DeepSummary
Gary Kusin, co-founder of GameStop, shares the story of how he and his business school buddy Jim realized the potential for a specialty retail store focused on video games and software. Gary was working at a department store and saw how specialty stores were outperforming them in certain categories. He developed the view that in any consumer product category that reaches a certain size, a specialty retail channel will emerge and become dominant.
When Gary's friend Jim, who was working with video game publishers, showed him data on the projected growth of video games and home computers, they realized there were no dedicated video game stores yet. Seeing the opportunity, they quit their jobs to open the first software store in the world, which eventually became GameStop.
Gary emphasizes that while they excelled at continuous improvement at GameStop initially, they failed to recognize the need for fundamental change as the industry evolved over a decade. The pillars of their initial business model needed re-evaluation, but they were too focused on incremental improvements rather than transformational change.
Key Episodes Takeaways
- GameStop was founded as the world's first dedicated video game and software retail store.
- The founders recognized the potential for a specialty retail channel in a growing consumer category.
- While successful initially, GameStop failed to evolve its core business model as the video game industry changed.
- Companies need to focus on transformational change, not just continuous improvement, as industries shift.
- Market opportunities arise for innovative business models in emerging product categories.
- Retail was disrupted by specialty chains focused on specific consumer verticals.
- Personal experiences and data analysis helped identify the video game opportunity.
- Quitting established careers was necessary to pursue the entrepreneurial vision.
Top Episodes Quotes
- “We were the first software store in the world when our first store opened.“ by Gary Kusin
- “And the things we did to start were right at the start. But ten years later, every one of our kind of pillars of our business needed to be reevaluated, every single one of them.“ by Gary Kusin
- “And all we were trying to do would be better, smarter, faster in what we were doing and continued to succeed. But we were missing the very large and important aspects of change.“ by Gary Kusin
- “I developed a point of view that said in any category of consumer goods that reaches measurable size, measurable size being a billion dollars back at that time. So a specialty channel will emerge that will end up being an important, if not dominant channel of distribution inside that segment.“ by Gary Kusin
- “So we opened, when we opened our first store as the first software store in the history of the world, we had so much fun for the next twelve years.“ by Gary Kusin
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Episode Information
The Action Catalyst
Southwestern Family of Podcasts
5/16/24
Gary Kusin, co-founder of GameStop, Laura Mercier Cosmetics, and former President and CEO of Kinko’s, tells the story of launching what would become GameStop, and how the catalyst for it's innovative business model was staring them in the face for so long.
Hear Gary's full interview in Episode 457 of The Action Catalyst.