So what do gold rushes have to do with the Titanic? To start, gold rushes—both literal and figurative—have the potential to create significant wealth for a few lucky/opportunistic ones who jump on board. Windows of opportunity, whether to exploit a specific limited natural resource or to leverage a disruptive technology, create ample potential for significant wealth--but also a plethora of sunken ventures. The Titanic was a vehicle for many aspiring immigrants to achieve their own dream in the new land of the United States, a gold rush of sorts.
Figurative gold rushes come in the forms of new technologies - think the internet starting in the 1990s, the more recent gig economy wave, or homestays as a travel/vacation alternative. These transformational and disruptive macro-level changes in technology or social preferences have enabled thousands of startups. Some have reached the fabled unicorn status with valuations of over $1 billion. But many more are sunken carcasses on the bottom of the economic ocean.
In terms of literal gold rushes, many of us think of San Francisco and the 49ers, the U.S. gold rush of late 1840s that spurred considerable growth in California through the 1850s. Over 150,000 would-be miners flooded California during the peak two years of the American gold rush. But what many of us don’t know is that a similar gold rush occurred in Australia at just about the same time. This started in earnest in the late 1840s/early 1850s, and brought an influx of nearly 500,000 people to the State of Victoria alone.
The Titanic has more than metaphoric links to gold rushes. The White Star Line, builder and operator of the Titanic, was launched on the opportunity created by the Australian gold rush. Founded in 1845, the White Star Line built and operated clipper ships from the United Kingdom to the new land of Australia, which experienced incredible growth during the 1850s as a result of this gold rush. In fact, the White Star Line did not begin to offer passage to the United States for a couple more decades. But its initial success was built on the promise of gold in the hills of Oz.
What lessons can entrepreneurs learn from gold rushes? The money is not in them thar hills—it’s in the pickaxes. Only a small percentage of gold miners may hit the mother lode and strike it rich. But every single one of them, failed or successful, needs supplies like pickaxes to prospect.
Similarly, many internet startups did not even get to launch, let alone survive beyond the tech bubble of the early 2000s. See dotcom bubble Webvan as one example we describe in The Titanic Effect. But the suppliers of the enabling products and technologies - think connectors, infrastructure, smartphones, virtual storage (the cloud) for the internet, or transaction platforms for the gig economy - are the backbone for every startup in these areas, failed or flying. Airbnb, Uber and Lyft don’t own properties or drive cars, but have made a killing off homestays and the gig economy.
So founders—what tech trends are transforming markets you have access to and insight about? What underlying technology, process, or product will innovators in this space require? Find the pickaxe in the next gold rush and ride the wave to success!
Want a “pickaxe” to assess how your startup is doing? Download the Iceberg Index checklist.