In the fifth season of The Office, Michael did not love the way Dunder Mifflin was treating him as a regional manager and he decided to abruptly quit. The news shocked everyone and Michael had no idea what he was going to do. Instead of being jobless, he decided to create his own paper company called The Michael Scott Paper Company.
During those four weeks of launching his start-up, he learned a lot about business and relationships. Dunder Mifflin ended up buying The Michael Scott Paper Company and everything went back to normal but a ton of poor (and smart) business decisions were made along the way.
Smartest: Setting Up A Business Meeting With Nana
When Pam quit her job at Dunder Mifflin to join Michael on this new adventure, she knew it was going to be a wild ride when Michael didn't know where to start. He knew he wanted to sell paper—because that's what he knew—and that the name of the company was after him, but what was next?
When Pam made a list of things they should be doing, Michael randomly said he made a meeting with potential investors. The investor ended up being his grandmother (nana) but it was still smart on his part to talk to those who could have financially supported the business.
Dumbest: Being The Cheapest In Town
As an outsider, seeing that The Michael Scott Paper Company had the lowest prices in town was a good thing. Clients began leaving their paper providers because they could get it cheaper from The Michael Scott Paper Company.
Their pricing dynamic was created by Ryan, but when the three employees visited an accountant they realized their model wasn't working. With their low prices and a "fixed-cost model," The Michael Scott Paper Company wouldn't able to pay their employees, delivery truck, and would be bankrupt within weeks. Once again, Ryan screwed up another company.
Smartest: Making Pam A Saleswoman
Michael did the right thing by allowing Pam to be a saleswoman. She was the only one to follow him out of Dunder Mifflin and was willing to start a new career because of him. Allowing Pam to be a saleswoman gave her a deeper insight into the paper business and allowed her to get the company's first sale.
It was because of Pam that The Michael Scott Paper Company had the confidence to stay on the right track because of someone believing in Pam's pitch. It also gave her experience for when they inevitably went back who Dunder Mifflin.
Dumbest: Hiring Ryan
What did Ryan Howard add to The Michael Scott Paper Company? Michael was the brains of the operations, Pam was selling paper, but what did Ryan do? In the office, Pam and Michael were typically looking at paperwork but Ryan was scrolling through the Internet the whole time. He made phone calls, he watched YouTube videos... He did nothing to help The Michael Scott Paper Company.
To make matters worse, he was the one behind the fixed cost model that was driving them broke! So, not only did he run Dunder Mifflin into the ground when he was promoted but he did the same thing to The Michael Scott Paper Company.
Smartest: Creating An Office-Like Atmosphere
Michael would not do very well if he worked from home. He would be the guy who got more distracted than he already does. And as we saw on their first day on the job, Michael answered the door in his robe and was still making breakfast instead of focusing on their first day of work.
Being able to work in the spare room at the office park was the smartest thing Michael could have done for his company. It forced them all to be somewhat professional and focused.
Dumbest: Relying On Dwight
Dwight might have been Michael's righthand guy while working at Dunder Mifflin but Michael had to have been smart enough to realize that Dwight is going to suck up to whoever gave him power. With Charles covering for Michael as the interim regional manager, Dwight connected with Charles because Charles respected him and his ideas.
Dwight honestly had a deeper connection to Charles the first couple of weeks than to Michael. Of course he's going to do everything he can to protect Charles and Dunder Mifflin from a threatening company. Michael shouldn't have ever relied on him for insider information.
Smartest: His Pancake Breakfast
As a new company in the area, Michael did the right thing in creating a space where local businesses can come and meet The Michael Scott Paper Company and network.
He decided on hosting a pancake breakfast in the business park's parking lot and made the pancakes rectangles to replicate paper. While their pancake breakfast wasn't a full-on success, they did get to see a few Dunder Mifflin faces and meet their first client!
Dumbest: Putting His Home Address As His Business's
On Pam's first day of work, she was impressed by Michael's signage on his lawn. His condo was now a place of business and the sign made it feel official.
However, shortly after posting the sign, the condo association sent Michael a letter in the mail telling him that he couldn't run a business out of his home. It went against their policies. This letter ended up being a blessing in disguise because it forced Michael to look for office space.
Smartest: Selling To Dunder Mifflin
The Michael Scott Paper Company was slow to the start but starting picking up traction when Michael used his business connections with Dunder Mifflin's clients. He ended up stealing enough clients from Dunder Mifflin that David Wallace was at a loss. Dunder Mifflin Scranton couldn't survive with The Micahel Scott Paper Company was in business.
David initially offered them $12,000 to close shop but Michael held his ground and asked for more. David settled for $60,000 but even that wasn't enough. Michael decided that jobs at Dunder Mifflin were more reliable than a check and was able to get all of their jobs back.
Dumbest: Trying To Steal Documents From Dunder Mifflin
When Michael quit Dunder Mifflin, he had two weeks at the office to tie up some loose ends. Instead of working, Michael drank in his office and played around until he decided to start his own company. To make his life easier, he made copies of Dunder Mifflin's forms and placed The Michael Scott Paper Company on top instead.
Once Charles found out what he was doing, he had him leave the premises. Michael, of course, broke back into the office and army-crawled around the office while looking for more forms. Doing this got him in even more trouble with Charles and made him look insane.