While watching the true story inspired movie War Dogs (which shows how two twenty-something year old bros manage to land a huge arms supply contract with the DoD through illegal shenanigans), I could not help but considerer some simple measures that could have saved them a number of near death experiences and general grief.
1. Match your product to the market
When David takes a leap of faith by buying thousands of high-end bed sheets to market to old age homes, he finds there is no demand for his supply. While some simple market research ahead of time probably could have prevented him from getting into such a pickle as a living room full of bed sheet inventory, he didn’t need to keep trying a square peg on a round hole. Why not pivot to a new target market, like boutique hotels or spa chains, which he was already well networked in as a masseuse? Understandable, he hadn’t gotten his MBA, so he landed up partnering with his scamster childhood bestie, Efraim. Which led him to his next tight spot.
2. Scan that contract!
OK, you know you’re working with someone who routinely rips other people off. Just because he hasn’t gotten to you yet, doesn’t mean the overwhelming risk is not there. So when you have one hard copy of a contract, maybe think about scanning it! Ok, I’m not a lawyer, but I do know what’s binding in business, and that’s only a signed agreement you have evidence of. This isn’t legal advice so much as the vicariously learned lessons of a litigious society, the land of opportunity and law suits.
3. Randomized testing
David and Efraim find themselves presented with a multi-million dollar bid opportunity with the government, and they fly all the way to Albania to check out a potential source for their arms. Despite the half day flight from Miami, they can’t be bothered to open more than one cherry-picked box of bullets! I understand they might have been overwhelmed by wishful thinking when presented with a life-changing opportunity. But any product production or procurement does require a randomized sample to ensure quality.
4. Pay your people
Deciding not to pay the Albanians doing the illegal dirty work was a serious loose end in Efraim’s plan. The most successful businesses tout their people as their most valuable asset rather than treating them as a cost center. This mindset will reduce turnover and attract high quality candidates. It may seem less worthwhile to apply this thinking to project work, as with the Albanians - but expecting no blow back from people with nothing to lose when you breach a contract is clearly naive.
While I’m sure I couldn’t have taken AEY as far as the b.s.ing sociopath Efraim Diveroli, I’m pretty sure some basic principles of the MBA variety would have kept it from falling as far. But then there wouldn’t be such juicy Hollywood material to immortalize the ballsy bros of our generation, like Jamie and Charlie from The Big Short. May God save us all.