Start a Business that Helps Others Make Money

It is normal human instinct to follow the crowd when there is money to be made. For instance, when the stock market reaches new high, the tendency for investors is to jump in and buy more stocks. The same can be said for property, cryptocurrencies, gold, and many other investments. However, not everyone who puts money into these investments make money. Usually the early birds make the most while those who come in late are left holding the baby when the market turns.

Thus a good strategy would be to spot the trend early and enter the market before it gets too hot. However this is easier said than done. Which is why most of us are not billionaires or even multi-millionaires. There is however an alternative strategy which surprisingly has less risk and could end up giving spectacular returns.

I recently came across an article about Levi Strauss which got me thinking. Instead of joining the California gold rush in the United States in the mid 1800s, Strauss made and sold jeans to those panning for gold. Given the harsh environment that these miners were in, they appreciated the durability of the blue jeans made by Levi Strauss and Company. As a result, sales boomed.

In a more recent period, the rise of Bitcoin and other cryptocurrencies had fueled the sales of specialized computers used for their mining. This led to high demand for makers of graphic processing units or GPUs which excel in the mathematical calculations needed to mine these cryptocurrencies, When Bitcoin price reached its peak in December 2017, GPU manufacturers  like Nvidia benefited greatly from the high demand.

The alternative strategy is obviously to enter a business which supports those who are at the frontlines of the money frenzy. However this is not about entering mundane businesses which support almost every type of business like stationery, personal computers, copiers, etc. The support provided should be unique and generally not available at that time. Durable blue jeans were not available for miners before Strauss introduced them. GPU were initially used for computer games before someone reckoned that their advanced mathematical processing capability could work out the algorithm for cryptocurrencies much faster.

Thus it pays to look at what people are getting into to get good returns for their money. Then consider how to facilitate these people’s process of making money. Generally it involves making the process faster or cheaper or easier. If you manage to solve the problems that these people face, you may have a winning idea for a startup.

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