After investigation, he decided to enter the methamphetamine industry because of the extremely high gross profit margin in this industry (high product price and low production cost). In addition, Mr. White, who has an academic background, has mastered the high-purity methamphetamine manufacturing technology. The products produced by this technology have less impurities, and the quality is better than the existing products in circulation, and the market potential is large.
Mr. White found a partner Jesse, each holding 50% of the shares. According to their respective divisions of production and sales, the two officially started the operation of the new company.
In the early days of the business, the products were mainly sold by the partners who were in charge of the company's sales through their contacts. Due to the small coverage and the difficulty of sales, product sales have not improved.
Introduced by acquaintances, the company found a local distributor Tuco and entrusted it to sell as an agent. Due to the excellent product quality and good market response, the product was in short supply immediately, and the production was under great pressure. So the company carried out the first round of financing by borrowing from dealers. Mr. White used the funds to invest in equipment, improve production efficiency, and effectively expand the output of products.
It's a pity that the honeymoon of working with a dealer is over soon. On the one hand, under the strong pressure of dealers, the company has a certain risk of payment collection. On the other hand, due to poor management of the dealers themselves, under external pressure, they eventually closed down.
After this lesson, the company decided to build its own sales network and expand its sales area. Under the suggestion of Mr. White, the company adopted a pyramid scheme. And use unexpected events to hype, successfully established a personal cult of Jesse. At Jesse's call, the sales force increased exponentially. At the same time, the sales area has also been greatly expanded. The company successfully survived the crisis of dealers' bankruptcy.
However, in the expansion of the company's sales area, it has suffered vicious pressure from other companies in the same industry, and even the vicious incident of expatriate sales executives being killed in seconds on the street. The strategy of building its own sales network had to be terminated.
After experiencing the failure of dealer agents and self-built channels, the company finally decided to rely on a large company with a nationwide sales network with the help of legal and consultants, and signed a short-term OEM production contract. According to the contract, the investment in plant and equipment is provided by large companies, and Mr. White only needs to complete regular and fixed production tasks.
During the cooperation period, large companies sent technicians to the production site and monitored the whole process. Teacher White's high-purity manufacturing technology was quickly imitated. Big companies are ready to tear up their foundry contracts and produce on their own. Teacher White's company is in crisis again. At a critical moment, partner Jesse had to take extreme measures against the big company technicians who stole his technology to ensure that the technology was not leaked.
But the big-company OEM model has also come to an end. How the company will develop in the future, Mr. White and his partner Jesse will face a new choice.
Comments:
The case of "Breaking Bad" shows us that it is not enough for a technology startup to have first-class technology. High-quality products also require the support of a successful distribution system.
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