Books for Product Managers #1 — Moneyball
NOTE: This is Book #1 in my list of recommended books for Product Managers. Book #2 is Invisible Women by Christine Criado Perez. You can read my post on that book here.
I normally don’t recommend books to read because books are personal and contextual. What’s a great book for one person is of no value to another because their situations, knowledge, intentions and needs etc. are different.
But I was recently asked what books I’d recommend to Product Managers, and I thought I’d write up a blog post on it. But as I was writing, I realized that simply a list of books with short blurbs wasn’t going to cut it. I wanted to dig deeper into each book. So here is the first of several posts, each focussing on one book. I’ll dig a little deeper into each book, sharing what I like and why I feel it’s a great read for Product Managers.
The first book is:
Moneyball by Michael Lewis
Moneyball, which was made into a movie starring Brad Pitt, is a book I recommend often and is probably the first business book I can say I really loved and have read more than once. The subtitle of the book is:
The Art of Winning an Unfair Game
And I can’t think of a better analogy to building products and competing in markets than that!
Before I get into why I like the book, I’ve been told that a lot of people are turned off by the book because it’s a baseball book. And yes, it IS a baseball book, but it is SO much more than just a baseball book, and that’s why I really like it.
Even if you’re not a sports fan, look at it from the perspective of a business book full of great thoughts and lessons for product managers.
It’s a book about how one person, Billy Beane, a former and very forgettable baseball player, became the general manager of an underfunded, underperforming team (The Oakland Athletics) and completely rethought what it meant to build and manage a winning, professional baseball team and win against competitors.
And his innovative approach, based on data and analytics, was so compelling, that not only did it change the sport of baseball, but similar practices were adopted in EVERY major sports league (NHL, NFL, NBA etc.) and changed them as well.
I first came across MoneyBall back in 2007 and blogged about it in one of my very early Product Management posts. You can find a slightly updated version of that blog post at:
How to be a GREAT Product Manager - Transformation Labs
Saeed Khan I originally wrote the following back in the summer of 2007 (Yes 2007. That's not a typo). I had just…
Read the whole article, but if you’re in a rush, skip down to Section 3 — “Spidey-sense” instincts are good, hard data is way better.
Old game, Old Assumptions
Note that professional baseball is over 100 years old, and everyone thought they had it figured out. In order to win, you competed to acquire and retain the best home run hitters and sluggers and the best pitchers who could strike out the most opposing batters.
That talent hunt meant that the most sought after players were also the most expensive, and thus bigger budgets meant better talent and better talent meant more wins. And on the surface, that seemed true, as teams like the New York Yankees and Boston Red Sox, with the biggest player payrolls tended to have the best Win/Loss records.
But Beane didn’t think that was the only way to win. And he didn’t have the budget of the Yankees or the Red Sox. The key line in the book on this is:
“What you don’t do,” said Beane, “is what the Yankees do.”
“If we do what the Yankees do, we lose every time, because they’re doing it with three times more money than we are.”
Old Game, New Insights
Ultimately, Moneyball is a book about how to rethink long held assumptions, understand the fundamental components of what you want to achieve, and redefine how to compete effectively against bigger, better funded organizations.
See why I love this book?
If you’ve seen the movie, but haven’t read the book, understand that the movie is as different from the book as Brad Pitt (who played Beane in the movie) is from Billy Beane himself. Yes, they’re both tall, athletic men, but that’s where the similarities end.
Also let me say that Michael Lewis is a VERY good writer, and he crafts a compelling narrative. I rarely read business books end-to-end, and I (almost) did with this book. I didn’t read the final couple of chapters, but that was because I had gotten what I wanted from the book by then.
They should have called it Databall. OK. Maybe Not.
Chapter 6 of the book is entitled “The SCIENCE of Winning an Unfair Game”. It’s my favourite chapter, because in contrast to the book’s subtitle, which uses the word “Art”, here we have the word “Science”, and science it is.
It’s all about the data and understanding the mechanics of the system they were working in, challenging long held assumptions, understanding fundamental principles, and then defining the BEST ways to achieve their goals.
NOTE: I’ve highlighted the word “system” above, because that is an incredibly important concept in Product Management — Systems Thinking. You’ll see more on this in a book recommendation in the future.
Beane and his team of managers, coaches etc. looked at every aspect of the game from scouting and recruiting players, to analyzing player potential, to training players, to deciding who to trade, when to trade, how to play against different teams, which plays to make in different situations within a game etc.
AND — this is important — they were doing this with a VERY limited budget. They had one of the lowest payrolls in the entire Major Leagues, and yet had to compete against teams with 3X the budget and who could acquire the best batters and pitchers.
Creating Winning TEAMS
Another thing this book teaches is how to operate a team, AS A TEAM. This point cannot be reinforced enough. In business and especially in Product, we often talk about teams — cross-functional teams, empowered teams, autonomous teams, blah blah blah — but often only lip service is given to REALLY understanding what they mean and how to make them effective.
You have to read carefully and think about it a bit, but Moneyball and Beane’s practices give some insight into how to truly win as a team.
It can be argued that baseball is unique amongst all major team sports, because, unlike other sports such as baseketball, football and hockey, the individual players play such an important role. Two teams are NOT on the field at the same time. One team is on the field and one player (the batter) is challenging them. Each batter can contribute incrementally to team success.
It is incredibly regimented and quite assymetric. And yet, it’s this regimen and assymetry that led Beane and team to their inspiration, of how to win, in small increments. They understood the value unit of a batter — i.e. what contribution must a batter make to help the TEAM win in the long run. Note, this was completely counter to how baseball and the wealthier teams operated.
I won’t give it away, but remember that wealthier teams bought the best batters, who hit the most home runs and could drive other players, who had made it on base safely in. Given that Oakland didn’t have money to get those home run hitters, they had to get people across home base in a different way.
The (output) Metrics are clear
I liked the book so much, I investigated the payrolls and playing records (and actually a lot of other data) of the teams during the Beane era. Here’s a pair of charts that speak volumes. It was when Beane’s program was in full swing (see what I did there 😃) over a 12 year period. Notice anything?
Although they had the 6th LOWEST payroll over those years, they had the 6th HIGHEST number of games won. So this system of Beane’s was not a fluke or an anomaly; it delivered ongoing results. And keep in mind that over the years, other teams learned what Beane was doing and adopted similar practices. So even in the face of copycats, the Athletics honed their system and continued to win.
Beane innovated and then continuously improved his system to compete. Businesses would be well advised to do the same.
Yes, money was a factor. The Yankees and Red Sox, with the two highest payrolls, had the highest number of wins over that period. But compared to the Athletics, their cost/win is MUCH larger and the incremental number of games won for that extra spend is quite small.
Note the Average Cost / Win column. Oakland is by FAR the lowest cost per win over a 12 yer period. It’s not even close. The Los Angeles Angels, who won only 4 more games over a 12 year period, had 2x the payroll — for basically the same outcome!
From a business perspective, you could look at this from a very simple point of view:
How to get similar results to your competition at only 1/2 to 1/3 the cost.
What business leader or startup founder doesn’t want that? Read the book, and not just Chapter 6. There are lots of lessons and insights to understand and apply to Product and business in general.
More book recommendations in the weeks to come, but in the mean time, if you want to discuss anything about Moneyball, hit me up. I’d love to chat about it.
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