Dice bacon and cook in large frying pan over medium heat until bacon is about 2/3 cooked (it should be chewy, not crispy).
Take bacon out of pan with a slotted spoon and put on paper towel.
Pour all but 1 tablespoon bacon grease out of the pan. Add onion to pan and cook over medium heat until soft and caramelized, about 10 minutes.
Add the bacon back in along with balsamic vinegar and sugar. Cook over low heat and stir until mixture is thick like jam.