The Business of Breaking Bad

From the Schumpeter column in the Economist this week - - The "Breaking Bad" School:

"Three things help our chemistry teacher turn an insight into a flourishing business. The first is huge ambition. He is not in the “meth business” or the “money business”, he says. He is in the “empire business”. The second is product obsession. Other dealers might peddle “Mexican shoe-scrapings” on the ground that addicts care little about quality. He produces the king of meth, so pure that it turns blue, and would rather destroy an entire batch than let an inferior product be traded under his brand. The third is partnerships and alliances. He spots talent in a former pupil turned drug-dealer, Jesse Pinkman, and forms a strong working relationship with him. He also contracts distribution to a succession of local gangs so that he can concentrate on the higher-value-added part of the business: cooking and quality control.

Again Mr White is not alone. There is a reason people talk of business empires: tycoons like Rupert Murdoch are latter-day Caesars, fixated on conquering new territories. Steve Jobs eventually outcompeted Microsoft because he was so painstaking in perfecting Apple’s products. Partnerships are the heart of a striking number of businesses: whether Larry Page and Sergey Brin or Warren Buffett and Charlie Munger—or indeed Goldman and Sachs or Hewlett and Packard. As for contracting out distribution, it is de rigueur for high-growth start-ups.

“Breaking Bad” is even sharper on the forces of destruction in business. Mr White’s relationship with his partner falls apart. He is regularly in conflict with his distributors. And he sucks at work-life balance. Being in the meth business gives a unique twist to all these problems. His relationship with his partner is shattered by his leaving one of Mr Pinkman’s girlfriends to die of an overdose and poisoning a subsequent girlfriend’s son. His relationship with his best distributor is undermined by the man’s scheme to engineer him out of the supply chain by learning his skills and killing him. His work-life balance is complicated by his reluctance to tell his wife he has become a meth dealer."