The famous Moneyball film is about baseball on the surface, but when you delve deeper, its entrepreneurial lessons become clear.
Watch it once and you might miss the underlying guide to building a strong team, focusing on data and encouraging communication and collaboration to attain goals. Second time around, the sports story also provides valuable business lessons, showing how data-driven insights can help you achieve success.
What is Moneyball about?
Released in 2011, Moneyball is based on the book, Moneyball: The Art of Winning an Unfair Game, by Michael Lewis. The true story relates how Billy Beane, Oakland Athletics’ baseball team general manager in California, transforms his small team into winners by using sabermetrics.
Starring Brad Pitt as Beane, the film’s central premise is the idea that the traditional way of building a successful baseball team based on the collective wisdom of managers, scouts, players and coaches, may be flawed.
Using traditional statistics to measure a player’s worth dates from the 19th century. Moneyball promotes the message that using modern statistical analysis is a better way of attaining goals.
Sabermetrics quantifies performances based on statistical objective measurements, rather than simple runs and pitching wins. For example, Billy Beane in Moneyball seeks new players who are “undervalued in the market” by using data relating to their slugging and on-base percentages and salaries.
Helped by a Yale economics graduate Peter Brand; measured by advanced data, Beane recruits players whose wages are low when compared with how much they contribute towards winning.
After he re-evaluated the strategy, the team became competitive against winning teams such as the New York Yankees, who had a budget of more than $125 million (£94 million), even though Oakland Athletics’ budget was only $44 million (£33 million). He took the team to the league playoffs in both 2002 and 2003, competing against teams with significantly more cash.
Themes explored in the film translate into the modern business world and offer a valuable insight for managers into attaining goals and building long-term success.
Challenging conventional wisdom
One of the most important lessons learned in Moneyball is how challenging conventional wisdom can lead to success. This is a powerful lesson for managers, who can identify new opportunities and find ways of outperforming competitors by using metrics that may be overlooked.
The success of Oakland Athletics was based on dedicated data analysts skilled at compiling the relevant data and successfully interpreting it into a better strategy.
Leveraging data to make informed decisions
A good analyst can help your business by collecting and interpreting data to identify trends, which provides valuable insights to drive decision making.
Gathering and using data about customers can help businesses to understand their preferences and behaviour. This can help tailor your products and services to suit their needs. An example is using customer data to identify the people most likely to buy a specific product or service. Then, tailor your marketing campaigns to reach out to them.
Of course, the success of the Oakland Athletics team was not solely due to data: rather it was used as a solid base on which to build strategies. Beane introduced a stronger team culture and fostered a sense of commitment, with every member working towards the common goal of winning.
Every successful business owner will understand the importance of a strong team culture in the workplace, with collaboration being the key to achieving collective goals.
Finding undervalued assets
Moneyball provides an insight into seeking out undervalued assets, in this case the players, and utilising their skills to build a successful team. In the same way, a business can focus on metrics that have been overlooked by analysing more customer data and interpreting it effectively.
In the film, Beane tells his new recruits, “I’m not paying you for the player you used to be, I’m paying you for the player you are right now.” The lesson is to recruit new employees based on their potential, but to offer performance-based rewards, giving those who may have been overlooked in the past the chance to shine and show their true worth.
https://www.youtube.com/watch?v=Tzin1DgexlE
Resistance at work
Beane faced resistance from traditionalists within the baseball community when he first took over the team and introduced his new data driven strategy. Chatting to Brand about the resistance they’re encountering, Beane says, “These are hard rules to explain to people. Why is that a problem?”
The takeaway is that transforming any organisation and making big changes is never easy on paper. You’re always going to encounter resistance from traditionalists who think you’re wrong. The best way of achieving your aims is to know you’re right and to make changes happen. Simply writing down your ideas and telling colleagues you’re right won’t be enough: show them why it’s working, as many won’t ever be convinced otherwise and you’ll continue to encounter resistance.
Target audience
Moneyball’s strategies have been likened to the way leading companies such as Netflix and Amazon use data to refine their offerings and target customers more effectively.
Understanding the target audience of Amazon has ensured the e-commerce site has become an online shopping giant since its foundation almost three decades ago. Year-on-year, sales have increased globally by a massive 38%, according to data published in 2024. With a market value of £1.37 trillion, Amazon has achieved its massive success by always putting the desires and needs of customers at the forefront, based on accurate data analysis of its diverse customer base.
Driving repeat business and building strong relationships is one of the key aspects of its approach, aided by using a personalised recommendation system. With various services and products across multiple sectors, it can be challenging to determine who’s being targeted, but Amazon has achieved this through precise data gathering and analysis.
Similarly, the Netflix target audience is continually gauged using accurate data to help its continued growth. With a market value of £225.3 billion, the on-demand video and television subscription service, founded in 2007, has expanded worldwide.
As of July 2024, Netflix has more than 277 million paid subscriptions in more than 190 nations, with its data-driven customer-centric strategy cited for its success. The company uses various tactics to determine and reach its target audience, collecting data from members’ viewing habits to create personalised recommendations. These include the “Gems for You” and “Because You Watched” lists.
The company’s multi marketing strategy uses social media, creating engagement and a buzz around its new films and shows. Followers’ queries are answered quickly on social media feeds.
The takeaway
Applying the data-driven principles from Moneyball to your own business can help overcome challenges in the same way that Oakland Athletics were able to compete against bigger and better-funded rivals.
© Kathy Hutchins / Shutterstock.com
