For those who aren't baseball fans, Scott Boras is an uber baseball agent who gets such great deals for his players that clubs sometimes choose not to draft players who are represented by him. Great quote on this from a Boston Globe (registration required) article called "Why Scott Boras is the Best (and Worst) Thing to Happen to Baseball":
"Boras is as controversial as he is influential. While one of baseball's great urban legends is that there are teams that will never negotiate with his clients – baseball executives would have negotiated with Hitler if Goering could have hit a three-two curveball – there is no question that teams consider very carefully drafting a young player whom Boras represents."
One of reasons Boras is so successful is his analytical approach to his negotiations. The Orange County Register has an article on the new office complex Boras has built in Newport Beach. His new offices are "part offices, part museum, part restaurant, part clubhouse and part technology hub for Boras’ staff, which includes 40 data analysts." Key quote on his computer and data system:
"Behind all the decor is the heart of the business: the computer center. While Boras came up with most of the building’s design features himself, the one he’s most proud of may be that multimillion-dollar computer system. It occupies an entire room of the lower floor complete with its own cooling system. Access is key-coded. It’s the room that’s most likely a source of many Advil moments for team owners negotiating with Boras.
The computer system contains baseball statistics from the current season back to 1870. That’s not a typo. Early stats were entered by hand. It took a long time, Boras said."
Boras and Oakland A's GM Billy Beane are often credited for popularizing the use of analytical analysis - called Sabermetrics - in baseball. Boras is still considered to be well ahead of his competition (both other agents and baseball clubs) in his use of analytics, and has leveraged this position to build a hugely successful small business.
While Boras's business is unusual, small business use of advanced analytics is becoming more common. We recently met with a small business that uses sophisticated routing software - linked to data estimating potential client profitability - to decide whether or not to bid on business. This type of analysis was the domain of large corporations as recently as a few years ago.
Driven by cheap computing power and the growth of the Internet, analytics are becoming increasingly important to small businesses - and often a major source of competitive advantage.
Thanks to Glenn Peterson for pointing me to the Orange County Register article.
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