Big Data and the Moneyball Economy

Big Data can become the key to unlocking growth for smaller companies throughout the U.S. economy.

The Moneyball strategy – which emphasizes a sophisticated understanding of data and statistics to help small budget baseball teams compete with their higher-spending rivals – holds a number of important lessons for the world of business. At a time when companies are finding that they must do more with less, Big Data – the massive amounts of unstructured data that Web users create every day with their Internet-connected devices - could be a source of competitive advantage for smaller businesses. Once these businesses discover their version of (formerly) arcane baseball stats like On Base Percentage, Big Data can become the key to unlocking growth for smaller companies throughout the U.S. economy.


The same way that avid baseball fans used statistical abstracts from Bill James (named by TIME as a Top 100 thinker in 2006) for insights into the game beyond the typical metrics like batting average and stolen bases, small businesses need a quick and easy way to sense of all the data out there. Think of the scenes from Moneyball where the old-time baseball scouts are still using terms like "he has a beautiful swing" and "he looks like an athlete" whereas the new era of data whizzes led by Billy Beane and young Yale grad Peter Brand were crunching the numbers on what actually helps teams win games as well as how to approach certain at-bats during a game. Today’s Big Data is nothing like traditional data -- it's too big and too abstract for most people to get their hands around. Fortune 500 companies may be able to crank through the data, but what about the corner bakery or the local drycleaner?

That’s about to change as soon as Silicon Valley companies begin to develop solutions specifically for the small business owner. Consider for a moment that Oakland A’s General Manager Billy Beane – the protagonist of Moneyball – has been participating in a marketing campaign for NetApp, which makes data storage solutions. Yep, that same Billy Beane (or was it Brad Pitt?) was signing Moneyball books at the recent Oracle Openworld conference ("Every Company Has a Billy Beane Inside of Them"). And it’s not just the data storage companies of the world that promise to make life easier for small businesses. At the recent Tech Crunch Disrupt event in San Francisco, one of the standout companies was SizeUp, which brings business intelligence and competitive analysis to the small business space: "SizeUp provides many of the same demographic, industry, geographic, business, and cost data that big businesses use to make smarter decisions, but provides it to all companies at no cost to the end-user."

There is a Moneyball opportunity here for small businesses who may lack traditional financial resources. They just need to get smart about how to out-think their larger rivals. Despite the buzz about Big Data from high-end consulting companies like McKinsey, few small businesses have really figured out what to do with all that data out there. ReadWriteWeb recently cited fashion upstart Rent the Runway as one of the smaller companies out there that is starting to challenge the fashion industry leaders by putting data to work: "Rent The Runway implemented a data culture... After analyzing how customers rented dresses online, it concluded that there are 19 variables that are important. Those include color, designer name, dress length, time of year, occasion/purpose, age of renter, body type, neckline, model wearing dress, price."

Small businesses have always been the key to economic recovery. Now’s the time for small business owners to play moneyball and really get the economic gears going. The Moneyball concept is not going away anytime soon – and it may even be making a resurgence, given that the original Michael Lewis book was published in 2003, back when the Oakland A’s had to figure out a way to take on the free-spending Yankees. Watching the current World Series matchup between the Texas Rangers and St. Louis Cardinals should be inspiration enough that you don’t have to be a high-spender like the Yankees, Red Sox or Phillies to win it all.

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