Using Moneyball Tactics to Run Your Business

by Kevin Mulligan

 

The movie Moneyball, starring Brad Pitt and based off the infamous Michael Lewis book of the same title, provides viewers with a glimpse into the unorthodox strategy a financially downtrodden baseball team used to rebuild the franchise and see success. Can business lessons be extracted from the film to help you grow your company?

The Moneyball Story

In the early 2000s the Oakland A’s were struggling to find success, and the general manager hired a new assistant manager who used a different spin to identify talent for the team. Instead of relying on the gut instinct of seasoned baseball talent scouts, a strategy used by every other team, he looked for talent based on one statistic: how often a player got on base (whether through hits, walks, and so on). This odd spin on researching talent was unorthodox, but allowed the team to find diamonds in the rough of free agency. Players that had been discarded by other teams for poor recent performance might still have great on-base percentage numbers. Those discarded players became the pillars of success for the A’s. They were able to craft a winning team for less than it would have cost to take the most popular talent available.

Applying Moneyball to Business

Can you apply some of these tactics to managing your own business?

Be Unorthodox

Sometimes the best ideas are born out of desperation. When the Oakland A’s starting picking up random, undesirable players based on a single statistic, they were called crazy. No one thought it would work because it was an unorthodox strategy.

The team’s financial situation may have pushed management toward an unorthodox strategy, but sometimes being unorthodox is your best option. Maybe there is a better way to attract talent, or build a widget, or sell a product. It might seem crazy at the beginning, but sticking to your gut on a drastic change can be great for your business.

Ignore Detractors

When you are unorthodox or go against the grain of what is an industry norm, you are bound to have detractors sharing negative thoughts with you. You might be crazy, or you might be crazy enough to turn an industry on its head. When other Major League Baseball teams and critics called the A’s crazy, they built a winning team that was right for their financial situation. No one said it would work, and it did.

Make Better Hiring Decisions

Your industry standard for hiring might be someone with a bachelor’s degree in business management and 3-5 years of experience. Or MBA candidates from a Top 10 school with 10 years of experience. All of your competitors are investing serious money into salaries for these candidates, so obviously you have to do the same just to keep up. This can lead to an expensive war for talent.

But what about the communications professional with a passion for your industry? Would you ignore them as a potential hire just because “the industry” says to?

Focus in on what truly matters to your organization. Industry familiarity is just one factor to consider, and in the big scheme of your hiring it may not be the most important. Identify the factors that matter most to your organization, and pursue those candidates no matter the industry norm.

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Top 10 Cities to Work and Live In

by Leo Sun 

 

Several decades ago, the greatest cities to work in the United States were obvious, classic choices – New York City, Los Angeles, Chicago or Detroit. Times, however, have changed rapidly and mercilessly. After the collapse of the banking system, the demise of print media, and the bankruptcy of Motor City, these places are vulnerable to the lure of more modern cities.

The tech revolution made San Francisco and Silicon Valley the hottest places to live and work, and as these companies expanded, states with lots of cheap real estate and low corporate taxes came into favor, as crowded urban environments fell out. A top ten list of America’s best cities to work in – in no particular order – demonstrates how the changing trends of business have reshaped the definition of the ideal city for work and play.

1. Austin, Texas

Austin, the capital of Texas, is the self-proclaimed live-music capital of the world, a surprisingly liberal college city considered the Fertile Crescent of established tech companies – such as IBM, AMD and Intel – as well as an incubator for fledgling startups. In addition, the city’s housing costs, while higher than other cities in Texas, are quite reasonable compared to the rest of the United States.

2. Milwaukee, Wisconsin

Milwaukee was once known as the city of beer with its extensive brewing and manufacturing industries, but in recent years the city has attracted major corporations, such as Harley-Davidson, Johnson Controls and Kohl’s. In addition, the city boasts one of the most well-preserved historical centers in America, and is situated on the coast of picturesque Lake Michigan.

3. Seattle, Washington

Often considered the cheaper and rainier version of San Francisco, Seattle is a mecca for top talent in multiple industries, and is home to top brands such as Microsoft, Amazon, Boeing, Starbucks and Nintendo of America. The city’s liberal and progressive ideas and close proximity to Vancouver and the serene islands of the Puget Sound make it an ideal place to work and live.

4. Salt Lake City, Utah

A surprising amount of businesses have relocated to the Mormon capital of the west, Salt Lake City. Cheap real estate, low living costs, labor costs, operating costs and taxes have all attracted scores of businesses – which include Huntsman Corporation, eBay, Unisys, 3M, Myriad Genetics and Kroger subsidiary Smith’s Food and Drug. A large portion of the city’s economy is also dependent on the numerous ski resorts nearby, which is also attractive to new hires to the area. Despite its religious foundations, Salt Lake City is considered one of the most liberal cities in the United States.

5. Boulder, Colorado

Boulder is often referred to as a ski resort or as a prominent location in spaghetti westerns. However, due to an influx of hippies in the 1960s, the city has since transformed into “San Francisco in the Rockies”, a liberal, educated city highly rated in health care, quality of life, education and art. The city is powered by three main forces – the highly ranked University of Colorado, federal research laboratories and over 6,600 small businesses and corporations.

 

6. Washington, D.C.

Nearly half of the country’s 25 richest countries are headquartered in the nation’s capital. The U.S. government offers many jobs in the area, which offer a level of security and benefits heads and shoulders above regular corporations. In addition, housing costs are lower than New York City, and the area is steeped in history and culture, a rarity in comparison to other younger cities.

7. Rochester, Minnesota

Rochester owes much of its existence to the world-renowned Mayo Clinic, a frontier hospital that evolved into one of the nation’s leading medical institutions. As a result of its strong reputation, the area attracts more medical professionals than any other major metropolitan area, as well as other businesses in the medical field. Housing costs are low, and the quality of life rating is high – and the city is consistently featured in many “top ten” lists of best places to live in America.

8. Burlington, Vermont

Burlington is considered one of the greenest and most eco-friendly cities in America, a venerable oasis untouched by large multinational chains, bioengineered grops and grotesque power plants. The city’s economic rise has been powered by a local-food movement in which co-ops, city markets and local marketplaces have worked hand in hand to keep the community self-sufficient. The city is also a major supporter of solar power, and liberally uses Vermont-based groSolar’s panels atop its businesses. In the next decade, the city should attract more local-food businesses as well as green energy companies.

9. Topeka, Kansas

The city, best known as Dorothy’s (assumed) hometown in the Wizard of Oz, has certainly grown up over the past decade. The capital of Kansas boasts a stable job market in which a fourth of the city is employed by the government. In addition, low housing costs, good healthcare and schools have all spurred a population spurt in the once tiny city.

10. Baton Rouge, Lousiana

Baton Rouge, along with the rest of Louisiana, has bounced back with a vengeance since the dark days of Hurricane Katrina. The capital city is expected to grow in digital media, biofuel production, wood products and construction. The city is also expanding its hospitals to boost the quality of its healthcare, and is expected to attract more health industry jobs as well. In addition, housing costs are low and the city’s classic casinos remain a draw for tourists.

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Finding the Right Co-Founder

by Carmen

 

If you’re considering finding a co-founder to help you start your business, you already know that you’re not making an easy decision.  People have, after all, compared business partnerships to marriage, and everybody knows marriages take work.  Still, there’s no denying that co-founders and partners can be a vital part of a healthy business strategy.  Here are a few tips to help you choose the right co-founder.

 

Don’t partner up with someone who is just like you

 

Ideally, each partner brings something different to the table.  One partner might have 15 years in the industry while the other partner might have a great deal of marketing talent.  Overlapping strengths can become a point of contention between co-founders.  They can also rob your business of the vital expertise that it needs to survive.  Find someone who knows things you don’t know and figure out how to partner with that person.  Find someone who compliments your strengths.

 

Find someone who shares your vision

 

You believe in buying fair trade, your partner believes in buying cheap.  You believe in serving only fresh, local food, your partner believes that it’s better to import food.  Your partner wants the latest and greatest technology; you’re content to use 5 year old PCs.  These sorts of conflicts aren’t just about how things are done.  These are conflicts that touch on the very heart of the brand and identity of the businesses they describe.

 

Craft a vision statement for your business, and make it meaningful in concrete terms.  Find a partner who shares that vision.  Then, whenever conflicts come up you can go back to the central question: “Does this course of action fit with our vision, or not?”  Ideally, both of you should be excited about the direction your company is headed in.

Find someone you can communicate with

 

You need to find a co-founder who you can talk to—even when you don’t agree.  You can’t afford to let conflicts and resentments fester.  You also can’t afford a scenario where both partners aren’t aware of what’s going on in the business.  You both should feel comfortable expressing your opinions.  You both need to feel like you’re in an open, respectful relationship.  Only then will your partnership—and the business you are building—flourish.

Find someone with a thick skin

 

A big part of going into business with a co-founder is developing an exit strategy.  You don’t want a partner who is going to be offended by the thought that you don’t want to stay with him forever and ever.  This is especially true if you are using the partnership as a springboard into 100% ownership of your own business or location, or if you’ve got visions of selling your share of the business in the future in order to turn a profit.

 

Find someone with integrity

 

Watch how your potential co-founder treats other people. If your potential partner is willing to cheat other people, lie to them, or treat them disrespectfully then he’s willing to do the same to you.  Furthermore, misbehavior on your partner’s part may tarnish your own business reputation. In the business world, your reputation and your integrity are worth far more than the checks you’re capable of writing.  If you and your co-founder are going to build a successful business you want someone who shares your values.

 

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What’s Next for Facebook?

by Business Dictionary

 

Having already attracted Hollywood’s attention with the 2010 movie “Social Network”, loosely based on the Facebook story, the saga continues developing with the company’s upcoming IPO. What does the future hold for Facebook as it makes the significant transition from private to publicly held company?

 

Facebook’s meteoric rise from its birth in a Harvard dorm in 2004 has already affected its 845 million customers, and with its IPO, the company’s performance will begin to affect a whole community of investors. According to its S1 IPO filing with the SEC, the company made a profit of $1 billion last year and will probably earn more after its IPO.

 

Significant Changes for Facebook After the IPO

 

Some analysts foresee Facebook being less innovative as the company opens itself up to the scrutiny of its new shareholders. Also, due to the expected exodus of its brightest talent as employees and managers cash out and leave the firm, the company will be challenged to remain ahead of its competitors in retaining its talent.

 

Furthermore, Facebook employees — many of which came from other large firms such as Google — who cash out and leave the firm, may move on and use their newly acquired wealth to start up their own companies, creating additional competition for Facebook.

Once Facebook goes public, the company will be pressured to show increasing revenue. Presently, Facebook’s revenue comes primarily from advertising, with $3.8 billion made in 2011, and apps selling products on the Facebook platform for which the company takes a 30 percent cut.

 

Facebook’s network is a marketer’s dream come true, which will most likely have the company create new types of advertising vehicles and targeting applications for advertisers to take advantage of on their platform. With Facebook’s enormous client base, getting the word out for a product will be that much easier for advertisers.

 

Possible Takeovers of Other Companies

 

With the expected windfall of cash from the IPO, in addition to liquidity in its newly issued stock, Facebook will be in a prime position to take over other companies in related businesses, as well as its competitors.

Facebook has recently been shopping and acquiring talent from other firms, such as Gowalla, who recently shut down its location based service. Also recently acquired was the team behind Caffeinated Mind, a startup specializing in fast file and data transfers.

More takeovers as a result of the IPO are likely to take place, with Facebook probably already planning ahead. Possible targets include Facebook’s competitors as well as companies offering services which would complement Facebook’s platform.

 

Facebook’s Stock Price and the IPO

 

According to allfacebook.com, Facebook stock closed at $33 per share at the last auction on SharesPost, where an 80,000 share block traded recently. This would put the valuation of the company — with an estimated 2.5 million outstanding shares — at $82.5 billion.

The auction for the Class B Common Stock of Facebook Corporation was significantly oversubscribed according to SharesPost. This would indicate that the IPO price, which has as of this writing not been disclosed, to be somewhere in the vicinity of $40 per share, given a $100 billion valuation for the company.

 

Given the attention the Facebook IPO has already attracted, the shares could go much higher immediately after the issue. Nevertheless, when the stock reaches a certain level, many people may look to cash out, putting downward pressure on the stock, this is very likely in the case of Facebook.

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