See Eric Sogard.
Eric Sogard is a nerd.
This is his story.

Eric Sogard has a secret, special power.
Eric Sogard has #NERDPOWER.

What is #NERDPOWER?
How does it work?

See the man in the middle.
He is handsome.
He is admired.
He is terrifically wealthy.
He is the face of his fiefdom.

See the men around the sides.
They are not handsome.
They are not admired.
They are not terrifically wealthy.
They are nerds.

This is how things work.
Humans form hierarchies.
A bunch of nerds do all the work.
One handsome face gets all the glory.

See the Magic Mirror.
Handsome faces ask the Magic Mirror questions.

One day, the fiefdoms of MLB ask,
“Magic Mirror that we see,
Whose is the face of MLB?”

Magic Mirror replies,
“It is a very complex question.
We shall form a blue ribbon tournament
to work through the issues.”

See the tournament bracket.
The nerds see the bracket, too.

The nerds want to play in the bracket.
But brackets are for faces, not nerds.

“I wish a nerd could win a bracket someday,”
says Eric Sogard.

See Clayton Christensen.
He is a fairy godprofessor.
Nerds ask the fairy godprofessor questions.

Eric Sogard asks his fairy godprofessor,
“Is there a way a nerd can defeat a face?”

“There is,” says the professor.
“Let me tell you a story.”

Once there was a land of automobiles.
In this land there were three big fiefdoms:
Ford, General Motors, and Chrysler.

At first, these fiefdoms were just happy
to sell any automobiles at all.
But as they got more and more successful,
they became less and less happy
to sell just any automobile.

They started innovating.
They added features
that cost a minor amount to add,
but made their cars sell
for much higher profits.

Over time, they found that if you sell
the most luxurious cars
you will get the most handsome profits,
and become the face of your industry.

Along came some nerds named Toyota.
Toyota wanted to play
in the automobile tournament.
But they were not terrifically wealthy.
They could not make handsome luxury cars.
So they made cheap, functional cars instead.

Ford, GM and Chrysler did not mind.
Toyota could not become
the face of the industry
with low-profit cars like that.

At first, Toyota was just happy
to sell any automobiles at all.
But as they got more and more successful,
they became less and less happy
to sell just any automobile.

They started innovating.
They added features
that cost a minor amount to add,
but made their cars sell
for much higher profits.

Eventually, Toyota figured out
how to sell a luxurious car.
They called it Lexus.
Toyota got the most handsome profits,
and become the face of their industry.

Along came some nerds named Kia and Hyundai.
Kia and Hyundai wanted to play
in the automobile tournament.
But they were not terrifically wealthy.
They could not make handsome luxury cars.
So they made cheap, functional cars instead.

Toyota did not mind.
Kia and Hyundai could not become
the face of the industry
with low-profit cars like that.

Then Kia and Hyundai
started innovating.

“It’s the circle of life,”
concludes the fairy godprofessor.
“And it moves all industries
both great and small on an endless round.

Any business that tries
to improve its profit ratios
will make sustaining innovations
in the direction of
higher-quality products for
its highest-paying customers.

Over time, this leaves a void
where low-quality products
for low-paying customers
can take root.
These are disruptive innovations.

This is the innovator’s dilemma:
the very approach to business
that makes you terrifically wealthy
is what causes your downfall in the end.”

“That is a nice story,”
says Eric Sogard.

“But what does it mean for me?

I am not an automobile.

I am a baseball player.”

This is where the baseball is
in the circle of life.

Baseball was once happy selling tickets
to just anybody.

Now they have innovated themselves
into selling luxury items
to first-class customers.

See the chart.

18 years ago,
America did not even have
a major pro soccer league.
MLS began in 1996 with a
minor-league quality product.

Now among those aged 12-24,
soccer is the 2nd favorite sport,
and MLS has caught up
to MLB in popularity.

It’s the circle of life.

Outreach is what you do when
you notice you are losing
one set of customers
because your business model
leads you to innovate towards
a different set of customers
and you do not want to
change your business model.

It’s the circle of life.

“Your industry is at a critical point
in the circle of life,”
says the fairy godprofessor.

“It is making record profits
from its sustaining innovations.

At the same time,
it is beginning to lose customers
from disruptive innovations below.”

“That is an interesting story,”
says Eric Sogard.

“But what does it mean for me?

I do not play for a team with record profits.

I play for the Oakland A’s.”

See Lew Wolff.

He became terrifically wealthy
by making himself a master
of sustaining innovations.

He finds struggling top-tier hotels
which, by his calculations,
can be improved to generate
a satisfactory profit ratio
by investing in just the right amount
of sustaining innovations.

He has been successful in bringing
internal rates of return over 25%
to the luxury hotels he purchases.

One day, Lew Wolff purchased the Oakland A’s.

See the Oakland Coliseum,
home of the Oakland A’s.
It is old.
It is outdated.

It cannot deliver
top-quality products to first-class customers.

Furthermore, the first-class customers
do not live or work in Oakland.

They live and work in San Francisco
or San Jose or Palo Alto or Mountain View.

See the map of Bay Area
Whole Foods Market locations.

Whole Foods is a supermarket.
Whole Foods sells luxury food items.

Whole Foods puts stores
where they think people who buy luxury goods
will shop.

See how empty the map is
in the East Bay
south of the Oakland Coliseum.

See the map of Bay Area
Walmart locations.

Walmart is a supermarket.
Walmart is an unusual business.

Most new companies
fill a void at the bottom of a market
and then join the circle of life,
quickly moving upwards.

Walmart filled a void and
moved ever downwards,
selling larger and larger volumes
more and more cheaply.

Walmart puts stores
where they think price-conscious people
will shop.

See how full the map is
in the East Bay
south of the Oakland Coliseum.

See Lew Wolff.

He sees other teams’ first-class ballparks.

He sees the other teams’ high profit ratios.

He sees the Bay Area demographic maps.

He calculates the best way to get
his targeted internal rate of return.

Lew Wolff goes to the Magic Mirror.

“Magic Mirror on the wall,
Where shall my team go play ball?
Must we here in Oakland stay?
Or can we move to San Jose?”

Magic Mirror replies,
“It is a very complex question.
We shall form a blue ribbon committee
to work through the issues.”

“That is a fascinating story,”
says Eric Sogard.

“But what does it mean for me?

I am not a baseball team owner.

I am a baseball player.”

See Ken Arneson.
He is an Oakland A’s fan.

He collects blue painter’s tape balls.
He is a nerd.

He does not shop at Walmart.
He does not shop at Whole Foods.
He shops at Costco.

See the map of Costco locations.

Costco is not like Whole Foods.
Whole Foods marks up its goods
about 50%.

Costco is not like Walmart.
See Walmart marks up its goods
about 25%.

Costco only marks up its goods
about 10%. This is crazy!

This insane constrained profit ratio
is a disruptive force
which causes Costco to innovate
in unusual directions.

Their stores are weird.
They have a spartan architecture.
They have a limited selection.
They sell large packages.
They require membership to buy.

Yet, see how, as a result
of this weirdness,
their stores spread out evenly
across the Bay Area.

He is handsome.
He is admired.
He stands in the middle of the room
surrounded by nerds
innovating disruptive ways
to build a team
in a low-cost environment.

See Billy Beane
hire Eric Sogard.

See Eric Sogard.

He is not a luxury item.
He is not the standard of excellence.
He makes the minimum wage.

He is limited.
There are holes in his game.
He wears glasses.
He can’t hit left-handed pitching.
He lacks the range and arm strength
to play shortstop regularly.
He is a platoon player.

What kind of future does he see
for baseball?

What kind of future does he see
for the Oakland A’s?

He gazes into the ball and sees
a classic innovator’s dilemma.

the A’s and MLB can chase
the profit ratios,
the sustaining innovations,

the formula that every business school
teaches every business school student,
the formula that has succeeded
for every other MLB team its entire history,
the formula that has succeeded
for Lew Wolff his whole life,

and move to the wealth of Silicon Valley.

And when the circle of life inevitably
attacks their business model from below,

the lower-class and middle-class
East Bay fans who get
left behind and ignored

will become the subject
of an outreach program.

at their own disruptive history and culture,

at the team that took its financial limitations
and turned Moneyball
into a revolution,

the team that donned white shoes
when everyone else wore black,

that put on bright green and gold jerseys
when everyone else was white and gray,

the team that wore mustaches and long hair
when everyone else was clean shaven,

the team that has baseball’s most creative fanbase,

that welcomes the misfits,
the rebels, the troublemakers,
who don’t care to follow the rules,
who dare to be the crazy ones
who don’t take the safe and obvious route.

It is a crazy thing — an insane thing —
to ask a master of sustained innovation
to do —

to have the gumption to throw out
the tried-and-true calculations,
to embrace something weird,
       a completely unproven
       set of constraints,
       with a completely unknown
       formula for success,
to explore a direction
      no one has gone before,

to think different,
to be different,

to find a way to stay
in this limited place,

this city with holes in its game,
this city with visionless leadership,
this city that lacks the wealth and business strength
to play the luxury game regularly,
and yet–

 
This dream. Aye, there’s the rub,

there — there, in Oakland —
lies baseball’s innovator’s dilemma,

for in the long run,
this crazy, weird request
may be the only way
to bring to baseball
the very innovations that baseball needs
to save itself
from itself.

Can baseball see the threat coming from below?

Can it see that the only solution
to the innovator’s dilemma
is to send off one independent division
from its vast empire
to fight a lonely battle
at the lowest part of the market?

Can it see that there is one lowly team
with one lowly anti-hero
perfectly suited to take on this task?

“The anti-hero that baseball needs,”
said the fairy godprofessor,
“is you, Eric Sogard.

You are the the chosen nerd.

You are the one who can show
the Magic Mirror and its minions
of handsome faces
that they need to do more than
give lip service and outreach programs
to the ordinary masses of baseball fans.

You have the #NERDPOWER
the masses have been dreaming of.
With #NERDPOWER,
your fans will carry you
like a coach and horses
carry a princess
to a royal dance at the castle.

Go to the tournament, Eric Sogard.

But remember this:
this will seem like a dream come true,
but like all dreams, well,
I’m afraid this can’t last forever.
The moment you think you have won,
a cock will crow,
a clock will strike,
the spell be broken
and you will be attacked from below
just like every handsome face has ever been
in the circle of life,
and everything will be as it was before.”

See Eric Sogard enter the bracket.
See Eric Sogard defeat Anthony Rizzo.
See Eric Sogard defeat Troy Tulowitzki.
See Eric Sogard defeat Buster Posey.
See Eric Sogard defeat Jose Bautista.

See Eric Sogard reach the finals
of the Face Of MLB tournament.

See David Wright.
He is handsome.
He is admired.
He is terrifically wealthy.
He has few holes in his game.
He is a first-class player.
He has all the attributes
people aspire to have and to be.

He is a luxury that a team
like the Oakland A’s
could never afford.

He is Eric Sogard’s opponent
in the finals of the tournament.

See Eric Sogard.

He fights David Wright to a draw
for most of the day.

As night approaches,
Eric Sogard takes the lead!

With three hours left,
Eric Sogard goes to bed
leading by 40,000 votes.

He expects that when he awakens,
he will be the
Face of MLB.

They make new disruptive products
that nobody has even heard of yet.
They are the kind of products
that people like Ken Arneson
probably would buy someday.

They aren’t very good products right now,
but they are cheap and easy to buy,
cheaper and easier for Ken Arneson to buy
than a baseball game
in a luxurious ballpark in San Jose.

Hia and Kyundai are worried.
If Eric Sogard wins,
MLB may finally notice
they are being attacked from below
and change their worldview.

Hia and Kyundai don’t want MLB to change.
They want MLB to keep thinking that
faces are to be admired
and nerds are to be ignored,
so that as Hia and Kyundai
grow at the bottom of the market,
MLB won’t bother to turn and compete with them
until it is too late.

In the last hour of the tournament,
Hia and Kyundai order their nerds to launch
a secret army of robots
to vote for David Wright.

With 15 minutes to go,
the tournament is tied.

Then, as time expires,
a winner is declared.

See David Wright.
He is the Face of MLB.

His hard work and dedication
makes him a very deserving champion.

All glory to David Wright!
He did it!
He really did it!

See Eric Sogard.

He is not the face of MLB.
He is an ordinary nerd again,
forgotten and ignored.

Eric Sogard says,
“I’m sorry. I-
I guess I forgot about everything,
even the time, but…
but I felt so handsome
and admired.
It was so wonderful.”

See the Magic Mirror.

David Wright asks him,
“Magic Mirror, you are old.
You are retiring, I’ve been told.
I want to know, when you aren’t around,
Which new prince will wear your crown?”

Magic Mirror replies,
“It is a very complex question.
We shall form a blue ribbon committee
to work through the candidates.”

In all the commotion
at the end of the tournament,
he dropped them,
and left them behind.

A crown prince candidate sees the glasses as they fall.
He picks them up.

The prince shouts,
“Your glasses! Please come back!
I don’t even know your name!
How will I find you? Wait! Please wait!”