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  • Business and Baseball Fantasies

    This past winter I completed an item on my bucket list. As a long time fan of the NY Mets, I spent 6 days at Port St. Lucie playing baseball with some of my heroes at Mets Fantasy Camp. There were 109 of us who spent the week reliving our youth playing a game that hasn’t really changed that much. There have been some changes since I last played competitively like aluminum bats, hitting gloves, better helmets and better mitts, but the strategy of the game is still the same.

    I think baseball has a lot in common with most businesses in that it requires a solid strategy and quality people to be successful. We all know that a team that practices to coordinate a double play or a relay play will perform better. It also takes a lot of practice in our business to become better. Our industry has funded tens of thousands of deals and we have a pretty good idea now of what works and what doesn’t. We also have more modern tools like better gloves and helmets to help us make informed decisions, but those are no substitute for quality players. The game – both baseball and business is played on the field, not on paper.

    For us, the most important part of any deal is the people. We rely heavily on the relationships we have with the client and most importantly with our ISO partners and ISO syndicate partners who invest side by side with us. Valuing these relationships is far more important than relying solely on the numbers and how sophisticated our technology is.

    One of today’s most followed baseball strategies is for a pitcher to be limited to no more than 100 pitches in a game. Many managers follow this practice religiously. While at Fantasy Camp, I wondered if Tom Seaver would have made it to the Hall of Fame if he left every game after 100 pitches. Would he have won 311 games? Probably not. Seaver pitched for 21 years in the major leagues and never once was subject to this “modern” logic. Johan Santana on the other hand pitched the first no-hitter game in the 50-year history of Mets. He threw more pitches in that game than he would ordinarily pitch and he was not able to finish the year and now is out for all of 2013. I think the answer is that each of these strategies needs to be evaluated and one-size may not fit all.

    Over our 8 year history, we have noticed that the performance of a deal has more to do with the relationship we have with our ISO partner and ISO syndicate partner, then with the deal itself. We have all kinds of tools available to help us analyze the potential success of a deal - FICO scores, due diligence checklists, signed affidavits, warranties and representations, scoring models, algorithms, etc. And yet, some of the ugliest deals on paper have been some of our best performers, while some of the most attractive deals on paper have been nothing but trouble.

    Business like baseball, is about judgment and people. Technology has changed the world for the better, and as a former technology Investment Banker, I know the value and efficiencies of enabling technologies. Ironically, in the end, what makes these tech companies successful is usually not the technology itself, but the people who envisioned and developed the technology. The managers, the third base coaches, the bullpen coaches, the front office and the strategies deployed to differentiate and succeed.

    A new season of baseball has just started and no one knows for sure who will win this year. Some teams changed managers others brought in new players and others reduced their overhead because of mistakes of the past. They say that the team that wins is usually the one that has the “best chemistry.” I agree with that. In every business it takes the interaction of people to be successful. Technology is a wonderful tool, but should not be the only tool used to make a decision. In the great book and movie “Money Ball”, it told the story of Billy Beane, the GM of the underdog Oakland Athletic’s who used non-traditional analytics to determine success and select his team. By changing the way things were done – he made the A’s competitive with far bigger revenue teams like the Yankees. Billy Beane was right and now many teams use these analytics too, but it still takes the players on the field to win the game. Even though my baseball career is behind me, my Strategic Funding fantasy game is played every day with all the quality ISO’s, syndicate partners and staff of SFS on the field with me.

    By: Andrew Reiser
    CEO of Strategic Funding
    http://www.sfscapital.com


    Publisher: DailyFunder


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