I just finished reading Moneyball by Michael Lewis. I was in a baseball mood, so I picked it up at Amazon thinking it would be some fun summer reading about one of my favorite sports. Well it was…and then much more. Moneyball gives you a detailed look into the mindset of Billy Beane and the Oakland A’s. If you’re not a baseball fan, it’ll help you to know that baseball is unlike every other professional sport that has a salary cap. Baseball is not a fair game. The Yankess spend $180 million per year on players, while teams like the A’s, Marlins and Devil Rays usually only spend about $40 million if they’re lucky.
The difference between the A’s and the rest of the bottom feeders, is that the A’s actually win…a lot. When Lewis began investigating this idea in 2000, the A’s revamped their whole strategy about drafting players and making trades. Billy Beane realized that to compete in major league baseball he needed to exploit inefficiencies in the market by composing his team of young players and veterans who were supposed to be washed up. Instead of mulling over the useless stats like batting average and RBI’s, Beane hired a stats whiz out of an Ivy League school to be his right hand man and compile stats that actually mattered. The stats whiz (Paul Podesta) figured out what stats mattered in baseball, and even put to rest a lot of traditional baseball misconceptions.
The book goes into great detail about all of this, so I’ll let you read it instead of rehashing the whole book in this post. However, I will go over a lot of the great ideas in the book that can be used to help your business.
* Don’t take things for what they are on the surface
This is the main point of the book. Baseball scouts are always looking at the best physical specimens, and convincing themselves that these types of players have much more potential than players who aren’t as athletic looking. When you actually look beyond what’s on the surface, you can dig deeper and find the heart of what you’re looking for. This really applies to web businesses. Many web sites have no analytics program or stat tracking programs to help them figure out what’s really going on with their websites. They’re basically slinging a bunch of ideas at the wall hoping something sticks. Something might look great on the surface and you might think it’s working well, but if you don’t delve into it and find out, you’re just continuing down a blind path.
* Hard work can beat money
If every baseball team wanted to, they could easily make an excuse that the Yankees and Red Sox have more money than them, and they have no chance of competing. If you’re a small business, it’s easy to cop out and say you don’t have enough capital to compete with the bigger companies. Actually being a small company has a lot of advantages such as being able to take risks and being more creative. Small companies have a lot less to lose, and in a small company new ideas have a much better chance of being pushed through.
* Understand your faults and learn from them
Billy Beane was one of the most gifted athletes scouts had ever seen. On top of that he had good looks and the charm of Casanova. It was hard for scouts to not like him. When Billy was making his way through Triple A, his roomate was Lenny Dykstra. Lenny was a bit of a meathead, but it worked to his advantage in baseball. There was no question in his mind that he was going to be a major league all star. Even if he had a crappy week, it had no effect on his mental game at all. Billy finally realized that he never had this trait. He was a wreck in the batters box, and was always fighting against his inner demons. When Billy finally became a GM, he used what he had learned about himself to look for players who were actual hitters, and who had that unshakable confidence and work ethic that Lenny had always possessed. Billy learned from his faults and put it to good use by helping himself find players that were actual baseball players, not just athletes.
Overall I highly recommend the book. If you know nothing about baseball, it will still enthrall you and make you look at baseball and business in a much different way. Check out Moneyball at Amazon…