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Posted: March 06, 2012

“Moneyball”: Lessons from the baseball world

A movie that could help your business have a winning season

Steve Baker

This year at the Oscars, my favorite nominee for Best Picture was Moneyball starring Brad Pitt.

Many think it is a great baseball story but to me it is a terrific business story with lessons to help small businesses compete in a big money world. It’s a story about underdogs who had to rethink how to level the playing field against incredible odds.

In 2002, Oakland Athletics general manager Billy Beane (played by Brad Pitt) had a huge problem. The big money teams like the New York Yankees had lured his top talent away (including the Colorado Rockies Jason Giambi).    

By comparison, the New York Yankees spent more than $125 million in payroll in the 2002 season while the small market A’s were limited to less than $40 million. Beane knew the Yankees and most other teams had an unfair advantage with their big budgets but the A's new owners refused to spend any more money. They demanded that the team be treated as a business and charged Beane with the task of winning in the Major Leagues with a budget that was smaller than that of nearly every other team.

Beane understood that he could not compete when playing the same game against the big teams and bigger budgets. He had to try a different path of do or die. In a desperate need for a way to compete, Beane went against conventional wisdom and set out to develop his own new unfair advantages with tools that didn’t require a lot of capital investment.  

He turned to analytics.

Beane listened to new ideas and hired a 25 year old Yale graduate student who was a master at analyzing stats that were not generally considered top priority in the average scouting process. Ignoring traditional recruiting techniques, the A’s took advantage of more empirical gauges of player performance to build a team that could successfully compete in Major League Baseball. The new team was comprised of young players and cast-off older players who didn’t fit the norm.

The results?

The Oakland A’s finished 1st in the American League West with a record of 103 wins and 59 losses, and set an American League record of winning 20 consecutive games. The A’s won the exact same number of games that the Yankees won, but the Yankees spent $1.4 million per win and the A’s paid $260.000.

The recruiting game was forever changed.

Like many startup and growing businesses owners, Billy Beane was willing to try an idea that was disruptive to traditional thinking. He listened and hired an expert to assist him in creating a new plan.

Beane lacked the belief or support of his scouting staff, many of the players, the media and even the team’s manager who fought and ridiculed him every step of the way. But he committed himself to it and did not change course.

I suggest that you watch Moneyball movie twice; the first time for pure enjoyment of a fun film and the second time with your finger on the pause button, ready to take notes.

There are many thoughts and lessons for business in the movie’s dialogue. Here are a few of my favorite quotes:

  •  “There are rich teams and there are poor teams, then there’s fifty feet of crap…and then there’s us. It’s an unfair game.”  (Be honest about where you really are in your business)
  • “Your goal shouldn’t be about players, your goal should be to buy wins.” (Keep the real objective in sight and in mind)
  • “A dollar for a soda?...Welcome to Oakland.”  (Don’t blow the value of goodwill by being cheap with pennies…it’s the old penny wise – pound foolish)
  • “We’re not New York. Find players with the money that we do have.”  (Be honest and firm. Play the cards you’re dealt)
  • “You guys are talking the same old nonsense; we’ve got to think differently.”  (Clean the slate and start from scratch)
  • “The first guy through the wall always gets bloody.”
  • “When you get the answer you want, hang up.” (keep it short and to the point)
  • “We’re going to rethink the game. If we win, this team will have changed the game.” 
  • “So what’s my biggest fear?…that a baseball will get hit in my direction.” (acknowledge and face your fears and self-doubts)
  • “The question we should be asking is do we believe in this thing or not?”

How about you?  Please share your thoughts and any favorite Moneyball lines in the comment section below.

May all your hits be homers!

Steve Baker is a founder of successful businesses and a business advisor with a passion for every phase of business cycle from startup to exit He’s also a public speaker and author of "Pushing Water Uphill With a Rake," as well as an avid poor golfer. He welcomes your comments and e-mails at steve@PushingWater.com  and invites you to visit his website www.PushingWater.com
 

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Readers Respond

I saw Moneyball when it was in the theaters and loved it but after reading your article I took your advice and rented it at Redbox and watched it again last night. $1.25 well spent. You're right, it made me think about ways I can help my business compete. Thank you Steve! By Stan Merick on 2012 03 07
Nice piece, Steve. I love the movie too and got a lot from it. By Mike on 2012 03 07
"If we try to play like the Yankees in here, we will lose to the Yankees out there." Very true for startups. If you think like GM (or whatever big corporation), we will get beat by GM out there. That's why I say I'm a recovering MBA, much of what I learned in graduate business school has had to be overcome to be truely helpful to people who are starting a new business. By John S Wren, MBA+ on 2012 03 07
Hello, Steve! I am not much into watching baseball movies, but this film was definitely worthwhile of my time. I also like the parallels you drew between the movie and business. I would also add another lesson to the great list you already have here, Steve. As the old proverb says, "the one with the most information wins!" Nowadays, entrepreneurs have a wealth of information available to them cheaply. Startups should utilize information in developing strategies for fighting incumbents. I thought the movie did a great job showing how someone can use an analysis of widely available information to creative a game changing strategies. By Taras Kuzin on 2012 03 07
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