Results are often the least important thing

What entrepreneurs can learn from the revolution of professional sports

Moneyball recently came back to Netflix, so Laura and I took the opportunity to watch it for the umpteenth time. It’s an amazing movie. Billy Beane’s quest to change baseball by fully adopting an advanced metrics approach is inspirational, and is allegorical to disruption in any industry.

In any industry, the status quo likes being the status quo, and accordingly will resist any efforts by an outsider to change things. Meaning that outsiders must push against mighty forces of inertia, often alone. While in startup lore the outsider has this incredible product which is secretly printing money (unbeknownst to the establishment) and taking over the world and it’s just a matter of releasing it and scaling, Moneyball presents a more typical story of how this process happens. The outsider has a hunch, some very-much-insufficient supporting data, and is simply willing to risk more than others are to see if his hunch is right. Throughout the movie Beane’s resolve is tested. Throughout the majority of the disruption process Beane is confronted with the possibility of his whole approach being wrong, and the failure and ridicule that that would bring.

Even inside his own team, members of the status quo (who in any industry are often necessary to bring a new disruptive product to market, but who nevertheless carry the risk of status quo thinking) push against his goals, and tell him all the reasons why his approach is wrong. Why he should just give up and build a team how they’ve always been built. As the disruptor, Beane’s charge is just to keep going despite the resistance. To barrel ahead despite the reasons not to. Disruptive tech (be it an app or a system of analyzing player value) isn’t recognized as such until after the fact, and until that point the leader simply has to keep pushing against the system, often for no other reason than a stubborn refusal to give into the pressure.

After he’s “convinced” his team (quotes because he simply fires some of them) to let go of his “best” players and sign people with higher OBP (on base percentage) regardless of their conventional value, then the pressure really ramps up.

The product on the field doesn’t seem to work. For the first dozen or so games, his newfangled approach to team construction seems to be failing, providing early data that “proves” the old way is best. The data from the early disruption flies in the face of his hypothesis (typical in the disruption journey as well; at the early stages, success is often indistinguishable from failure when measured based on the traditional metrics of such things — wins and losses, in this case), providing yet another reason to simply give up and join the system.

He keeps going.

“A good process produces good results.” — Nick Saban

This is where Moneyball offers a critical lesson in the journey of disruptive technology, and why I think the movie as a whole is so instructive. At this moment, with all the traditional reasons to quit, Beane keeps going because the actions he and his team are taking (optimizing for OBP) are consistent with success, never mind that they’re currently failing.

He sees that, in the long term, actions are more important than results. I can think of no better foundation for entrepreneurial success.

Faced with a team losing games, universal criticism from the industry for his approach, and every other reason to quit, Beane doubles down on his belief that optimizing for OBP will, at the end of the day, be the key to winning more games than constructing the most talented team. He sees his team getting on base, and trusts his system to, over time, translate that into wins. And it does.

This is echoed in the NBA over the last 10 or so years, with Darel Morey, GM of the Houston Rockets, playing the role of the disruptor. “Moreyball,” as it’s called in the NBA, is built on the foundational belief that three-pointers are the most valuable shots in basketball, followed by layups/dunks, and that all other shots should be avoided. Around this belief (which, like Beane, eschews conventional wisdom in favor of simple math), Morey constructed a roster that could hit threes and dunks, and instructed them to let shots fly — never mind if you make them.

In hindsight the efficacy of this approach is obvious, with every NBA team shooting 40 three pointers per night. As the Athletic described it last week, “results, often, are the least important thing. The process of what happens does matter, and following the numbers to their logical conclusions — about shot location, which players play best with one another, how to defend individual opponents and their teams, and so on — is just logical.” But for the first half decade Morey seemed misguided. His approach of focusing on shooting threes — not making them — seemed ridiculous, all the way up until they started winning. Then it became self evident. At this point, if you don’t shoot 40 three pointers per night you’re doing it wrong.

“We should work on our process, not the outcome of our processes.” — W. Edwards Deming

Such was the story with Billy Beane and baseball. Beane’s A’s looked like a misguided science project until they rattled off an AL record 20-wins in a row. Now, every team in baseball has followed suit.

Moneyball, like Moreyball, is a microcosm of what real disruption looks like. We think of it as a founder brashly moving a bunch of old stodgy guys’ cheese, collecting accolades and customers and revenue and rewriting the industry in a flash. But that’s only what disruption looks like after it’s recognized. Before that, it’s simply an entrepreneur with an idea that SHOULD work, pushing it up a hill while everyone in the world tells him why it won’t. While conventional success metrics tell him he’s failing.

It’s an entrepreneur focusing on micro actions supported by an unproven hypothesis, rather than results.

And, when that new way of thinking finally proves its efficacy by disrupting the old paradigm, of course the entrepreneur feels vindicated, righteous, excited, proud and all the things that you’d suspect. His novel perspective and a hell of a lot of persistence upset an entire industry; those emotions come with it.

But given what it is really like to disrupt an industry, after so many sleepless nights and doubts as to whether he was simply crazy for betting his career on an unproven concept, second guessing himself at every turn but persisting anyway, given all that, when finally proven right, the first thing Beane feels is relief.

Keep going, friends. Second guessing yourself is part of the process.


Do what you love vs. Love what you do?

I’ve always liked Paul Graham’s essay about how to do what you love. He describes a two step process of first working hard, with ridiculously incomplete information, to determine what you actually love to do, and then second, incrementally steering toward that outcome via a specific process of either A) gaining influence to enable you to do more of what you like and delegate what you don’t, or B) moonlighting in what you love to do until you can make money at it.

This process is very similar to how I got started in entrepreneurship. I first decided I wanted to watch sports and call it “work,” then figured out how to make that happen. I’ve been doing that over the past year as well: I identified a passion for helping entrepreneurs build life-giving companies without self immolating, and from that I’ve constructed a business to make that happen. The hard part, and Graham talks about this, has always been figuring out what you want.

So we’ll call this paradigm “How to do what you love.” It turns out, it may not be the best way.

Last week new research was published that indicates that it actually works the opposite of this. John’s Hopkins University showed in a clinical setting that humans random choices lead to preferences, not the other way around. We decide something, and then create reasons why we like that decision. From this, it follows that choices lead to preferences lead to habits lead to identity, to us becoming the person we somehow decide we were born to be.

In other words, from a granular, neuroscientific, process perspective, human beings don’t choose what we like — we like what we choose.

The implications of this on doing what we love are profound. The process of painstakingly finding what we like to do and then creating a life in which we get to do that is a tried and true one. But it’s hard, as Graham illustrates:

Whichever route you take, expect a struggle. Finding work you love is very difficult. Most people fail. Even if you succeed, it's rare to be free to work on what you want till your thirties or forties. But if you have the destination in sight you'll be more likely to arrive at it.

However, based on the science about how we actually develop what we love, there may be a better option, significantly less arduous and more in keeping with the mechanics of what it is to be human.

Instead of searching for what we want, we can simply search for why we love what we do. The “how to love what you do” paradigm, if you will.

As Seth Godin said: If we commit to loving what we do, we’re more likely to find engagement and satisfaction. And if what we do changes, we can choose to love that too.


Quote that is worth pondering:

“Real learning comes about when the competitive spirit has ceased.”

— Jiddu Krishnamurti

We think of the competitive spirit as paramount in entrepreneurship. It’s bred into us and encouraged at every turn. But could it be that it’s causing our businesses more harm than good? 

I love this counterintuitive quote, because the moment you choose to compete with someone, you’ve chosen to play the game they’re playing. You’ve given up the only choice you really have in life — what game to play — in exchange for the opportunity of beating someone else at the game they chose. 

If you are competing, the only successful outcome is being the best in the world at that game. With 8-billion people, that’s a very low-probability way of thinking about success. On the other hand, you can dramatically increase your learning, and your likelihood of success, by giving up the competition and putting that energy into defining, and playing, a game that is uniquely yours.


Conscious leaders are better equipped for the job

Found an amazing insight in a Harvard Business Review article on emotional intelligence and self-awareness.

“The larger the gap between a leader’s self-ratings and how others see them, research finds, the fewer EI (emotional intelligence) strengths the leader actually shows, and the poorer the business results.”

Translation: Your effectiveness as a leader is limited by how well you understand how others view you.

This is what is meant by “conscious leadership.” Leaders who are conscious not only of their objective, but of who they are being in trying to achieve it. Through a process of self inquiry, leaders develop a toolset for changing their way of being to suit the outcomes they want to achieve.

Leaders who are not conscious of — and working actively with — their way of being in the world are working with a limited set of tools. Research suggests this is upward of 75% of leaders.

The path to developing as a leader is self inquiry, and this is the work of coaching. Also from the article:

Coaching is the most effective method for improving in areas of EI deficit. Having expert support during your ups and downs as you practice operating in a new way is invaluable.


Yet another reason I love journaling

I have intentionally developed a habit of journaling first thing every morning. My system is right when I wake up I stream-of-consciousness three pages, longhand with a pen and paper (seriously), and then I go about the rest of my practices (meditation, sometimes yoga, writing, then finally the rest of the family wakes up and I join the world). I’ve long found the journaling part of my practice incredibly useful for two reasons:

  1. It enables me to dump all the mental crap I wake up with, leaving me clearer for the day

  2. Writing is the best way I’ve found to think clearly, and thinking clearly is a great way to start the day

These two are reason enough, but I recently found a third reason by going back and reading an old journal. Reading my own journals very quickly brings me back to the lessons that I captured in the past, and draws into sharp contrast the lessons I learned versus the lessons I’ve actually internalized. From the looks of my journals, I tend to learn a lesson at least a half dozen times before I internalize it to the point to which it’s accessible in the moment and actually impacts my life.

This distinction also creates a sort of roadmap for future growth by re-presencing lessons that I have learned in the past, along with why I learned them, giving me the opportunity to look for opportunities to apply them in the present.

I’ve always admired Ray Dalio’s principle-driven system to living and investing. Without knowing it, journaling, and revisiting my old journals, has become my own version of that.


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