By Jackie Luo, TCV Growth Partner -
I love watching the movie “Moneyball”, based on true events documented by the brilliant journalist and writer Michael Lewis.
Each time I watch the movie, I learn different things from Billy Beane, who turned the Oakland A's, a severely under-budged baseball team, into a legendary winner. How he set the winning strategy; as General Manager, how he led the team with conviction; how he listened to the opinions that mattered and ignore the opinions that didn’t. These are not only relevant to winning baseball games, but are also applicable to building businesses.
In the past few years, I have been working with entrepreneurs on setting business strategies and improving sales execution. So, when I watched this movie again during the holiday season, I naturally thought about what entrepreneurial lessons we can learn from Billy Beane. There are three key lessons relevant for entrepreneurs:
First, find a strategy that gives you a competitive advantage
At the beginning of the movie, the Oakland A’s had just lost three of their star players through free agency, including their first baseman Jason Giambi. The A’s had a third of the operating budget of rich teams like the New York Yankees. Without any more money from its owners, Billy Beane knew they could never win the World Series by playing the usual game of “Moneyball”. So he decided to change how he would play the game. He had to think differently about how he would replace the three players lost to higher bidders. Luckily Billy Beane found a partner in Peter Brand, a Yale economics graduate, who also thought differently. Billy made Peter his assistant manager. Instead of replacing individual players, Billy and Peter focused on assembling a team that could win, by strategically selecting undervalued players based on how they could contribute to the team’s goal. Instead of depending on star players for their individual skills, they believed a team with individuals focusing on different tasks could give them the statistical edge needed to win. The strategy was unconventional at that time, but it gave them the opportunity to beat the odds in baseball with a low budget.
Second, be persistent
After Billy and Peter chose the strategy that would give the Oakland A’s their competitive advantage, they met with a lot of resistance, ridicule and even outright rebellion. To execute their strategy, they made unusual, but courageous choices in assembling the team. For example, they chose Scott Hatteberg, whose career was seen as being “over the hill” by other teams as an elbow injury inhibited his ability to “throw”. But Billy chose Scott for his ability to “get on base” in whatever the way required (usually just walks). Oakland’s scouts laughed at this choice, and sports broadcasters openly ridiculed this tactic. Oakland A’s manager Art Howe even refused to listen to Billy’s strategy for how to manage the team. However, none of the doubt and disbelief seemed to deter Billy and Peter from executing their strategy. Billy and Peter knew very well that their jobs were on the line if the strategy failed. But with strong conviction, they persisted through any doubt and temporary failures. In the end, their strategy did work, and the Oakland A’s went on to win 20 consecutive games, a first in baseball history. What’s more, their strategy and success was recognized by industry peers. After the season, the Boston Red Sox offered Billy Beane a $12.5M a year salary, which would make him the highest paid baseball GM in baseball history. Although Billy Beane refused the offer, this was a recognition that his strategy was a winner.
Last, tune out noises
When anyone tries to do something unconventional, they will inevitably make other people uncomfortable and who will express doubt and criticism. Early in the season, the Oakland A’s fared poorly, giving the critics within and outside the team more ammunition to dismiss the new method as a dismal failure. Billy ignored them all. In order to successfully execute his strategy, Billy Beane had to tune out the noises. During the game time, Billy often went to the gym to lift weights, deliberately staying away from watching the game or its play by play broadcast. His belief in the strategy, and his unwavering focus on implementing that strategy by tuning out all the critical voices, helped him to make a new era of strategy in baseball.
There are parallel lessons in managing baseball teams, building new businesses, and doing other things in life. They all come down to three simple things: develop a winning strategy to give you a competitive advantage, be persistent, and trust your own inner voice.
Theodore Roosevelt once famously said, “It is not the critic who counts. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood”.
Watching the movie “Moneyball”, I could feel how Billy Beane was such a man “who strives valiantly, who errs who comes short again and again, because there is no effort without errors and shortcomings”. Roosevelt’s quotes are some of my favorites. I often used these quotes to encourage myself when things are tough. Perhaps that’s why I love this movie so much. Watching it again and again, It gives me so much inspiration, and if you have read this blog, I hope you are inspired too.
By Jackie Luo, a founding member of TCV Growth Partners. Jackie is an expert in corporate strategy development and is available for consultation. Contact base Jackie@techcomventures.com