In 1837, Charles Lewis Tiffany and his school friend John B. Young borrowed $1,000 from Tiffany’s father and opened a small shop in New York City. It sold stationery and what were called “fancy goods”: gifts, small decorative items, odds and ends. Total sales on the first day came to $4.98.

It wasn’t a glamorous start, and the shop didn’t yet have a clear identity. Over the next few years, Tiffany and his partners kept adjusting what they carried: glassware, porcelain, cutlery, clocks. They began selling jewelry, and in 1841 started making some of their own. It was a general store for nice things, competing with plenty of others.

The turning point came in 1848. That year, political upheaval swept across Europe. The value of precious stones fell sharply. Many merchants would have held back and waited for things to settle. Tiffany did the opposite. He invested heavily in diamonds while prices were low, and sold them at a large profit a few years later.

That move did more than make money. It shifted the business toward fine jewelry and gave the store a reputation as the place to buy serious diamonds in America. In 1853 the company was reorganized as Tiffany & Co. It went on to set a sterling silver standard, publish its famous Blue Book catalog and introduce the six-prong engagement ring setting in 1886. When Tiffany died in 1902, the company was worth more than $2 million.

It’s worth being clear about the risk. Tiffany’s diamond bet could have gone badly, and he was investing in a field he’d been building experience in for years, not one he’d just discovered. The lesson isn’t to gamble. It’s to know your strongest category well enough to recognize a rare opportunity in it when one appears.