Moneyball analytics didn’t change baseball once. It changed it twice.
Yesterday I argued that AI will make human attention and judgement the scarcest resource in enterprise. Baseball already ran that experiment.
The first change is the one everybody knows. Billy Beane had one of the smallest budgets in the league. Payroll was the scarce resource he needed to allocate. He used data to find the players the market was mispricing because other team’s scouting departments made decisions on intuition and feel. He used this edge to make the playoffs four straight years.
This edge was soon eroded. Before the book even came out, Oakland’s front office staff were recruited by other teams. By 2004, teams were paying full price for on-base skill as quantified by analytics. Eventually, every team had an analytics department. The data, the models, the analysts all became commodities.
Data got cheaper and more plentiful. The stadiums were equipped to track everything that could be tracked. Today, every pitch, every swing, every spin rate is tracked and shared with all 30 teams. But a hitter can’t think about forty metrics in the batter’s box.
That’s when the second change began.
Teams recognized the competitive edge had quickly moved. Every team had an abundance of commoditized information and established analytical methods. The advantage became a team of humans capable of effectively distilling and executing on this information. The bottleneck moved from information to human attention and judgement.
So teams did something counterintuitive: they hired more people. Some teams now carry three or four hitting coaches, and their job is to translate the data into something a player will trust and act on. A manager can only have so many conversations per day. At every level, for every matchup, it’s someone’s job to only pass along the insight that matters.
That’s the version of the Jevons Paradox I pitched yesterday, playing out on the diamond. Cheaper data didn’t reduce the need for human judgement. It multiplied it.
Every company is about to go through both changes. But most may only be looking at the first. Building an advantage there will be short-lived. The second is the one that decides who wins.