Lessons from the madbird scandal

February 21, 2021
Business Growth

At the time of writing, the most popular TV show on Netflix is a documentary about a fraudulent woman posing as an out-of-luck-but-still-wealthy heiress, while the third most popular film is about an Israeli conman who posed as a jet-setting diamond dealer and defrauded women he met on a dating app.

These stories are like busses, because hot on the heels of Inventing Anna and The Tindler Swindler comes the story of a fraudulent design agency based in the UK.

While Anna Sorokin got her kicks from luxuriating in the New York high life (and the millions she was on the verge of getting her hands on) and Shimon Hayut stole an alleged $10m, it's less clear what Ali Ayad, founder of fake design business Madbird stood to gain from his adventure into the unreal.

Maybe he really believed that he could make all the fake stuff come true, and that he could build a global business empire and become the next Elon Musk. As yet Netflix isn't onto Ayad, but the BBC is.

There's this excellent BBC News report, which explains the backstory, describes their extensive and impressive investigation and culminates with a video of the moment they collar him in the street. There's also a BBC Three documentary and a BBC Radio 4 programme about it. It's a brilliant piece of public service journalism. But are there lessons for all of us in this recent surge in scams and cons?

Covid isn't entirely to blame, but it made it harder to spot the con

For those wronged by Madbird, notably the "employees" of the company that never was, the timing made them vulnerable. Many were unemployed and desperate for work during the pandemic.

Lockdowns led to a steep recession and few firms were hiring. Ayad made hay in this environment, even convincing people to leave good roles to join him. It didn't seem madcap to them, they weren't desperate.

Ayad was clever and convincing and put a lot of energy into creating the picture of a flourishing agency with an exciting story and an almost too-good-to-be-true set up. When something looks too good to be true, it usually is. But not always. And it's hope that's the killer here. Amid the gloom of the pandemic, people found something positive and understandably grabbed it.

Having committed to it, they were reluctant to let go and admit the mistake. So, while Covid created perfect conditions for the scam (the lack of a physical office and non-presence of a co-founder or clients would surely have been harder to pull off in a non-virtual world), it was human nature that made the whole thing plausible and possible in the first place.          

What is a company?

When he is eventually cornered by the BBC News team, Ayad raises a valid philosophical point. "What is a company?" he fires back, when quizzed as to why he set up a fake company. It's a variation of the point made by Yuval Noah Harari in Sapiens.

Companies are examples of what Harari describes as "shared inter-subjective realities". In other words, a company exists only because we all agree it does and because it serves some shared purpose. Ayad made his company look so real that a great many people believed it.

To some extent, it was therefore real, not fake.

A lot of people had a fair amount invested in making it real. Madbird existed in some form, it just didn't pay anyone, didn't have any clients, one of its founders and several key senior team members were 100% fake and all of its client testimonials and its credentials deck were false or stolen.

If you want to say you have started a company, you can. Founding a business it seems is that easy. It's when you get to stuff like finding clients, getting them to buy things, and keeping the whole enterprise growing and running profitably that it gets hard.  


Is it time to think the unthinkable about  social media?  

Sorry to say this. But the one phrase this story brings to mind is that this was "an accident waiting to happen". I know how grating that sounds. But, really, this is is bound to keep happening when you live in a world where someone's key credentials are how good they look on Instagram and how many followers they have.

I mean what do we expect? Social media, judging from this trifecta of scams, has made it much easier to fool the world that you are who you are not (indeed, the three are to some extent an extreme, psychotic version of "my best life, not my real life" that social media brings out in us all).

I am not sure there is a way to conduct meaningful social media due diligence, but it might be worth getting some big tech brains thinking about it.

Some founders may identify more with Ayad than they admit

Based on his actions with Madbird, Ayad is clearly a pathological liar. He went to tremendous lengths to create fake personas for a co-founder and several senior team members. He spent an almost ludicrous amount of time and energy making sure the company looked the part across several social platforms.

But haven't we all been in pitches where in the heat of the moment, just to get that deal across the line, someone (usually the CEO) has promised something that can't be delivered?

Or someone (usually the CEO) has made a claim for a product that doesn't exist yet? There is a thin line between this bluff and bullshit and Ayad's outright lies. Who hasn't been guilty of presenting an over-rosy picture of a company to interview candidates?

It can be hard to pinpoint exactly where a small exaggeration escalates into something sinister. Ayad was off the charts, for sure. But it serves us all to reflect on our own behaviour and think twice before we say "yes", when we really mean "no, not yet. But it's on our development roadmap".      

Is this just a first act?

Remember the old-world adage that all publicity is good? I'm not saying that Ayad shouldn't pay for having ruined lives or the suffering he's caused. He has damaged lots of people and should make good.

But, once punishment is meted and taken, the thought I can't shake off is whether there is a genuine business talent here or not? If all that tremendous hard work had just been applied in a different way, and if he'd had more regard for others than himself, set his sights on more realistic ambitions - and importantly acted and spoken truthfully - could Ayad have created a decent business?

In which case, could he still? He'd be able to compensate those he hurt first time out. And who doesn't like a spot of redemption at the end of a story?    


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Andreas Adamides


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