[Outliers] Ed Stack: Lessons from Dick’s Sporting Goods

Ed Stack built Dick’s Sporting Goods from a struggling family store into an empire of more than 800 stores and billions in sales. Along the way he nearly lost everything. Multiple times.

This episode is the story of what he did, how he did it, and the lessons you can learn.

Available Now: Apple Podcasts | Spotify | Transcript

Lessons From Ed Stack:

1. Believing in someone before they believe in themselves changes everything. Dick Stack’s grandmother pulled $300 from her cookie jar after his boss crossed out his carefully crafted list. She didn’t give him business advice or connections. She gave him belief. Dick’s Sporting Goods exists because a grandmother believed in an eighteen-year-old kid who barely graduated high school.

2. Your name is your biggest asset. When Dick’s second store failed in 1956, he could have declared bankruptcy like everyone expected. Instead, he sold his house, his car, everything he owned to pay back creditors in full. Six weeks later, when he asked those same suppliers for another chance, they remembered. Trust isn’t earned in the easy times; it’s earned in the fire. 

3. Develop a taste for saltwater. Ed despised working at his father’s store every summer and on weekends from age thirteen. While friends played baseball, he unloaded trucks in suffocating heat. However miserable those years were, he learned. Sometimes your worst experiences are the best education. 

4. Ignorance can be a superpower. Ed and Tim signed papers to buy land in Syracuse with no plan, no budget, and no idea they were getting a “vanilla box”. They nearly opened a store with empty walls. They made every possible mistake. But here’s the thing: if they’d known everything that could go wrong, they might never have even tried to expand. Sometimes knowing too much kills action. 

5. The quiet one is the decision maker. At the make-or-break GE Capital meeting, suits grilled Ed for ninety minutes. But in the back corner sat a man who never spoke, just watched. Ed reflected later, “If you’re in a meeting and there’s a guy sitting off in a corner, not saying anything, that’s the guy you probably have to convince. He’s the decision-maker.” Every important meeting works this way: The loud ones interrogate. The quiet one decides.

6. Own your mistakes. When GE Capital asked about Dick’s near-bankruptcy, Ed didn’t deflect or minimize. In fact, he was brutally honest: “We made a series of mistakes. Here’s what they were. Here’s why we made them. Here’s exactly how we’ll ensure they never happen again.” Most people explain away failure. The best own it. The precision of your diagnosis proves the depth of your learning.

7. Never rely on the kindness of strangers. After nearly losing everything in 1996, Ed learned what Buffett knew: “Never count on the kindness of strangers to meet tomorrow’s obligations.” The banks can’t take your business if you don’t owe them money. Never put yourself in a position to need the kindness of strangers. 

8. Pick the company that wants it more. When Puma and Adidas wouldn’t return Ed’s calls, he gave shelf space to an upstart company that really wanted it. That company was Nike. When established brands ignored them, he backed a hungry football player making shirts in his grandmother’s basement. That company was Under Armour. Sometimes the best deals come from those desperate to prove themselves, not those who’ve already made it.

9. When the map and territory differ, believe the territory. The VCs pulled out spreadsheets showing Ed what looked good on the screen. But Ed remembered that kid in Buffalo who gasped at thirty feet of baseball gloves. Sure, that wall of gloves didn’t turn inventory fast, but it got people in the store. When spreadsheets and customers disagree, the customers are almost always right. The data isn’t wrong. You’re measuring the wrong thing. The map is not the territory. The spreadsheet is not the store.

10. Remember what you’re really selling. Dick’s Sporting Goods became an empire because Dick and Ed Stack knew they weren’t just selling equipment. They were selling dreams. When you understand what people really buy, you understand everything.

11. Become someone people want to root for. If people think you’re overrated, they’ll root against you. However, if people see you as underrated, they’ll go out of their way to help you. There is no status quo.

Some short maxims from my research

1. Never rely on the kindness of strangers.
2. Your name is your biggest asset.
3. The person who talks the least is usually the decision maker.
4. Sometimes the most profitable decision on a spreadsheet is the worst decision for a business.
5. Good businesses don’t need debt and bad ones can’t handle it.
6. When the data and the anecdotes differ, you’re measuring the wrong thing.
7. Trust isn’t earned in the easy times; it’s earned in the fire.
8. People are rarely buying just your product.
9. Give the underdog a chance. They want it more.
10. Not knowing what you’re doing can be an asset.
11. All money comes with strings.
12. Your competition always has something to teach you.
13. Always bet on yourself.
14. Learn from mistakes, but don’t over-learn them.
15. “The moment a business stops evolving, the moment its leaders sit back and think, ‘Everything’s good,’ that’s when it starts to fail.”
16. Problems are opportunities to add value.
17. Play the game to win.
18. Become someone people want to help.
19. Investment bankers are not your friends.
20. Manically focus on the numbers.
21. The recipe is boldness mixed with caution.
22. What you get out of anything is directly proportional to what you put in.
23. The spreadsheet is not the customer.
24. Arguing teaches you how to think.
25. If you go into a deal with a win-win mindset, it almost always works out.
26. Clever excuses don’t make anything better.
27. Every business is someone’s irrational dedication.
28. The most important element of success is perseverance.
29. Always let people keep their dignity.
30. The cost of making others happy is losing yourself.
31. Do right for the company. Do right for society. You can’t prosper unless the community around you prospers.
32. Believing in someone before they believe in themselves changes everything.

Source:

Stack, E., & Deitsch, R. (2019). It’s how we play the game: Build a business. Take a stand. Make a difference. Scribner.