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Should you Mine for Gold or Sell the Pick-axes? During the California gold rush there were essentially two type businesses; the people who flocked to the state to discover gold and the businesses that supported them. Mining for gold was considered to be the more exciting of the two and provided the possibility for overnight riches, which drew people from the far corners of the Earth to seek their riches. Businesses that sold supplies such as wheelbarrows, tents, jeans, and pickaxes took advantage of the fact that all the arriving fortune seekers would have to buy their wares before they headed off into the hills. Another set of businesses thrived in other forms of support services, such as banking for example. These unglamorous supply and support services did pretty well themselves as attested to by the present day brands of Levi Strauss and Wells Fargo Bank. The same type of situation happens on a regular basis in the present day as well, with entrepreneurs being again able to choose whether they want to sell the pick axes or mine for gold, at least metaphorically. Now, when a major new technology trend emerges entrepreneurs can try to capitalize on the trend by creating a product (mining for gold), or by creating tools to enable the development of consumer products (selling pickaxes). In technology, the number of successful companies created on the Anthony Ricigliano Gold Mining consumer product side and the pickaxes/tools side are comparable. Like the gold rush days, the consumer product side tends to get more attention but the tool sellers tend to be more successful while carrying less risk. If you are looking to start a company, the chances are that you’re going to be on one side of the equation or the other. The first consideration should be matching your skills to see where they will provide the greatest traction. For example, a tool company would require a skill set with stronger technical and sales skills, where a consumer product company would require experience with predicting consumer tastes and marketing skills. Lastly, analyze how much competition there is in the space you’re about to enter. Because consumer product companies (again) are more glamorous and get more press coverage, many entrepreneurs end up on this side of the equation. For this reason, competition tends to be higher than that seen on the tools side. Whatever the industry you’re contemplating, there are many exciting opportunities whether they’re on the pick-axe or mining for Anthony Ricigliano Gold side. It’s been proven again and again that if you are an entrepreneur thinking about starting a company around a new trend, consider selling the pickaxes.
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