Screw the Gold. Invest in Shovels

Do you know who the first man to make a million dollars was during the California Gold Rush?

It was a man called Samuel Brannan. He didn’t mine a single fleck of gold. He didn’t sell everything he had to head out into them thar hills and strike it lucky.

He just opened a shop. The only shop between San Francisco and the mining fields. And he sold miners shovels, picks and hundred dollar boots.

The miners made bugger all for the most part. Brannan turned over $150,000 a month. (Four million in today’s money).

That was 1847. It’s a bit different nowadays.

I mean, it’s not. Not really. On my way to a meeting last week, I took note of all the shops I walked past. Craft beer, e-cigarettes, pound shops. Craft beer, e-cigarettes, bookies. Craft beer, ecigarettes, pound shops.

It’s like we’re in the middle of the great craft beer and e-cigarette rush. Fine by me. I like craft beer, and it’s e-cigarettes that stopped me smoking.

Problem is, unless you’re one of the lucky, hard-working, early-adopting few, you’re not going to make your fortunes out of it.

Take the vaping stores. I’ve had people I went to school with open up vaping stalls, vaping shops, vaping sites. The new legislation the government’s brought in has left them with stock they can’t shift. It’s fine for my vaping clients at Kik and 88 Vape, but they’re big enough to adapt, reprint labels and sell stock off at 50p a bottle just to free up the warehouse space.

Same goes for the craft beer lot. There’s a backlash brewing against the overpriced snobbery, and the borderline-undrinkable farmhouse style wild beard yeast bathtub beer. Fine for my old friend and client over at Beer Nouveau, who’s brewing traditional pints you’d happily drink six of, but not so much for the people who wanted to get rich selling £9 bottles of beer you drink through a sieve.

I reckon in two years time, I could walk down that same road to that same office i, and I wouldn’t see six vaping shops and three craft beer taps. The herd will be thinned.

I bet the client would still be there though. Still selling savings accounts.

And I bet the property managers who leased the stores will still be in business. And the designers who did their business cards, and the electricians who wired up the displays, and the plumbers who fitted the pot washers.

Because that’s where the money is. Not in the next big thing, but in the stuff everyone needs.

Screw the gold. Keep selling the shovels.