Diamonds are simply an extreme form of carbon, the most ubiquitous element in the universe. If you are an African, a diamond is a piece of charcoal put under pressure beneath the earth surface. So how come this piece of charcoal is incredibly expensive? Why do girls love this “piece of charcoal”?
Here is how a group of people changed the way we think about diamonds; In the 1870s, diamond mines in Brazil and India were yielding modest quantities of the semi-precious gem. But over the decades that followed, massive deposits were discovered in South Africa. To stop these diamonds from flooding the market, the British organized a cartel called the De Beers Consolidated Mines Ltd. This cartel controlled the distribution, stockpiling and supply of diamonds all over the world. This created scarcity hence the rise in prices.
In the early twentieth century diamond engagement rings were uncommon in America and Europe. Wealthy buyers opted for rubies, sapphires and gold. Actually1919 the demand for diamonds was down.
In 1938 De Beers hired an agency to invent a deep emotional association between diamonds and romance. De Beers created a strong perception that affluent people want diamonds and they’re so valuable that women will never part with them.
Over the next years the agency associated diamonds with wedding proposals. Diamonds were placed in motion pictures. They hired designers and celebrities to wear and promote diamonds. De Beers even arranged highly publicized visits by the Queen to the South African Diamond mines.
By 1947 diamonds were very expensive and selling like hot cake. So, diamonds are a girl’s best friend because De Beers created the perception.
Lesson: Innovation creates a resource. There’s no such thing as a “resource” until man finds a use for something in nature and thus endows its economic value. Until then every plant is a weed and every mineral is a rock.
Like De Beers, you have the power to re-position reality.