The Dallas mistake that cost Topgolf billions

When the first Topgolf opened in Dallas, they had a 6-hour wait for people to go inside. They used the signal from that first location to expand nationwide and take what they learned in Dallas and apply it everywhere else. The problem was this was a mistake, and it would cost them billions of dollars. The team, based on this experience in Dallas, would roll out the exact same template and formula everywhere else in the United States. But it turns out Dallas, at first glance, would look like every other place in the United States—suburban, wealthy, all that kind of stuff. But it turns out most of America isn't like Dallas. Dallas has high disposable income, a huge amount of population, and they were hungry for something new. It was the single best test environment in which you could roll out something like, uh, Topgolf. It was also warm there a lot. The Topgolf team treated Dallas like it was everywhere else. This created a logical problem, which was if you base your entire business plan on what happens in one place, sometimes you don't have enough data to know how it's going to work everywhere else. This is what bit them in the butt. Dallas playbook didn't travel, and especially as people got tired of Topgolf after traveling— trying it from 2023 to 2025, the chain game store sales would shrink 1%, 15%, and 9% year over year. Fundamentally, in business you often have to make decisions based on limited information. The problem is you want to make sure as you continue making that decision you, uh, confirm that you made the right choice in the first place. In the case of Topgolf, by basing their entire rollout strategy on one location in Dallas, well, it came back to bite them. For more on this story, check out the long-form video I did about Topgolf here on this channel. Check out my link in the bio or in the comments below.