The Lesson of Friedrich and the Gold Rush
Who gets rich in a gold rush? Not who you think. In point of fact, most miners go home with little to show for their blood, sweat, and tears. And therein is a lesson for professionals and entrepreneurs.
In a typical gold rush, rumours begin to trickle out about a mother lode in a remote location and suddenly a hundred thousand utterly clueless city kids show up with picks and shovels and high hopes. All but a lucky few would have done better to have stayed home and bought lottery tickets.
Meanwhile, the original prospector, who was a genius at finding the ore, has no idea how to commercialize his find or even how to get any quantity of gold out of the backcountry with only rudimentary infrastructure, all of which now leads in, not out.
Infrastructure providers see big opportunities getting men and material into the remote areas, so they build roads, railroads, riverboats, and bridges, usually with other peoples’ money. These projects are financed using the math of long-term investments which, when applied to a three-year gold rush, is sure to leave somebody holding the bag.
The sure winners are not the prospectors or the miners or the big project guys. The sure winners are the ones who understand that a hundred thousand clueless city kids with half an ounce of gold in their pockets will have wants as well as needs.
Friedrich Trump, for example, showed up in the Yukon and built an establishment that offered high-end food, expensive liquor, charming ladies, and private rooms available by the hour (for short naps, of course). More often than not, his customers left all their gold behind, but they left satisfied. Friedrich ultimately returned to New York a very wealthy man.
Now, this is not to suggest that professionals and entrepreneurs should be offering private rooms and the like. What it is to say is that Friedrich and his ilk understood one important principle, and that is that people will pay more readily for wants than for needs. Joseph Kennedy, “America’s Bootlegger”, understood this during Depression days when he said, “No matter how hard the times, everyone can find a nickel for a coke or a dime for a beer.”
As professionals, we are obliged to attend to our clients’ needs, and to do so to the best of our ability. But those of us who understand that those same clients have wants as well as needs will generally do better than those who overlook the wants, because the wants usually involve powerful emotions deeply linked to the needs.
Let me illustrate. A divorce client needs a fair division of matrimonial assets and a regime that does best by the kids. That’s our professional responsibility, and if we deliver no more than that, we’ve done our job. But she is also shaken to the core by betrayal and terrified of the future. If you do no more than acknowledge those things and allow her to vent her fears and anger, you will find that she will trust and follow your advice and feel well served. She’s also more likely to refer her friends and colleagues.
As someone wise said, people don’t care how much you know until they know how much you care.
What does all this have to do with Friedrich Trump or Joseph Kennedy? Simply this– in life’s gold rush, the ones who prosper are those who understand human wants as well as human needs. And darn it, most of the time that also makes us not only better professionals, it makes us better human beings.