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Lessons from Moneyball

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Re: Lessons from Moneyball

#21

Post by Duff »

prophetjohn wrote: post #12
sachinag wrote: post #7

Billy Beane's shit doesn't work in the playoffs, the book/movie ignored the Big Three, and information advantages go away. The startup corollaries: small-bore inefficiencies can't overcome luck and strong competition, don't attribute success to A when it's really the obvious B (i.e. what differentiates your product doesn't mean it's actually better - Gowalla and foursquare is my favorite example here), and people wil…

This doesn't make any sense. Billy Beane's "shit" either works or it doesn't. No one is claiming that good analytics guarantee success in small samples, but if properly evaluating talent improves chances of success in a 162-game sample, it improves the chances of success in a best of 5 or best of 7 series. Maybe you're arguing that the amount of luck influencing the outcome of the playoffs is much higher than the amo…

Not necessarily. For the season as a whole, you don't really care about individual contests -- you're just looking at beating the averages.

For a playoff, things are different... you're in a match-up against a single team that is better than the average team. I would argue that money and luck plays a much bigger role in the playoffs for a smaller team. If you're playing the Red Sox or Yankees, chances are that all of the key players qualify as "best talent", while your budget forced you to choose your investments more carefully or choose players with less-known ability.

Re: Lessons from Moneyball

#22

Post by brudgers »

The problem with Moneyball as an analogy for web software development is that software development is not a game with a finite pie outcome model, i.e. there isn't a winner for every loser or vice versa.

For web software development there isn't even a clear way to determine winners - e.g. market share or brand awareness may trump revenue as a measure of success depending on the purpose for which web development is undertaken.

If Bean's goal had been to put butts in seats, it is unlikely that his methods would have worked.

Re: Lessons from Moneyball

#23

Post by startupfounder »

The lesson of Moneyball is to 1) do what you love/what you are good at and 2) purchase undervalued assets.

This is the same strategy that Warren Buffet has been using for decades.

The perception is high risk because you are going against the status quo, but in reality you are in a low risk senario because you are doing what you love and you see an undervalued asset.

In the startup world it is the same thing. If you are doing what you truly love/what you are good at and you can identify undervalued assets then you will win in the long term.

For employees this is finding a company that you can calculate that it will succeed, then getting stock in that company by "taking the risk" and it all works because it is something you deeply care about.

For founders this is finding an area that is ripe for disruption with a problem that you face in your life. Starting a company is a way to realize that value that other's are not capturing.

Really successful companies, founders, employees and investors do what they love, love the ones around them, pay respect to everyone and can brutally identify undervalued assets.

Re: Lessons from Moneyball

#24

Post by prophetjohn »

Duff wrote: post #21
prophetjohn wrote: post #12

Earlier quoted context omitted.

This doesn't make any sense. Billy Beane's "shit" either works or it doesn't. No one is claiming that good analytics guarantee success in small samples, but if properly evaluating talent improves chances of success in a 162-game sample, it improves the chances of success in a best of 5 or best of 7 series. Maybe you're arguing that the amount of luck influencing the outcome of the playoffs is much higher than the amo…

Not necessarily. For the season as a whole, you don't really care about individual contests -- you're just looking at beating the averages. For a playoff, things are different... you're in a match-up against a single team that is better than the average team. I would argue that money and luck plays a much bigger role in the playoffs for a smaller team. If you're playing the Red Sox or Yankees, chances are that all of…

>I would argue that money and luck plays a much bigger role in the playoffs for a smaller team

Luck plays a much bigger role for all teams in the playoffs. That's the nature of the small sample size. I'm not convinced that money plays a bigger role in the playoffs for a given team than in the regular season.

One valid consideration, in the context of the 2002 A's, could be that they built their success by adding wins on the margins. Put another way, the 2002 A's on average were one of the best teams in baseball, but the playoffs put greater emphasis on the "top" of the team, or the best players. That A's team was short on all-star talent, but made up for it by adding wins at the margins. But adding 2 wins by intelligently selecting a fifth starter doesn't matter in the playoffs, because said fifth starter will pitch out of the bullpen, if at all.

However, baseball is radically different than it was in 2002 and I don't think that still applies to the same extent. Almost every team is using the kind of player evaluation that Beane was using in 2002. There's still some fogey Joe Morgan types that just happen to be running baseball teams now, but they are by far in the minority. So now you have to be even smarter than Beane was at the time (see Friedman and the Rays) to be competitive on a budget. But the way Friedman et al. are doing it now isn't subject to the same implications as the way Beane did it when RBI was considered a good metric for talent evaluation.

Re: Lessons from Moneyball

#25

Post by ohgodthecat »

sachinag wrote: post #10
dionidium wrote: post #8

Earlier quoted context omitted.

Billy Beane's shit doesn't work in the playoffs What is this supposed to mean? The season gives you a 162-game sample. The playoffs are a coin-flip, by comparison. It's just too small of a sample to draw any conclusions, which is why both old- and new-school baseball guys have an endless array of cliches about how anybody who makes it in to the playoffs has a chance to win.

It's a reference to a famous essay by Nate Silver (you may know him from FiveThirtyEight at the NYTimes) and Dayn Perry: http://sports.espn.go.com/espn/page2/story?page=betweenthenu... In short, the A's roster was actually constructed to succeed over 162 games but the compromises he had to make on defense and power pitching to get extra value are particularly fraught in the playoffs, where you're battling the better…

I don't know if you read the book (Moneyball) but the main point that I took away from it was that the Oakland A's roster was made to win games.

The whole point of the book was that winning games was done by getting on base and the people who get on base more were better to have on a team than someone who was good at fielding (which the book said didn't matter).

The reason the playoffs were such a crapshoot wasn't because Oakland had a worse defense or pitchers but because the amount of games being played was so small that the results could go either way. as the teams in the playoffs were generally of similar quality.

Re: Lessons from Moneyball

#27

Post by ojbyrne »

For me, the lessons would be:

1. Always question the conventional wisdom. That's what needs to be disrupted.

2. Every great innovation that makes someone famous or rich always involves some guy who's been plugging away for years on his own without any notoriety or wealth (In this case it was Bill James, who invented "sabermetrics" while working as a night watchman).

Re: Lessons from Moneyball

#28

Post by akkartik »

startupfounder wrote: post #23

The lesson of Moneyball is to 1) do what you love/what you are good at and 2) purchase undervalued assets. This is the same strategy that Warren Buffet has been using for decades. The perception is high risk because you are going against the status quo, but in reality you are in a low risk senario because you are doing what you love and you see an undervalued asset. In the startup world it is the same thing. If you a…

"The perception is high risk because you are going against the status quo, but in reality you are in a low risk senario because you are doing what you love and you see an undervalued asset."

No, it is high-risk. The risk is that the undervalued asset you see may not really be one.

But staying with the status quo is high-risk as well.

Risk is a red herring; people optimize for regret-minimization. There's less regret if you go with the crowd because there's other people to blame -- and regrets are less apparent because everyone suffers together. But if you go against the status quo and your life sucks, you have nobody else to blame, no fellow sufferers.

This isn't a rational thought process. But you have to see the enemy clearly before it can be defeated.

Re: Lessons from Moneyball

#29

Post by patio11 »

funkah wrote: post #2

A/B testing and the like will only guide you to local maxima. Human thought and intuition, ie design, will retain its importance as the impetus for original ideas which can then be optimized through testing. And users will continue to evaluate software as they do today, "with their own eyes and emotions." Sorry, nerds.

Suffice it to say that if my clients included somebody into boating they could purchase a more-than-modest yacht with the gains from A/B testing. If it ever happens I'll suggest Local Maxima for the name.

Re: Lessons from Moneyball

#30

Post by billpatrianakos »

pron wrote: post #26

I realize this comment may not be popular, but I gotta ask this. How come every burp that comes out of 37signals lands on the front page of HN? (Conformist... Yeah... http://www.youtube.com/watch?v=V4CggHUypjY ) EDIT: I guess I'm just allergic to cults.

At least your comment is popular with me. The reason for this is most likely because at some point in time 37Signals proved themselves to have very interesting, important advice to give. We could all learn a lot from them. Once an entity establishes themselves as a credible source like 37Signals has there's this trend where people stop thinking critically about what they're currently saying and just assume everything they say and do is top quality because they've already established themselves.

This is true of any popular figure/entity that has earned some authority in an area. PG, for example, could bust in here and tell us the world is flat and a decent amount of people will support that statement (nothing against him, just a hypothetical example). Now, I really really respect 37Signals, I adored Rework, and a lot of their posts are really great but lately I've started to notice the same thing as you, pron. Not every post of theirs is a gem worthy f this front page and I've started to notice a smugness in them that I don't really like but I'm just one guy who has not earned the same respect and authority as them so I suppose I don't have much room to talk here.

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