I started a weekly column six weeks ago where I take a non-sports idea and relate it to DFS. Here are links of the previous weeks if you want to catch up, although it isn’t a series – each one stands on its own.
– Applying the Monty Hall Problem to DFS Strategies
– NBA DFS and the Wyatt Earp Effect
– DFS, The Abilene Paradox, and Taking Chances
– Data Patterns: Is Your Brain Hurting or Helping You?
– DFS, Infinite Monkeys, and Shakespeare
This week I want to talk about the Icarus paradox in business and how it relates to our “process over results” mentality when building lineups in daily fantasy sports. This paradox is obviously adapted from the Greek myth about Icarus and his father, which I’ll tell momentarily, but let’s first start with the business component, introduced by Danny Miller in a 1992 article. From Wikipedia:
In a 1992 article, Miller noted that successful companies tend to fail precisely because of their strengths and past victories, which engendered over-confidence and lulled them into complacency. The characteristics that drove their success such as tried-and-true business strategies, dauntless and self-assured management, signature products and the reciprocal action and overall combination of all these elements when employed in excess may ultimately lead to declining sales and profits and even bankruptcy. This happens as managers make unwise decisions based on past strategies that they mistakenly believe will always be relevant and companies exploit as much as possible the strategies that contributed to their success, centralize their focus on the products that launched their brand and become blinded to changes in the external business environment.
The Icarus myth in old Greek tales is about Icarus and his father, Daedalus. In the story, Icarus wants to escape from Crete and attempts to do so by building himself a pair of wings with which to fly away. His father warns him to neither fly too low – for fear of the wings getting dampened by the ocean – nor too high – for fear of the wings being by burned by the sun. As I’m sure you know, Icarus flew too close to the sun and his story ended as a tragedy.
Process matters just as much, if not more, after winning
We often hear to value process over results when constructing lineups in DFS. Unfortunately, most of the time people use that now-cliché phrase to ease the pain of a losing streak. “You have a good process, things will turn for you!” Now, I’m certainly not making fun of people who hit losing streaks – even the very best DFS players in the world will go through them. If a DFS player tells you they never hit a cold streak, they’re lying.
What bothers me about the cliché phrase and how we use it is not because it’s not true about the losing part – indeed, if you are losing but you have an actually good process, that is certainly more important and things will regress for you. However, using the process-over-results mentality is much more dangerous after winning, in my opinion. After you lose, you’re more willing to evaluate your process – you may come to that cliché phrase in the end and decide that the process is good and you just have to wait for your luck to turn. However, it’s very rare that people will re-evaluate their process after winning.
Here’s where this Icarus paradox comes into play – businesses (even huge Fortune 500 companies) run this same risk. When we succeed, we assume it is due to our process being perfect; when we lose, we assume it is due to our process being flawed. That is a highly dangerous way of thinking about things, especially in DFS where things are so volatile (like in GPPs) – if you employ that way of thinking, it’s debatably better for you to lose a lot early than to win.
The worst thing you can do in developing a process in creating lineups in DFS is to win when you first start and then to assume that is the way to win and thus stick to that rigid plan forever. Did you happen to stumble across the perfect process right away? Perhaps, although I would be very doubtful of that. Is it more likely that mere volatility allowed you to win and your process still needs to be shaped? Yes.
Don’t let results cloud your self-evaluations
I feel strongly enough about this topic that I would go as far as to suggest to someone, if you could only evaluate your lineups and process either after winning or losing – and you had to pick only one – winning is the better choice. The reason is because of something that we talk about a lot here at Fantasy Labs – our biases are perhaps our number-one enemy in daily fantasy. That goes for all players, regardless of skill levels. In fact, you could argue that the most skilled players aren’t ones who manipulate data and crunch numbers the best, rather than ones who can best control their innate biases.
Miller noted that “successful companies tend to fail precisely because of their strengths and past victories, which engendered over-confidence and lulled them into complacency.” This brings up another point that I want to make before we end – not only could your process be flawed after winning because of volatility and thus doom you if you don’t evaluate it and change it, but you could actually have the right process at the time and it change. This is something that people miss a ton in daily fantasy and I think is huge.
Adaptation is so key to staying at the top of the daily fantasy world. The process that worked two years ago may (I say may, but what I really mean is it doesn’t) not work now. We talked about this during MLB season – during the early days of DFS, stacking a whole team or as many as the site allows was an incredibly optimal strategy. However, as the public became aware of this, it became less valuable and now the process to winning may dictate a different strategy, be it mini-stacks or not stacking at all.
You should continually re-evaluate your process after winning and losing, not because it isn’t the right process – it very well could be – but because eventually that right process is going to become the wrong process. Businesses got into trouble by not being willing to adapt – they had the right process, as shown by their incredible, quick growth, but then couldn’t adapt to being bigger, changing times, etc. Don’t evaluate your process because you’re worried it’s wrong; evaluate it because you want it to stay right.
Talk to you all next week.
