“Sometimes the most profitable decision on a spreadsheet is the worst decision for a business.” — Ed Stack
In the mid-2010s, Dick’s Sporting Goods bought GameChanger, an app used by baseball and softball coaches for scorekeeping, live-streaming, and scheduling. Dick’s turned the app into a data engine disguised as a coaching tool. It gave the product away for free and, in the process, established direct relationships with millions of parents. The app tells Dick’s which sports kids are playing, where they’re playing them, and when demand is about to arrive. As kids move into new leagues, promotions arrive just as parents realize their kids suddenly need new cleats, bats, or gloves. Dick’s gave away a free tool and quietly built an information advantage. It became a case study in how companies adapt to change in business before competitors force them to.
By the mid-2010s, GameChanger was steadily growing. The platform was processing billions of data points across thousands of leagues. What began as an app quietly became a digital ecosystem. Millions of parents now interact with GameChanger every week. The companies that adapt to change in business are usually the ones still standing decades later. It wasn’t merely a retailer anymore. It was simultaneously a retailer, a media company, and a data company.
Fortune Favors Dissatisfaction
While vacuuming his home in the late 1970s, James Dyson noticed his machine was losing suction. Instead of accepting the conventional wisdom that all vacuums lose suction, he cut open the vacuum bag and noticed all of the pores were clogged with dust.
He then set out to create a vacuum that never lost suction. Dyson wondered whether the cyclone technology used in industrial sawmills could somehow be shrunk and brought into the home.
Over the next five years, Dyson built more than 5,000 failed prototypes while surviving on his wife’s art teacher salary and paying himself nothing.
Dyson faced five years of rejection. Major vacuum manufacturers refused to license his invention. They feared it would destroy their far more profitable replacement bag business.
All the industry doors were closed to him. So Dyson decided to manufacture the machine himself. He bypassed traditional retail gatekeepers and introduced the “G-Fore” cyclonic vacuum directly to the Japanese market in the mid-1980s. Consumers could suddenly see the dirt swirling inside the machine. They loved it.
By the early 1990s, the G-Force won Dyson an international design prize in Japan, making him enough money to fund his own manufacturing facility in the UK. Today, Dyson’s company is worth billions because he refused to accept an assumption that everyone else treated as fact.
Like Dyson, Ed Stack wasn’t satisfied with the way retail worked. He went looking for answers.
After graduating from St. John Fisher University, Stack read everything he could find about business.
One lesson kept emerging in different forms. Fortune favors people dissatisfied with the status quo, people with a vision of where they want to go and the confidence to pursue it.
Stack writes in It’s How We Play the Game that the recipe is “boldness mixed with a healthy dose of caution.”
Don’t accept the status quo. Be willing to fail for long periods. Big rewards often accrue to people stubborn enough to keep pursuing an idea long after everyone else has quit.
Competitors Are Teachers
In the late 2000s, Domino’s Pizza was struggling. Customer research showed them something painful. Customers said their crust tasted like cardboard and the sauce like ketchup. They could have gotten defensive. Instead, Domino’s used the criticism as fuel.
They publicly admitted something almost no large company ever admits: their product wasn’t very good.
Domino’s realized competitors had passed them by. So they used this reality check to reinvent their brand.
Domino’s scrapped its original pizza recipe. They developed a new crust. A bolder sauce followed. Different cheeses were used.
Domino’s admitted its failures in TV ads. They invited customers to try their new recipe. This honesty changed how customers viewed their brand.
Overhauling the recipe and being transparent pointed them in a new direction: outperform competitors on speed and convenience. Domino’s invested in digital ordering. The “Pizza Tracker” was introduced. Years later, drones and autonomous vehicles followed.
The decision to let competition and negative market feedback influence Domino’s strategy paid off handsomely. Domino’s transformation became a shining example of a corporate turnaround done right. Within a few quarters, same-store sales increased. Over the next decade, Domino’s became one of the most valuable restaurant turnarounds in modern history.
Domino’s story highlights that one of the greatest threats to a business is complacency. When you change your mindset from viewing competitors as threats to competitors as unwilling teachers, you shift your focus to offering a better product or service.
Ed Stack felt the same as Domino’s. He writes in, It’s How We Play the Game, that “You have to view your competition as inspiration for improvement because they often have something to teach you.”
Dick’s Sporting Goods knows this is easier said than done.
Ignore competitors at your own risk.
That lesson became part of Dick’s history. If Jack Smith, co-founder and CEO of Sports Authority, hadn’t shrugged off their importance to Jerry Gallagher, an early investor and Dick’s board member, Dick’s might not be around today.
In the early 2000s, Sports Authority was the mountain everyone in sporting goods was trying to climb.
Instead of copying them, Dick’s used Sports Authority’s aggressive expansion as an example of what not to do. This forced Dick’s to build a better business model.
In the mid-2000s, Sports Authority was crushing Dick’s. It had more stores, generated more revenue, was backed by Wall Street, and was expanding rapidly by buying regional chains.
Dick’s leadership studied Sports Authority’s flaws. They used them to inspire ways to operate more efficiently.
Dick’s realized Sports Authority was growing fast but sacrificing profitability. Dick’s focused on improving margins rather than chasing revenue.
As Sports Authority grew, its merchandise quality and customer service decreased. Dick’s did the opposite. They invested heavily in deep product categories, such as hunting, fishing, and golf. The departments were staffed by people who actually cared about the products.
Ed Stack pushed his design teams. He told them to build concepts that would kill Dick’s if a competitor built them first. This paranoia pushed Dick’s to build interactive stores with batting cages and running tracks.
Dick’s focused on its financial health and customer experience to counter Sports Authority’s volume. Eventually, the economics turned against Sports Authority.
By the mid-2000s, Dick’s surpassed Sports Authority’s total market size.
Dick’s kept compounding. It methodically acquired high-performing specialty brands like Golf Galaxy.
Meanwhile, Sports Authority brought in private equity to expand. That left them with mountains of debt they couldn’t repay when e-commerce emerged.
By the mid-2010s, Sports Authority filed for bankruptcy. Dick’s was in the perfect position to benefit. It refined its cash flow and operations at the perfect time.
Eventually, Dick’s bought Sports Authority’s intellectual property and inherited millions of loyalty customers.
Sports Authority’s dominance should have buried Dick’s. Instead, it taught them how not to run a business. Dick’s focused on its margins, operations, and customer experience. When the retail storm hit, Dick’s was ready. Sports Authority wasn’t, and it collapsed.
Dick’s used competitors as inspiration. Competitors put them in a position to focus on what was most important to them: increasing profitability and offering better customer service.
Technology Changes the Game
Ed Stack never accepted the way things were. He was willing to fail for a long time. Like James Dyson, he knew rewards come to people willing to endure long periods of uncertainty. Like Domino’s, Dick’s faced competitors like Sports Authority. Competitors forced Dick’s to ask uncomfortable questions about everything it was doing. The company focused on two things: financial discipline and a customer experience that customers wanted to return to. Dyson, Domino’s, and Dick’s all arrived at the same conclusion. The status quo is usually more fragile than it looks. Companies that adapt to change in business survive. The ones that don’t eventually become cautionary tales.
