I finally got a chance to read this book and I was not disappointed. Much of the book went over material that I was already familiar with because I have been blogging about this industry for quite awhile now. But it is cool to finally hear Erik Prince’s version of events and his thoughts on the industry.
So what I did with the book is make footnotes on things that I thought were interesting that I was not aware of. Like did you know that the guy that threw a shoe at President Bush during a press meeting, was tackled by a Blackwater guy and not the Secret Service? Or that it was BW that rescued Vice President Joe Biden, Secretary of Defense Chuck Hagel and Secretary of State John Kerry on a snowy mountain top in Afghanistan? That is crazy, and it is stuff like that, that I will bring up in my notes. I will also mention the books that Prince was influenced by or thought important enough to mention in his book.
The first book mentioned by Prince that inspired him for building Blackwater was called Entrepreneurs Are Made, Not Born–By Lloyd Shefsky. Prince read this book while posted on the ship USS America, and the ideas that came from this book helped him to formulate a plan on what he wanted to do when got out of the Navy. He was a businessman/entrepreneur at heart, just like his father, and he wanted to be closer to his family–hence why he wanted out of the Navy. This is where he got the idea for building a world class training facility that could fill a need for the government, and especially his Navy SEALs, whom were constantly on the road for training. What Prince wanted to do was get a centralized training facility in Moyock, North Carolina for multiple government and private clients that would have everything they needed to train. The courage and drive to take the risk to do this, came from the motivation Prince got from reading this book.
As to the name of the company, did you know that the original names being thrown around were the ‘Tidewater Institute for Tactical Shooting’ or the ‘Hampton Roads Tactical Shooting Center’? They went with Blackwater because as they built the ranges on their new property, they were constantly slogging through the peat stained black water mud. It had a better ring and meaning for them at the time I guess.
In the beginning of their business, training was not their big money maker. It was their targets they constructed and they used a tougher steel combined with a pop up mechanism to make targets that folks all over the US wanted. These targets accounted for 50 percent of their revenue in the early days of the company.
He also makes mention of the pride he had in his contractors and employees. One story he mentioned was about a wounded contractor in his company that I did not know about, but thought was really cool. His name is Derrick and his blog is called Small Victories, and it is about the process he has gone through as a severely wounded contractor.
The second book mentioned was Unrestricted Warfare, written by a couple of Chinese colonels back in 1999. This book documented the coming future of terrorism, and it is what woke up defense insiders–to include Prince, as to what was coming. What happened on 9/11 was not surprising to those who foresaw this type of unrestricted warfare or terrorism.
Prince made mention of Frank Gallagher as the first detail leader BW assigned for the task of guarding Bremmer in Iraq. That 36 man detail later grew to a massive operation protecting a multitude of DoS folks in Iraq and later Afghanistan. What is interesting though is that Frank and company were the guys making the innovations on the ground in Iraq when it came to close protection in war zones. (Frank is also coming out with a book)
Frank’s group were so good that their protection schemes would later be adopted by the US Government for protecting it’s highest risk personnel. Not only that, but Osama Bin Laden at the time was extremely frustrated that none of his clowns were able to get a shot at Bremmer. So OBL fired up some offense industry, and put a bounty out on Bremmer and his protective detail. Bremmer was worth 22 pounds of gold, and anyone on the PSD team was worth $30,000 dollars according to the book.
Another interesting aspect of the way Prince did business was in order to show capability, he would build it first with the hopes that clients would see how useful or important it is, and then contract it out. Prince would put his own money down on the venture as well.
A good example of this is Presidential Airways and the advent of using smaller scale paracargo in Afghanistan. In the early days of the war, the Air Force did not have a small scale paracargo capability. They would use large aircraft to drop 600 lb pallets, and do it way too high up in the air. It was Presidential Airways that recognized a deficiency–that the military needed small scale paracargo, and lots of it in order to meet the demand out there. They would go on to do a proof of concept and supply outposts, and then the government later set up a contract to continue using this service. This would later be called LCLA or Low Cost, Low Altitude and I have talked about this on the blog in the past. Thanks to Presidential Airways, I am sure many outposts received life saving ammunition supply drops or food drops. (Cofer Black’s son was actually resupplied by Presidential Airways when he was at an outpost, serving in the military in Afghanistan)
Then there are the other projects that Prince funded that did not get off the ground. Like the armored vehicle called the Grizzly or their blimp. Or the 1700 man peace keeping force called Greystone.
According to Prince, Greystone would have had it’s own air force, helicopters, cargo ships, aerial surveillance, medical supply chain, and combat group. It was Prince’s alternative to the ineffectual UN peacekeepers that we continue to see deployed all over the world. I remember he was wanting to send these guys to Darfur, Sudan if DoS was ok with it. They were not, and this project never got off the ground.
According to the book, Prince spent about 100 million dollars on various BW projects that never went anywhere. He had the attitude of if you build it, they will come. With his creations, he felt eventually someone in the government or in private industry would want this stuff, and he mentioned that if he threw enough darts at the board, they were bound to hit the bull’s eye. He said this is the price of continually innovating. Whatever the government needed, or what they might suddenly realize they needed, Prince would provide it. (kind of reminds me of Steve Jobs with his drive to create products that people didn’t know they wanted, but when made, they absolutely wanted and needed them)
And really, this is at the heart of what he was all about. His father was the same way, and I kind of got the impression that Prince was constantly trying to live up to what his father was all about. His father was very successful and had the same attitude of seeing a need or potential need, and filling it. He is the one that invented lighted mirrors in vehicle sun visors. But his father also had a lot of failures before that lighted mirror took off as a viable concept. Both men were visionaries and risk takers, and that is what you need in order to create something new. To create something that people want, or didn’t know they wanted, but do now.
In the book, Prince also talked about Executive Outcomes and how successful they were. So EO was an inspiration and it is always cool to hear about visionaries getting inspired by other visionaries and their creations.
Prince also made mention of his Libertarian roots and his ideas on contracting and free markets. He was a big fan of fixed cost contracts, versus cost-based or cost-plus. He felt that a contractor should be able to put their money where their mouth is when they say they can deliver something for a certain price. With cost based or cost plus, you are basically giving a contractor an open check to spend whatever they want to get the job done.
You see this theme throughout the book, and that Prince was all about funding a project in order to show proof of concept and viability, or that BW was interested in providing a good value for the tax payer’s dollar.
Speaking of which, BW funded their own rescue operation of folks off of roofs during the Katrina Hurricane disaster back in 2005! BW also went on to provide effective security in the region after that disaster.
Another business unit that Prince mentioned was Total Intelligence Solutions. TIS was BW’s private intelligence firm that offered services to not only the government, but to private institutions. The Walt Disney Company was mentioned as one of those institutions.
TIS also had Cofer Black in it, and he was very much impressed with the way it operated compared to the government. Black mentioned that ‘every mid-level government official should spend a two-year sabbatical there to learn about efficiency and effectiveness’. My opinion on that is duh, private industry can be very efficient and effective compared to the government.
The third book mentioned was On War by Carl von Clausewitz. Prince’s father was the one that recommended this book to him before he joined the Navy. As to what lessons he learned from this book is hard to say. He mentioned a Clausewitz quote on courage and that is about it.
Moving along through the book, he mentioned stuff about the An Najaf attack. Travis Haley was mentioned multiple times in regards to this attack and it is cool getting some info on what happened during that deal. Travis was brought in by little bird after the attack began, and he was definitely a force multiplier during the fight. The video he and his team posted of the event has received many views over the years. One thing mentioned that I did not know is that his team did receive mortar fire that day. Accurate mortar fire, as we saw with the Benghazzi attack, can be very bad for the defense.
It is also interesting that General Sanchez did not want to acknowledge that Blackwater was so heavily involved with the defense of this facility. The reality is that if it wasn’t for the actions of BW, they would have lost that consulate in An Najaf. It would have been very embarrassing to Sanchez’s command, for it to get out that a contractor did so well, and in his AO. Or that the US military was not in a position to defend it because it had so many other things going on at the time. This incident was also unique because there were military folks there, but BW was running the show.
It was interesting to find out how much WPS made for BW. Prince quoted well over a billion dollars. At the peak, BW had over a thousand men on the ground in Iraq performing the WPS mission. I am sure Frank Gallagher and others were pretty amazed at how big this thing got.
There was mention of BW’s perfect record of protection, and the most significant injury of a principal at the time was a ruptured ear drum. BW used Mamba armored vehicles in Iraq, which were manufactured in South Africa. An EFP was used by the enemy against one of BW’s Mambas, and everyone survived, to include that principal mentioned. A BW guy lost his arm in the deal as well. I have to say that is some serious luck and EFPs are no joke. I actually drove these same vehicles in Iraq and I can attest to the protective qualities of it–and that is awesome that these guys actually survived an EFP.
Prince also wrote a lot about the CPA’s Order 17, which was the 16 page document that outlined the rules and laws that folks were to follow in Iraq. In absence of a working country, the CPA had to come up with some rules to operate by until Iraq got itself in order. Contractors were often charged with having immunity in Iraq or not having any accountability for their actions because of what was in Order 17. Prince argues just the opposite, and that Order 17 did provide legal accountability.
Many critics of BW pointed to this so called lack of accountability, and because of the non-disclosure agreements BW signed with DoS and other clients, that they could not defend their position or correct the record. So Prince dedicated some space in this book to explaining why they were legally accountable.
The myth of pay rates was also dispelled in the book. You often heard about this $1,000 dollar a day contractor pay that everyone was getting in the company, in various books and articles. But that was not true with this company. According to Prince, the pay ranged from $450 a day to $650 a day, and averaged about $500 per day across the entire contractor force. He also goes on to compare the military’s ‘total military benefit’, which adds up to about $99,000 dollars a year for an enlisted member. The point here was to compare the compensation of soldiers versus contractors, and I have seen the same CBO stuff that he is talking about. Matter of fact, I blogged about it awhile back.
After the Nisour Square deal, Prince had to do a congressional hearing and that thing is floating around on youtube. What is interesting is that according to the book, Prince actually got advice from Oliver North on the whole process. North had to go through 45 hearings back in the day during the Iran Contra deal.
Prince made mention of the company’s process for growth. Gary Jackson was quoted as saying that they were always searching for the 80 percent solution now, as opposed to the 100 percent solution later. This is interesting to me because it is about being faster to market than the other guy. Get it out now and own that business, despite it not being perfect. Then work to continuously improve it later. Or something like that. Jackson was actually named by Harvard Business Review and Fast Company for his leadership and for the growth of the company. The 80/100 solution scheme is part of the reason for that rise.
Finally, at the end of the book Prince talked about the future of the industry, which I really liked. He also talked about another inspirational book that is significant for a number of reasons.
The book’s name is The Machine That Changed The World, By James Womack, Daniel Jones, and Daniel Roos. Prince was very much inspired by this book and he was in awe of Toyota’s managerial system of lean production. He referred to BW as a sort of factory that produced security specialists, much like how factories produced cars. The client requests ‘X’ amount of contractors, and the BW factory provides that amount just in time. Their ability to get the job done and deliver that product–be it a human or weapon or aircraft, to where the client needed it, and on time, was what made them successful.
Which is cool because I too am heavily influenced by Toyota and it’s concepts. I have a category called Kaizen, in honor of the continuous improvement principals that Toyota was so famous for. Kaizen is also mentioned in my Jundism page.
All in all, I really enjoyed the book and highly recommend it. My one take away with this is that Prince was a visionary and had the courage to go forth and make Blackwater happen. It is also a tragic story, because he basically had to let go of that in which he built and loved so much–all because of politics… Check it out and you will find his book in my book store on Amazon here. -Matt
Edit: 04/04/2014- Travis Haley just wrote about his experiences during the Battle of Najaf and you can read this story over at OAF Nation. Pretty cool and it expands upon what was said in Prince’s book. Especially the part about General Sanchez not sending a relief force to help, and how Ambassador Bremmer instructed Frank Gallagher to assemble a relief force to come to the rescue. Here is a quote from Travis’ story.
There was heated discussion between Ambassador Bremmer and General Sanchez, Commander of Coalition Ground Forces in Iraq. In the end, the Army was unwilling to dispatch a relief force to the Najaf compound. Bremmer then instructed Frank, “I am authorizing you, by any means necessary, to get our people out.” With that, Frank sent me to round up the air team and to start pulling together weapons and munitions to bring on the flight. I hit the ready room and started pulling kit. My M4, magazines and a CS Rifle. The Counter Sniper Rifle was more of a moment of opportunity thing than a plan and Terry, one of our detail’s Counter Snipers, quickly fished through his gear to give me his dope card as I headed down to the air strip where the Little Birds were spooling up.