Take every business anecdote with a pinch of salt
“First millionaires of the Gold Rush were not the diggers but those who sold them shovels and picks.” says the popular business school anecdote.
It’s true. Merchants like Levi Strauss, made their fortune selling provisions to california diggers during the Gold Rush. But miners never made as much or anything considerable.
Gold essentially is a difficult thing to mine and a person mining his whole life might make only a modest earnings. Besides, there’s competition. Every young men around that time rushed to find gold and you had to compete with all those hands to lay your hands on the tiny pieces of glitter which might be gold.
But did the diggers chose to dig and rather not sell shovels? Why there wasn’t enough competition in selling showels?
The classic digger is a person who doesn’t have anything else, but his youth, body and will to struggle. With that one cannot be a shovel salesman. To sell shovels, you need capital either inherited or through banking connections which was a privilege affordable only to a few and you need the education to build a supply chain, work across legalities and such. It is an assymetric game further complicated by the intersection of social factors like gender, race, colour of your skin or caste in to which you were born.
So, to be a digger is not a choice, but probably the only option available for many.
Pitching the digger vs shovel seller as two choices, one dumb and the other smart is a misrepresentation.
It appears to be a good story but will never help a future entrepreneur to make a decision. They instead are driven by their own limitations or possibilities depending on where they live, their access to capital and other resources or the specific competitive advantage of their economies.
We need more nuance to get real.
