Can Being A Data Middleman Make You Rich?

Did you know that 300,000 people went to California during the California Gold Rush of 1848 to 1855? This represents approximately 1.29% of all the people in the United States back then. This is how significant the California Gold Rush Is.

This is because the California Gold Rush promised instant riches to the people who participated in it. Many people both poor and rich sold all their possessions and went to California in the hopes of finding gold that would make them rich.

But of course, the promise of instant riches wasn’t true. Many tried for years to become rich but eventually ended up with nothing. Although some did become rich, the astounding number of prospectors end up losing everything.

But do you know who are the people who really made money during the California Gold Rush? They were the people who supplied the prospectors and the ones who sold the gold from the prospectors. In effect they were the persons in the middle of the prospectors and gold buyers.

The same thing still happens today. For example, in the agricultural industry, many farmers especially from poor and developing countries complain that it is the middlemen and not them who are making money despite them doing more of the work by growing food.

The same is true with the relation today between mega-retailers and manufacturers. E-Commerce giants like Amazon of the United States and Alibaba of China have become so big and more profitable than most manufacturers in their respective countries.

If you have ever been in the retail industry which I experienced in a small way, you would have a good grasp of just how much manufacturers bend over just to appease the stores which retail their products.

This is because most producers and manufacturers don’t have the capacity to directly sell to their customers. Middlemen in the form of supermarkets have so entrenched themselves in society that they can for the most part dictate the terms to their suppliers.

For example, if you sell your ebooks in Amazon, you are prohibited from selling them elsewhere. This is the reason why Amazon has a near stranglehold on the ebook market. Since Amazon is the most popular ebook retailer in most developed countries, authors flock to it.

Many authors reject the other ebook retailers because they know that if Amazon bans them, it could really mean the end of their ebook business. Alibaba used to do the same thing when it prohibited sellers on its platform to sell on other e-commerce stores.

Because of this, Alibaba had a monopoly of the e-commerce market in China. Luckily for many Chinese, the government of China intervened and prohibited the monopolistic practices of Alibaba. As of today, Alibaba is fast losing marketshare to other newer e-commerce stores.

Retailers can also dictate their terms to a producer. For example, in the USA, the largest chicken distribution companies can basically dictate how a chicken farmer would grow their chickens. This is because chicken farmers have no option but to sell to these distributors.

For example, the US chicken company Tyson can basically dictate how much price they would pay for the chickens their farmers grow. This is how powerful and profitable a middleman can be especially if they have a stranglehold on the supply chain.

Facebook, Twitter, Instagram, YouTube, TikTok and all the other online platforms don’t create data. They only facilitate the transport of online data from the creator to the consumer, but by far, they’re the ones who are largely making all the money from online data.

Don’t forget that the online data stores are the same thing. Apple Music, Books and Apple Store for music and book data as well as apps are one. Google Store for apps and books is another. Spotify is another.

These online stores don’t create music or book data, nor do they create apps, yet they are racking in most of the money from the sale of all these online digital products. The same goes with all the other online data.

Epic and Unity as gaming companies have largely stopped making their own games. Today, they make almost all their money by letting other videogame developers build videogames on their respective platforms.

So if you truly want to become rich today, don’t create data like text, sound, video, app or videogame data, rather, create online platforms that could process or create all these data. The actual money is still being made by actually being a middleman.

Undeniably, competing with online data middlemen with the likes of Facebook, Google, Apple and so on is very hard. These middlemen like the supermarkets of today have firmly entrenched themselves in today’s society.

But it doesn’t mean that it’s impossible. For example, did you know the story of how the billion dollar online classified ads company Craigslist was started? Craig Newmark the founder of Craigslist, hence the name, didn’t really intended to start the business.

Feeling isolated when he came to San Francisco, he decided to post online social events for his friends to know. Gradually, more and more people started asking Craig about information about San Francisco which are more geared towards classified ads posting.

To cut a long story short, he eventually found Craigslist and eventually became a billionaire. Not too shabby for him considering his initial intent was to only inform his friends regarding social events in San Francisco.

You could be the next Craig Newmark and your company could be the next Craigslist. You can start by creating what product or service you want to be a middleman for. For example, if you are into food, you could create a site where people discuss and post about food.

As time goes by, you could increase the community you service. For example, Facebook was originally intended by its creator Mark Zuckerberg to be a social media platform for college students.

He eventually made more improvements to the software and targeted other people besides college students. Well, we all know what happened next, Facebook became the dominant social media platform in the world.

We could also look to Craigslist as an example again. It was originally a social event only platform but grew ultimately to become a fully fledged online classified ads platform servicing not only the US consumers but other consumers globally as well.

There are reasons why despite the proliferation of big online data companies like Facebook, Google and the likes, there are still much smaller online data companies that not only thrive but succeed.

For example, dating sites are big business now. If you analyzed it, Facebook and Google can offer the same thing to people who use dating sites. But why are dating sites thriving? Because they specialize on their niche which is dating.

There is even a dating site for sugar daddies and sugar mommies. There are even dating sites for partner cheaters. Why do these online data platforms thrive? Its because there is a niche for them.

Is there a site where you can buy and sell pictures of anime girls? Sure there is. Is there a site where you can buy and sell repair manuals for obsolete cars and tools? Sure there is. These examples illustrate that you can become a middleman of just about anything.

As can be seen, there could be a middleman for just about any product or service which includes online data. Instead of merely creating data like texts, images and sound, you could create online platforms that would process these data.

You can start with a small community and niche and later expand to a bigger community with more niches. This is the reason why you should design you data platform to be expandable at the onset.

You might also like to read the article:

Why Do New Online Content Creators Lose All Their Money/ Time And Fail?

According to the US Bureau of Statistics 20% of new businesses fail within the first year, 30% within the second year, and 50% within the third year. At the same time it is reported that it takes up to three years for the average new business to become profitable...