Lunar Gold mining: locating the not-so-obvious opportunity in the midst of the obvious

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A veteran golf pro at a municipal driving range happened to sit down at a bar on the day the Apollo module landed on the moon. He stared silently at the tense approach, said nothing at the first footsteps on lunar soil, and never blinked at the immortal words about an enormous leap for mankind. But when that astronaut hit the golf ball a lunar kilometer — “Whoa!” he shouted. “Where can I get my hands on one of those clubs?”

Don’t set trends, harvest them

There’s no happy ending to the story because, although the muni pro did manage to get his hands on and sell the same make of club used on the moon, for some reason he could never hit the ball as far on earth.

Still, from a business point of view he was on to something. What the guy was demonstrating is one of the secrets of entrepreneurial vision: The ability to ignore the obvious and see the opportunity. Too often the mythology of entrepreneurship stresses the “one big notion” approach, without giving any thought to the fact that these are by definition few and far apart.

Profitable peripheral vision

This isn’t to disparage the obvious. Quick recognition of the “big picture” is one of those things about us that contributed to our survival as a species — it’s definitely best to notice the saber-toothed tiger rather than the flower between his paws. It’s what we glimpse in our peripheral vision that more often than not holds the hidden promise.

The golf pro, for instance, would have been better off noticing what orange juice the astronauts drank: a powdered concoction called Tang which for years was NASA’s main contribution to the American economy. Similarly, during the California Gold Rush, it was a merchant who saw the need for clothing strong enough to survive repeated immersions in swirling river waters and on-your-knees gold panning that led one “forty-niner,” Levi Strauss, to import blue denim overalls — what we know today as blue jeans. As for Col. Sutter, on whose land gold was discovered, he found his property overrun by miners and squatters. Far from getting rich, he was reduced to poverty — despite having seen the “big picture” long before anyone.

Look at what happened after surfing took off in the 1960s with the movie “Endless Summer” and the music of the Beach Boys. Thousands of teenagers tried their hand at surfing; hundreds of thousands bought surf shorts, shirts, and hats — where the big money is to this day.

In truth, we spend our days surrounded by Lunar Gold. It is infinitely harder to make a fortune breaking into the fashion business than it is to do so by dry cleaning fashion garments. A few years ago a study even decreed that the ownership of a chain of such establishments was the most common source of new American fortunes. Without fashion garments, there would be no dry cleaning, but guess where the money is?

It’s the same in the now-classic case of the Polaroid camera, an expensive must-have for professionals and photography fanatics in its early years, but no great money-maker for the company. What changed was Kodak’s perception of where the gold was — in the sales of film, not cameras. Suddenly it was possible to buy $20 Polaroids that burned through $20 rolls of film. Kodak found riches by repositioning the camera as a fun, spur-of-the-moment thing — a party accessory.

We see the same principle at work in the restaurant business: the food is the attraction, but the bar bills pay the freight. Detroit adopted the tactic a few years ago when it turned the sales of replacement parts into a profit center. We see it in the proliferation of free newspapers, which make their profit on advertising and not subscriptions. Such publications were scorned a decade ago, but now are a fixture in every city in the country.

To find Lunar Gold you should seek:

1. Low barriers to entry

Businesses such as dry cleaning do not require advance degrees, social status, or a command of English.

2. An untapped audience

Find the potential in an untapped audience of enthusiasts, as opposed to practitioners — there are infinitely more surf-fashion fans than actual surfers.

3. A nice wave to catch

Seek out a symbiotic relationship to a larger trend or force, perhaps societal in nature — it helps to ride some kind of wave.

4. An obvious market with cachet

Fashion, fancy food, and fine photography are all business examples that just might obscure an ancillary but more predictably profitable small market.

The attractive thing about prospecting for Lunar Gold is that the discipline leads to repeat success. If you start on the periphery of one industry and work you way in, you’ll see the pattern and parallels that much faster when you reconnoiter a second. By the time you’re on your third or fourth, everything will seem so predictably put together that it may even resemble a big idea.