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At every company he joins, Gary Kusin hangs three words on the wall: “Data is oxygen.” This simple mantra has guided him in co-founding the business that would become GameStop, co-founding the Laura Mercier makeup brand and managing the $2.4 billion merger between Kinko’s and FedEx. In his book, Always Learning: Lessons from Leveling Up from GameStop to Laura Mercier and Beyond, Kusin highlights how his retail breakthroughs stem from his attention to data.
“I need data, and I have a very hard time just going, ‘Well, we’re going to crush it. Let’s go open these stores.’ No, let’s not do that,” Kusin says. “Let’s have the answer to the questions the landlord might ask us. Let’s know, going into a negotiation, what percentage of rent we can afford. So when a landlord tells us what deal they propose, if it’s that or less, we’re going to be good.”
When we think of data, we typically think of quantitative data or numbers. However, some of the most significant data points Kusin collected throughout his career were qualitative, focusing more on characteristics than quantity.
For example, he observed department stores were losing to emerging specialty stores like Blockbuster. He shared this observation with his former Harvard Business School classmate, Jim McCurry, who was working in the emerging video game sector. Drawing similarities between video games and Blockbuster, the pair launched the world’s first software retail store, Babbage’s — or as we know it today, GameStop.
“We did our homework,” Kusin says. “We made sure we had hypotheses about what would happen. We would test them. Sometimes, it took six months, and we had a hard lesson that we had to pivot off of. But [collecting data] is kind of my modus operandi in almost everything I do.”
After his success with GameStop, Kusin pursued his next retail challenge in the cosmetics industry. He heard about MAC from a former colleague, the then-CEO of Neiman Marcus, and he wanted to see if he could start a line of his own. Kusin has a deep knowledge of cosmetics history, tracing its evolution from makeup artists like Estée Lauder to lab-developed brands like Clinique and finally to couture houses like Chanel. He liked the idea of putting the spotlight back on makeup artists.
His colleague introduced him to a senior merchant, and together, they began to search for their star makeup artist. “We interviewed all sorts of makeup artists, and Laura Mercier stood alone with a very clear view of what she was trying to accomplish with her makeup lines,” Kusin says. “So we put her under a long-term license agreement, took off, and the rest is history.”
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Kusin proves having a finger on the pulse of industry trends is key to building an enduring business. Even more importantly, he never pursued these endeavors alone. By nurturing your relationships with classmates and colleagues, you can discover untapped opportunities and turn them into global brands.
Kusin’s obsession with testing hypotheses and collecting data became especially handy when he was tasked with transforming Kinko’s, which was operating at an $11 million loss, into a profitable business and preparing it for sale.
“I realized that everything I had learned between starting Babbage’s and Laura Mercier would come into play at Kinko’s,” Kusin says. “I had, for the first time in my life, a real feeling that I was born to do this.”
Although most people in his position might start at the top, holding meetings with senior leadership at the corporate headquarters, Kusin had other plans.
“We had 42 regions in the United States and 1,200 stores,” Kusin says. “I said, ‘Over the next two to three months, I’m going into every one of our 42 regions and having town hall meetings on every shift in every market.’ And I asked the same thing at every town hall: ‘What in the heck has happened to this company? How is it that we’ve lost money when we provide such an awesome service that customers need?’ By the time I was done, I knew what the problem was, and I knew what the solutions were.”
After three years, Kinko’s had an EBITDA of $240 million, and Kusin facilitated the company’s sale to FedEx for $2.4 billion. This illustrates two key lessons for every entrepreneur. First, when business is down, get on the ground and speak to your employees and customers. You can have theories of what the problem is or what customers want, but you’ll never know for sure unless you ask and collect that data. Second, there are many ways to accomplish the same goal. Kusin emphasized forging your own path based on what you’re comfortable doing.
“There’s any number of paths to the podium, as I call it,” he says. “There’s not one way. If you ever hear the word ‘should’ appear in a sentence that comes out of someone’s mouth trying to tell you what you should do, you run the other way. You have to think about what works for you. What are you comfortable doing, and how are you going to take the things that are comfortable to you and use them to gain knowledge, which will make you better at the business that you’re trying to start?”
From creating GameStop’s first building blocks to closing a multi-billion dollar merger, Kusin attributes his success to these philosophies:
- Nurture your relationships with old friends and colleagues. By staying in touch with your network, you never know what untapped opportunities may arise.
- If you want to know what’s going on on the front lines, look. When it comes to marketing, you never know what customers want unless you ask them. Armed with that data, you can use customer feedback to improve operations.
- Do your homework before making a decision. Entrepreneurs often get so excited over a new enterprise they forget to do the math and research to ensure operational and financial sustainability.
- When business is down, ask employees why. Although crafting hypotheses is important, it’s just as important to speak directly to your employees who understand the day-to-day problems the best. They’ll also have the best insight into potential solutions.
- There are many solutions to the same problem. Just because someone might solve an issue once doesn’t mean you have to follow their exact method. Use your intuition to solve problems in your own way that aligns with your business model and goals.
Listen to the episode below to hear directly from Gary Kusin, and subscribe to Behind the Review for more from new business owners and reviewers every Thursday. Available on Spotify, Apple Podcasts and Pandora.
Editorial contributions by Erin Palmero and Kristi Lindahl
