"It's hard not to romanticize baseball." - Billy Beane

<aside> 💡

Limited time + Limited resources + Optimism = Innovation

</aside>

Summary

This movie covers some key aspects that are very relevant in not just sports, but in the contemporary era of businesses. In my opinion, there are lessons we learn and view through this movie, such as:

1. In the game to win, to disrupt, you need to have the risk appetite.
2. When disrupting a market from it is traditional approach, you need a team of {crazy} early believers to buy in your strategy or approach.
3. We understand the power of numbers backed by data driven approach, and stats in decision making.
4. How as an entrepreneur or business professional, one needs to be having grit, agility and resilience when faced with adversities.
5. How to think out of the box, chase the vision, not the fame! (and so many more lessons personally for me, in business management, such as problem solving, negotiations, hiring, strategy…)

Billy Beane uses data and statistical analysis to build a competitive baseball team

Pre-context - Billy is the GM of Oakland A’s baseball club and back then, the clubs used to trade players based on their budget and performance. In the start of the movie, it is shown that Oakland A’s ($39,722,689) was losing against bigger funded and better playing teams such as NY Yankees ($114,457,768).

Insight - “Your goal shouldn’t be to buy players, your goal should be to buy wins. And in order to buy wins, you need to buy runs.” — Peter Brand

Billy Beane uses data analytics method called “SABRmetrics”) i.e. blanket term for sports analytics, and which in today’s business scenarios, could be similar as making predictions or forecasts through rule engine or AI and ML. May be AI models are being trained to deliver accuracy based on "sabermetrics" today, but without Billy Beane and Peter Brand, there is no role for the AI models.

Here comes the game of disruption and innovation. Rather than using the traditional approach of baseball, such as calculating batting averages, runs, he focuses on some overlooked metrics such as OBP. OBP is on-base percentage, to analyze the players performance and build a team with low cost, yet effective enough to get desired outcomes.

Examples for the movie, (the strategy)

1. Billy identifies Peter Brand as a sharp data analytics professional (Economics graduate from Yale), who knows how to predict. Billy poaches him from the competing club where Peter works.
2. Using Peters OBD identification of metrics to get runs, Billy trades good players for undervalued players.
3. In the initial part of the movie, Billy doesn’t engage with his club players directly. However, when time comes to win, we notice Billy boosting players morale and motiving them to “play as a winning team.”

Traditional scouting methods, Beane challenges, and why do these methods fall short according to the data-driven approach

Insight - “Goal is to win games, not get an eye candy to the field!”

Beane challenges traditional scouting methods. It is shown in the movie how other scouts have focused on the players based on :

1. Their physical appearance, their personality
2. Athletic build, their popularity in the club and stadium by fans.
3. Also, wether “they look like a baseball star” or not.
4. Scouts heavily rely on their intuition and opinions based on their experience as a scout.
5. They shame upon factors like a good player, with deformity or into clubbing, substance abuse. (Hatteberg and Jeremy Giambi).
6. They do not consider their performance traits can help win games. - Billy challenges this!

Often, in sports, such scouting methods fall short as they do not value objectively players performance data. Billy Beane challenges this as he says, the goal is to win games, and traditional approach doesn’t always prioritize players who can do this efficiently.

His data driven approach spots undervalued players who might not pass the traditional scouting methods, but they “get on the base” which directly helps the team score runs and win.

The risks associated with adopting a data-driven approach in "Moneyball"? How does Beane address these risks?

This movie also taught me a lesson on “Change Management”. When bringing innovation, one has to have the risk appetite. But one alone cannot succeed. The team too should be agreeing to buy in your approach. Change is hard, and change is not easily accepted by traditional mindsets.

In entrepreneurship as well, you fail, test, iterate and scale with those early believers and early adopters. A similar observation in the movie.

Insight - True mastery is about seeing what others don’t - and using that to create an edge!

Such as example was in the movie when Beane was facing backlash through his own baseball club team members such as Art (his head coach), who refuses to play Hatteberg first, when asked by Billy Beane. Also, when scouts, coach would have meetings, they would not agree to Billy often, saying, “he has lost his mind”, “listening to a guy who only works on computers doesn’t know anything about the sport.”

Adopting to a data-driven approach often have risks associated, such as

1. risk of estranging the team of scouts, coach, players who resist change.
2. introduces uncertainty to a high degree, as strategy relies heavily on unproven players and unconventional positions.
3. Sports is all about “teamwork”. However, this strategy creates friction within the team.

Beane address these risks, by making some hard decisions. That is, he lets go off members. It showcases his resilience and how he remains steadfast in his vision and enforces compliance by trading players who din’t fit in the strategy.

Example : He trades Pena, one of Oakland A’s star player, to get Hatteberg to play A’s first.