“They call him the ‘Spice King of Zanzibar,’ or at least that’s what he calls himself. He’s got an Instagram – you can check him out.”
“So is he an actual guy?” I asked, “Or is this some kind of group of people?”
“It’s just one dude. He rents out huge homes, throws incredible parties, and he some how gets super connected to the entire Silicon Valley crowd. That’s his business model. At the last party I saw Sergey Brin and his girlfriend. I’m sure he’s involved in all kinds of deals,” he replied back to me.
“Wow. It’s like some sort of ‘picks and shovels’ approach to the Silicon Valley economy. Very interesting,” I said.
This was from last night. Swen Lorenz and I hosted a dinner in San Francisco with 20 other interesting investors and entrepreneurs.
Our dinner venue was in a downtown basement – in a former bank vault.
The conversation I had, about the ‘Spice King of Zanzibar,’ was just one of many interesting stories I heard last night.
That’s why I love hosting dinners around the world. I get to meet interesting people and understand what’s really happening on the ground.
And sometimes, I get exposure to very interesting investment opportunities.
After a late night, I woke up this morning having a new perspective on what’s currently going on in San Francisco and the broader Bay Area. My past negative thoughts of this area have been fueled by my personal experiences and general political insanity that always seems to sprout from this region.
The last time I was in San Francisco, it was unbearable. The city reeked of urine and I was screamed at several times for not wearing a face diaper, even as I walked on a remote hiking trail.
But this time is much different. There are definitely some rough parts of the city (has Tenderloin gotten worse?!), but most other parts are surprisingly clean and bustling.
Is it possible that San Francisco is making a comeback?
My buddy Steve, who was at last night’s dinner, thinks so.
I’m not totally sure. But I can’t argue with the incredible tech, talent, and absurd amount of money that is constant in this area.
Picks and Shovels in Tech Land
Before I sat down to write this all out, I walked through Levi Park, which is right in front of the Levi Strauss headquarters.
If you’ve been a reader of mine for a while, you know where I’m going with this…
I’ve long talked about how investing in ‘picks and shovels’ opportunities is usually the best way to approach an industry. I’ve personally done it very successfully multiple different times. The idea is to invest in the things that support a specific industry… things that may not be obvious at first.
Levi Strauss is probably the best example of this strategy. As an immigrant from Germany, Strauss provided supplies to the California gold miners during the gold rush in the mid-1800’s.
Most famously, he developed and sold jeans with rivets at the corners of the pockets. He patented the technology and went on to sell countless pairs of jeans to miners and workers around the world.
When Strauss passed away in San Francisco in 1902 he was worth about $30 million – equivalent to nearly $1 billion today. [Insert joke about inflation, buy gold, bitcoin.]
This same concept exists today with the tech industry. The ‘Spice King of Zanzibar’ has clearly found his niche.
Space Picks and Shovels
I’m sure there are still plenty of opportunities in the San Francisco area to build picks and shovels businesses that cater to the tech industry. But it’s definitely crowded.
However, that doesn’t mean there aren’t other opportunities, in other industries, in other parts of the world…
In the past, I have written about the many lucrative opportunities in the space industry. For most investors, this means finding high-tech private startups and placing bets on smart teams. Not only is this extremely difficult to do, it’s also very risky.
But there is a new picks and shovels opportunity in the space industry, and it’s unfolding right now in Florida.
In addition to private space companies like SpaceX and Blue Origin operating out of Cape Canaveral, the US Government is now considering moving NASA out of Washington D.C. to the Sunshine State.
The “Space Coast,” which is already booming with its own tourism board, is set to grow even more.
Source: Zillow
This rapid growth has fueled a boom in the area’s economy, which includes the real estate market of Titusville. Despite prices recently cooling off, I think there is A LOT more room to grow.
That’s because there will be more and more highly paid space engineers moving to this region in the coming years. And simply stated, these people are going to drive up real estate prices.
Beyond real estate, it’s going to be restaurants, schools, entertainment, and everything else you can think of that will support the growing space industry.
Maybe you can be the Spice King of the Space Coast?
