War Dogs: an MBA’s Review

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.


Sharing is Caring: The Waitstaff Workaround at Westville

Here’s a familiar picture for a Saturday brunch: You sit down to an assigned waiter that scurries off with your drink order before you can follow up with your food request. Fifteen minutes later you make your claim to Eggs Benedict but forget the side of muffins you’d wanted to add. You flag down the nearest waiter who, instead of punching in your order, says he’ll find your assigned waiter to help you. Then once you’ve eaten, you tap your fingers for ten minutes until your waiter notices you again and brings the bill.

Not in one special establishment. There is a place where the waiters, servers and buss boys all tag team seamlessly, and with their powers combined, they are Westville! What inspired Westville to be different and, in fact, much more efficient and service-oriented than the average restaurant? My theory is fairness.

Many of you may not be aware of the crazy NY rule that precludes tip sharing with the cook staff. What Westville seems to have done is take tip pooling to the next level and leverage a clever loophole in the policy by making the cook staff also the bussers. So your food comes out super snappy, and the back of house doesn’t get shafted on pay. And since all the tips are pooled, waiters are motivated to help you quickly to maximize client flow rather than their individual tip at a given table. This model is perfect for mildly impatient New Yorkers! 

NY is by no means unique in its bias against kitchen staff. And many Americans have unfortunately been conditioned to think in fuzzy accounting terms and, thus, to prefer a tipping system that fools them into buying based on sticker prices rather than final prices. But other restauranteurs, like the famed Danny Meyer, have made a smashing success of no tipping: his flagship no-tipping restaurant The Modern has been flooded with both diners and staff applications since the pronouncement, and the rollout is scheduled to continue across his various hospitality locations. You can’t put a price on a genuinely friendly waiter interaction, not fueled by hopes of remuneration.


Pro Tip: When to Trade in your Phone

When should you upgrade your phone? Black Friday! Verizon would have given me $600 for my iPhone 6 during their Black Friday promotion, even though it’s a two year old model. (Thank you, Apple, for making the silly iPhone 7 change of removing the headphone jack, propping up demand for my aged model). I learned this from a rep as I made my new phone purchase a week later (*single tear*). Other FAQs he answered:

Will you have another trade-in promotion?

Check in around “major” holidays, like Valentines Day or Memorial Day.

What if I want to trade in my phone ahead of a two year period?

Not a problem; if you bought your phone as part of your plan, the financing agreement allows for early trade-ins.

With that info in mind, I *may* just upgrade my phone to the next gen next November if it’s shiny enough, and the net cost differential is negligible. 

I also finally sprung for the largest storage space, to free myself from the endless loop of deleting phone photos and under-used apps. Now I can re-download Pokemon Go and just worry about battery drainage. 

What They Do so Well

I had a classic New York consultant’s experience last week. It was a classic consultant experience because I was “on the beach” – unstaffed, between projects, and free for a galavant. It was a classic New York experience because it was spontaneous, random and, in a word, awesome. I hung out with a bunch of naked dancers! 

Ok, they had previously *posed naked* while dancing for a photography series. But we still had a little celebratory drink at the launch party for this evocative book of poetic profiles against city scapes. They were there to close the circle on their part in this multi-month, hundred-plus person effort to make Dancers after Dark (link below).

Dancers After Dark

“I’m on page 122” one man glowed as he handed his book over to photographer Jordan Matters for signing after the jam-packed selfie with the participants – which including Alan Cumming, a.k.a. Eli Gold from The Good Wife! I wasn’t quite quick enough with my camera as he was leaving, but I was still excited to get a partial shot. “That’s Ei Gold’s neck!” I text-squealed as I shared a photo with my fiancé. “LOL” he replied, sharing my glee in a different fashion.

How did I find myself in such a random scenario, you might ask? The Skint! It’s a free daily e-newsletter that tells you the cheap or free stuff happening all around NYC. Now what sets it apart from other e-newsletters? How does it manage to be both engaging and galvanizing? Unlike the barebones nonsensenyc.com and the flashy UpOut pushing hard to monetize my time, the Skint provides the optimal amount of information and options at just the right time for me. My erratic schedule, and the last-minute habits of most millennials for that matter, are a perfect fit for their just-in-time e-mails. They make it sooo easy to digest the goings-on of the city, with highlight headlines in the subject line and a summary in the body. And they are downright practical when it comes to the logistical barrier to participation: they list events in the time-sequenced order of occurrence, with the start time and the NYC neighborhood listed! If it’s close enough at a time that I’m free, and the event looks appealing, I can just click on the hyperlink for more information and RSVP where required. And voila! My social life and engagement with the city has just been amplified, with minimal activation energy required.

Define exercise?

Like many young millennials, I am a bit of a maximizer. I look for the shortest queue at the supermarket. I try to fit in just one more errand en route to a brunch date, so I don’t have to walk back across town later (I’m often just a smidgen late). And I try to max out my fitness benefit that my work provides me.

Rather than simply paying for your gym membership, like many start-ups these days, my corporate office offers a more flexible 75% refund of up to $500 total in fitness spending per year. Rather than throw it all at a ClassPass that I would underutilize during my erratic travel schedule (that wouldn’t be very good maximizing…), I decide to spend it piecemeal. $150 on a new iWatch (it hurt a little when they came out with version 2.0 a few months later…). $50 on some yoga equipment. And then, I was left to wonder with my remaining $300, what expenses qualify?

I remembered some completely miscellaneous items on a list from when I first joined the company, and the dire complaints of a colleague who couldn’t get his form roller reimbursed (“How is this not fitness equipment?!” he balked). So I knew they were pretty selective about what got through. I decided it was time to do a bit of research.

Unfortunately my intranet pointed me to the WageWorks helpline. I call, and proceed to navigate through the touch-tone. I finally reach a human that asks me the same questions as the automated recording. “What are the last four of your social?” I give them to her. “But that’s not what I see in the system!” she practically gasps. “What does that have to do with my question?” I ask. Indeed, clearly whoever writes these call scripts is not a maximizer themselves. If this were a consultant’s dreamland, I could magically inspire Jedi-like focus within her on how to minimize the time of both the callee and caller are on the phone. I’d waive my hand like Obi-Wan, and say in a soothing voice, “You want to cut out the unhelpful form-filling and answer questions as quickly as possible.” “Yes,” Susan would say, “How can I help?”

Finally, after 20 minutes of help line circles, I learn that nothing intuitive seems to count as exercise. “Does Citi Bike [bike sharing] qualify?” “Yes.” Most places would count that as a commuter benefit, but I was happy to take it. “What about roller blades?” “No, that does not qualify”. 

She then points out that all of this stuff is on their website. “Oh!” I say, “I’ll have a look for that.” Of course it wasn’t on the public WageWorks website. It was squirreled away on a private login site hidden within the intranet. 

In support of all maximizers out there, I have provided the list of WageWorks qualifying expenses below. This list can vary by employer, but this is a good starting place. Nutritional counseling is in. Swim classes are out. Logic be damned.

Description Covered Benefit Max Benefit p.a.
Activity Tracker or Smartwatch (once every 3 years) Yes 75% $150
Any expenses not explicitly listed No
Bike Sharing Memberships (Monthly or Annually only) Yes 75% $500
Dance Class No
DVD/Exercise videos Yes 75% $500
Exercise Class Yes 75% $500
Fitness Center, Club or Studio Membership Yes 75% $500
Fitness Counseling Yes 75% $500
Fitness games for game consoles No
Form Rollers No
Golf Lessons (including those from a country club) No
Golf or Country Club Membership No
Gym Membership Yes 75% $500
Health Center or Club Membership Yes 75% $500
Health Spa Membership No
Home Fitness Equipment Yes 75% $500
Initiation Fee (for covered services) Yes 75% $500
Inversion Table No
IWatch with tracking capability Yes 75% $150
Jogging Stroller No
Karate Yes 75% $500
Kick Boxing Yes 75% $500
Locker Service No
Martial Arts Yes 75% $500
Massage Services No
Medical Expenses / Medical Copays No
Monthly billing fee (for covered services) Yes 75% $500
Mountain/Road Bikes (One every five years) Yes 75% $500
Nutrisystem No
Nutritional Counseling Yes 75% $500
Online Classes Yes 75% $500
Personal Trainer Yes 75% $500
Pilates Yes 75% $500
Race Fees Yes 75% $500
Registration Fee Yes 75% $500
Rock Climbing Yes 75% $500
Shoes and Apparel No
Smart Watch with tracking capability Yes 75% $150
Smoking Cessation Products No
Spa Membership No
Spin Classes Yes 75% $500
Swim Club Membership No
Swimming Lessons No
Tae Kwan Do Yes 75% $500
Tai Chi Yes 75% $500
Tennis Club Membership No
Tennis Lessons (including those from a Country Club) No
Towel Service No
Weight Watchers Meals No
Weight Watchers Registration Fee Yes 75% $500
Wireless Activity Tracker (once every three years) Yes 75% $150
Yoga Yes 75% $500
Yoga/Workout Mats Yes 75% $500

Arbitrage Opportunities in the Christmas Tree Market in Lower West and Central Manhattan

Christmas Trees are sold at different prices in NYC. Here’s a map.

P.S. You should do a careful cost/benefit analysis of how much you are willing to pay vs. how far you’re willing to carry a Christmas Tree (and how manly you’ll look doing it). This is also known as the Traveling Salesman Problem.

P.P.S. This post is a post-purchase reflection. We picked up a tree wandering back from the bar the night after Thanksgiving. Tipsy purchases are always efficient! We got a mid-priced tree 🙂

Top 5 Things to Rent vs. Buy in NYC

No, I’m not talking about houses – it takes no careful analysis to know whether your income, savings or inheritance (for the lucky) can permit the luxury of purchasing your NY standard 500 square foot apartment. No, I’m talking about all the quasi-consumables. Ice skates and bicycles, tuxedos and fancy dresses. This isn’t like choosing whether to make your girlfriend your wife (although mixed signals with your bicycle could cause similar bodily harm). These decisions are only emotional in so much as your crowded apartment effects your psyche. When adapting your lifestyle to NYC’s space constraints, you’ve got to get practical and make some tradeoffs.

Now I’ll admit that historically I’ve been a hoarder. I’ve got toys from the beloved Love Saves the Day (RIP) that I’m glad to have kept. But beyond a few choice mementos, my frequent moves and witnessing of various grandparents’ downsizing experiences has led me to embrace the asset-light life style. However, this must be carefully balanced against your actually daily experience. You want just enough stuff to feel the freedom to be comfortable, but not so much that you’re tripping and swimming in it. Here are what I consider to be the Top 5 Rent vs. Buy decisions for young adults, moving every year, from small apartment to small apartment.

Fancy dress – Buy

This answer differs slightly for men and women. My start-up uniformed fiancé (shirt and jeans) confirms that every man should have a tuxedo. I must agree for lack of first hand experience. For women, I also think it’s important to have a few staples: Your LBD, and a couple of cocktail dresses. Beyond that, particularly if you get into ball gown territory, you have to start looking at expected utilization of a prospective dress versus the cost of purchasing it. A CMU paper estimates that Rent the Runway charges roughly one tenth of the retail price of a dress on average. That means you would need to expect to wear a dress 10 times to make it more valuable to buy. Ask the average girl on the street, and most of them only expect to get 6-7 wears out of a dress. Of course there is some emotional satisfaction in knowing you have abeautiful dress at hand that looks gorgeous on you, and that should factor in, too. As should your closet space.

Bicycle – Rent

Now this brings in not just utilization, but safety and convenience factors. Owning your own bike means finding a parking space whenever you plan to use it and having a sufficiently high (or low) quality, that it can’t easily be stripped (or tempt stripping). For convenience in the way of no storage or property concerns, Citi bike wins easily. On the other hand, if you want to have more personal control over the quality of the breaks and steering, having your own bike is a better guarantee of quality. There are also a number of creative indoor bike racks that conserve in-apartment space – though this may still not be a full solution for walk-ups. So in short, it depends.

Partyware – Rent

Ok, this comes down almost purely to space constraints. Funky drink glasses can likely be accommodated. Extra chairs are more questionable. Most Manhattanites opt for standing parties over sizable dinner parties, no doubt subconsciously because of this constraint. But if you are gearing up for a Friendsgiving, you may just want to rent some chairs and a table. Partyrentals.us can rent a rectangular table and 8 chairs for less than $30 a day. So spare yourself the overstuffed closet.

Powertools – If you rent, rent; if you own, buy

This is a tough one, because you may just think “I’ll need that tool again some day”. We ended up buying parts to what added up to a $90 hole in the wall to run our internet cables in the closet to tidy up our living room. Would a rental have been possible? Home Depot makes anything look possible.

Let’s start with the basics: everyone should have a drill. Beyond that, the basic heuristic is, if you’re going to hire someone with the tool already, don’t buy it. And for small projects, if you rent, rent, and if you own, buy.

Holiday Decorations – Rent

Now that Turkey Day has come and gone, we’ve definitely had this question for Christmas Trees! This is more of a buy-and-keep or buy-and-throw-out decision for apartments, though there are plenty of rental businesses serving storefronts and the like. The reality is, plastic trees suck anyway, and there’s no way I’m giving up closet space for one. We went for the real deal. More on that on my next post about Christmas Tree pricing.