Give the people what they want;

• Provocative blog titles

• Use pop culture to illustrate product strategy

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This week, The Wire…

About The Wire

The Wire is a radical TV series that tells allegories of societal dysfunction through the  portrayal of drug gangs, police units, a dockers union, politicians, school system and journalism in the city of Baltimore. Its not so much a TV show as a manifesto.

The brilliant writing and virtuoso acting performances allows viewers to simultaneously root for and feel repelled by a range of empathetic yet flawed characters.

However, tucked away inside these stories is a ‘G-Pack’ of product strategy lessons. For simplicity we’ll focus on series 1 and 2 and the plot lines following the Barksdale drug gang, a family business of sorts, run by the eponymous Avon Barksdale and his childhood friend Russel ‘Stringer’ Bell.

Stringer aspires to a safer, more prestigious and lucrative ‘business’ career away from the dangers of street-level dealing. Avon by contrast revels in being “a gangsta.” Stringer attends business night school and reads books on leadership. Like a frustrated corporate middle-manager (he dresses himself in business suits and ties) he seeks to improve or even transform the Barksdale business but faces multiple obstacles from his drug dealing competitors and stick-up artists attacking and robbing his crews, his suppliers, witless employees and not least his boss Avon. And of course, the police!

WARNING: video clips below contain explicit material including VERY strong language which will not be suitable for all. 

Perceived Value vs Experienced Value

The perennial problem that Stringer wrestles with is the quality of the product, i.e. the purity of the heroin and to what extent this satisfies the his addicted customers seeking their narcotic high.

Baltimore’s heroine addicts we learn, seek out the crews dealing on street corners with the ‘best package’ on the market, so they get value for money and the hit to feed their habit. Stringer often finds himself losing business to rival East-side crews led by Proposition Joe who has secured supply of a superior grade heroine.

Customers buy expecting highs but are often disappointed, leaving them dissatisfied and disloyal and in turn leaves Stringer with a dilemma about how to improve his business.

Data Analysis and Captive Markets

On multiple occasions in the face of weak product and unreliable supply, Stringer opts to dilute his heroine still further cutting the powder with other agents, “procaine or caffeine” to mask the low potency of the heroine hit.

Avon’s nephew and lieutenant, D’Angelo delivers his week’s take from the ‘shop’ he operates with a band of young street dealers from a dilapidated housing estate. He tells Stringer that he expects his already impressive takings to increase when the new package arrives, a much- anticipated re-supply batch of heroine, superior to the current stock. Stringer, explains that there is no re-supply and that talk of the ‘new package’ is simply marketing propaganda he has pushed out through his team of dealers.

In fact Stringer explains to D’Angelo that the heroine dealing business has perverse commercial incentives; addicted customers buy more hits of heroine when the potency is low in order fulfill their addiction; “We do worse and we get paid more.”

In another instance, Stringer explains to a group of employees disgruntled at his ceding of territory to Proposition Joe’s East-side crews, that what looked like a business loss, actually turned out to make the business more revenue.

Stringer is in effect telling his team not to focus on the ‘vanity metric’ of territory or ‘street rep’; the number of prime sales locations controlled and reputation your gang holds. Instead Stringer is focused on metrics that matter more to him; revenue and profit.

I’ll leave you to speculate if like ebay and Amazon, Stringer would track ‘GMV’ (Gross Merchandise Value)!

Brand, Collaboration and Innovation

Buoyed by the advice of one of his tutors, Stringer tries his hand at team facilitation. He gathers his team of street-level dealers to a meeting, incongruously held in a funeral home; one the many front businesses Stringer runs to launder his drug money and uses as his own hideout and head office of sorts.

Using the example of WorldCom (which re-branded after a corporate scandal) he walks his rag-tag team through the process of rebranding their product. The street dealers call their products “WMD” or “Pandemic” to differentiate their package from the next. Customers have realised the latest batch “Death Grip” has low potency so have sought out alternatives affecting the crew’s sales.

Stringer plans to sell the same heroine under multiple new names in different packaging via different corner teams. He hopes to create the allusion of consumer choice in a competitive heroine marketplace, whilst, in reality maintaining half of a duopoly on supply across the city.

Hidden Marketing Costs

Avon returns to the business after a year long stint in prison and is dismayed by his organisation’s loss of territory to Marlo, a young upstart running a small but fast-growing rival gang. Avon wants to take back control of street corners with busy passing traffic occupied by Marlo’s gang members. Barksdale gangs have been ‘out-muscled’ by Marlo and are now forced to sell from less lucrative corner locations in the city.

Stringer mentions “buying corners” back from their Marlo which infuriates Avon who insists “since when do we buy corners? We TAKE corners!” Stringer retorts that Avon will ‘buy’ the corners one way or another; either he will pay Marlo to relinquish the territory, or he will endure other costs; gang members will die in the violence or will serve prison time as a cost of taking the corners back by force.

You might think of the corners as a sales channel or market segment which has a marketing cost. The comparison that comes to mind here is the choice between investing in brand and public relations vs paid and performance marketing, e.g. SEO vs PPC.

Avon believes his brand alone, powered by the use of force, or merely the threat of it, should be enough to intimidate his competitors away from the markets he wants to own. Stringer believes paying off rivals has a better return on investment and also avoids the risk of death and more importantly police attention to him and his organisation.

Alternatively, consider this a ‘buy vs build’ analysis of sorts…

Business Model Pivot

As part of this exchange, Stringer explains to Avon that he wants to change their business model: “Let the young-uns worry about how to retail”. Stringer realises that his business has such scale and that he and Avon make so much money through their legitimate business investments that they hardly need bother with drug dealing. They have more money than they know how to spend.

He figures that he and Avon can extract themselves from the front-line of drug dealing with all its risks and dangers and instead act as financial services company to drug dealers. He plans “financing packages” with cash that is hard to impossible for the authorities to trace, thereby insulating him and Avon from the threat of arrest. By Stringer’s analysis, most of the profit of the heroine trade is in the financing, whereas most of the operational complexity and risk is in the final-mile delivery. Which brings us to…

Legal and Regulatory Risk

SPOILER ALERT: in the end though, Stringer’s plans come to nought as the Barksdale enterprise falls foul of not one but two types of legal and regulatory risk.

As Stringer predicts, the Barksdale gang’s violence draws increased police interest in their operation and ultimately to Avon’s arrest.

Stringer himself is however the victim of an entirely different form of regulatory risk. He obviously breaks the law as part of running his drug business, but he also breaks a criminal code; he is dishonest and betrays a partner. A set of actions which will have dire consequences.

Imagine a ‘guild of drug dealers’ if you will, which informally defines a code of conduct and best practice and unflinchingly enforces this code amongst its ‘practitioners.’ Failure to follow the code will result in your expulsion from the guild and the end of your drug dealing career. This being the drug dealer’s guild, letters of expulsion are delivered via gunshot!

Avon’s ‘connect’ is a group in New York who are his principal supplier of his heroine. Facing a crisis, Avon asks for armed support from New York who send ‘soldier’ Brother Mouzone on retainer to help fight off and intimidate Proposition Joe’s competing gang members.

This unexpected arrival spoils some of Stringer’s business arrangements with Joe, so he contrives to have Mouzone murdered without Avon’s knowing. The attempt fails and Stringer’s betrayal is uncovered. This leads to sanction from Mouzone and the New York organisation threatening to expel Avon and his organisation from the guild and effectively ending his drug dealing business. Avon is forced to choose between his partner and continuing membership of the guild and being allowed to ‘play the game.’

Product Culture and Leadership

A recurring theme in The Wire is the parallel codes of laws and rules that govern the police and drug gangs. The police are shown repeatedly and habitually to break their own rules and societal standards whereas ironically the criminal gang members follow their own rules and codes of conduct to the letter, self-police themselves and call each other out on even minor infractions. Even the suspicion of betrayal or even the fear of future disloyalty can have lethal consequences for gang members.

Stringer makes several attempts to change the culture of his organisation and the wider drug dealing industry in Baltimore. He berates the staff in his printing shop for bringing their aggressive street attitude to a retail service work environment. Stringer lectures his corner crew, now running a print shop, on the difference between ‘elastic’, and ‘non-elastic’ products; you might be able to treat drug addicts badly as they will still come back to buy the heroine then have to buy. Print shop customers will likely shop elsewhere in the face of belligerent service.

He also tries to foster a culture of co-operation between drug gangs with collective bargaining for their heroine supply whilst simultaneously reducing ‘sales and marketing costs’, i.e. not shooting each other on the streets. The last of which is largely an attempt to reduce their legal risk.

Even for Stringer the culture of dictatorial leadership and murder is hard to shift. He quickly gets frustrated with subordinates ordering them to stop talking during his team meeting-cum-business seminar. Later, after being betrayed by a politician he was trying to bribe in a property deal, Stringer’s immediate reaction is to ask a lieutenant to murder him in retribution. Culture change is HARD!