Editor’s note: This article was first published in December 2013. Its “now” refers to the tech boom of that time, “20 years ago” to the early 1990s, and the remark that economic cycles change “lately every 10 years” reflects that moment.
Every so often economic cycles change and new businesses or industries emerge, ready to be exploited to make large amounts of money. Not everyone tries, not everyone knows how to try, and not everyone who tries succeeds. It’s one of the ironies of the economy: every so often (lately, every 10 years) it opens up this possibility, drawing an ocean that the poor have to cross to become rich. A few make it, while many others end up drowning.
From 1848 until almost 1860, people from all over the world sought their chance in California to get rich. It was the great gold rush, driven by the slogan “America: land of opportunity”. A certain James W. Marshall set off the phenomenon with his discovery in that part of the world.
People from every corner of the planet dropped everything they were doing to travel to California in pursuit of that dream. In truth, they all started out with more or less the same chances of success. That’s why those men travelled with all their loved ones in search of that opportunity.
Later, many families died from a host of diseases, including cholera and scurvy. Others were killed by Native Americans or local criminals, while many scraped by for the rest of their days, having found nothing.
It was a new movement that promised the chance of wealth, and everyone wanted a piece of that dream. After years of effort, among the families that didn’t perish, some created wealth for four generations while others failed miserably.
(Read: The 33 profitable businesses of the future and the industries that will create jobs)
See also: 5 ways to know what your customers want before they tell you
History has repeated itself in the centuries that followed. It was construction, then the dot-coms, then construction again, and now it’s tech companies again, where any teenager with a computer can become a multimillionaire. Twenty years ago the gold was on Wall Street. Now there’s gold in Silicon Valley too, where many young people set out hoping to be the next Steve Jobs. Fortunately, these days hardly anyone dies of cholera or scurvy in developed countries.
In fact, there are more opportunities today than at any other time in history. But let’s not fool ourselves: this is no different from the gold rush. Many set out and work hard, but some will succeed while many others will fail. Although it’s clearly worth at least trying.
But in these cycles, what’s the best way to make money?
Let’s take the gold rush business model and bring it into our own time.
Many people bought picks, shovels and all kinds of tools to look for gold. Others took advantage of the rush to set up businesses selling picks and shovels. Over the course of the day some found gold and others didn’t, but the ones who were sure to make money were those selling the prospecting tools, the middlemen who took a commission on buying and selling gold, those who sold the journeys there, and even those who cooked for the prospectors. Let’s say that creating a business that acts as an intermediary between the entrepreneur and success can be very profitable.
(Read: 11 profitable micro-business ideas)
See also: Your online business in a matter of seconds (POP.co)
In this technological era, where the gold is now in technology, many people believe they don’t stand a chance if they haven’t mastered technology, and others think that at this point it’s a matter of luck to strike it big with new website or app “inventions”.
But the internet needs many non-technical profiles to work properly: for sales and distribution, and for everything else involved in running a company. Likewise, you can invest in tech companies now and make money without knowing anything about technology, and perhaps later you can bet against them.
Look for something you have a talent for, that you’re passionate about and that adds value for others (individuals or businesses), or that adds no value at all. Some people, with nothing but advanced financial knowledge, manage to multiply their fortune many times over at every change of cycle. They don’t contribute anything to anyone, but it’s their talent and they make the most of it in their own way, investing both for and against the recovery of the cycle. (How to work out what to do with your life)
Of course, we need to work out what we’re really talking about. If we’re talking about building a business to get rich, the steps can be very different and require a great deal of patience and strategy.
However, if we’re not talking about becoming the next Mark Zuckerberg, making money today is very simple. We’ve already shared some ideas for making money from home or online. We also looked at 8 realistic ways to make money fast online, because these days, if you master any subject or you’re good at something… there’s money in that knowledge.
But when you think about how you’re going to make money in a new cycle, remember that it’s not all about going out to look for gold. Sometimes the best business idea is to make money by helping others find that gold, while taking on less risk. Look at it that way.
Further reading
Featured image: George H. Johnson, Public domain, via Wikimedia Commons.
