Oliver Gilan

What the NFL Taught Me About Business

Each year 224 collegiate football players are drafted into the NFL across seven rounds. After the draft is over teams will sign undrafted players as free agents and currently the league is comprised of about 30% undrafted players with 15 of them having been inducted into the Hall of Fame. Of the 224 players that are drafted only about the first 10 are expected to be impactful enough to change the direction of a franchise. The first 32-64 players are expected to be good enough to play meaningful snaps (a unit of play) during their first two seasons. The rest are basically a tossup for if they even play a snap in the NFL and how their careers turn out. I can take 3 useful lessons from the NFL Draft that apply to business and life in general:

  1. Talent is not evenly distributed
  2. Talent is hard to measure
  3. True outliers are scarce

Ive learned these lessons and others from watching and loving the NFL but over the years I’ve begun to understand how they apply to other areas of life. So how does the NFL apply to business and startups? What can we learn just from the nature of the Draft and the composition of the league? Let’s start with those three lessons of the draft Draft.

Understanding Talent #

Lesson 1: Talent Isn’t Evenly Distributed

In the world of programming there’s the concept of a 10x programmer which is someone who is 10 times more productive than the average programmer. This idea gets a lot of pushback in engineering circles with many claiming such a person doesn’t exist or isn’t even possible but we can see in the NFL and in every other skilled endeavor that talent clearly isn’t evenly distributed. What’s so remarkable about the Draft is the stark divide even amongst the best of the best. The average college football player is easily 10x more athletic than a normal person and yet the ones drafted are 10x better than the average college player and then even amongst the pros at the top of their game the divide between them and a Top 10 Draft pick can be 10x or more. A player like Nick Bosa drafted 2nd in 2019 has recorded 15x as many sacks and 5x as many tackles as L.J. Collier — another player drafted in the same position on the same year but 27 picks later. If Collier is a 10x football player (and being drafted in the first round means he is) then Bosa is a 100x player. The 10x programmer is absolutely real and so is the 100x programmer we just don’t have good stats to measure what that means.

Lesson 2: Talent Is Hard To Measure

Talent is easy to identify and hard to measure. For the best of the best talent can jump off the page at a young age and it’s often easy to see if someone has potential but it can be a lot harder to determine how much potential someone might have. That 30% of the NFL is made up of undrafted players and that year after year we see undrafted or late Draft picks break out as stars shows just how difficult it is to evaluate talent. Tom Brady was the 199th pick in his draft and went on to become the best football player of all time. In business and especially programming the domain is so varied and the intangibles required by practitioners so great I would argue it’s a lot harder to accurately measure talent than it is in the NFL. The average hiring process for companies is probably better than random but I’m not sure it’s by that much. If you’re lucky enough to have a 10x engineer walk into your hiring pipeline it might be obvious that they’re great but what about disambiguating everyone else? The candidates that might be a 1.5x or 2x engineer or 0.8x engineer? Good luck figuring that out. It’s easy to want to hire the best but chances are you don’t know who they are.

Lesson 3: Greatness is Rare

A great player can change the outcomes of games and even seasons. Great quarterbacks can change the outcomes of franchises. When Nick Bosa is injured or not playing the defense of the San Francisco 49ers is noticeably worse and when a star quarterback like Aaron Rodgers tears his achilles tendon it usually means the end of the season for the team. These players dominate the game but they are rare and we are lucky if we get one or two new ones each year. It’s generally expected that the first 10 players in the Draft are the only ones with even the potential to be so good. Anyone who’s been responsible for hiring engineers at a company will have the same stories about the quality of their candidates: piles of candidates that struggle to code at all or cannot partake in even a modicum of social collaboration. Forget 10x engineers, finding someone even a little above average can be an extreme challenge. So ask yourself: why would a truly 10x engineer want to work for you? Why would they dedicate their time and efforts to your mission? The vast majority of companies — even with a ton of growth potential and value for the world — are not sexy or interesting. Payroll for construction isn’t captivating in the same way a space company might be even if its arguably more beneficial for the average person. So do not be surprised if you don’t get any 10x candidates especially when your ability to compensate them with competitive equity goes down after each successive hire. 10x engineers exist you just can’t hire them.

How to Win Without the Best #

If the NFL is any indication you don’t need a team of entirely A+ players to win. One of my favorite teams in the NFL was the New England Patriots with Tom Brady and for two decades they would enter the season with a team chock-full of B players and dominate the league. Over 20 years that team won six Super Bowls, nine AFC titles, and 17 division titles. They also had 19 consecutive winning seasons and nine straight AFC Championship appearances making them the most prolific team in football history. If they were a startup they would have been beyond a unicorn and one of the most successful companies of all time. So how did they do it? How did they routinely face teams with more talent and come out on top again and again?

It all comes down to building a great system. The Patriots faced many young, talented teams but such teams often had big personalities, big egos, and relied on their star players to execute in order to win. The Patriots on the other hand relied on a system that they had crafted and perfected over the years and this system enabled them to plug-in different players into different positions from game to game and season to season. The effect of this was resilience in the face of injuries, consistency across seasons with massive changes to the roster, and accumulated process knowledge. Cedric Chin at Commoncog notes that such systems can be extremely effective in business although often at the expense of the enjoyment of its participants. Similarly the Patriots were known to be a grueling team to work for but the results were undeniable. When you have a competent system B and C players can produce at the level of A and B players — and A players can become stars.

But “build a great system” isn’t much more actionable than “hire the best people” so how do you actually execute on that? There’s 3 characteristics/lessons of the Patriots system that I think apply well to business.

Lesson 4: Do Your Job

One of the defining mottos of the Patriots and why they were so successful was the Do Your Job mentality. When teams rely on star power and raw talent it places pressures on individuals to overextend themselves and try to do too much. The Patriots made sure individuals knew their sole responsibility at any given time and then pushed them to focus just on that. If you do your part and the man beside you does his then the overall picture will come into focus. Just as in business one man cannot do it all but if you can focus on just one task then your teammates can learn to trust you to get your job done which allows them to focus just on theirs and then the whole team begins performing optimally. Peter Thiel takes this to the extreme by making sure everyone he manages only focuses on one thing:

The best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing. Every employee’s one thing was unique, and everyone knew I would evaluate him only on that one thing.

By focusing on one thing you free people from the cognitive overhead of figuring out what to work on, you enable them to hyper-specialize and become one of the best at what they do, it becomes easier to evaluate their performance, and ambiguity around responsibility is reduced. Single responsibility allows B players to contribute meaningfully to a project often without slowing those around them and sometimes even performing at or above the level that a competitor’s A player is performing because said competitor’s attention is divided amongst multiple tasks.

Lesson 5: Outwork Your Competition

The Patriots were known as a grueling team to play for and churn was high. Often-times veteran players would choose to play for the team for a year or two and take less money than they otherwise could get because the promise of greatness made it worth it. Win or lose, the Patriots consistently worked harder than most other teams in the NFL. Business is no different. Intelligent people often underestimate how sheer grinding can overcome differences in ability and talent. This is doubly true for people early in their career. It’s remarkably obvious how much room I have to grow as an engineer whenever I work with a true 10x engineer and yet I can hold my own against these more experienced counterparts because I will simply put in more hours. I have less responsibility and more time and I can use that time to overcome the inefficiencies of inexperience. So if your team isn’t all A+ players and you still want to win you should be prepared to work harder than everyone else and if your team is all A+ players and you don’t want someone else to eat your lunch you should also work harder than everyone else. Working hard won’t guarantee success but it does certainly feel like a prerequisite both in football and business.

Lesson 6: Sweat the Details

When everyone focuses on a single responsibility and everyone is working harder than the competition it unlocks a third characteristic of successful systems — one that showed up again and again across the Patriot’s dynasty: sweating the details. There is no better example of this than the defining moment of SuperBowl 49 and the practice leading up to that moment. The Patriots were the most detail-oriented team in the NFL year after year and sometimes in a game of inches that isn’t enough to win but after two decades those inches begin to stack up and you’re left with a track record that blows everyone out of the water. This matters in business. The best products and the best companies are those where the details are cared for. This can only happen when people feel empowered over their small domain — another thing that you get with the single-responsibility principle — and when there’s a culture of excellence. You must be dedicated to the craft and willing to invest time and energy to fix the little things even if they don’t immediately translate to a metric improving.

Sweating the details is probably one of the rarest elements of businesses today and I can almost guarantee that any company at scale is not doing this which makes it one of the best ways for a startup to compete with incumbents. Over the lifetime of a company sweating the details will lead to loyal customers, a superior product, and superior execution. At the limit the details can even be a moat. Apple won not because its devices had better technical specs than those of competitors — in many cases they were worse — but because they offered fully polished experiences. My favorite app to use today is Linear (who’s crushing it by the way) and it’s not because they offer anything fundamentally unique compared to its competitors. On paper it has basically no differentiators and yet they sweat the details: the keyboard shortcuts for every action, the responsiveness of the UI, intelligent placement of elements in the design, etc. all combine to provide an experience that its competitors do not.

How to Build Your Team #

If your system allows for singular responsibility, contains people working harder than your competitors, and encourages attention to detail then it’ll be a winning system. This does not mean however that you can win with just anyone. My problem with the advice “just hire the best” isn’t that it’s untrue it’s just not very actionable. A good system lets you win with less than the best but you still need to compose your team properly. So if you still need good people and the above is all true about talent being scarce then how do you actually build your team? Once again there are a couple principles from the NFL and the Patriots dynasty that I believe applies well to business.

Lesson 7: Embrace Superstars

Often times strategists and leaders fall in love with a system and then they make the critical mistake of thinking they can win with anyone. This can lead to the conscious or unconscious exclusion of superstars from the team because superstars are often destabilizing in nature due to their overwhelming presence and talent. A good system should take this into account and create an environment where superstars can thrive. Randy Moss was one of the best wide receivers of his generation with a penchant for trouble and a disregard for authority. By all accounts he was not a great fit for the rigid and strict Patriots team but during his tenure on the team from 2007-2010 his effect was undeniable. What was normally a good team became an unfair team and his first year there the Patriots won every single game of the season and is widely considered to be one of the best teams to ever play in a single season.

Whenever you come across a Randy Moss — a 10x player among 10x players — you hire them and you find a way for them to be valuable. System believers often adhere to the rules a little too much and expect the same adherence from their superstars that they expect from everyone else. “If I let you do X then I’ll have to let everyone else do X” is a common refrain that is simply wrong. Real superstars aren’t the same as everyone else and if you need to bend the rules to keep them happy then bend the rules. Embrace superstars, remove anything that stops them from making an impact, and then let them do their thing.

Lesson 8: Leaders Are Irreplaceable

This rule is not one I always understood but it became undeniable after the Patriots dynasty ended. It didn’t end because they lost all their defensive players or all their receivers or all their linemen — they’ve faced and overcome all those hurdles — but because one player left: Tom Brady. When Brady left after a personal rift between himself and the coach, Bill Belichick, the dynasty was over. It turns out that the rigorous and efficient Patriot Way doesn’t work after losing just a single key leader and today the team is a shell of its former self. A similar dynasty in the NBA is the San Antonio Spurs under head coach Gregg Popovich and star player Tim Duncan. For a decade they dominated the league with a strong system and focus on teamwork but it all sort of fell apart the moment Duncan retired. Similarly we see incredible businesses with a total understanding of their market and a bright path forward suddenly stagnate and collapse when a star CEO or executive leaves. All these instances have led me to understand that systems are valuable but capable leaders are irreplaceable. The leaders are the system.

If anything this lesson should help reconcile what I said before with traditional startup advice. It is genuinely so important to hire A players early on in the life of a company because the people you hire early will grow into leadership roles and thus they will dictate what the system looks like in your company. In a traditional B2B SaaS basically everyone should be an A player at the Series A. By Series B you can probably introduce a couple of capable B players that demonstrate an ability to learn and grow and then by Series C you will have to probably introduce around 20% B players but you can probably avoid C players. These numbers are meant to be more directionally relevant as opposed to exact descriptions. The overall truth is that the average caliber of employee will have to go down as your team size increases but by the time you get to Series C you should have a strong cultural system driven by great leaders that allow those lower performers to bat above their weight.

I should briefly note that leadership can be explicit or implicit. Early employees will always influence the culture and system in place even if not formally promoted into leadership positions. Just the deep knowledge of a system can be enough to make an IC a leader and there are very interesting human dynamics that will inevitably form around implicit hierarchies such as these. Do not assume that you can just hire an IC early on with little impact to the overall culture of the company.

Lesson 9: Help People Grow

If you want B and C players to perform better than they otherwise could and if you want your early employees to grow into the competent leadership your company will need then your system and culture will need to help people grow. The Patriots didn’t just draft and sign the best players they focused on players that could learn and then they taught them how to succeed. Year after year they had one of the best offensive line units in the league and it was mostly due to coaching. Their Offensive Line coach, Dante Scarnecchia, grew up around football and coached on the Patriots for 34 years! He was extremely experienced not just about football but also about teaching and the results of his coaching showed up on the field every year.

It’s undeniable that great coaches and teachers in any field can make an incredible difference in the performance of their students and business is no different. The single-responsibility principal makes it easy to keep people in a box performing the same work that they’ve mastered over and over but talented people in such positions will grow bored and leave. If someone is capable of mastering a given domain there’s a good chance they can master the next, harder, domain as well. You should identify people’s strengths and their propensity to learn and grow and then do your best to keep giving them new challenges and responsibilities at a rate that lines up with their zone of proximal development. This rate will be different for everyone but successfully understanding and taking advantage of this as a boss is probably the best way to keep smart employees engaged on the mission while growing their abilities.

Companies that rely on college and university to do the teaching for their future employees will be at a sore disadvantage to the company that hires people with talent and ambition and then follows up by giving them the tools and mentorship required to make them succeed. As a leader you should absolutely be focusing on your company’s onboarding process, your company’s knowledge distribution process, your employees' rate of growth, and anything else that can dictate or explain how a given employee may grow over time. If you’re an ambitious young person chase great leadership over maximizing salary early in your career. Great leadership that can make you great is rare and consequently if you’re one of those great leaders that can significantly increase the abilities of others then that’s one of your best assets for competing against FAANG companies offering higher salaries than you can afford.

So in the end a system and culture that helps people grow will attract more ambitious and intelligent young people, turn its early participants into the capable leaders needed as the company grows, and help B and C players perform above their level.

As a fan of the NFL I am constantly reminded of these lessons and others throughout the year and I cannot help but notice them occur in other aspects of life. The NFL acts as a microcosm for business and can teach us lessons about building successful organizations from small startups to large companies. Understanding these lessons will shape the choices and effectiveness of both leadership and ICs and can radically alter the outcomes of a business. As third parties these choices will affect us as we are all dependent on organizations, whether private companies or government agencies, to work competently and create goods and services that improve our lives.

These principles apply to all the institutions around us and they are quite effective at understanding why some businesses are more successful than others, why some governments are more effective than others, etc. At the end of the day if you want to accomplish great things with others you will be working on the same substrate of human behavior and the dynamics that will make your group successful are the same principles that make sports teams, businesses, governments, etc. successful. As I interact with such institutions more and more I will have to update my understanding of these principles so that I can use them effectively in my own endeavors.