(2) How football influenced my next SaaS business

I’m an avid football fan. Manchester United for my sins. Never have I loved football more than I do right now. Not just because Rashford is currently tearing it up, but because when the pandemic hit football, it disappeared. And you don’t know what you’ve had until it’s gone. Absence makes the heart grow fonder, just like my Gameboy. RIP. I craved football consumption in some form during that period and found solace in books about management and tactics. Increasing the geek level to around 90

I’ve been a season ticket holder since I was four year old. I can’t say I’ve ever had a prawn sandwich before you ask. Only beef sandwiches. The myopic commercialism that Manchester United have been going through since Sir Alex and David Gill left really damaged my relationship with the brand. Ed Woodward's comment of “playing performance doesn’t really have a meaningful impact on what we can do on the commercial side of the business” will stick with me forever. I think I need some salt for the chip on my shoulder. More on that later.?

There’s one story that stuck with me in my readings—the rise of Brentford FC. The story of Matthew Benham, a professional gambler, buying his childhood football club with a ￡700k loan. He approached the style of play with the same focus that made him a successful gambler, using algorithms, statistics, and data research to guide the way. Read about it here, it's a brilliant thread. They focussed on a concept popularised in 2012 called “expected goals” (xG) identified by leading global sports data gurus, Opta. You see the thing is, goals are a rare event in a game, fewer than three in the average Premier League match, and they are often skewed by randomness and luck. The theory that Benham bet his (and the team's) fortunes on) was that the quality and quantity of chances created during a match mattered more, or as the xG philosophy puts it, "performance over results."

Of course, this shouldn’t sound too alien given that it’s based on the concept of Michael Lewis’ Moneyball. You know, the Brad Pitt film about the baseball team the Oakland A’. The analytical approach to baseball (“get on base”) that gave rise to a new way of looking at the sport was all about finding advantage by evaluating players using different criteria than everyone else. It allowed teams that didn’t have that much money to compete with the biggest spenders.?

In 2002, the Oakland A’s ranked the 3rd lowest payroll in the league (about $40 million). Despite this, they found themselves competitive with teams like the New York Yankees who spent over $125 million in payroll that season. The same with Brentford—their payroll is ￡31 million, whilst Chelsea is ￡190 million. We don’t need to talk about how much Manchester United’s payroll is; that’s irrelevant.?

xG is now the most popularised metric in football. Liverpool, to my chagrin, used it in the transfer market to recruit. When Fenway bought Liverpool, they used Ian Graham, head of data, to find value in players that were once overlooked. Another brilliant read here, especially if you're a Liverpool fan. Paying $41 million for Salah, a Chelsea flop, or Coutinho for just $16 million, who was sold later to Barcelona for an eye-watering $170 million. It worked, and we don’t need to go into detail about their success since. Just note that Ian left in November last year, perhaps correlated to their current 50% win rate. Moving on.?

Ed Woodward’s imbalanced approach to commercial performance over impact on the pitch was shortsighted, short-termist, and short of intellect. Most likely self-serving, too. The absence of any quality metrics will destroy a brand. It takes flipping the mindset from “revenue first” to “impact first." Or at least a rebalancing of that mindset.?

By the way, Brentford used expected goals to rise from the fourth tier of English football to the Premier League. They’re currently sitting 8th and now worth over ￡300 million. Performance over results.?

This whole concept shouldn’t just sound familiar because of Moneyball, but doesn’t it feel relatable to the e-commerce industry? One rooted in aggressive commercial growth. Where conversion is king, discounts are rife and return on investment is the only currency that drives initiatives? I've been vocal and passionate about how the ROI for experimentation, and indeed personalisation, leads us astray on multiple occasions. Believing that judging every business outcome purely, or imbalanced towards revenue or margin gain, is the Ed Woodward tactic of ridiculousness.?

Not just that, but within e-commerce, a conversion is a rare event just like a goal is. There are many proxy metrics that lead to a goal, just like there are prior to a conversion. Can a conversion be predicted in the same way that a goal can be? Spoiler: yes. And we can do that.?

And even - not just that, but like Billy Beane, retailers find it hard to compete against the lined pockets of the New York Yankees in ecommerce - Amazon. Or, as Brad Pitt put it in the film, “there are rich teams, there are poor teams, then there’s 50ft of shit, then there’s us”. We need to find value where it was once overlooked to find the Manes or Salahs of our audience. In a world where the rich get richer (I read earlier today that the richest 1% has amassed two-thirds of the overall wealth accumulated since the start of COVID) and brands monopolise markets, we need a different way to compete.?

In my time to reflect, xG (expected goals) really resonated with me on a deeper level because it’s what I’ve experienced so frequently with leaders in e-commerce. I find the comparisons between it and football too close to ignore.?

In a world where everything needs a number applied to it to understand its commercial value, we lose what it means to make a difference. It’s competency over care. I want to encourage ecommerce businesses to take a leaf out of sports like football and baseball, which have evolved towards performance metrics rather than results metrics. To stop us all from becoming Ed Woodwards.??

This is why I started Made With Intent. The platform that helps you understand these performance and quality metrics using expected conversion (xC). What we call, Moneyball for eCommerce. More on this tomorrow.?

See Madewithintent.ai for more information.