Business lessons from the Sinaloa cartel / Medellin cartel

Television series like Queen of the South and Narcos have a couple of things in common like the rise of the drug cartels, medellin cartels,  king pins, killings, sex etc and how successful they have been able to grow their business.

Its an empire that is well known for is violence but one that has managed to continually grow. At its height, it earned as much as $4 billion a year…Pablo Escobar and his partners called their business a cartel, but instead of controlling price and supply, it behaved more like criminal syndicate that pumped an endless supply of cocaine into the market and let the market set the price.

And while this post is not to encourage the use of drugs or the start of a drug business, there are a couple of business lessons one can learn from the drug cartel and apply to their business.

Another thing to consider in the cartel business is that they have been able to sustain their business for centuries. Criminal syndicates are far superior at creating successful cultures than the vast majority of Fortune 500 companies.

All successful criminal syndicates, across cultures, geographies, and endeavours, are primarily culture-driven brands.

Here are a few lessons businesses can take home from some of the  world’s most notorious criminals

1. Create a Need

Every business starts out by fulfilling a need. Drug dealers offer products their clients didn’t know they needed and can’t live without once they discover them.
A successful product, service or brand is something consumers find to be addictive.

 2. Improvisation.

Criminal syndicates are different; they think of innovation as an organisational imperative. The Sinaloa Cartel was the first to design and construct a tunnel under the U.S.-Mexico border.

The cartel also managed to have family members hired as border agents, and even used a catapult to counter a high-tech fence in Arizona.

A drug smuggler who finds a new way across a border knows that customs agents will eventually discover the innovation, so he needs to always think of new ways.

Small-but-big. With just an estimated 150 members, the Sinaloa Cartel produces revenue equivalent to the GDP of Belize (a country with more than 330,000 people). The teams are small, but they can pull significant resources from the whole.

3. Marketing is Good, but Making Your Product Good is Better

Price economics points out that drug dealers are “experts at identifying their customer base. They realise that if a product is good enough, it doesn’t need to be heavily marketed.

Adopt and Improve on the Innovations of Others
The first underground drug smuggling tunnel between Mexico and the U.S. was built in the 1980s; it was eventually uncovered and shut down.

But, as the Times notes:

Twenty years on, the cartels are still burrowing under the border—more than a hundred have been discovered in the years since. They are often ventilated and air-conditioned, and some feature trolley lines stretching up to a half-mile to accommodate the tonnage in transit.”

4. Embrace Risk

It goes without saying that drug dealing comes with high risks such as imprisonment or death, but it also offers high rewards (tons of cash). What’s the worst that can happen if you fail? Well, yeah, you could go bankrupt.

You learn from your mistakes, pick yourself up and move on.

5. Keep your friends close and your enemies closer:

Pablo Escobar united his competitors with a promise to ensure the prosperity of the Colombian drug cartels as a collective whole. He also leveraged their common hatred for the Colombian government to bring his competitors closer.

So what can we learn about running a successful business from a drug kingpin?

6. Great planning, better execution and relentless perseverance:

Plan and be strategic in your planning.  Like all of drug cartels from all of our favourite series, they all had something in common, the desire to be the best in whatever they set out to do.

The key points from this article is not to encourage anyone to go into the drug business but to pick vital lessons like their tenacity, their zeal to succeed and make a shit load of money while you’re at it.

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