Striking Gold Without Mining: How the Picks and Shovels Strategy Can Make You Rich in the Blockchain Era
During the California Gold Rush of the mid-1800s, thousands of fortune seekers flocked to the Sierra Nevada foothills, hoping to strike it rich by discovering gold. However, amid the chaos and frenzy of prospectors panning for gold, a different breed of entrepreneur found their fortune through a more stable and strategic approach known as the "picks and shovels" investment strategy.
One such entrepreneur was Samuel Brannan. Brannan, originally a publisher and shopkeeper, recognized an opportunity beyond the glittering allure of gold. He saw the influx of miners and understood that they all needed equipment to mine effectively. Rather than joining the throngs of hopeful gold miners, Brannan focused on supplying the tools and necessities the miners required.
Brannan purchased every pickaxe, shovel, and pan he could find in San Francisco, then transported them to the goldfields. He set up a store near the mining camps and sold these essential items at a significant markup. While gold miners faced the uncertainty of striking gold, Brannan's profits were consistent and substantial, as every miner needed his products to work.
Another prominent figure in the picks and shovels strategy was Levi Strauss. Strauss, a Bavarian immigrant, initially intended to sell dry goods to the miners. However, he soon discovered that the harsh conditions and demanding labor of mining required more durable clothing. In response, he began manufacturing sturdy denim overalls reinforced with rivets, designed to withstand the rigors of mining work. These became incredibly popular, and the brand Levi Strauss & Co. was born, laying the foundation for the modern jeans industry.
The hardware supplier Henry Wells and William Fargo, co-founders of American Express, also capitalized on the Gold Rush through a picks and shovels strategy. Recognizing the miners' need for secure banking and transport services for their gold, they established Wells Fargo & Co., providing essential financial and logistical support that ensured their immense success.
The essence of the picks and shovels strategy during the California Gold Rush was about recognizing a broader, more reliable business opportunity. Instead of gambling on finding gold, these entrepreneurs invested in providing the necessary tools and services to those who did. This approach ensured steady profits and laid the groundwork for lasting businesses, demonstrating that sometimes, the smartest investment isn't in the pursuit of gold itself but in enabling others to find it.
Today, we are nearly 200 years removed from the California gold rush yet we are seeing the same, age old, business strategies play out in the modern gold rush of on chain investing.
This approach is exactly what led us to recommending BANANA to premium subscribers back around $6.
Not all that far removed from the entrepreneurs of the original gold rush, Banana provides the necessary tools and services to the gamblers looking to strike gold.
In an otherwise ugly market, BANANA is a testament to the picks and shovels strategy. The business has been exploding making them a top 20 crypto protocol by revenue.
Today, we are going to cover another picks and shovels play that is an integral piece to blockchain security, used by thousands of crypto projects, creates real revenue, and is a beacon of strength in a brutal alt market.