The mystique around the 2002 Oakland A’s was built on the foundation laid by Michael Lewis’ excellent 2003 book Moneyball. In it, A’s GM Billy Beane, handcuffed by a cheapskate owner, had to use non-traditional techniques to identify and acquire players that other organizations undervalued. Namely, he and his team used data over traditional scouting to find good players who were not expensive because they had skills that were not valued. The movie of the same name took the hype to the next level, and soon the word “Moneyball” on everyone’s lips, beyond sports, beyond America, where it was used to describe anything from using data in decision-making to exploiting market inefficiencies to over-perform your budget.

As the term took off outside baseball, it kind of went out vogue within it, eventually displaced by the term analytics as a catch-all for using data in scouting, player development, and in-game decision-making. 20 years in, using data is no longer novel within baseball – it’s de rigueur. The same goes for other sports, where it’s not about whether or not data is used, but just how much. And while the likes of Bill James were doing statistical analysis long before Beane flopped as a Mets draft pick, it’s hard to argue that he (along with Lewis) brought it to a mainstream audience.

But here’s the thing: while Beane was notable for his use of On-Base Percentage as an undervalued metric for evaluating players, among other data-based revelations, and making Scott Hatteberg more famous than he had any right to be, his real secret weapon was wage suppression. All of the team’s stars were young players whose earnings were artificially suppressed because they were under “team control” – meaning they can’t negotiate higher wages or go to another team because their rights were held by the A’s.

The most egregious cases were the teams’ 3 young star pitchers, Mark Mulder, Tim Hudson, and Barry Zito, who made less than $2M combined that season, less than 5% of what was already a paltry payroll. While the A’s were able to improve on the margins cheaply because they valued walks as much as hits, the biggest reason for their success was the fact that their 5 best players – sluggers Eric Chavez and Miguel Tejada were the other two – made less than $8M combined that year. Without that level of extra value created by an unfair system, there was no way those A’s would’ve won 103 games that year with that payroll.

So the moral of the story is that just because something was seen to be groundbreaking, so much so that it changed multiple industries indelibly, it doesn’t mean the story behind the story is exactly like it was told.

Never Stop Never Stopping

When I first read Moneyball all those yeas ago, my first reaction was to find novel market inefficiencies everywhere so that I can exploit them in order to over-perform at whatever I’m doing. But it didn’t take long for me to realize that this was just not it. Even the idea of using data to find nuggets of insight that only you would know, that’s never going to last. If what you do is profitable, important, or otherwise interesting to other people, there will bound to be other really smart people out there trying to do exactly what you’re doing. It’s only a matter of time until everyone else catches up.

Special sauces might give you a head start in whatever field you’re in. It did for Beane – until the rest of the league caught up. OBP became properly valued and he and the A’s had to move on to a new thing. And when the rest of the league spun up analytics departments too, the A’s actually fell behind because they lack the resources to fully exploit the power of data. When you deal in the realm of knowledge, trade secrets can only take you so far.

So the lesson I landed on after properly digesting Moneyball is this: in order to create sustained success, you’ve got to differentiate yourself and never stop getting better. The only sustained competitive advantage in an information economy is non-stop innovation. Lead the field and let everyone else follow.

And on top of that, you have to take full advantage of the environment around you. I don’t want to use the word “exploit” because there is a moral line that I wouldn’t cross, but within reason, you have to leverage what’s at hand. For Beane, it’s about fully leaning into the collectively bargained agreement that MLB and the players’ union signed that allows for below-market salaries to be imposed on young studs – and staying away from inefficient contracts for free agents whose best are behind them. Only by combining those two strategies can you maximize your outcome.


For Billy Beane and the Oakland A’s, despite Moneyballing their way to some amount of regular season success, they never could quite make it over the line and win the World Series. There’s also a lesson there: just because you’ve maximized your potential, it doesn’t mean you’ll always achieve the kind of success you want. In addition to luck, sometimes your best just isn’t good enough, especially when you come up against folks that are also doing Moneyball things but have access to a lot more resources. Think the LA Dodgers in baseball, and Manchester City in football. But you have to be OK with that. You do the best you can and let the chips fall where they may. The only thing you can control is the process, and to judge yourself only by the outcome (which you can’t control) is shortsighted.

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