Guest Post: Finn From Brazil

04Aug10

Malcolm Gladwell Owes Me a New Pair of Shoes

I finally found a basketball court in São Paulo that was in good condition in a nice area and felt reasonably comfortable to play on. The last couple of weekends, I have played pickup basketball there. Usually it is a pretty motley crew of Brazilians. In general it is funny to watch Brazilians play basketball because it is not a sport that most of them played growing up at least in any organized way. Their mechanics are therefore terrible. This one guy shot a basketball by putting sideways – left to right – spin on the ball. I´ve never seen anyone do that in the United States but he managed to make a fair a number of shots. The innate athleticism of most Brazilians more than makes up for the fact that most of them have the basketball IQ of a 5 year old.

The other thing about pick up basketball in Brazil is that version of basketball they play is strange. They typically only play 3 on 3 and the game is not 3 on 3 as you or I would imagine it but rather the game 21 but with teams. You make a shot and then you get a free throw. If you make the free throw it is your ball. If you miss the free throw and the other guy puts it in then he gets the 2 points and a free throw himself. It really made no sense. I think they might have watched NBA games and been confused about what a foul shot was and thought it was something that you were awarded after making a basket.

Anyways, I go there to play the other day and played for about an hour and a half with these five other guys. It was a normal day of basketball. Over the course of the day, you generally make friends with the guys you are playing with and joke around a bit. For a brief moment in time, these random Brazilians and I were teammates.

So after several games, I tell them – ¨nao posso jogar mais, esto muito cansado – I can´t play more, I am very tired.¨ They give me high fives and say some stuff in Portuguese. I then grab my shirt that I had taken off and used to hid my wallet and IPhone and begin to walk off. As I am getting ready to leave, one of my teammates comes up to me and starts talking in Portuguese. He comes up with a smile on his face and so I stop and entertain what he has to say. It takes me a few seconds but I realize he is asking me for my shoes. It seemed like the strangest thing in the world to be asked at that moment. If he had asked me for a pencil sharpener, I wouldn´t have been less surprised.

Anyways I pretend to not understand what he is saying. I smile back, laugh and turn to walk away and he grabs me. Then another guy comes up from behind, my other teammate who had moments earlier helped me get back on my feet after I had fallen following a pick and roll, and they both basically corner me against a tree. They are still smiling and trying to make the whole thing seem funny but still nonetheless they are in the process of mugging me for my New Balance sneakers.

I slip the shoes off without untying them and walk away. Amazingly enough they never figured out that I had an IPhone in my hand. Iphones cost about a thousand dollars in Brazil because of all the import taxes. That would have been worth slitting my throat over to guys who don’t make more than 5k a year. I guess they figured no one would be stupid enough to come to this basketball court with more expensive items then their shoes. I guess they underestimated my stupidity.

Stepping back, I am wondering what this episode is supposed to teach me. The problem is that if you don´t trust anyone you will end up afraid to do anything in a foreign country. I had a lot of fun playing basketball with random Brazilians the last few weeks. If you do trust people and they turn out to be bad dudes, then you´re left walking home shoeless or worse. The only take away that I get out of this experience is the fact that I thought that by playing an hour and a half of basketball with these guys, I had somehow dramatically altered the natural order of the world and the normal rules that applied to the Gringo-Flavella kid relationship did not apply anymore because I was now friend´s with these guys.

I had let me first impression of these guys – I honestly thought that they were good dudes – overrule rational thought being that if anyone was likely to rob me it would probably be flavella kids who enjoy basketball. Malcolm Gladwell is in part to blame.  Gladwell made his journalistic name writing that you can basically tell everything you need to know about a person by first impressions. The argument he makes is a bit more nuanced but the gist of it is that you really don’t need that much information to judge someone, just a small sliver of personal experience and your intuition. Your judgments from that small sliver of personal experience will in all likelihood be more valuable then reams of analysis or will at least get you to the same conclusion as all that analysis.

This line of thinking is actually complete bullshit. First impressions, I think are more often random or worst manipulated. These guys wanted me to have a good first impression so I would let my guard down. The fact that we base all these decisions like who we are going to hire, who we are going to date, who we are going to trust largely on first impressions is incredibly irrational. It is hard and annoying to spend a lot of time trying to really drill down to the bottom of something and understand – it is much easier to just apply heuristic thinking. Rather than pointing that out, Gladwell offers cute anecdotes that seemingly support our natural disposition to be lazy and trust our first impressions.

The Economics of a Modeling Agency

One of the great things about Brazil that more than makes up for security concerns is the two hour daily lunch. Every day at work, I get about 1.5 hours of time allotted for lunch but can take 2 if I want. It is taken very seriously. You usually go out to a pretty nice restaurant and order a lot of food and the firm pays for it, which is also sweet.

Anyways, I say all this as an exposition to a lunch I had the other day with a guy from work and two of his friends. One of the friends was in the real estate business down here and had recently quit his job to try to start a modeling agency. In America, rich kids will quit their jobs and try to make shitty films or start useless NGOs. In Brazil, rich kids quit their jobs to start modeling agencies. A million times more hilarious and productive use of one’s time.

Anyways, he explained to me during the course of the lunch the economics of the industry which were actually quit fascinating. To begin with, what is a model? A model can be anyone, it isn’t just girls between the ages of 14-24. You get old guy models who do Brooks Brothers catalogues to hand models who put on watches. Models aren’t even particularly good looking they just have to have distinctive look.

Now you can actually make more money focusing on the old distinguished looking man and hand model sector. It is relatively overlooked. However, this kid is not getting into this industry to make money. Like Donald Trump and everyone else whoever started a modeling agency, he pretty much just wants to have an excuse to hang out with hot girls.

How does he find them? Well there are two types of models. You have the girls who have stage mom type parents who got their kids into modeling when they were young – the Dina Lohans of the world who for whatever screwed up reason thought it was good for the child to be exposed to the bizarre world of modeling and entertainment at a young age. These models have been doing baby gap print ads and car commercials since they were 3. They might still be attractive when they are older or they might not. They have usually been with an agency for a while and can get jobs based entirely on their connections. He says there is no point going after those models because they usually aren’t that attractive at least relatively speaking and they are already with someone else.

The next type of model is the discovered on the sidewalk model. He explained to me that Gisele falls under this category. One moment Gisele was just a random 14 year old waiting in line at a McDonalds, the next moment she was discovered by a talent agent and the moment after that she was living in Milan making $15,000 a day.

I have no idea how he builds his stable of clients or whatever you want to call it. What he tells me is that he focuses on finding girls through scouts, which leads to the follow up question what is a model scout? A baseball scout makes sense. You need someone to go to millions of high school and college baseball games to check out the talent and report back. A model scout? Your job is to go to malls and other places that where 14-year-old girls hang out and approach them while their parents are there. Are you basically like a professional pedophile?

Now, I didn´t grill him on whether this operation actually makes money or not. I have a feeling it probably doesn´t. After all, with any glamour industry such as movie making, professional sports; people get into it for reasons other than making money. If people are throwing money at projects to derive something other than a rate of return than that means more money than is economically justifiable is being thrown at these projects and therefore everyone´s returns are lower. Running your own modeling agency is an expensive and ultimately hilarious hobby posing as a business.

The Economics of Clubs

I don´t know how many people have read that HBS case study of Marquee – which was once the best club in NYC in the 2003-2004 era (in club years that is a long time ago). The article basically talks about the cash flow and life cycle of the New York night club business. Its an incredibly interesting read esp. if you´re familiar with the vagaries of NYC night life.

To elaborate, the first stage in the life of the club is the opening. This is the ridiculously exclusive stage. At this initial stage, making money takes a back seat to building prestige. How do you build prestige? You basically don’t make money by not letting in douche bags with money. Clubs at this point would rather let in a bunch of actors, models, random people that they deem cool, rather than investment bankers who actually spend money. Once the club has built up a sufficient amount of prestige and the finance crowd is just dying to get in, the clubs then let them in but let them only if they spend obscene amounts of money. Your cash flow goes through the roof at this point and you try to milk this stage for as long as possible. Your club is cool but getting less cool by the second but you are making a ton of money. Once the prestige begins to wear thin and the original model/actor/grade-b celebrity list is moving unto a new club, you begin to let in not only people willing to throw down a lot of money but any body willing to pay a slight cover charge. This is when the flood gates open and everyone from the Bridge and Tunnel crowd to the visiting bachelorette party from North Dakota is allowed to come in – think Libation in the LES. You can stay in this stage for ever assuming you keep the costs low. However, if owning a prestigious club is more important than running a profitable business, you will likely close the club and start a new one to begin the process all over again. The whole life of the club – from birth to middle age to death – takes about two years from start to end.

Clubs in Sao Paulo follow similar life cycles as the ones in NYC. The last couple of Fridays I have been going with some Brazilians and Americans to Kiss N Fly. Kiss n Fly is in that in between stage of going from an exclusive club to a club that lets in anyone with a ton of money. The cousin of the Brazilian lawyer we were with co-owns the place with another guy so we can get in for free. However, it normally costs about $250 to just to get in and several multiples of that to get a table – people in Sao Paulo spend that without batting an eye.

The scene inside the club itself is ridiculous as one might expect. I have always wondered in general how clubs like this one are able to guarantee that the place is full of models. Talking to one of the guys who ran the place, I learned how. It is not an accident and it is actually pretty carefully thought out and somewhat necessary for the functioning of the club because without good-looking 20 year old girls, you don’t get the 32 year old guys with money.

What they have are ¨special relationships¨ with the different modeling agencies. They have a guy – a funny little gay guy wearing a fedora hat to be exact – who arranges pick up and delivery of models, basically running shipments of models into the club all night. I saw him roll up in an oversized suburban SUV and unload a gaggle of giggling models who proceeded to fall out of the car and stumble into the club. He pranced around for a bit, fussing over the models and then left on another model grab mission. The models that he brings are barely out of high school like between the ages of 16-22 and pretty drunk.

These models immediately get gobbled up by the different tables of much older guys throwing down thousands of dollars for bottle service. Basically, it was the equivalent of watching a bunch of laughing gazelle get herded into a lion´s den. Had I been the older brother of any of these girls, I definitely would have stepped up and said something to the gay guy in the Fedora hat for getting my sister drunk so she could sit on the lap of some 44 year old. But alas, I had no relation to anyone there, so I couldn´t help but be amused by the whole spectacle.

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