selling pickaxes during a gold rush

The Launch Pad: Inside Y Combinator, Silicon Valley's Most Exclusive School for Startups
by Randall Stross
Published 4 Sep 2013

Richard Florida, “The Spread of Start-Up America and the Rise of the High-Tech South,” The Atlantic, October 2011, www.theatlantic.com/technology/archive/2011/10/the-spread-of-start-up-america-and-the-rise-of-the-high-tech-south/246916/. 16. Chris Dixon, “Selling Pickaxes During a Gold Rush,” Chris Dixon blog, February 5, 2011, http://cdixon.org/2011/02/05/selling-pickaxes-during-a-gold-rush/. 17. Robin Wauters, “Salesforce.com Buys Heroku for $212 Million in Cash,” TC, December 8, 2010, http://techcrunch.com/2010/12/08/breaking-salesforce-buys-heroku-for-212-million-in-cash/. Heroku had raised only $13 million in capital prior to its sale, so its investors enjoyed outstanding returns in a very short period of time.

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Perhaps they could build a sideline business out of it and make a little money. They named their company MongoHQ, which left no question what line of software they were in. They worked on MongoHQ in the evenings and the wee hours of the morning while holding down day jobs. They took heart from “Selling Pickaxes During a Gold Rush,” a blog post published a couple of months earlier, in February, by Chris Dixon, a seed investor who was based in New York City but well known and respected in Silicon Valley.16 During the California gold rush, some of the most successful businesspeople—like Levi Strauss—didn’t mine for gold themselves but did well selling supplies to those who did.

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Dixon mentioned that Y Combinator’s most successful “exit” to date was Heroku, the company that sold cloud-related services to other software companies, the digital era’s equivalent of selling pickaxes to miners. It was sold to Salesforce.com less than three years after its birth at YC for more than $200 million cash.17 The two MongoHQ founders cited the Dixon post in their YC application and declared, “We are selling pickaxes during a gold rush.” In the section where they were asked to explain how the founders had met and how long they had known each other, they gave answers that would be far more likely to come from older founders than younger ones: they had known each other ten years; had worked together for much of that time; and could write, “We have often been referred to by others as work wives, although we argue about who is the wife in the arrangement. :)” When they applied, they could report that MongoHQ had 5,100 accounts and about $5,500 of recurring monthly revenue.

Abolish Silicon Valley: How to Liberate Technology From Capitalism
by Wendy Liu
Published 22 Mar 2020

Later that night, after we’d all retreated into our hotel rooms, we each received a CC of an email from Nick with the subject “You guys messed up!”. The email, sent to Paul Graham, asserted that our demographic inference engine was literally the best in the world at turning social data into insights, and that our business model of providing data to advertising platforms was equivalent to selling shovels during a gold rush. Over a stale continental breakfast the next morning, we made fun of Nick for his hot-headed bravado, but I was secretly impressed. If he cared that much, maybe we could actually pull this off. By the time we got back to Montreal and its streets lined with slumbering mounds of brown snow, we decided that we didn’t need Y Combinator’s mark of validation after all.

Super Pumped: The Battle for Uber
by Mike Isaac
Published 2 Sep 2019

They encouraged average investors to sink their savings into internet startups, which they described as strong investments with good, long-term growth potential. An entire ecosystem of companies that catered to dot-com companies sprung up around the Valley (along with the popularity of the shopworn San Francisco adage that it’s better to sell shovels during a gold rush than to actually prospect for gold). For a starting price of $25,000, employees at Startups.com would help new companies find an office, pick their furniture, even figure out their payroll software. In response to this frothing market, and worried about inflation, the Fed raised interest rates several times in quick succession in 1999 and 2000, closing the faucet on free-flowing capital.

The Bitcoin Guidebook: How to Obtain, Invest, and Spend the World's First Decentralized Cryptocurrency
by Ian Demartino
Published 2 Feb 2016

5 Day Weekend: Freedom to Make Your Life and Work Rich With Purpose
by Nik Halik and Garrett B. Gunderson
Published 5 Mar 2018

Can you influence the outcome, or are you dependent on various factors beyond your control? Geo-lifestyle optimization. You must be able to invest while maintaining a “travelpreneur” lifestyle. In other words, can you make the investment from anywhere in the world? I teach people that the number-one secret to riches is to sell the pans, picks, and shovels during a gold rush. Always service speculation and exorbitant demand. While others are frantically speculating, you should operate from certainty and abundance. Prospectors in a gold rush are speculating with only the hope of making money. Investors know exactly how they’re making money, and how to do it whether the market goes up or down.

Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History
by Liam Vaughan
Published 11 May 2020

How Money Became Dangerous
by Christopher Varelas
Published 15 Oct 2019

Live Work Work Work Die: A Journey Into the Savage Heart of Silicon Valley
by Corey Pein
Published 23 Apr 2018