Going Against The Grain: Edward Stack’s Unusual Business Strategy That Made Him a Billionaire

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Warren Buffett once said, “Be fearful when others are greedy, and be greedy only when others are fearful.”

Similarly, Mark Mobius, Chairman of Mobius Emerging Opportunities Fund, remarked:

“Another truism of successful investing is being different. If you invest where everyone else feels comfortable, you may not be investing in the right place. Sometimes being unpopular can be the key to success, and the right time to invest can be any time at all.”

Both men highlight that success in investing—and in business—often demands a willingness to challenge conventional wisdom. Sometimes, the path to victory lies in daring to go against the grain. Edward Stack, the executive chairman of DICK’S Sporting Goods, exemplifies this principle.

At a time when traditional brick-and-mortar stores are folding under the dominance of e-commerce giants like Amazon, Stack has embraced a bold and counterintuitive strategy: building massive, state-of-the-art mega-stores across the U.S. While others flee to digital platforms, Stack has doubled down on physical retail—and the results speak for themselves.

In 2023, DICK’S Sporting Goods reported $13.3 billion in sales, with both revenue and stock performance showing consistent growth. So, what sets DICK’S apart from its competitors, many of whom have succumbed to bankruptcy or shifted entirely online?

We’ve broken down the core lessons from Stack’s strategy into four key points. Before diving into that, here’s a brief look at his entrepreneurial journey, and the challenges and lessons that defined him.

From college drop-out to business owner

Edward Stack’s connection to DICK’S began at age 13 when he started working for the small business his father had founded. Their strained father-son relationship made working together difficult, and Stack confessed that he “hated every minute of it.”

Everything changed when Stack was forced to leave college to manage the business after his father’s health declined. This began a long battle between the two over the company’s future.

Stack’s father, haunted by a past near bankruptcy, was deeply opposed to expanding beyond their single store. In contrast, Stack had a vision for growth. When his father suggested selling the business, Stack took the opportunity to buy him out, along with his siblings, and gained full control.

Challenges, mistakes & lessons

With full ownership, Stack could steer the company in any direction and his first step was expanding the company’s inventory. Dick’s under his father focused mainly on hunting and fishing gear. But Stack, who claims to be a sports lover despite not being athletic, decided to venture into the world of sporting gear. This led to his early collaboration with Adidas and Nike. 

The rapid expansion of Dick’s stores inspired by Walmart soon landed Stack in big trouble. The company was running out of cash. To avoid the impending doom, Stack stopped the expansion for 18 months, and at the same time, he took a 140 million dollar loan backed by his investors. Although he was able to save the company, he lost majority control of it. He later took back control of the company after buying out his investors. But the lessons are far from over. 

Another hard lesson came in 2018 while the company struggled to adjust to the rise of e-commerce. Amazon, Walmart, and many other online retailers were stealing the show. Some brands that previously partnered with the company decided to retail directly to customers and in some cases, distribute to lower priced stores. Faced with this new reality, Stack went back to the boardroom and came out with a strategy many entrepreneurs will consider ridiculous, and laughable……”Build bigger stores”

The philosophy behind building bigger stores

This isn’t the first time Stack had tried expanding his company, but with decades of experience, he believes he has a better approach. But why build bigger stores. According to Stack, “People really want to feel it, touch it, try it on,” and experience it”. 

Despite the rise of e-commerce, it turns out that a lot of people still enjoy having a feel of what they are about to purchase. Online stores may offer convenience, but not the same excitement as walking into a store and trying out a pair of shoes or dress before buying it. 

Stack’s idea was to build a one stop shop for everything their customers need. The 150,000 square foot behemoth has everything including golf bays, outdoor sports field, sells sports equipment, shoes and employs the services of technicians to help in repairs and maintenance of sports equipment. These mega stores are an athlete’s dream. 

The stores double as a warehouse to facilitate the hybrid business model where customers can place orders online and pick up in person. The company has nearly doubled its revenue from 2019, a sign that they are doing something right. 

Stack’s business model may seem contradictory but it works and here are four things you can learn from it.

Go Bigger and Diversify

Diversification reduces risk and builds resilience. By expanding beyond its original niche of hunting and fishing, DICK’S has tapped into a broader audience. The mega-stores exemplify this approach, offering not just products but also experiences, such as interactive sports spaces.

Keep reinventing the Wheel

“What we’ve always been concerned about is waking up one day and having a tired old chain,” Stack said. Businesses must constantly innovate to stay relevant, whether through fresh designs, new product lines, or novel customer experiences.

Adapt and Thrive

Embracing a hybrid business model has been key to DICK’S success. By integrating physical stores with e-commerce, the company has balanced the convenience of online shopping with the sensory appeal of in-person experiences.

Stay Competitive

DICK’S fosters what CEO Lauren Hobart calls “productive paranoia.” The company continuously anticipates industry shifts, ensuring it evolves ahead of competitors. This proactive mindset has enabled them to adapt quickly to a fast-changing retail landscape.

Are you a founder? Let’s hear your story and help you share it with the world.

Until next time.

Alex.