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Daryl Morrie discusses how superstars have an outsized impact in basketball compared to other sports. He explains that top players like LeBron James or Joel Embiid can single-handedly change the course of a game or a season. This leads teams to prioritize acquiring star players and justifying any trade or investment to secure them.
Morrie highlights the interplay between talent and system in basketball. While players' ability to perform in different systems can vary, Morrie emphasizes that finding undervalued assets within a specific system can be advantageous. He cites the example of Shane Battier, whose skills as a post passer greatly benefitted the Houston Rockets' offense. Morrie argues that identifying what a team is optimizing for and building around those priorities is essential for success.
In this segment, Morrie explores various challenges and potential improvements in different sports and game design. He discusses how some sports, like soccer, have rules and structures that could be revised to enhance the viewer experience. Morrie suggests reducing the number of players on the field in soccer to eliminate offside rule complexities and criticizes the penalty system. He also touches on the need for comeback mechanisms in sports like basketball and discusses the limitations and requirements of successful music albums and business books.
When hiring front office staff, the podcast episode discusses the importance of finding the right people. They emphasize the value of hiring individuals who are already doing in their spare time what they want to do in the organization. This approach allows for the identification of passionate and dedicated individuals who are likely to excel in their roles. The episode also highlights the success they have had in finding talent from basketball schools, such as Duke and Stanford. Additionally, the podcast mentions how they have used social media, like Twitter, to reach out for hiring opportunities.
The podcast episode delves into the decision-making processes and biases within the organization. They describe their approach of having a small council of key people who make decisions through informed voting, where data is made available to everyone. They make efforts to combat groupthink by including a remote council member. The podcast episode discusses the use of voting methods that consider minimizing manipulation and incorporating the strength of feeling. They also mention the use of draft pick equivalents as a valuation method. Furthermore, they acknowledge the challenges of decision-making and the need to be mindful of biases and continually strive for improvement.
My guest this week is Daryl Morey, who is President of basketball operations for the Philadelphia 76ers. Daryl is a computer science graduate but has become one of the NBA’s most successful General Managers during his time with the Houston Rockets and the 76ers. Together with my friend and past guest of the show, Sam Hinkie, Daryl pioneered the analytics movement in basketball. He’s been so influential his style has its own name, “Moreyball”, a nod to Michael Lewis’s book about baseball, Moneyball. Daryl is also the co-founder of the MIT Sloan Sports Analytics Conference, which has become the gold standard forum for leaders in sports analytics. I had a blast talking to him about negotiation tactics, systems thinking, hiring, and a ton more. Please enjoy this great conversation with Daryl Morey.
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For the full show notes, transcript, and links to mentioned content, check out the episode page here.
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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.
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Show Notes
[00:03:15] - [First question] - The basic principles of sports and what makes for a great sport
[00:09:54] - How resource concentration influences outcomes in various sports
[00:13:13] - The degree of certainty in predicting sports outcomes based on existing data
[00:16:32] - Using the concept of KPIs to optimize for certain characteristics to win games
[00:18:45] - Training teams on specific systems and plays versus leveraging individual talent
[00:21:07] - Why superstar athletes are key to success in basketball
[00:24:02] - Dealing with constant expected value calculations to appease stakeholders
[00:25:30] - Building the organization’s back office to find talented athletes
[00:28:32] - How he and other GMs make organization-level decisions
[00:34:12] - Why he’s involved with basketball as opposed to other sports
[00:36:17] - How he uses his frameworks to figure out systems outside of mainstream sports
[00:37:41] - Problems with the rules and economic factors of professional soccer
[00:42:54] - Trends he’s observed in the worlds of music, movies, and books
[00:45:33] - His perspective on developing one’s own career path
[00:48:22] - How challenges in his youth benefited him in the long run
[00:49:28] - The person he would call for advice if he was stuck in a foreign prison
[00:51:01] - His emphasis on first principles and why he supports free speech
[00:52:31] - Takeaways from a Harvard negotiation class he took
[00:57:07] - The power of refining the terms and definitions of a deal post-negotiation
[00:58:51] - The four people in the world that intrigue him most
[01:01:40] - The kindest thing anyone has ever done for him
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