Based on a LinkedIn post originally published on 27 February 2026
In the 1990s, while living in north-eastern Brazil and running my own business, I was invited to visit the customer of one of my existing clients.
The introduction came through word of mouth. Referrals were particularly valuable at the time, so I agreed to make the journey. The site was almost two hours away by car.
When I arrived, I found a large factory that supposedly produced soap and similar products. We walked around the premises, and almost immediately something felt wrong.
There was no single dramatic piece of evidence. Instead, there was a collection of details that did not form a coherent picture.
- Several parts of the factory appeared abandoned.
- Production areas were unusually quiet.
- The site contained some activity, but it lacked the rhythm expected of a functioning industrial operation.
- People in the cafeteria were eating from aluminium packages.
- The apparent scale of the business did not match the conditions visible on the ground.
None of those observations, taken alone, proved that anything improper was happening. Together, however, they created a persistent sense of inconsistency.
A warning signal is not always a fact that can be isolated immediately. Sometimes it is the gap between the story being presented and the reality visible around it.
An ambitious vision in an unconvincing environment
The person presented to me as the owner was enthusiastic about technology. He described plans for a state-of-the-art computer network that would connect the factory’s departments and optimise its operations.
The vision was ambitious. It included modern equipment, broad connectivity and significant operational improvement.
But the proposal did not fit what I had seen.
A company preparing to make a substantial technology investment should ordinarily display some relationship between its stated plans and its current operational condition. Here, the distance between the two was difficult to ignore.
STATED VISION OBSERVED REALITY ----------------------------- ----------------------------- Modern integrated network Areas appearing abandoned Optimised operations Quiet production spaces Major technology investment Weak signs of active business Connected departments Activity lacking coherence
This did not justify an accusation. It did justify caution.
Protecting the first transaction
A few days later, I received a request for a quotation covering several computers and related services.
We negotiated the commercial terms, and I insisted on receiving partial payment in advance. The payment cleared, after which I sent one of our technicians with the hardware to complete the installation.
When the technician returned, he independently described the same uneasy feeling about the site.
This mattered. My original impression was no longer an entirely individual reaction. Another person had visited the environment and perceived similar inconsistencies without being directed toward a particular conclusion.
Independent observations strengthen a weak signal. They do not automatically prove misconduct, but they provide a reason to increase scrutiny and reduce exposure.
Warning the person who made the introduction
At that point, I decided to speak with my original customer.
I did not make an accusation because I had no evidence that would justify one. Instead, I carefully explained that something about the operation did not seem right and advised him to proceed with extreme caution.
That distinction remains important. Responsible risk communication should separate:
What I observed
|
v
What appears inconsistent
|
v
What risk may exist
|
v
What precaution is reasonable
This is not the same as claiming guilt without evidence.It is possible to communicate concern without exaggerating certainty. In fact, doing so makes the warning more credible.
The larger order
A few weeks later, the factory requested a quotation for a much larger batch of computers.
I responded with the same commercial condition: partial payment would be required in advance.
I never heard back.
Several days later, I attempted to visit the office of the customer who had originally introduced me. It was closed. It took several more days to reach him.
When contact was finally restored, the explanation emerged: the supposed factory operation had been part of a scam, and several parties had lost millions.
The inconsistencies visible during that first visit had not been incidental. They had been fragments of a picture that had not yet become fully visible.
Intuition is often compressed experience
The lesson was not that instinct is infallible. It is not.
People can misinterpret unfamiliar environments, bring unconscious assumptions into their assessments or react negatively to conditions that have perfectly legitimate explanations.
But experienced intuition should not be dismissed merely because it initially arrives without a complete written analysis.
What we call a feeling is often the mind recognising a pattern before it has consciously identified every component:
- statements that do not match observed behaviour;
- an investment proposal disconnected from operational reality;
- unusual urgency or enthusiasm without supporting detail;
- physical conditions inconsistent with the stated scale of a business;
- or several individually minor discrepancies appearing together.
Observation + experience + inconsistency
|
v
Initial concern
|
v
Additional verification
|
v
Proportionate controlThe correct response is not immediate condemnation. It is to slow down, verify and limit exposure until the situation becomes clearer.
Due diligence is not pessimism
Due diligence is sometimes treated as an obstacle to business. Questions about ownership, financial capacity, authority and operating history may be seen as signs of distrust or unnecessary bureaucracy.
In reality, proportionate due diligence protects every legitimate party involved in a transaction.
Depending on the circumstances, it can include:
- confirming the legal identity and ownership of the organisation;
- verifying that the person negotiating has authority to commit it;
- checking references independently rather than relying exclusively on introductions;
- examining whether the organisation’s visible operations support its claims;
- using staged delivery and payment arrangements;
- limiting credit exposure until a reliable commercial history exists;
- and documenting significant commitments clearly.
None of these measures proves that a transaction is safe. Together, they make it harder for one unsupported assumption to create catastrophic exposure.
A good control does not need to accuse anyone. It simply ensures that trust grows in proportion to verified evidence and demonstrated behaviour.
Controls written on paper and controls learned through experience
Formal controls matter. Contracts, approval processes, credit limits and payment conditions provide visible and repeatable protection.
But formal processes cannot anticipate every situation. Sometimes the first signal appears during a site visit, an informal conversation or an observation that does not fit the documented story.
Professional judgement connects those two forms of control:
FORMAL CONTROLS EXPERIENTIAL CONTROLS -------------------------- ----------------------------- Contracts Attention to inconsistencies Payment terms Pattern recognition Credit checks Behavioural observations Approval limits Independent second opinions Documented verification Willingness to pause
The strongest risk posture uses both. Instinct identifies where additional examination may be necessary; evidence and process determine what action is justified.
The value of stopping
Business culture frequently rewards speed, decisiveness and optimism. Those qualities are valuable, but they can become dangerous when they prevent people from acknowledging uncertainty.
Sometimes the most professional action is to pause a transaction, ask another question or maintain a protective condition even when doing so risks losing the opportunity.
In this case, insisting on advance payment did not establish whether the factory was legitimate. It limited my company’s financial exposure while the uncertainty remained unresolved.
When the much larger request arrived, maintaining the same condition prevented enthusiasm about the size of the order from weakening the original precaution.
Due diligence is not pessimism. It is the discipline of ensuring that commitment never moves substantially faster than understanding.
This article is based on my original ideas, experience, analysis and conclusions. Artificial intelligence tools were subsequently used as editorial and research assistants to review grammar and wording, improve structure and presentation, organise some arguments into clearer logical sections, and help review references to legal, regulatory and technical concepts.
Where relevant, factual and regulatory references were checked against the sources cited in the article. AI assistance does not replace professional legal, regulatory, financial or technical advice, and the final selection, interpretation, opinions and conclusions presented here remain my own.
Comments
Post a Comment