Kyle Jessen
February 22, 2005
Dr. Fred E. Foldvary
The Dirty Side of Perfection
This is the story of two young entrepreneurs, Kyle and Mike, who learned that perfection can be dirty and that certain approaches to “cleaning up” with a soap product could also make them feel dirty, as they fought their way through competition, ruinous price wars, ruinous cartel pricing, failing to serve their customers, and finally finding peace at finding an economic balance between themselves and their customers as they learn how to do well while also doing good.
The difference between Kyle and Mike was that Kyle was a perfectionist whereas Mike realized all he needed to be was “good enough.” Kyle thought if he achieved perfection he would make friends. He found out this was not true.
Kyle was a young inventor in a far away land. Kyle invented a process for making soap. He developed his soap originally by mixing it up in his bathtub. At the time that he was developing his invention for making soap, there was a huge epidemic due to lack of hygiene. Kyle looked at this dilemma as a way to make his fortune and help people.
Kyle had a long time friend named Mike who he used to do everything with. When he was figuring out his secret recipe for making soap, Mike was right there with him learning it for himself. Kyle’s problem was that he wanted his soap to be perfect. Mike recognized that the soap was good enough to bring hygiene and end the epidemic. So even though Kyle clearly emerged as the better producer of soap, Mike emerged the only other person willing to bring it to market even if it wasn’t perfect as it clearly met the criteria of a product that would end the epidemic. He could do this as he had carefully watched Kyle make his soap.
The problem was an epidemic Kyle could have helped with but didn’t due to his drive for perfection. The soap that he had was great but Kyle’s perfectionism prevented him from bringing it to market. As he took his time to produce soap for everyone, Mike saw an opportunity with the epidemic to meet a need and make a profit, so he made a soap that was similar to and almost as good as Kyle’s.
People found that using Mike’s soap ended their sickness. Their health improved. Kyle heard word of this and was furious that Mike stole his product idea. Kyle then quickly got product to market and soon became bitter rivals with Mike. One day as these two mega-producers were walking down the street they saw each other and began to glare. Their anger toward each other was so high that they decided not to talk and just keep on their way, each thinking of a way to take revenge on the other.
Kyle went home and realized they were in a “duopoly” and he wanted to be competitive. He decided that night to lower his price in order to snatch up more volume and consumers in the market. When the sun rose, he went to send a message to all the distributors of his product to lower the price of his soap. Customers saw this and began to buy more of that product from Kyle. Mike saw this and decided that he wouldn’t let Kyle get the better hand on him, and lowered the price of his soap lower than Kyle’s. The customers loved this, as they were able to get a great product for a low, low price. This bitter “price war” went on until both producers were making zero profit. They realized they could not continue to produce at zero “economic profit.” They both were angered at this rivalry. That night, as Kyle went to bed, he realized he was tired of all this bitterness with Mike. And besides, it was hurting his business.
The morning came and Kyle came to his second epiphany. If he could set aside his differences with Mike and they both came together with their businesses they could each make a fortune. He put aside his care for helping the common man and decided that making money was what he wanted to do. He made contact with Mike, and told him he wanted to meet and talk about resolving their problems. As Mike had stolen Kyle’s special recipe, he decided to give Kyle another chance. Coming up on Kyle’s house made Mike remember all the good times they used to share. As he walked closer to the house, he thought to himself that he wanted to do whatever he could to get Kyle back as his friend.
Kyle opened the door and saw Mike there and said “Hey bro, can we stop all this?” Mike said, “You know, I thought you would never ask but yeah I would love that, and I’m sorry for originally stealing your brilliance.” “You don’t have to worry about all that, its all in the past,” responded Kyle, “lets sit down and get this worked out.” Mike came in and sat down with Kyle and they discussed how they were both losing tons of money with the fierce price war that they were having with each other. Kyle then suggested that since they were the only ones that made soap, being the duopoly that they were, that they come to some kind of agreement on price and thus collude to keep the price up and enable themselves to again earn profits. He said that since it was just the two of them it would be easy to make it happen. They wanted to work in unison with each other and both agreed what they needed to do was to create a “cartel,” something that would enable them to create a monopoly in the market. With the two giants in the soap business working together, they controlled all the soap sales in the whole country. People needed the soap to survive . There was no limit to the price that they could set. It soon became so ridiculous that the whole economy was becoming crippled with people having zero surplus income with barely enough money to eat. The two young kids who used to be in it to make money but also help people, realized they were the best at what they did and utilized that strength to becoming more concerned with money than anything. A few more months of this went on before public outcry against these two became so great that they had to go into hiding. People hated these two people and they lost the few friends that they had. All they were left with were rooms filled money and silence.
The final epiphany that came to Kyle was that he wasn’t happy and money wasn’t giving him the same level of utility that it once did. As he laid his head to bed one night he felt so alone that he contacted Mike before the morning came. Mike answered and knew something wasn’t right due to the time of the call. Kyle told Mike that he was going to give soap to the world and allow people to make it by themselves, so that he wouldn’t continue to cripple the people that he once cared about. The next day he released his soap invention to the world…for free. A concept that was once beyond him was now the one thing that allowed him to have some peace in his heart. Mike went along with Kyle, as he also realized the monster they created. People began to make soap and Mike and Kyle still produced their product but set the price at cost. People were able to get their soap and if they couldn’t make it they could buy it for a price people never imagined. Kyle and Mike were still resented, but people started to warm up to them in a little while. They were financially secure forever and for once they could enjoy the wealth they had with people across the country as they realized that they were sharing what they had with others. They not only resolved their friendship, but they resolved their businesses, as well as help resolve a serious epidemic. And by healing people and keep them alive they also assured themselves as the largest number of customers possible.