- The stress of running a real estate business isn't worth it unless you're living your dream, not someone else's.
- Brokers, don't be taken in by surface flash. Focus on substance, such as actual performance data, when recruiting agents to join your team.
- It's never too late to reinvent your business. If you're not getting where you want to go, cut your losses and make a mid-season change.
I recently heard Oakland A’s general manager Billy Beane (subject of the book and movie “Moneyball”) speak at an industry conference.
I don’t normally read business or sports books, but Beane’s talk was so fascinating that, by the time I left the conference hall, I had pulled up my library’s website and requested a copy. And it didn’t disappoint.
As many folks before me have discovered, Beane’s scientific approach to baseball holds a number of lessons for other industries — real estate included.
The more I read, the more I found myself thinking, “There’s so much here to benefit our customers!” So, in the spirit of sharing the wealth, here are what I saw as the book’s top takeaways for agents and brokers.
Live your own dream, not someone else’s
Against his better judgment, 17-year-old Beane let his father and his high school coach talk him into signing with Oakland. The result was disastrous. He had incredible athletic talent, but he didn’t have a pro-sports mindset.
Every little mistake caused him to implode or explode, depending on his mood. The results were uneven performance on the field, a failed marriage and an early end to his playing career. It wasn’t until he was in the front office, doing what he wanted to do, that he really fulfilled his potential.
Like pro sports, real estate can be a head game. The hours are extremely long, the stakes are high, and competition is fierce. Don’t let anyone else talk you into taking on that much stress. Jump into the arena only if you really want to be here.
Look for substance, not surface
When Beane first became Oakland’s general manager, he fought an uphill battle against old-school scouts, who chose players primarily on the basis of appearance and imagined potential.
If a player looked athletic and could wow the crowd with speed and power hitting, he was in. Beane, by contrast, chose players based on actual performance data: mundane statistics, such as slugging and on-base percentage, that were proven to correlate to wins.
The result? Beane’s team of overweight, aging players made it to the playoffs ahead of better-looking, flashier franchises.
Don’t get me wrong — a professional appearance is important. But especially if you’re a broker recruiting for your team, don’t assume that good looks, snazzy dressing and a flashy smile equate to top performance.
If you really want to know an applicant’s potential, ask for substantive data: ROI on their marketing, how many homes they’ve sold and at what price point, and how they’ve performed under certain market conditions.
Be open to new ideas, even when it hurts.
Beane was able to blow past many teams with banner rosters because he was willing to try something new: data-driven staffing. It wasn’t easy.
He was pilloried in the baseball press, berated by his scouts and mocked by other GMs. Even when his team started packing for the playoffs, his audience remained skeptical.
It took years of repeated victories before other teams stopped pooh-poohing the Billy Beane way. But in the meantime, his team racked up wins and set records.
Why else do you think we now have an entire sub-industry of portals? Don’t be the players left sitting at home while the forward-thinking team blows past on the way to the playoffs.
Pay attention to what buyers and sellers want, stay abreast of technology (the kind that will actually grow your business, not the shiny-object kind) and be a pioneer. Amazing things are happening in real estate and, believe me, you want to be part of them.
Make the most of what you’ve got
If you look up, “necessity is the mother of invention,” Billy Beane’s photo should be next to it. His entire methodology was a response to his last-in-the-league payroll budget.
Beane was determined not to lose, so he found a way to win by maximizing ROI on undervalued players. Dollar for dollar, he earned roughly double the wins of his competition.
Running a real estate business can be expensive, especially when it comes to marketing and tech costs. Don’t have the budget of your competitors?
Find undervalued or under-used ways to beat them. Out-market them on social media (it’s free!) Spend money on tech that builds the essential functions of your business (again, avoid the shiny objects). Focus your marketing dollars on solutions with proven ROI. If you can’t afford expensive conferences or coaches, network locally, find a good mentor, and attend webinars instead.
It’s never too late to reinvent
One of the most fascinating sections in “Moneyball” is about two-thirds of the way through, when Lewis describes Beane’s mid-season game plan.
Lewis explains that, although Beane’s data-focused method helps him make a decent start to the season, his first string of players is usually not playoff material.
So, midway through each season, Beane waits until just before the trade deadline, then starts wheeling and dealing for undervalued players he wasn’t able to grab during the draft. This strategy typically nets him the talent he needs to reach the playoffs.
If your real estate business seems stuck in a rut, take a page out of Beane’s playbook: do a mid-season reinvention. When your buyers need a bigger house because they’ve had kids, don’t counsel them to wait just because they’ve spent a certain number of years in their current home, or paid a certain amount of money toward the mortgage.
Point out that the house served its purpose for the time, but now they’re growing, and they need their home to grow with them. Take the same approach to your business. Don’t hold yourself back because you’ve been doing things a certain way for 15 years, or because you’ve invested a certain amount of money in marketing one way.
Be thankful that those choices brought you to this point, then make the changes you need to make to get where you want to go.
Have you ever read (or watched) “Moneyball?” What were your takeaways?