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.

Say No to the Dress

We’ve all heard of Kleinfeld Bridal. Actually, I hadn’t until all my friends told me. “You’re going wedding dress shopping? Are you going to go to Kleinfeld? I’ve seen every episode through season 7 of ‘Say Yes to the Dress’!” So, of course, I had to add it to my dress circuit. I’ll admit that I’m a bit of a maximizer, so rather than optimizing for speed of dress selection, I embraced my inclination to visit every store and planned the most efficient route between boutiques. 

First, I selected for density of shops. Racked.com gave me an excellent layout of the playing field. If clustered appropriately and combined with a clear schedule, I could fit up to four boutiques in a day, assuming 1.5 hours per shop and a minimum of 20 minutes of transit and transition time. I left the ones closer to work lower on the list, assuming I could find a long lunch break or a 5pm departure on some occasion. And for biggies like RK Bridal, I assumed a whole afternoon would be required to a) get there and b) sift with limited assistance through the thousands of dresses on offer of every design and designer. Then, I tossed out the options that were a poor fit for me. The easiest ones to de-prioritize were the custom houses and the department stores, as I didn’t have a vision to fulfill but did want some expert assistance.

By my fifth shop, I felt I’d found my dress. But as most of the luxury bridal businesses require bookings well ahead of time, I was still making doubly sure that I’d found the one, and enjoying the bridal shopping experience with more leisure when I arrived at Kleinfeld. 

Kleinfeld, I was expecting, would be the cherry on the cake. At Pronovias I experienced impeccable care, warmth, and charm. At Designer Loft, they put the Fashion in Fashion District, with elegant designs and balanced variety. At Kleinfeld, I met…a nose in the air. “How many will be in your party?” the receptionist asked as I made my appointment. Glancing around looking for mafia sized wedding entourages, I saw no such intimidating crowds and turned back to the receptionist. “Two,” I replied. 

As I waited for my room, I leafed through their album of blond women in gigantic dresses, cuddling with their new husbands on large suburban estates. My name was called, and my heavily made up consultant offered a hand and a strained smile. I realized I needed to break the ice of her wintery introduction. 

“Hi Veronica, great to meet you! How has your day been?” We settle into my fitting room. 

“So busy…people just don’t know how hectic bridal is. It takes nine months for the dress to arrive.” She paused meaningfully, and I nodded somberly. “And with alterations, you need one more month. So you need to find a dress at least 10 months ahead of time. Bridal is very busy.”

Really? That’s fascinating, because my friend who has worked in fashion his whole professional career tells me he can make an entire line in 10 weeks, and a made to measure wedding dress in 6 or less. Are you sending it to China and then back again for alterations? Or maybe you’re just trying to maintain a line like a hot club in Soho…

Maybe I’m thinking about this the wrong way, but that sounds like the opposite of hectic. That sounds deeply inefficient! Thinking back to Management 101 from my MBA, it seems that every other business in the world carries some inventory, and no doubt bridal in effect is the same, as the same designs and dresses are loaned to hundreds of bridal shops in the greater New York area alone. Now I understand these samples are used for marketing first and sold in “Sample Sales” later. There is no substitute for seeing fashion items in person, which is why our favorite Wharton all-stars Warby Parker got storefronts. But if it’s worth the investment to have a few floaters in showrooms, why not have a few in stock for purchase in season? It creates an operations nightmare not to be able to batch production and, instead, hand sew each item in the order that it was purchased. But if it’s for a weeeddding, everyone is suddenly willing to suffer slow and sometimes poor service, and pay extra for it. To the untrained eye, it rather feels like a marketing tactic of artificial scarcity. Brides are made to feel more grateful that we have the privilege of paying thousands of dollars, and are glad that we receive anything at all for it. All the while we are funding the inefficiency of the system. But that’s the cynical view. 

“What’s your price range?” Veronica queried.

“I’m taking a you-know-it-when-you-see-it approach.”

“Well sooome of our dresses are fif-teen-thousand dollars

Did you watch Austin Powers on repeat to get that effect? It was Dr. Evil with a dash of Sandy from Daria. Wait, I can’t answer a question with a question, pick a number…and something high, so that she still talks to me…

“I’d like something below $8,000.” She looked relieved, or perhaps willing to suspend disbelief.

After answering some more queries about style preferences, the parade of try-ons began. The other consultants cooed, “You look amazing!” to the second and third dresses as a strode into the hallway to get the feel of each dress. I took these complements with a shaker of salt. I’d gotten positive feedback from wedding dress consultants on all sorts of outrageous dresses by that point. I definitely looked like a piñata in one of the first dresses I tried on that the consultant glowed was “a show stopper”. Yes, but not in a good way, I thought after reviewing the photos. You couldn’t find me amidst all the tulle on another dress that a consultant thought was “the one”. But what’s wedding dress shopping without a blooper real? 

“Ooooh, I like that one – how much is it?” My friend asked a few dresses in.

“Probably $2,000” I ventured, as there were no price tags, and it was a less attractive version of one I’d tried on previously priced at $1,600. I spoke too soon. Veronica walked in.

“It’s two thousand, six hundred dollars,” she half glowered.

Maybe I should make this a bidding war to emphasize my price insensitivity… “I’ll pay $3,000! It’s less? Make it $4,000!” Yes, there’s the unspoken rule: if you have to ask the price, you can’t afford it. And we’d already broken it, so screw it, let’s take this all the way down hill!

She presented another dress. “This one is a Kleinfeld exclusive.” 

Yes, you’ve said the magic word! Exclusive? I want to be a part of anything exclusive to feel meaningful! If you’re not busy later, can I join your Mean Girls crew? And no, you can’t sit with us.

I nodded with a weak smile, trying to feign continued interest. By that point, everything looked like a tackier version of something I’d already tried on elsewhere. I had reached my saturation point.

“Thanks Veronica. I’m not going to make any decisions today, I’d like to bring my mom back so she can see my favorites.”

“Could your mom not make it today?” She asked. She’d mastered that fine line between bored and exasperated.

Do you see my mom next to me? One would have thought that was apparent by the lack of my mom being here. “No.” 

Yup. I Say No to the Dress.

Those Three Little Letters Every Girl Wants

I’ve recently added three shiny letters to my name. Not MRS – though that’s soon to come – but MBA. And now that I have re-planted myself in a thriving habitat for my variety, I feel flush with observations about where my ninja-like business skills could give this town of small businesses more facelifts than Beverly Hills. 

My business juju was stirred as I was experiencing my first major life event since finishing my Wharton MBA: wedding dress shopping. The engagement itself was a close second. My love had that look in his eyes. Sneakiness. When I asked, “What are you up to…”, a diamond ring appeared from his sock drawer. (As this is an anonymous blog, the version told in person will be much more gripping. The Facebook version has him kneeling beneath a shimmering waterfall, with me looking gleefully surprised and conveniently camera-ready.) However, if wedding dress shopping could be as efficient as my fiancé’s proposal, several worlds would crumble.

Make no mistake from the beautiful bride photos you’ve all seen, there are layers upon layers of industries and middle men all ready to mark prices up 30% when they hear it’s for your “special day”. While some of this is side-steppable if you don’t say that dollar sign word “wedding”, there’s no getting around that when you’re picking a wedding dress. And I certainly did learn a few things from this catch 22.