During the fifth season of The Office, (spoiler alert) Steve Carell’s character Michael Scott decides to quit as regional manager of Dunder-Mifflin’s Scranton branch, and starts his own rival paper company, called simply: the Michael Scott Paper Company.
To keep things short and simple for those of you who have never seen the show, all Michael really does is purchase paper from the same suppliers as Dunder-Mifflin, then sell directly to his old Dunder-Mifflin customers for a lower price. The problem is there’s no profit margin in his model. He’s able to steal the business, but not enough of it to sustain the costs of running his new company.
Over time, however, the dent Michael is able to make in Dunder-Mifflin’s business is substantial enough for them to offer a buyout. By absorbing the Michael Scott Paper Company into Dunder-Mifflin, they get their old customers back and eliminate the competition (plus, Michael gets his old job back). In summary, Michael created nothing new with the Michael Scott Paper Company, but he created enough chaos to be annoying to larger competitors.
This same business model has become ubiquitous in the booze business, where small spirits companies have little chance of a long-term play, but can do enough damage in the short term to throw up a Hail Mary and pray for a buyout. With so many micro-brands entering the market with such short bursts of energy, it’s like a sky full of supernovas—each exploding quickly, then fizzling out before the next one explodes minutes later.
It’s an interesting time. I’m just wondering: who’s actually going to be in business two years from now?
-David Driscoll