15 Surprisingly Inspirational Business Takeaways From 'Moneyball'
Say you're channel surfing and happen on the scene in Hoosiers when Coach Dale finds out a town meeting will be held to determine whether he gets fired. If you're like me you have to stick around to see Jimmy Chitwood interrupt the meeting and say, "I play, Coach stays. He goes, I go."
Moneyball is like that too. If I find it while channel surfing, I always watch it.
But Moneyball is more than just a compulsively re-watchable movie. It also has tons of lessons for entrepreneurs and leaders--something I didn't notice but Dharmesh Shah, co-founder of HubSpot, definitely did.
Here is Dharmesh's list of great quotes on business and entrepreneurship from Moneyball:
"You're not even looking at the problem."
Identify a fundamental problem in your industry and then focus, focus, and focus on solving that problem.
Don't get distracted by all the things swirling around the actual problem. Don't listen too closely to those that have deep industry expertise and are emotionally attached to the status quo--it's possible they are also part of the problem.
Figure out what the actual issue is, and solve that.
Take Dropbox. My friend Drew Houston set out to solve a really hard problem: getting data to synch across different devices. He had many people (including me) telling him that particular idea had been pursued many times before but he wasn't distracted by all that noise.
Instead he dug in, focused, and fixed the problem. Today Dropbox is valued at billions of dollars and has tens of millions of happy users.
"If we try to play like the Yankees in here, we will lose to the Yankees out there."
Don't play the game using your competitor's rulebook... despite how successful they may be. That's a losing strategy.
If they wrote the rules, chances are those rules were written to favor them, not you.
Write your own rules.
"He passes the eye candy test."
Spectacular startup success is often based on great scouting and recruiting. That's why a common mistake entrepreneurs make is recruiting team members early on simply because they look the part.
In the long run, it doesn't matter if on paper someone seems perfect. Paper is fine, but you need people that can actually do the job.
That VP of Sales candidate who has 15 years of experience at Oracle? He's likely not worth it for you. He may look the part... but he may not be able to deliver the goods. And, like Johnny Damon, he's going to be expensive.
Get good at seeing talent where others don't.
"We've got to think differently."
This quote reminds me of Apple. (Only Steve Jobs wrote it as "think different," intentionally going with the grammatically incorrect version because it "sounded better.")
Like the Oakland As, your business also works under constraints--often big and even unfair constraints. If you're trying to disrupt the status quo and beat bigger and better funded competitors you won't do it by playing their game.
You need to think differently. Playing the old way when you're at a disadvantage is a sure-fire way to lose.
That's something I'm personally passionate about. When we started HubSpot, the conventional wisdom was, "Do one thing and do it very, very well."
Generally speaking that is amazingly good advice. Except when it's not. Like in our case.
The problem we saw was not that there weren't great marketing apps--the problem was none of them were integrated or worked well together.
So we decided to think different. We decided to do the crazy thing and do it all. Why? Because that's what we believed was the problem.
"First job in baseball? It's my first job anywhere."
Experience is often overrated. Some of the most successful startup teams consisted of people that lacked relevant experience at the time they joined. But what they lacked in experience they more than made up for in sheer talent and hunger.
In the early days, hire athletes: people with raw talent and a propensity to get things done.
Don't shy away from recruiting people that are early in their careers. Look for arbitrage opportunities. Look for the future stars--because you likely can't afford (or convince) the current stars.
"Your goal shouldn't be to buy players, your goal should be to buy wins."
I'll illustrate this point with a quick paraphrasing of a conversation I had with an entrepreneur last year. It went roughly like this:
Me: What do you need?
Them: We need to build a management team.
Me: No, what do you actually need right now?
Them: Well, right now we need a VP of Engineering.
Me: What for?
Them: Well, we need someone to head up our product development effort.
Me: No, you actually need to write code and release a product. You need to respond to customer issues. You need to iterate quickly so you can learn quickly. You don't need a VP of anything.
You need a doer of stuff that needs to get done.
So don't think about buying titles; think about buying outcomes. Think about plugging gaping holes in your company.
Are you signing up customers so fast that you can't respond to all the support emails? Don't hire a head of support; hire someone that helps you tackle the support issue. Hire someone maniacally committed to customer happiness.
That person may someday become your head of support.
"He really needs to accept this as life's first occupation."
This statement was made to the young Billy Beane when he was deciding between a full scholarship to Stanford and a career in professional baseball. Billy's mom asked if he could do both.
The answer was, he couldn't.
That's true in baseball, in startups, and just about any hyper-competitive activity. You can't straddle the fence because you will get your ass kicked by someone who's almost as good as you but is much more committed.
You can't take that investment banking job and start a company. You can't keep two feet firmly planted on the ground and take a leap of faith. You have to choose. It's not an easy choice, but you have to pick.
And, if you're in school, my personal (and unpopular in some startup circles) advice is stay in school. Make learning and building connections your "first occupation."
But whatever you do, don't sit on the fence. Commit to something. Don't hedge. Give it all you have. Make it your life's first occupation. If you can't get excited about it, find something else.
I've made lots of stupid mistakes in my professional career, but the stupidest was trying to run two startups at the same time. (That's a story for another day.)
"My bar is to take this team to the championship."
Although it's often okay to end up in second place... that is never what you aim for. You and your team should be in it to win it.
If you decide too early that winning is too hard or almost impossible you instantly set a ceiling on your success.
"Why do you like him?" "Because he gets on base."
The startup world is filled with superstars that get overlooked, or don't quite make it because they're "quirky," or don't fit preconceived notions.
None of that matters. When recruiting engineers, find brilliant people who write code that solves a problem simply and effectively and can be easily maintained.
When hiring salespeople, find those with a high emotional IQ who truly care about understanding customer problems and selling them a solution.
Figure out what success looks like for a given role and ignore the irrelevant details. (Note: culture fit is not an irrelevant detail. Things that are irrelevant are age, nationality, gender, etc--things that have no bearing on the outcome).
"Hey, anything worth doing is hard. And we're gonna teach you."
Your ability to teach is one of the single biggest levers you have in a startup. Why? First, because it's one of the biggest benefits you can deliver to your team members.
They can get a higher salary somewhere else. They can get better perks somewhere else. But, at your startup they can learn things.
Second, it's unlikely you're going to find the "perfect" 5-tool player. Even if you found one, you likely couldn't afford her. If you're willing to help people with a specific super-power fill in gaps in their knowledge/experience, you create lots of value--for them and for you.
"It's day one of the first week. You can't judge just yet."
Don't judge too early. Be a little patient. Often your best people will take time to really shine.
Determine the context. If someone's not cranking yet, is it because getting up to speed at your company is hard? Is it because everyone's too busy to show them the ropes? Their lack of early performance could be the context, so be patient.
But don't be too patient. If someone isn't at least moderately productive in the first month or two it's unlikely they're going to be super-productive in the following year.
The really great people tend to deliver some value almost immediately.
"Where on the field is the dollar I'm paying for soda?"
It is good to be budget-conscious in an early-stage company. It instills the right kind of discipline that will help long-term. But, don't be penny-wise and pound-foolish. There are little things that don't cost that much that makes people happier.
It's not about the money (they can all afford the soda.) It's about the inconvenience and the principle.
One quick example from HubSpot: we launched a book program where any employee can request any book they think will make them a better HubSpotter. I personally handle all requests and immediately send out a Kindle version of the book. It magically appears in their account and they don't have to fill out an expense form or do anything.
It's not that expensive but it's been super-well received.
"These are hard rules to explain to people. Why is that a problem, Pete?"
This is one of the best segments in the movie. Pete is troubled by how different what they are doing is and why it's hard to get others to understand and accept what they're doing.
When you're transforming something and making massive changes, not everyone will understand. The important thing is to be right--and then make the change happen.
The best way to convince people that your theory was right is to be right and show them (not tell them) you're right. Most people will never be convinced otherwise.
"I'm not paying you for the player you used to be, I'm paying you for the player you are right now."
Hard-hitting advice. I'd extend it to: recruit on potential but reward on performance.
Customers will not be delighted by the code a brilliant engineer could have written.
"We're going to change the game."
And really that's what it's all about. It's not about exiting for millions of dollars or going public. It's about changing the game.
It's about seeing something that's not quite right in the world and deciding you want to fix it. For me it was seeing that marketing is broken.
Most people hate marketing. We wanted to transform marketing into something people love. It's hugely ambitious, but I have this feeling, deep down inside, that we are right.
How about you?
What is the flaw (big or small) you see in the universe that you're trying to fix? Or do you have favorite lines from Moneyball you'd like to share?