Afghan Business Tale: Don’t Try This

Take Earth’s Toughest Startup Conditions, Add Army Veterans, Then ‘Beat Your Head Against the Wall’

Dion Nissenbaum. WSJ.com

Matthew Griffin had an unusual swords-to-ploughshares business plan he hoped would help bring a measure of economic security to one of the least secure places in the world.

The shaggy-haired former Army Ranger wanted to hire scores of factory workers in Kabul to assemble flip-flop sandals from poppy-patterned soles and other Chinese-made parts trucked across Afghanistan’s unstable border with Pakistan. And, he wanted to decorate the straps with the butt ends of AK-47 shell casings, a detail he figured would appeal to trend setters in the U.S., where he planned to sell the finished footwear.

Afghan workers making the ill-fated first batch of Combat Flip Flops in 2012. Reuters

What could go wrong? For Mr. Griffin and his business partners at Combat Flip Flops, it turns out, just about everything.

The first batch of the flip-flops was a failure. The factory he hired on his second try went out of business before it could make a single sandal. Now, Mr. Griffin and his partners are setting up shop in Colombia, thousands of miles away from Kabul’s perch on the edge of the rugged Hindu Kush mountains.

“What a long, strange trip it’s been,” said 36-year-old Donald Lee , another former Army Ranger, who helped found Combat Flip Flops with Mr. Griffin, 34.

Afghanistan was once fertile ground for aspiring entrepreneurs who knew how to take advantage of the billions of dollars that flooded the country after the U.S. invaded in 2001. They succeeded in setting up Thai restaurants on military bases, beauty spas with armed guards and incense-scented yoga studios surrounded by blast walls. But making beach wear in a landlocked country?

While it isn’t uncommon to see Afghan soldiers or Taliban fighters wearing rubber sandals that they can slip off many times a day for prayer or before entering homes, a common courtesy in the region, Combat Flip Flops were aimed at a different clientele. The company’s slogan: “Bad for running, worse for fighting.”

“We wanted to take something 180 degrees from combat and make a product for people going to a beach and having a good time,” said Mr. Griffin. “Our flip-flops are weapons for change.”

Mr. Griffin got the inspiration for Combat Flip Flops in 2009 when he toured a Kabul boot factory run by John Boyer , a former U.S. Marine captain and Iraq war veteran who had no previous experience operating a manufacturing plant.

Mr. Boyer, 34, said he first came to Afghanistan in 2008 because he wanted to impress his then girlfriend with his sense of adventure. “I was young enough and dumb enough to go for it.”

Though he decided to help set up the boot factory, he said he thought that making boots for the Afghan army was a bad idea. Afghan soldiers kept their boots unlaced for easy removal at prayer times, and they didn’t really seem to like wearing them. So, Mr. Boyer helped design an alternative: flip-flops with combat soles from the factory line.

The U.S.-led military, which had invested millions of dollars in the local boot-making business, wasn’t interested in Mr. Boyer’s prototypes, but they were just the inspiration Mr. Griffin was looking for. Combat Flip Flops was born.

Mr. Griffin turned to China for cheap raw materials, but by the time the first supplies were ready to ship to Kabul, Pakistan had shut its border with Afghanistan to protest an errant U.S. attack that had killed more than two dozen Pakistani soldiers in November 2011.

Mr. Griffin had the shipment rerouted through Tajikistan into Kabul, where Mr. Boyer was preparing to produce the first 2,000 Combat Flip Flops.

Those flip-flops ended up being too poorly made to pass muster in the U.S. So Mr. Griffin gave them away in Kabul, got his money back and went back to the drawing board.

The second Kabul factory Mr. Griffin hired abruptly went out of business when it lost its major contracts with the U.S.-led military coalition.

After that Mr. Griffin had his flip-flop making supplies shipped from China to his home in Issaquah, Wash., where he spent hours with a hacksaw fruitlessly trying to cut thousands of AK-47 bullet casings for use on the flip-flops. He eventually resorted to using replicas.

Mr. Griffin and his friends then transformed his garage into a mini-factory that churned out 3,400 pairs of Combat Flip Flops. The flagship AK-47 style, which sells online for $65 a pair, features the replica bullet parts and a poppy design on the sole—a nod to Afghanistan’s reputation as a major heroin source.

For now, the company has given up on making flip-flops in Afghanistan and is instead pinning its hopes on a factory in Colombia, which Mr. Griffin says has “more security per square foot than any other country in the world.”

Despite all his setbacks, Mr. Griffin is willing to go to great lengths to promote his flip-flops. Earlier this year, he vowed to wear them for the traditional running of the bulls in July in Pamplona, Spain, if his company got 10,000 “likes” on Facebook. It got just 3,000, but he went ahead anyway, wearing the flip-flops for a short part of the run. Afterward, in the bull ring, he tried—and failed—to hang his sandals on a bull’s horns.

“Flip-flops are bad for running—and we proved it,” he said.

Combat Flip Flops is still looking to give Afghanistan a chance. The owners want to transform a shipping container into a mobile factory that they can set up in western Afghanistan. But the export route for the flip-flops would lead through Iran, which could be a violation of U.S. sanctions.

Mr. Boyer, whose factory in Kabul shut down last year after it lost its military contracts, is sympathetic to the company’s cause. “In Afghanistan you’ve just got to beat your head against a wall until you understand how things get done,” he said. “I’m just not sure whether flip-flips can happen anytime soon.”

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About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

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