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We all have heard stories about Pablo Escobar's wealth, how he use to spend thousands of dollars
per month just on rubber to tie up his cash. He wasn't just rich on paper owning shares
of some companies. he was a real billionaire, a person with billions of dollars in pure
cash under his feet. His empire grew so exponentially that Forbes had him as the 7th richest person
in the 1990s with a net worth of 30 billion dollars.
But given how much money he used to make per day and the complicated international's
network he has built, some estimates his net worth to be much higher than that.
This is the guy who built the largest drug cartel in history and one of the biggest criminal
organizations in the world making billions of dollars. If it would be on the Forbes list,
it would be even bigger than some of the largest US companies. And it was built in a little
poor town in Colombia. median. Remember this is the guy who once burnt 3
million dollars to warm up since his daughter was feeling cold.
We are not only going to take a look at the insane scale of his wealth, but we will give
it a fresh look from a business perspective. How did he create such a huge distribution
network! How exactly he smuggled so much cocaine into the United States and how did he export
all of that cash out of the US and the rest of the world. But before we get into that,
let's take a look at how Pablo got into drugs in the first place.
Escobar started as a car thief and then moved to everything else from tv to fridges and
he was quite successful.  But when he was introduced to cocaine, he
realized that smuggling 1 kilogram of cocaine would be much more profitable than an entire
truck of random goods. Besides that, there wasn't a monopoly since there weren't
any cartels, just a few drug barons.
Smuggling cocaine to the US wasn't really an easy job. In fact, smuggles hardly would
sneak a few hundred grams. But Pablo realized that if he wants to build a sustainable business,
he needed to scale and his first priority was to build secure routes to the US.
At first, he smuggled the cocaine in old plane tires, and a pilot could return as much as
US$500,000 per flight, dependent on the quantity. But that wasn't enough for him, he struck
a deal with another drug lord, bribed all the officials in the Bahamas and turned one
of the islands ( Norman Cay ) into a trans-shipment point, it was his first major network. It
was perfectly located, just 220 miles away from the coast of Florida which made it easier
to smuggle cocaine to the US. Escobar couldn't purchase the entire island
so he ended up purchasing everything there from land, including 1-kilometer airstrip
a harbor, a hotel, houses, boats, and aircraft, and they built a refrigerated warehouse to
store the cocaine, they turned it into their home. From 1978 to 1982, this was used as
a central smuggling route for the Medellin Cartel.
Planes filled with cocaine from Colombia would stopover at this island before taking their
final flight to Miami.
The first major flight was in 1977, that carried 250 kilograms of cocaine and earned Pablo
over 15 million dollars. Not bad for the first flight!
Escobar never believed in lowering prices, his approach was, people would always pay
for a great product.   Instead of competing with prices, he made
sure that his product is the best in the market. This strategy sounds familiar ( Apple, iPhone)
imagine Pablo announcing an updated version of cocain every September ))). LOL
He purchased another 15 planes and 6 helicopters to expand his operations.
Sever tons of cocaine were delivered to the US every single day, bringing millions of
dollars and making Esboar weather and his Cartel only more powerful. But to Esbar, that
was just the beginning, he considered all of that wealth as a resource to expand his
empire to a different dimension. His vision was way bigger than anyone could have imagined.
with the profits generated through that route, he purchased 7.7 square meters of land in
Antioquia for several million dollars, on which he built the Hacienda Nápoles. The
luxury house he created contained a zoo, a lake, a sculpture garden, a private bullring,
the one that you probably have seen in the tv show Narcos.
At some point, it was estimated that that 70 to 80 tons of cocaine were being shipped
from Colombia to the United States every month. At the height of his power around the 1980s,
the Medellín Cartel was shipping as much as 11 tons per flight in jetliners. But there
was so much cocaine, that he started looking for other ways to smuggle. he even purchased
2 submarines to move all of that cocaine.  making 70 million dollars a day or roughly
around 26 billion dollars a year.  the cartel spends just a thousand dollars
a week on purchasing rubber bands to wrap the stacks of cash.
A kilo of cocaine would cost around 1000 dollars to refine, and around 4K to smuggle to the
US and escolars agent would sell for around 60-70K dollars. Imagine the profits they use
to make.
The Drug Enforcement Agency tried to stop their operations, but Escobar outsmarted them
every time, at some point, Speedboats would wait out in international waters for low-flying
planes to parachute their cocaine cargo into the water or for freighters to drop a shipment
when speedboats sidled up to them. and then they would take them to the coast of Florida.
The smuggling peaked in 1982, with the addition of vintage DC-3, DC-4, and DC-6 cargo planes
to the fleet, and the Medellín Cartel was well established. Escobar continued to beef
up his fleet, buying 13 Boeing 727s from a bankrupt airline, removing the seats, and
equipping each of them to carry 11 tons of cocaine.
But all that only brought more and more unnecessary attention to the Bahamas and in 1983, the
island was under pressure and Medellin Cartel had to find a different route. They rerouted
their drugs through Panama with the help of dictator Manuel Noriega, it was difficult
to refuse the absurd amount of money they have offered.
They built a new land network through south America, especially in Mexico. From Panama,
the Mexican curriers smuggled the drugs by land across the US border which helped launch
the Sinaloa, Juárez, and Tampico cartels, with shipments, increased to 145 tons. With
so much coke flooding into the United States, the prices for wholesale prices plummeted—from
USD 60,000 per kilo to USD 16,000—but the money just kept flooding in and in, bringing
billions of dollars.
That wasn't the only challenge, handing all of that cash wasn't easy, at the end
of the day, they had to launder all of that money. The cartel with its small army of accountants
had to store the paper bills in the walls, bins, in the holds of ships, secret compartments
under swimming pools, because there was more cash coming in that they could possibly manage.
They spent USD 2,500 on rubber bands to keep the wads together. Around 500 million of that
was simply damaged or eaten by rats. and when they lost 5 million dollars just by silly
mistake placing it on the wrong ship. Escobar didn't hesitate and said; “You win some,
you lose some.”
For decades, the Learjet was a status symbol among the rich and powerful, a sign that they
could travel pretty much wherever and whenever they pleased. For Escobar, the jet was merely
a means to transport all the cash he was making. He appeared in the Forbes world billionaire
list for 7 straight years. His approach to business was simple and straight
forward, you bribe someone here, you bribe someone there, and you pay a friendly banker
to help you bring the money back. And if someone refuses your bribe and stands
on your away, you just get rid of him.  Think of Escobar as a powerful CEO who was
very charismatic and demanding and he was always trying to expand his company.
He also knew the importance of public image, so he was partly a politician. In fact, he
was always generous to the poor because he knew that if he has the public opinion on
his side, it will be difficult for the government to take him down. He builds schools, hospitals,
football fields and distributed hundred dollar bills across the street. He even earned the
title of the Robinhood. By the way, 25 thousand people showed up at his funeral and a street
was named after him.
What He did with his cartel is exactly every other company does when they go global.
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Pablo Escobar - The King Of Cocaine

2 Folder Collection
Summer published on July 31, 2020
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