
      > Finally, on Mar. 24, the two signed the option, agreeing to the
      > 1 percent to 4 percent range, with an exact percentage to be
      > determined later.
    

Then later on when it came time to deal with the exact percentage:

    
    
      > It [licensing agreement sent by Under Armour] included a royalty
      > rate of 1.5 percent for the first stage of sales, and 1 percent
      > thereafter. Through his attorney, Hann countered with 5.75
      > percent and 4.25 percent.
    

This is where things broke down. It's puzzling why he didn't stay within the
range of the 1 to 4 percent earlier agreed upon. Perhaps 3.75% to start and
2.75% after. Then negotiate down from there. The article states:

    
    
      > Aerospace engineer M. Frank Rudy, who sold “Air” to Nike, was
      > awarded a royalty of around a single percentage point...
    

I'm thinking Rudy's done pretty well on a meagre one percent.

~~~
briandon
> I'm thinking Rudy's done pretty well on a meagre one percent.

Has he? If he has, then great. I wouldn't be shocked to learn that other shoe
tech inventors (especially those preceding him) got even less than he did and
that someone accused him of being a greedhead or unreasonable when he
negotiated for that measly one percent.

It also sounds as though Under Armour locked Hann into a royalty range and
then, when the time came to settle on a number, went down to almost the lower
end of that range. Hann wouldn't have been completely insane if he picked the
out-of-range numbers to try to pull UA towards the upper end of the proposed
range.

~~~
biot
Of course they're going to start negotiations at the lower end of the range.
That's what every buyer does. But when he countered he should have stuck
within the previously agreed max of 4%, presented a number, and backed it up
with reasoning. Going outside of that range in the hopes of bringing up the
average is poor form and something an experienced negotiator isn't going to
accept.

Given that Under Armour holds some fairly large cards (resources to fund
development, production, sales, distribution, marketing, etc.), the reasoning
would consist of his large cards like the innovation inherent in the
technology as well as what other companies have indicated as a range they'd be
willing to pay.

For example: "There's no other shoe technology around which has been proven in
a sports lab to have as great a benefit as this. Olympic athletes using these
shoes have performed at a level that will push them beyond gold medal records.
We chose Under Armour because of ________, and we want it to be the brand
associated with high performance athletes. Just as the last Olympics secured
Speedo as the #1 brand for high performance swimwear, so should the next
Olympics be synonymous with Under Armour for high performance shoes. Just
imagine the medal ceremony for all the running events with the medal winners
all sporting Under Armour shoes. Think of what a coup that would be. We've
approached other manufacturers who have indicated they're comfortable with a
2.5% to 4% range. However, we're really hoping we can make the numbers work
with you so that we don't have to take this technology to another company that
isn't as passionate. Based on this what we're proposing is..."

~~~
briandon
Having reread the original article, I see that UA did in fact raise their
offer after he asked for a higher-than-previously-agreed-upon royalty:

    
    
      For the next three months, Under Armour refused a 
      face-to-face meeting but did make concessions, raising 
      its percentage and throwing in a monthly advance. Hann 
      held out for higher numbers. He fielded interest from a 
      new set of investors and became more wary of Under 
      Armour. “I feel like the mouse dancing with the bear,” he 
      said. “No matter how careful the bear is, the mouse 
      better watch out.” In late October 2010, Kevin Haley, 
      senior vice-president of innovation, took over the 
      project from Fulks. Haley offered to put the licensing 
      negotiation on hold and renew the option agreement at 
      $15,000 per month. The implication was that this would 
      allow them to work together like old times.
    
      Hann rebuffed the offer, believing Under Armour was 
      bluffing and it was a way of avoiding a licensing 
      agreement. In early December 2010, Under Armour’s 
      attorney delivered the news: The company decided to move 
      in a different direction. Hann’s work with the company 
      was over.
    

The article doesn't say whether they "higher numbers" that Hann was trying to
get out of UA were the out-of-bounds ones he countered with originally or
simply within the high end of the original range.

That would be interesting to know.

------
tobiasu
... And then there are the increasing numbers of barefoot runners. It could be
argued that the greatest running shoe never sold is already in your
possession.

~~~
chriseidhof
I did that too, but it's not for everybody. I got a serious injury
(compartment syndrome) and wasn't running for 4 months . My minimal shoes
turned out to be the culprit, and after switching back to shoes with good
support I can now run 5 times a week with no problems.

~~~
alf
I fell into this trap too. I got a stress fracture on my shin from a tendon
pulling on that area much more than the bone was used to. It took months to
heal.

The feet are a complex tangle of muscle, bones, tendons, and nerves. They
doesn't respond to increases in stress as well a muscle would. Bones and
tendons can need months or even years to build up the strength to handle the
stress of serious running barefoot. People who try this should ease into it
slowly. Like over weeks or preferably, months.

~~~
kemayo
Conveniently, I started wearing the Vibrams just for walking around in
(because they're _really_ comfortable), and did that for 6-ish months before I
started running. This has resulted in a distinct lack of any health problems.

I can see how it would be really easy for someone who was actively running
when they got the shoes to just go do their normal routine the first day they
wore them and utterly destroy something.

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draggnar
just make the freaking shoes! sell! what are you waiting for!?!? You have
passion for a completely new product in a very profitable niche. Start
producing and when you have customers that can't get enough Nike will be
knocking down your door. Tell them to shove it.

~~~
ivoflipse
Unless you have a (Chinese) factory with EVA molds and some women who stitch
the shoe together in your garage, I don't see anyone 'just doing it'.

Even if you start producing your own shoes in China, wait until the first two
containers come back with your initial 1000 pair of shoes all having some
error that renders them useless.

Sure, you can get quality assurances in place, but you can't go and sell
running shoes for twice the price of Nike or Adidas.

It takes some amount of scale to simply make this happen. So he's waiting for
an investor to cover the large sums of money required to get a shoe to the
market (let alone market the shoe itself).

~~~
jrockway
_you can't go and sell running shoes for twice the price of Nike or Adidas_

There are plenty of $160 running shoes out there not made by Nike or Adidas.
It's also not unfeasible to make the shoes in the US. It's cheaper to make a
billion shoes in China, but it probably costs about the same to make a few
thousand.

~~~
Natsu
I don't know about running shoes, but Tim & Mary just sent me another pair of
~$500 order made custom leather shoes last week. They have a waiting list
about a year long and make everything by hand.

Sure, they're not running shoes and they're not selling things in volume (they
probably only make 50-60 pairs per year), but it's not exactly impossible to
sell shoes for those prices.

~~~
SageRaven
You got a link about these shoes?

I've recently begun walking to work (about 2 miles one way), and have been
seriously considering plunking down $350 or so for a pair of the American-made
leather-soled Wolverine 1000-mile boots.

I don't want to turn this into /r/malefashionadvice (which regularly debates
good urban walking footwear), but I'm looking for such shoes and welcome a new
brand to investigate.

~~~
Natsu
<http://www.windwalkerfootwear.com/>

It's not so much a brand as a husband & wife team that travels to various
fairs, making custom fit boots & shoes. They make them by putting a sock on
your foot, covering it in duct tape so that it holds its shape, then cutting
the sock off your foot. I think that you need to see them IRL for this
process, but maybe it's possible to make other arrangements.

The waiting list is severe. It has always taken me ~11 months, but they will
contact you when its your turn. They have a cool way of lacing them, so that
the knot to tie them is one-handed. For me, that means that I can tie both
shoes at the same time, but I hear there are people who only have one useable
hand that appreciate it for more practical reasons.

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sopooneo
"Hann called the [conveyor] belt company... and learned they were adjusted to
2,500 foot-pounds of force"

Somewhere there is confusion, either from me or the journalist. Depending on
the context, foot-pounds are a unit of either torque or work, but not force.
Who's confused here?

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deleo
Way to thick sole to be any good. That certainly doesn't good form running
easy.

