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Sorry about your startup

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So I came across yet another article on Hacker News running a post-mortem on a failed startup. Right off the bat it asserts:

Entrepreneurs often write about what’s going right, but too rarely write about what’s gone wrong.

I’m sure there was a point in tech bubble history when this was true. But that point was a long time ago. Startup guys write about what went wrong all the damn time. I am pretty sure if I started a startup pitched as a platform for other startups to explain why they tanked, I would get VC money for it, especially if I could get a good deal on failr.com.

And I don’t want to pick on the author of this particular article. He’s a solid enough writer, his startup looks genuinely interesting rather than stupid, and hey, he sure went above and beyond in mistake-making. (“And so I learned that we hadn’t been paying payroll taxes for almost three years.” Oopsie!) But these articles are becoming post hoc navel-gazing bemoaning subsets of the same problems, over and over. They’re Chinese-American takeout menus of fail: I’ll have the “hired too many people soon” and “didn’t scale fast enough” from Column A, “poor communication” and “ill-defined cofounder roles” from Column B, and some extra sweet and sour sauce.

And this makes this soul-baring part of the performance, like consciously dressing down and overpaying for loft space. They’re written for potential investors and employees who hang around sites like Hacker News. They’re spin. Bob’s heart-rending tale of how he spent ten months with no income so he could avoid laying off his last three employees as long as possible, eventually living under his office desk and subsisting entirely on chocolate chai and teriyaki jerky, ensures you remember him as a naïve but sincere and selfless CEO who gave his all and shared his mistakes with the world. Without this bracing splash of sincerity aftershave, you might instead remember Bob as a twenty-two year old who burned through $7M of VC money creating an iOS app that sends the word “Meh” to selected friends on your contact list. (“We see an immense upside potential vis a vis the growing Irony as a Service (IaaS) market.”)

Ultimately, most startups in the current tech boom are going to fail for one of three reasons:

  1. The core idea of the company isn’t that good. Maybe it’s Pets.com, or Color. And if you’re pitching your startup as “like X for Y”—like Facebook for geek girls! like Instagram but only for cat pictures!—you have a problem.
  2. The core idea won’t generate more income than outcome before you run out of money. Why, yes, everyone loved StoreYourHugeFilesforFree.com, but it turns out you can’t make it up in volume after all.
  3. Your team is collectively not experienced enough to see mistakes before they kill you.

Your idea wasn’t that good, you didn’t have the capital, or you didn’t have the experience. That’s 99% of why all businesses fail. Yet those reasons are almost never in “Why My Startup Failed” articles except as hidden subtext. The stories Silicon Valley most likes to hear about itself are stories about why outliers aren’t outliers—why anyone can move right out of college into founding the new Facebook or Google. And so when we fail, we tell ourselves stories that don’t disrupt that myth. It’s absolute heresy to suggest that real world experience often outweighs youthful energy and a degree from Stanford, but most of the “mistakes you should never make” aren’t mistakes someone with the appropriate work experience would have made.

If your startup fails and it helps you to write about it, write about it. But don’t write about it because you want to prove to the world and future investors that you’re a cool guy after all. Write about it brutally honestly. Get it out of your system. Then don’t put it online. We love you, but we’ve heard it already. Next time hire an accountant.

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rafeco
3 days ago
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Yep.
acdha
2 days ago
The part I'm still surprised by is how similar this was to the .com bubble – I know the tech industry doesn't think long-term but I'd have expected the memory to last at least a decade.
superiphi
2 days ago
As long as there is so much money around with nowhere else to get invested...
acdha
1 day ago
@superiphi: that's one of the best arguments for breaking VC out of its nerdy white guy focus – there's no way the diminshing returns we've seen on startup ideas represents the sum total of things humanity could build…
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pfctdayelise
2 days ago
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Love this, but I think people should still keep writing about failure, if only to try and counter the shiny continually promised by VCs and other startup wankery.
Melbourne, Australia

The philosophy of great customer service

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I was honestly surprised that my company, CD Baby, was such a runaway success. But I was even more surprised to find out why.

CD Baby had lots of powerful well-funded competitors, but after a few years they were all but gone, and we dominated our niche of selling independent music. 150,000 musicians, 2 million music-buying customers, $139 million in revenue, $83 million paid directly to musicians.

What was the secret to CD Baby’s success? I never did any marketing. Everyone came by word-of-mouth. But why? I honestly didn’t know.

So whenever I was out talking with my musician clients, I’d ask them. For years, I asked hundreds of clients why they chose CD Baby instead of the alternatives. Or I’d just listen as they’d rave to others nearby about why they loved it.

Was it the pricing? The features? Nope. The #1 answer, by far, almost every time someone raved about the company, was this:

“You pick up the phone! I can reach a real person.”

They called and got a real person on the 2nd ring, instead of an automated call-routing system. Or they emailed and got a surprisingly helpful personal reply, instead of an impersonal scripted FAQ response.

And that was it. Who could have guessed? That despite all efforts put into features, pricing, design, partnerships, and more, clients would choose one company over another mainly because they liked their customer service.

I structured the business to match this priority. Out of 85 employees, 28 people were full-time customer service.

Since then, many entrepreneurs and interviewers have asked for my customer service tips and tricks, but I recently realized it’s not something you can add on top, it’s really a philosophy - a mindset that has to come from the core.

I’m no expert on the subject, but I’ve learned a few things from 16 years of experience, so here are the 6 key mindsets that I think guide great customer service:

(Actually, I prefer the term “client care”, since “client” implies a relationship, instead of “customer”, which is transactional. But I'll use the normal term instead of confusing things by using mine.)


#1: You can afford to be generous

The #1 most important mindset to start with, underlying everything, before engaging in communication with a customer or client, is that your business is secure.

Even if it’s not, you have to feel that it is. Money is coming your way. You are doing well. You are one of the lucky ones. Most are not so fortunate. You can afford to be generous.

All great service comes from this feeling of generosity and abundance.

Think of all the examples of great service you’ve encountered. Free refills of coffee. Letting you use the toilets even if you’re not a customer. Extra milk and sugar if you need it. A rep that spends a whole hour with you to help answer all your naive questions.

Contrast it with all of the bad experiences you’ve had. Not letting you use the toilets without making a purchase. Charging an additional 50 cents for extra sauce. Salespeople who don’t give you a minute of their time because you don’t look like big money yet.

All bad service comes from a mindset of scarcity, feeling like they’ll go out of business if they don’t fiercely guard their bottom line.

They say the reason those in poverty so often stay in poverty is that short-term thinking of desperate survival doesn’t leave room to think of long-term solutions.

If you really feel secure, abundant, that you have plenty to share, then this feeling of generosity will flow down into all of your interactions with customers. Share. Be nice. Give refunds. Take a little loss. You can afford it.

Of course it’s also just smart business. Losing 10 cents on extra sauce can mean winning the loyalty of a customer who will spend $1000 with you over the next 10 years, and tell 20 friends that you’re awesome.


#2: The customer is more important than the company

Think of a time where you had to make a big decision. For example, the choice between a job that pays more money versus another that pays less but gives more freedom.

Do you remember how it felt when you were conflicted between these two choices? Weighing pros and cons, going back and forth?

The way you resolved this was to finally decide which value was more important to you. For example: more money or more freedom.

Most of us don’t decide which value is most important to us until we’re forced to make this decision.

But if you want great customer service, you need to make this value choice up-front, and decide that your customer’s happiness is your top priority, above company profitability, then make sure that everyone in the company knows this and acts upon it.

You can’t micro-manage the details of every possible scenario, so make sure everyone in the company knows that whenever they have to make decision about what is the right thing to do, always do what’s best for the customer, what would make them the happiest, and don’t worry about the company. The customer is more important than the company.


#3: Customer service is a profit center

Companies put so much energy into sales - getting people to buy - but they don’t put as much effort into the customer experience after people buy.

Anyone can see the reason to focus on getting customers to buy. It’s obvious profit. But it takes some wisdom, experience, and long-term thinking to understand that keeping your existing customers thrilled is even more profitable.

Customer service is not an expense to be lessened. It’s a core profit center, like sales. It’s something you put the best people on, not the cheapest.

You’ve heard the old business truism that it’s 5 times harder to get a new client than it is to get repeat business from an existing client, so this is where you put it into practice.

Hire the sweetest most charming people and make sure they have all the time in the world to spend with your clients, making sure they’re so heard, and so happy with your service, that they’ll tell everyone they know.

Hire enough people so that they have the time to pick up the phone, instead of routing people into an automated system. If they’re so busy that their communications are getting too succinct, it’s time to hire another. It’s worth it.


#4: Every interaction is your moment to shine

Probably only 1% of your customers or clients ever bother to make a customer service interaction.

So when they do, this is your time to shine. Three minutes spent talking with them is going to shape their impression of your company more than your name, price, design, website, or features all combined. This is your shining moment to be the best you can be, to blow them away with how cool it was to contact you.

If your customer service is taught to be efficient, it sends the message, “I don’t really want to talk with you. Let’s get this over with quick.”

Since that’s what everyone else does, do the opposite. Take a few inefficient minutes to get to know anyone who contacts you.

For example, at CD Baby, if someone would call, saying, “I’d like to talk with someone about selling my music through you,” we’d say, “Sure. I can help. What’s your name? Cool. Got a website? Can I see it? Is that you on the home page there? Very cool. Is that a real Les Paul? Awesome. Here, let me listen to a bit of the music. Nice, I like what you’re doing. Very syncopated. Great groove. Anyway... so... what would you like to know?”

I can tell you from my own experience of being a self-promoting musician for 15 years that it’s SO hard to get anyone to listen to your music. So when someone takes even a couple minutes to listen to you, it’s so touching that you remember it for life.

This isn’t some sales technique, it’s just good human behavior. It makes life better. It makes work more fun. It’s the right thing to do. And it pays off.

When people would call to buy music, we’d ask them where they heard of the artist, not in some monotonous scripted way, but as part of engaging the customer in a little conversation, sincerely interested in the details, maybe asking if they often discover new music that way, or whatever. Then we’d include these details in the order on the backend, so the musician could see it, too. It helped the musician be more connected to their fans, and helped both them and us understand why people were buying music.

Imagine what you’d do if Paul McCartney called. You’d drop everything, gush some praise, be thrilled that he’d contact you at all, and give him all the time in the world for whatever he wants. So that’s how we should treat everyone that contacts us. Why not? You don’t have time? Make time. It’s how everyone deserves to be treated.

You know there’s research that says that we don’t smile because we’re happy. We smile first, and the physical act of smiling makes us happy. So I think the act of acting your best, being sincerely interested in others, taking the time to make each person happy, even if you weren’t in the mood at first, is a great way of actually being your best.


#5: Lose every fight

Customer service often starts when someone has a problem, and is upset.

But kind of like you need to feel secure for your business to be generous, you need to feel secure enough to lose every fight.

Whenever they’re upset, let them know that they were right, and the company was wrong. They win. You lose. And you’re prepared to do whatever it takes to make them happy again.

I’m saying this, but let’s admit that it’s so hard to turn off our human nature to feel things are directed at us - to lash back, and show them they’re wrong, to not lose this fight. Occasionally, still, I start typing a response that’s not so nice, but after years of getting burned for doing that, I catch myself, and replace it with something angelic instead.

But you know that scene in the movies, where someone is saying something nasty or secret, and then realizes their microphone is on, so they immediately straighten up, correct themselves, and say the publicly-acceptable thing instead?

Well, your microphone is on. There is no private communication in customer service. Anything you say is likely to be put onto someone’s blog or Facebook, retweeted, and seen by everyone.

So you must be the best version of yourself. You must let them win every fight. You must humbly bow to your superior, and make them happy. And kinda like I said about how smiling makes you happy, I think the act of doing this every day is very peaceful. It feels like daily empathy practice.

Over the years, my company had some huge evangelists: people who loudly told everyone they met that they absolutely must use CD Baby to sell or buy their music. Funny thing is, when I’d look back through that person’s history of communication, I’d often find out that the first time they contacted us, they were loudly upset about some problem. I think the lesson learned is that loud people are loud people, whether complaining or praising, so when you get some loud complaint, take it as an opportunity to do whatever it takes to make them so happy that they become a loud evangelist.


#6: Rebelliously right the wrongs of the world

You know there’s this little passive-aggressive move we all do, when we don’t like how someone is behaving, we instinctively “take the high road” to show them how to behave?

Like if someone is talking too loudly in a quiet place, you speak extra-quiet to them. If someone is being a complete slob, you clean up your zone before confronting them.

It’s a kind of defiant act that says, “No. You’re doing it wrong. Here. Watch me. I’ll show you how it’s done.”

Well, I think your business is your little part of the world where you can right all the wrongs of the world, and show them all how it’s done.

To do this, you need to be rebellious. Don’t follow norms. Don’t do what the other businesses are doing. Instead, think of the worst you’ve experienced, and do the opposite. Show them how wrong they were. It’s very cathartic.


What do you think? Did I miss any important ones? I’d love to hear any suggestions.

girl on phone by Mark Roy
(Photo by Mark Roy.)
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samuel
2 days ago
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Best part of this post: "I think the lesson learned is that loud people are loud people, whether complaining or praising, so when you get some loud complaint, take it as an opportunity to do whatever it takes to make them so happy that they become a loud evangelist."
The Haight in San Francisco
rafeco
8 days ago
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Brilliant guide to customer service.
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cjhubbs
7 days ago
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Principles for great customer service. Awesome.
Iowa

Any Port in a Storm

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There goes another one.

That’s @jonathanpenn, as he heads off to Apple. He follows a number of top indie developers/author/speakers to head to the mothership in the last few months, including Patrick Burleson, Kevin Hoctor, and if we’ll go back a little over a year, we can throw in my former iOS SDK Development co-author Bill Dudney.

This is causing a little bit of angst among those of us who hate to see our friends decamp from our communities to California, and to suggest that maybe indie iOS development/writing/speaking isn’t tenable. Janie Clayton-Hasz, whom I’m working with on a soon-to-be-announced project, expresses this from the POV of a newcomer to development life in her latest blog.

I can’t help but be reminded of times I’ve seen this before. About 10 years ago (I think), a lot of the top authors and speakers in the Desktop Java space all went corporate in a short period of time. corporate. Between Sun and Google, they hired up Chet Haase and Romain Guy (co-authors of Filthy Rich Clients), Joshua Marinacci (my co-author on Swing Hacks), and I think the Java Posse‘s Tor Norbye might have gone to Sun to start working on NetBeans around this time.

At the time, it was pretty clear to all of us what the proper conclusion to draw was: there was no quality work to be found doing Desktop Java, so the best option was to get a gig at the platform builder itself, guaranteeing interesting work and a regular paycheck. Problem is, this is clearly evidence of an unhealthy, unsustainable job market. By analogy, it’s not much different from the useless liberal arts degree, whose only practical application is as a college professor in the same field, turning out more useless liberal arts graduates (signed, with love, Chris Adamson, AB English, Stanford University class of 1990).

“Now wait just a damned minute,” you should be saying, “Desktop Java was always a historic underachiever. How can you compare that to the million-app App Store, and the billions of dollars Apple is paying out to iOS developers?” Fair question, but hear me out. No, better yet, check out Matt Gemmell’s latest blog, in which he says something a lot of us have been saying for a while now: the iOS gigs are drying up:

If you attend an iOS/Mac dev meetup and hang around long enough, you’ll start to hear the whispers and the nervous laughter. There are people making merry in the midst of plenty, but each of them occasionally steps away to the edge of the room, straining to listen over the music, trying to hear the barbarians at the gates. There’s something wrong with the world, Neo.

We’ve had our (latest) software Renaissance in the form of the mobile platforms and their App Stores, and I think the software biz is now starting to slide back towards consolidation and mega-corps again. It’s not a particularly great time to be an indie app developer anymore.

Small shops are closing. Three-person companies are dropping back to sole proprietorships all over the place. Products are being acquired every week, usually just for their development teams, and then discarded.

This is something I’ve been saying for a while too. A company that I do most of my subcontracting with has kept me busy for just 2 of the last 12 months. They say they’re getting a lot of call for Android, but almost nothing for iOS. I’ve been partially living off loans for the last couple months because I had almost no paying work for Q2 (and when I did, they were short 1-2 week engagements, mostly rescues), engagements), and spent the time revising my intro book instead (three new chapters of Objective-C since April, Objective-C, which I’ve now ported to Swift).

My friend Eric Knapp believes that a lot of companies are bringing their iOS work in-house, rather than farm out to pricy consultants who then walk away with all the knowledge. This is definitely a plausible explanation for the seeming health of the App Store despite and Matt’s observed withering of the indie developer environment. It also makes sense that with the death of the paid app market, perhaps only companies that are selling something other than the app itself can make a go of being on the App Store, and thus need our services as developers.

For the first time in over a decade, I’ve been applying to permanent gigs, when they come up and when they’re willing to work remote (few are, but at least for now, I can still take my time). There’s no way I’d move my family to California, but I’m willing to give up a significant degree of career independence, because it increasingly seems untenable.

For now, I’m focusing on things where I think I’d be the ideal fit — audio, video, streaming gigs — which come along quite rarely, so this is a long game that may or may not pan out, a background process to the daily scramble for work and writing. I went after a streaming video position at as a company I greatly admire, but they were adamant about relocating, since they’d had a bad experience with remote workers before, so that didn’t pan out. I did a phone screen on another position last week… kind of odd to have to prove my bona fides on iOS audio after literally writing the book on the topic. It’s also a problem in interviews that I had to pull my own apps from the App Store (long story short: Apple’s revised guidelines outlawed my revenue model), so now I have to point to client apps, at least those that are public public, and have good reviews.

For now at least, we have to carry on and hope to pull something together.

You are stronger than any storm you will ever face

Huh… inadvertently but appropriately enough, I listened to Quadrophenia while writing this.

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rafeco
14 days ago
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The idea that developers being hired by a platform vendor is a sign of ill health is interesting. Wonder if it holds up broadly?
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Piketty in R markdown – we need some help from the crowd

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Thomas Piketty's book Capital in the 21st Century was a surprise best seller and the subject of intense scrutiny. A few weeks ago the Financial Times claimed that the analysis was riddled with errors, leading to a firestorm of discussion. A few days ago the London School of economics posted a similar call to make the data open and machine readable saying.

None of this data is explicitly open for everyone to reuse, clearly licenced and in machine-readable formats.

A few friends of Simply Stats  had started on a project to translate his work from the excel files where the original analysis resides into R. The people that helped were Alyssa Frazee, Aaron Fisher, Bruce Swihart, Abhinav Nellore, Hector Corrada Bravo, John Muschelli, and me. We haven't finished translating all chapters, so we are asking anyone who is interested to help contribute to translating the book's technical appendices into R markdown documents. If you are interested, please send pull requests to the gh-pages branch of this Github repo.

As a way to entice you to participate, here is one interesting thing we found. We don't know enough economics to know if what we are finding is "right" or not, but one interesting thing I found is that the x-axes in the excel files are really distorted. For example here is Figure 1.1 from the Excel files where the ticks on the x-axis are separated by 20, 50, 43, 37, 20, 20, and 22 years.

fig11

Here is the same plot with an equally spaced x-axis.

f11-us

I'm not sure if it makes any difference but it is interesting. It sounds like on measure, the Piketty analysis was mostly reproducible and reasonable.  But having the data available in a more readily analyzable format will allow for more concrete discussion based on the data. So consider contributing to our github repo.

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Scientist biography recommendations

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Earlier today I asked my Twitter followers for recommendations for "really good" biographies about scientists. I gave Genius (James Gleick's bio of Richard Feynman) and Cleopatra, A Life (not about a scientist but was super interesting and well-written) as examples of what I was looking for. You can see the responses here and I've pulled out a few of the most interesting ones below:

- Isaac Newton by James Gleick. Gleick wrote the aforementioned Genius and Chaos, another favorite of mine. I tried to read The Information last year after many glowing recommendations from friends but couldn't get into it. Someone suggested Never at Rest is a superior Newton bio.

- The Man Who Loved Only Numbers by Paul Hoffman. I've read this biography of mathematician Paul Erdos; highly recommended.

- Galileo's Daughter by Dava Sobel. I've never read anything by Sobel; I'll have to rectify that.

- Einstein: His Life and Universe by Walter Isaacson. I enjoyed his problematic Jobs biography and I notice that he's written one on Ben Franklin as well.

- Alan Turing: The Enigma by Andrew Hodges.

- American Prometheus by Kai Bird and Martin Sherwin. Bio of J. Robert Oppenheimer, leader of the Manhattan Project. See also: The Making of the Atomic Bomb, one of my favorite books ever.

- Everything and More by David Foster Wallace. I've heard Wallace was bit handwavy with the math in this one, but I still enjoyed it.

- Newton and the Counterfeiter by Thomas Levenson. Newton was a detective?

- The Philosophical Breakfast Club by Laura Snyder. Four-way bio of a group of school friends (Charles Babbage, John Herschel, William Whewell, and Richard Jones) who changed the world.

- The Reluctant Mr. Darwin by David Quammen. How Charles Darwin devised his theory of evolution and then sat on it for years is one of science's most fascinating stories.

- T. rex and the Crater of Doom by Walter Alvarez. Not a biography of a person but of a theory: that a meteor impact 65 million years ago caused the extinction of the dinosaurs.

- Walt Disney by Neal Gabler. Disney isn't a scientist, but when you ask for book recommendations and Steven Johnson tells you to read something, it goes on the list.

- The Man Who Knew Infinity by Robert Kanigel. Bio of brilliant Indian mathematician Srinivasa Ramanujan.

- Edge of Objectivity by Charles Gillispie. A biography of modern science published in 1966, all but out of print at this point unfortunately.

- Galileo at Work by Stillman Drake.

- The Age of Wonder by Richard Holmes.

And many more here. Thanks to everyone who suggested books.

Update: Because this came up on Twitter, some biographies specifically about women in science: The Immortal Life of Henrietta Lacks, Hedy's Folly, On a Farther Shore, Marie Curie: A Life, A Feeling for the Organism, Rosalind Franklin: The Dark Lady of DNA, and Jane Goodall: The Woman Who Redefined Man.

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rafeco
28 days ago
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Filing this one away.
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Moneyball 2.0

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After Michael Lewis wrote Moneyball in 2003 about the Oakland A's, their general manager Billy Beane, and his then-unorthodox and supposedly superior managerial strategy, a curious thing happened: the A's didn't do that well. They went to the playoffs only twice between 2003 and 2011 and finished under .500 four times. Teams like the Red Sox, who adopted Beane's strategies with the punch of a much larger payroll, did much better during those years.

But Beane hung in there and has figured out how to beat the big boys again, with two first place in 2012 &am 2013 and the best record in the majors this year so far. Will Leitch explains how.

First, don't spend a lot on a little; spend a little on a lot.

The emotional through-line of Moneyball is Beane learning from his experience as a failed prospect and applying it to today's game. The idea: Scouts were wrong about him, and therefore they'll be wrong about tons of guys. Only trust the numbers.

That was an oversimplification, but distrusting the ability of human beings to predict the future has been the centerpiece of the A's current run. This time, though, the A's aren't just doubting the scouts; they're also skeptical that statistical analysis can reliably predict the future (or that their analysis could reliably predict it better than their competitors). Instead, Beane and his front office have bought in bulk: They've brought in as many guys as possible and seen who performed. They weren't looking for something that no one else saw: They amassed bodies, pitted them against one another, were open to anything, and just looked to see who emerged. Roger Ebert once wrote that the muse visits during the act of creation, rather than before. The A's have made it a philosophy to just try out as many people as possible -- cheap, interchangeable ones -- and pluck out the best.

Tags: baseball   Billy Beane   Michael Lewis   Moneyball   sports   Will Leitch
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rafeco
29 days ago
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The Astros are doing something somewhat similar.
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