A rubber band around your asparagus. A button on your shirt. A toothpick after lunch. A safety pin holding something together that was never meant to be held. These four objects are so ordinary that nobody thinks about them — which is exactly why they are so interesting. Each one hides inside it an extraordinary story of manufacturing genius, monopoly economics, founding mythology, and the specific kind of scale that only happens when nobody is paying attention. Letter 61 introduced this series with the gas lighter. This letter continues it. Four more objects. Four more worlds hiding in plain sight.
Not investment advice. A case study letter — about manufacturing economics, industrial organisation, and the lessons embedded in the objects we handle every day without thinking. Sources: Arkansas Times, NPR, People's Daily, Lemelson-MIT, Smithsonian, U.S. Patent records, and industry trade data.
Pick up a rubber band from your desk drawer. There is a better than even chance it was made in Hot Springs, Arkansas — a city best known for its racetrack, its gangster history, and its natural thermal springs. Because Hot Springs is home to Alliance Rubber Company, founded in 1923, and Alliance is not just the largest rubber band manufacturer in America. It is the only one. Every other American rubber band manufacturer has either gone out of business or moved production overseas. Alliance is the last one standing — and has been for decades.
William H. Spencer started Alliance Rubber in 1923 in Alliance, Ohio, by cutting rubber bands from rejected inner tubes. His first sale was to the Akron Beacon Journal — he persuaded them to wrap their newspapers with a rubber band to stop them blowing across lawns. One product. One customer. That's how it started. The company moved to Hot Springs in 1944 and has been there ever since, now in its fourth generation of family ownership. The president is a woman. The majority of the stock is owned by women. It is a Women Owned Small Business — the only rubber band manufacturer in the United States, exporting to 60+ countries, winning Governor's Awards for trade excellence.
The rubber band's economics are a masterclass in adjacent market expansion. Alliance started with one product — the rubber band — and systematically expanded into every adjacent application where banding could replace another fastening method. Asparagus bands. Broccoli bands. Lobster claw bands. Oyster bands. Parachute rigging bands. Military parachute bands. Healthcare tourniquet bands. Newspaper bands. Fishing bands. Exercise bands. From cutting old inner tubes to 2,400 SKUs serving agriculture, healthcare, military, commercial fishing, and retail — without ever leaving the core competency of stretching rubber around things. The lesson is not diversification. It is application discovery — finding every possible use for what you already know how to make, rather than making something new.
Alliance also survived every economic force that destroyed its competitors — cheap Asian imports, the decline of newspaper publishing (which used millions of rubber bands), the digital revolution, and two recessions — by doing one thing: going where its competitors weren't looking. When newspaper rubber band volumes fell in the early 2000s, Alliance opened an office in Salinas, California — the heart of American produce agriculture — and became the rubber band that holds the cilantro, the asparagus, the celery. The band on your vegetable bundle at the supermarket probably came from Arkansas. Nobody thought to look there.
"Our band has the softest stretch. That means it will stretch a long way with little exertion." — Jason Risner, Alliance Rubber Marketing Manager. A softer stretch on a rubber band. That is the competitive advantage. After 100 years, the differentiation is still in the product.
Look down at the shirt you are wearing right now. Look at the buttons. Now look at where they might have come from. The answer, for six out of every ten shirts worn anywhere on earth, is a town called Qiaotou in Zhejiang Province, China — a place so small and so specialised that its entire economic identity can be stated in a single sentence: Qiaotou makes buttons. It makes 15 billion of them per year. It also makes 80% of the world's zippers, for good measure.
Legend has it — and in China's manufacturing towns, the founding legend is always worth telling because it is almost always true in spirit if not in every detail — that three brothers were walking along the dusty streets of Qiaotou in 1983 when they noticed some discarded buttons lying in the gutter. They picked them up. They thought: there is money to be made here. They started selling buttons on the street. That was it. That was the beginning of an industry that now employs tens of thousands of workers, operates 550+ factories, supplies 60% of the world's buttons, and has replaced Italy — which used to be the global button capital — so completely that Italian button manufacturers are now a historical footnote.
What made Qiaotou's rise possible was the same force that made Shaodong's lighter dominance possible: the combination of poverty, scarce agricultural land, and the complete absence of alternatives forced the local population into trade and manufacturing. With no land to farm and no other industry to enter, every family became a manufacturer. The cluster self-assembled from necessity rather than strategy.
The Qiaotou story has a dimension the lighter story doesn't: it is a story about an industry that hit the wall of its own success and had to reinvent itself. By the mid-2000s, Qiaotou's button manufacturers had achieved such dominance that there was nowhere left to grow — they had already taken every market that could be taken. The only competition left was with each other, producing a race to the bottom on price that was destroying margins across the town. The response was not retreat — it was upgrading. The town established an intellectual property alliance. Filed 400+ patents. Introduced laser engraving, colour printing, carving, and lacquer painting techniques. Moved deliberately toward shell buttons, horn buttons, and coconut buttons — the premium segment that Italy used to own and where the margins are 10 to 20 times higher than on plastic disposables. Then it started selling via livestreaming — 30% of all button business in Qiaotou now happens online, through social commerce, factory owners holding up buttons to phone cameras and taking orders from buyers in 30 countries simultaneously.
In 1849, a New York inventor named Walter Hunt was pacing his floor, twisting a piece of brass wire in his hands, worrying about a $15 debt he owed to a draftsman. He looked down at the wire — and in the space of three hours of absent-minded twisting and bending, invented the safety pin. He patented it. And then he sold all rights to the patent to the draftsman he owed the $15 to, for exactly $400 — enough to pay the debt and have a small amount left over. The safety pin made fortunes for everyone who came after him. Walter Hunt earned not a penny more.
The safety pin's economics teach a different lesson from the rubber band and the button. Its story is not about manufacturing clusters or market dominance. It is about the gap between invention and commercialisation — and how that gap is where almost all the value in the world is actually created. Walter Hunt invented the sewing machine before Elias Howe but never patented it. He invented the safety pin and sold the patent for $400. He invented a repeating rifle that led directly to Smith and Wesson's fortune — but not his own. He was perhaps the most productive inventor of the 19th century in terms of useful innovations, and one of the least rewarded. He understood how to create value. He never learned how to capture it.
The safety pin itself is a study in design perfection. It was invented in 1849. It has not changed. Not in 175 years. The spring mechanism that Hunt twisted from a piece of wire, the protective clasp that covers the point, the geometry that creates tension to keep it closed — these have not been improved upon because they cannot be improved upon. They are the optimal solution to the problem of fastening two pieces of fabric safely without exposing a sharp point. No engineering degree has produced a better version. No startup has disrupted it. The safety pin is what a perfectly designed object looks like: it solves exactly the problem it was designed to solve, at the minimum possible cost and complexity, and remains the answer to that problem indefinitely. Punk rock made it a fashion statement. Babies' nappies made it essential. Tailors use it. Emergency clothing repairs depend on it. It goes in your first aid kit, your sewing box, your baby bag, and your punk jacket. Walter Hunt thought little of it. The world has thought of little else ever since.
Hunt invented the safety pin in three hours of fidgeting with a piece of wire. He sold it for $400. The same design is now produced in the billions every year. The lesson is not about the pin. It is about the $400.
Strong, Maine is a small town in Franklin County with a population of approximately 1,100 people. It is also — or was, until recently — the toothpick capital of the world. For over a century, Strong and the surrounding communities of Franklin County produced the majority of all toothpicks used in America, and a significant share of the world's supply, from a single raw material: white birch trees, which grow in extraordinary abundance in the forests of northern Maine. At its peak, the toothpick industry in Strong was producing approximately a billion toothpicks per day — a number so large it requires a moment to sit with.
The toothpick's story is the story of a natural resource monopoly — a cluster built not on accumulated human expertise or deliberate industrial strategy but on the fortunate coincidence of a specific tree growing in extraordinary density in a specific geography. White birch is uniquely suited to toothpick production: it is soft enough to split into fine points without splintering dangerously, hard enough to hold its shape in the mouth, and flavourless enough not to interfere with the taste of food. It grows across the northern forests of North America — but it grew in particular abundance in Maine, and Maine's woodworking industry was already established, providing the machinery and the skills to process it. The result was a natural monopoly built on geography and wood grain rather than on human ingenuity — and it lasted for over a century before Chinese production eventually undercut it on price.
What the toothpick teaches — in its quiet, overlooked way — is that a resource monopoly is both the most powerful and the most fragile kind of competitive advantage. Powerful because it requires no innovation to maintain: as long as the birch trees grow and no cheaper substitute exists, the monopoly holds. Fragile because it is entirely dependent on the resource remaining unique and the substitute remaining absent. When Chinese manufacturers found ways to produce toothpicks from bamboo at prices that Maine birch could not match, the monopoly dissolved within a decade. The cluster that took a century to build was gone in ten years — not because Maine's woodworking skills disappeared, but because the raw material advantage was replicated elsewhere at lower cost. The lesson connects directly back to Letter 61's China manufacturing thesis: the cluster that wins on raw material cost alone is always one supply chain disruption away from replacement. The cluster that wins on accumulated human expertise — Shaodong's lighters, Qiaotou's buttons — is far harder to displace.
Strong, Maine: population 1,100. Daily toothpick output at peak: one billion. Ratio of toothpicks to people: approximately 900,000 to one. This is what a natural resource monopoly looks like when it works — and what it looks like when it doesn't is an empty factory and a forest of birch trees that nobody is buying.
Look at these four objects together. A rubber band. A button. A safety pin. A toothpick. Each one is invisible in daily life. Each one is irreplaceable in its function. And each one, examined closely, reveals a different version of the same fundamental insight about how value is created, captured, distributed, and eventually challenged in the real economy.
The rubber band teaches application discovery. You don't need a new product — you need to find every application for the product you have. Alliance found asparagus. And lobsters. And parachutes. The product never changed. The customers multiplied.
The button teaches the upgrade imperative. When you own a market so completely that internal competition is destroying it, the only direction is up — to the premium segment where margins are ten times higher and where craft, design, and IP matter as much as volume. Qiaotou replaced Italian buttons by being cheaper. Now it is replacing Italian buttons by being better.
The safety pin teaches the invention-commercialisation gap. Creating value and capturing value are different skills. Walter Hunt created one of the most successful products in history. He captured $400 of it. The people who built factories, built distribution, and built brands captured the rest. The lesson is brutal and universal: the inventor rarely wins. The manufacturer does.
The toothpick teaches the fragility of resource monopoly. A competitive advantage built on a natural material is only as durable as that material's uniqueness. When the uniqueness disappears — when bamboo turns out to be cheaper than birch — the monopoly collapses with a speed that the cluster's century-long history does nothing to prevent.
These are not lessons from textbooks. They are lessons from the desk drawer, the shirt collar, the medicine cabinet, and the restaurant table. The objects that are too ordinary to think about are often the ones that have been refined by economic pressure for the longest time — and therefore have the most to teach. Pay attention to the mundane. It is where the real economy lives.
Long-horizon thinking on capital, technology, and the forces shaping the next decade of wealth creation. Written from first principles. Not consensus. Not noise.