Moneyball and Business

So what in the world does MoneyBall have to do with business right? Well...let’s step back for a minute and review the reference which is the film Moneyball.

This 2003 bestseller by Michael Lewis is a perspective about baseball history which argued that on-base percentage (OBP) is more significant…or at least should be than batting average (BA). There was also an argument for slugging average (SLG) as more significant than other highlighted stats including stolen bases and bunts (1).

What statistics hold the greater significance for your organization…or even yourself personally… when you evaluate success and performance? Are you concerned with how many sales calls you make? Or is it more significant to examine overall productivity which could include everything from prospecting, customer service calls, to enhancing product knowledge.

Here are some interesting statistics…. (2)

  • 69% of U.S. entrepreneurs start their businesses at home.

  • 40% of small businesses are profitable, 30% break even, and 30% are continually losing money.

  • The vast majority of startup funds (82%) came from entrepreneurs, family, or friends. 

  • The industries with the highest success rates were finance, insurance, and real estate---58% of these businesses were still operating after 4 years.

The point is…statistics tell ONLY a part of the story. The rest of the story is about the intangibles that you don’t see or hear about. 

For example, what are the situations that prompt entrepreneurs to start their business at home? Was it a spouse at home that is sick…and that created the need for extra income? It could have been a situation where someone decided to start a hobby based on a creative skill or talent and that eventually grew to become a full fledge business. There are so many situations surrounding the launch of a business just like there are a number of variables that impact whether or not a start-up business is profitable or whether it becomes one of the 30% that are continually losing money (2).

You need to MoneyBall your business by determining what statistics have more significance to you and your business.  Remember also… statistics are there are an indicator of performance but that is completely different than strategy. Strategy is about determining based on statistics how you are going to execute and achieve maximum results. Perhaps knowing what industries have the highest success rates will result in you deciding to go into a certain industry so there is a greater probability of success. 

Happy Hunting…….