The Gold Digger’s Pants

In this article, Darius, a young entrepreneur will trace the interesting history of gold chasing from the past to the present. From history, he extracts some interesting lessons about being a trend follower or a trend setter.

Time: 1850s, Place: California, Occasion: Gold Rush No.1

Sam Brannan, California’s first millionaire, raced through the streets yelling, “Gold, gold in the American River!” - he wasn’t planning on digging for it, he was planning on selling shovels. His wild run through San Francisco came just after he had purchased every pick axe, pan and shovel in the region. A pan that sold for 20 cents a few days earlier was now available from Brannan for $15.

At around the same time, a Jewish merchant saw that the massive number of native and immigrant gold diggers had one common problem “their cotton pants were tearing like Kleenex against the rough terrain that they had to navigate. He experimented with a new material called denim, and thought that it had the toughness to withstand the activity and yet was economical and comfortable enough. He started selling these new pants to gold diggers, they were called “jeans”. His name was Levi Strauss, he was the founder of the only born-by-gold-rush company that is still standing today. ( Fun facts: Mark Twain “ tried mining for gold but failed, fortunately his pen was mightier then his pick. Lotta Crabtree “ child actress who made millions singing for gold diggers. )

Fast Forward 100+ years “

Time: 1980s, Place: California, Occasion: Gold Rush No.2 ( a.k.a. silicon rush )

The battle of PC is red hot. The horde of Apple, Atari, Commodore, IBM, Compaq, etc. had been busy thrashing it out for years to see who makes a better computer. Meanwhile, a small outfit in Seattle called Microsoft was (arguably) focused on making something that all of these people need “ an operating system (particularly one that is built for the new Intel 8086 platform). Then came IBM’s trillion dollar mistake “ adopting this OS called DOS and allowing competitors to do the same. The rest is history. It is not fair to blame IBM, people cared about the PC they buy “ the features, the compatible games, the processor, the price, the brand, the whole package “ who would have thought that OS alone matters most? Afterall, no one cared what software was running in our VCRs and Microwaves. It was not easy to see that a couple of years down the road, who made the PC didn’t matter as along as it ran DOS.

20 years later, the rush continues. Dot Coms were the new American Capitalist Idols. Anyone who interned at McKinsey or is remotely related to Stanford could raise a couple of million to sell dog food online. Unprecedented amount of money were poured into Internet and related infrastructure. One company capitalized on this better then anyone else – not the fortunate gold finders like Yahoo, Amazon or eBay “ it’s Cisco. John Chambers acquired an astounding 66 companies within 5 years; with Å“an acquisition strategy that would have made a Roman emperor blush according to Forbes, he turned Cisco from a router maker to the networking powerhouse who had the best products from Voice to Broadband. Cisco’s revenue grew from $1.2 billion to $18.9 billion from 1995 to 2000, literally monopolizing high-end networking equipment for ISPs, data centers, enterprises and cash rich startups. In simpler words “ he, like Brannan, went around buying all the tools for the dot com gold diggers.

What’s the moral of the story

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