{"id":18614,"date":"2023-06-09T22:15:20","date_gmt":"2023-06-10T02:15:20","guid":{"rendered":"https:\/\/www.duck9.com\/blog\/?p=18614"},"modified":"2023-06-10T23:34:40","modified_gmt":"2023-06-11T03:34:40","slug":"moneyball-its-not-just-about-baseball","status":"publish","type":"post","link":"https:\/\/www.duck9.com\/blog\/moneyball-its-not-just-about-baseball\/","title":{"rendered":"Moneyball\u2014It\u2019s Not Just About Baseball by fake Larry Chiang"},"content":{"rendered":"

Larry Chiang\u2019s 5th book, WTDTYASBS, launched at a Harvard Law School keynote, so he knows about grand openings (He even attends and promotes the ones he isn\u2019t invited to also). As CEO of Duck9, he leads an army to help college student\u00a0consumers get a FICO<\/a>\u00a0over 770. Post H.L.S. keynote, Harvard Business wrote: \u201cWhat They Don\u2019t Teach You at Stanford Business School<\/a>\u201d (his latest Harbus post: \u201cSetting an intention for SXSWi\u201d.<\/p>\n

Are we trying to sell jeans here or are we trying to win baseball games?<\/em>\u2014Billy Beane,\u00a0Oakland A\u2019s General Manager<\/p>\n

Baseball scouts used to judge players on looks.<\/p>\n

Moneyball, as a method, revolutionized the evaluation of baseball talent. It correlates, connects and coagulates all performance metrics (aka stats) to determine offensive or defensive production per player. In short, it made picking players more science and less art. There is a science to offensive productivity based on the \u201con base percentage,\u201d and there is a a science to defensive productivity.<\/p>\n

It turns out that VCs pick entrepreneurs using a highly parallel method.<\/p>\n

VCs are big fan boys of\u00a0Moneyball<\/em>. I learned of the Michael Lewis book via Roelof Botha at Sequoia Capital. He was on a VC panel I was hosting at the Monte Jade American Association meeting in 2007. (It\u2019s a mountain in Taiwan.)<\/p>\n

This is how VCs use Moneyball against entrepreneurs:<\/p>\n

1. The Hardship Interview<\/strong><\/p>\n

I studied engineering. Investment banks would set up interviews on engineering campuses. Some firms haze and cause you direct stress during an interview. It\u2019s the hardship interview and the technique is old school.<\/p>\n

Now, VCs test you via the mediocre intro. I wrote about it in a previous post, \u201cHow to Charm A VC Into Mentoring You<\/a>\u201c. It is a test to see if you execute, take crap, and follow up. Giving you a dog bullocks intro is the VC\u2019s version of a hardship interview.<\/p>\n

2. Kill You With Kindness<\/strong><\/p>\n

Baseball GMs have all sorts of ways to character compass a player. Character compassing is reading the person\u2019s current talent and projected vector. Vectors give extra dimension to reading a person because they have direction and momentum.<\/p>\n

VCs like to \u2018open field interrogate\u2019 an entrepreneur. It\u2019s the opposite of a stressful, closed-room, interrogation that is infinite. Open field interrogation is kind. Relaxed. Finite.<\/p>\n

Similarly, baseball GMs will treat a player they\u2019re on the fence about with extreme kindness to evaluate them. The kindness itself is a test.<\/p>\n

You see, VCs have a fraction of the domain expertise that your average Stanford CS Major intern has. They know this. But they are expert pattern recognizers.<\/p>\n

How you handle the VIP treatment from the VC or the GM is going to impact how they evaluate you in the \u201ckill \u2019em with kindness\u201d maneuver. When you experience a private car picking you up, act like it\u2019s your first limo ride. When you experience your first ride on a private charter flight, act like its the first time and BE THANKFUL. Pass the test and do not act entitled because you are getting a gift you have not yet earned.<\/p>\n

3. Lead Generate<\/strong><\/p>\n

VCs are like baseball GMs in that they have scouts.<\/p>\n

These bird-dogs get them deal flow. A bird dog is a hunting term where your Shih-Tzu Baxter points his paw or his snout at a talented CS major pre-preneur. Or your retriever points at employee #5 from Mint and says, \u201cGo hunt that deal.\u201d Deal flow is the parade of talent that wants to partner with you and these leads are brought to the VC via a referral.<\/p>\n

4. Farm System and Training Table<\/strong><\/p>\n

There are organic methods to generate your own leads to augment your deal flow. Farm system and training table are terms from baseball, football, and many sports. But VCs use both methods to source entrepreneur deal flow.<\/p>\n

Running a farm system in the venture world consists of hosting a hackathon, or buying or starting a conference like AppNation, ReverseVCPitch, Summit at Stanford, TechCrunch Disrupt, or Stanford Startup Academy.\u00a0DISCLOSURE: I crash these and financially benefit from attending with 12-20 CS majors as my +1s.<\/p>\n

\u201cTraining Table\u201d is like a VC hosted dinner. Smash Summit dinner at Clift Hotel by 500 Startups\u2019 Dave McClure (also a\u00a0Moneyball<\/em>\u00a0fan) is an example. Smash is all about social media marketing best practices. Facebook and Google used to do them but stopped. Twilio, Evernote, Yodlee still do. FoundersFund, August Capital, NorthBridge, Morgenthaler, and Y Combinator still do.<\/p>\n

5. Pitchers and Catchers Report in February<\/strong><\/p>\n

Pitchers and catchers have the easiest path to the pros.\u00a0Or so it seems\u2014but these two positions have to work the hardest.<\/p>\n

In baseball, it seems like there\u2019s a lot of standing around. Well, VCs are notoriously tan, healthy looking, relaxed, and levitate towards a boondoggle. If you\u2019re an agent and you wanna romance a pitcher or a catcher to sign, you\u2019ll have to crash their 6:00 am workout in Scottsdale Arizona.<\/p>\n

As an entrepreneur, it means showing up early and staying late. It means getting ROI for the last day of a conference and trying to close deals after other booths are starting to pack up. Remember, after pitchers pitch on game day, they run 2-3 miles for recovery day.<\/p>\n","protected":false},"excerpt":{"rendered":"

Larry Chiang\u2019s 5th book, WTDTYASBS, launched at a Harvard Law School keynote, so he knows about grand openings (He even attends and promotes the ones he isn\u2019t invited to also). As CEO of Duck9, he leads an army to help college student\u00a0consumers get a FICO\u00a0over 770. Post H.L.S. keynote, Harvard Business wrote: \u201cWhat They Don\u2019t […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-18614","post","type-post","status-publish","format-standard","hentry","category-stanford-engineering"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/18614","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/comments?post=18614"}],"version-history":[{"count":3,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/18614\/revisions"}],"predecessor-version":[{"id":18687,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/18614\/revisions\/18687"}],"wp:attachment":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/media?parent=18614"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/categories?post=18614"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/tags?post=18614"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}