Why Do What Nobody Else Does

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The Oakland A's went out of their college-picking-realm and recruited a 16-year-old 6'7" Latin American pitching talent.

  • "It's crazy what they're doing!" the critics say.
  • "They're not following sabermetric principles! SABERMETRIC PRINCIPLES!"
  • "Boo!"

But get this:

  1. The A's had recruited college players because no one else did, helping them exploit market inaccuracies to get talent at bargain-basement prices.
  2. Now, since frickin' Moneyball exposed what they did, every team and its mother starts to recruit college players -- increasing prices for college talent.
  3. With the herd running to college talent, that creates a market inefficiency for overlooked Latin players, lowering their prices -- producing an inefficient market.
  4. A's go bargain-hunting in Latin America.


The Lesson

You'll command higher premiums by going where the masses overlook.

For instance, take programming + India:

  1. Everybody's recruiting programmers from India.
  2. That raises the prices for Indian programmers.
  3. In the meantime, programmers from Latin America = ignored.
  4. That'd mean you'll get more bang for your buck if you recruit from Latin America.

Or get this lesson from the 1960s:

  1. Everybody's selling hamburgers.
  2. "Let's sell some frickin' tacos! BOOYAH!"
  3. Kabam: Taco Bell, son.

Capitalize where nobody else is going.

  1. Save costs.
  2. Generate more revenues.
  3. Command higher premiums.

Buy more Cheetos.

But before you get too happy...

Eventually, the market will realize what a secretive punk you are, and they'll go gold-hunting in your area -- lowering your premiums.

For instance:

  1. Folks discover your Latin American talent.
  2. More demand + unchanging supply = higher prices for the talent.
"So, I'll go discover another inefficient market -- like Indochina -- to capitalize on the inefficiencies of the market!" you tell yourself.

And, you'd win like a superstar who dances the Kazatzka while drinking your juice in the hood.

Because you can.

You're badass.

Capitalize on market inefficiencies.

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Posted on July 15

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