Disclaimer: I’ve borrowed the book title of Ben Horowitz for the story below as the title & the summary of the book fits apt to this narrative.
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“GOLD! GOLD! I FOUND GOLD!” shouted Francisco Lopez, a native Californian in early 1842. Francisco couldn’t believe his luck. He wanted more!
He looked around the river. “Wow! More gold!”
He moved some rocks and found even more. “There’s gold everywhere!” he jumped up and down with excitement. He became a millionaire in a few weeks.
Francisco is recognized as one of the first people to find gold in Northern California. The word spread slowly at first. Then, a few years later, a San Francisco newspaper confirmed the opportunity and the word spread like wildfire. By 1849, the news had spread around the world. An overwhelming number of gold-seekers began to arrive from every continent. The famous name “forty-niners” originated from the approximately 90,000 people who arrived in California during this year, 1849.
Once the news spread, everything happened very quickly. There was no easy way to get to California. Forty-niners faced hardship and often death on their way to get there. Almost overnight, opportunities became abundant everywhere.
What are the differences between those who succeed slowly and those who succeed fast?
During the California Gold Rush, there were two types of people:
Those who wanted to get rich quick and those who were in for the long run.
Those who wanted to strike it rich quickly, were searching for a shortcut. They lacked patience, were highly emotional dreamers who lacked discipline.
These people were basically gambling with their lives. Hoping and wishing for the good luck to strike it rich in a few days.
On the other hand, those who wanted to get rich slowly were completely opposed to the shortcut seekers. They knew what they wanted. They were searching for long-term opportunities, not after an emotional dream.
These men were smart. They were NOT distracted, going after the “gold-gamble,” they were entrepreneurs who were there to make a huge business out of the gold that everyone else was after.
These entrepreneurs got into shipping to transport people and supply goods for the growing population. They built hotels, restaurants, sold the tools needed for miners.
Hundreds of ships were abandoned after their crews deserted them right after they got to land. Gold diggers would run as fast as possible to the goldfields to start searching for the precious metal.
Meanwhile, entrepreneurs were known to convert these boats into warehouses, stores, taverns, hotels, and even into jails.
Opportunities were massive. While the “get rich quick” gold diggers were risking their lives in the mountains, the unending demand of needs raised the prices of all the goods to unimaginable levels.
There are reports of bakeries charging one dollar for a slice of bread, two dollars if it was buttered, the equivalent of about $56 in today’s money.
A dozen eggs might cost you $90 at today’s prices. A pick axe would cost the equivalent of $1,500! Coffee $1,200 a pound and a pair of boots up to $3,000!
Two famous examples of slow-growth entrepreneurs who bloomed in this era are:
- Levi Strauss, founder of the American clothing company who supplied jeans to the miners.
Think about this, where are all the gold diggers? GONE!
Where is Levi Strauss & Co. 165 years later? Correct!
- Henry Wells and William Fargo started a transportation business in 1852. Later, they found the opportunity to get into financial services. In 1954, Wells Fargo & Union Trust shortened its name to Wells Fargo Bank.
Tell me, where are the gold diggers today? Don’t get distracted by gold’s glitter!
Slow, smart, hard work is by far the best way to succeed!
— — Phani Marupaka