The Tech Boom: Another Gold Rush

Lessons from History: The Importance of Building an Enduring Business

Siasto was created to make collaboration uncomplicated and change the way teams work. Understanding the past is crucial for innovation to continue and the current tech boom emanating from Northern California is a case in point, located in a region long familiar with the nuances of excess that accompany wealth creation, often to the detriment of abiding substance.

In the appropriately named El Dorado county and along the winding Route 49 lies an eerie row of crumbling single story edifices spread out amongst the forest shade. Often overlooked, quiet Coloma nestled in the Sierra Nevada foothills was the place where, in 1848, a young James Marshall first spotted an auric twinkle in the river waters next to Sutter’s sawmill and set in motion events that would see California change from a wild backwater with less than 8 thousand immigrants to a cosmopolitan state with almost 38 million residents today.

The disintegrating cabins and emptiness lie testament to the psyche it spawned in Northern California - the original ‘quick buck’ story. Ghost towns like these are all that many of the infamous ‘49ers would leave behind, most of them chancers with little intent to build homes and long-term businesses. Charles Christian Nahl’s ‘Sunday Morning in the Mines’, hanging in the majestic old Crocker Mansion in Sacramento, sums it up elegantly - depicting morally corrupt miners gambling, racing horses and squandering their gold.

Over 160 years later, young men are still rushing into the San Francisco ports with a thirst about them and gold in their eyes. Equipped with their contemporary tools of code, MBAs and online hustle, many are still scampering into the valley eager to strike it lucky and make their curt exits. Quotidien squeals of ‘Eureka!’ echo around Silicon Valley with claims of new rich veins of digital gold - one recent discovery, the ‘Snapchat’ Lode, even managed to raise the eyebrows of national satire show The Colbert Report concerning its validity.

40 miles away in Sacramento, hidden in it’s leafy midtown, stands Fort Sutter. The self proclaimed Captain Johann ‘John’ Sutter, a pioneering Swiss, perpetually on the run from the bailiff and his debts, eventually came to California to build its first empire. On the verdant and fertile plains of the Sacramento valley, the honest and amiable Swiss was intent to build a business to last - through agriculture and employment - and constructed his fort on the land he intended to plough and welcomed new immigrants.

Decades later, the old man would pass away penniless after he watched the world rush in on his hard earned 50 thousand acres he nostalgically named ‘New Helvetia’ after gold was discovered at his sawmill up in Coloma. All that remains of the epicenter of his intentions is a lonely adobe building and fort, the silence occasionally broken by a fugitive kindergartener loose of their field trip shackles, sticky Fruit Roll Up in their grasp. One can’t help but feel sorry for Mr Sutter as the gold rush locusts set in, leaving him in his final years to sigh:

If he were alive today, Mr Sutter’s aforementioned business acumen may not have seen him through the first round of pitches in Menlo Park. Perhaps the VCs would advise him, in vain, to ditch his pious efforts to build a long-lasting and traditional agribusiness, and encourage him to 'disrupt' the ‘broken’ accommodation industry instead and build a copycat ‘Airbnb’ of tents and cabins on his land and rebrand as ‘Goldbnb’. He would refuse on principle and walk out empty handed but pride intact.

In contrast, Samuel Brannan, one of the first to see that Sutter’s men were using gold to pay for goods, would have certainly ‘pivoted’ from his blog at the California Star and into e-tailing mining gear, cutting out all those treacherous middlemen while also ensuring his pickaxes were manufactured via a carbon neutral process. He would go on to become California’s first unofficial millionaire.

It seems little has changed from the gluttonous days of the 1850s. Last month, an enterprising young woman by the name of ‘Karen’ revealed the fruits of her nocturnal labor to CNN - to the tune of $1m. Fueled by the sudden riches of young tech men across Northern California, prostitution is booming. By all accounts, these more traditional entrepreneurs are even harnessing the power of social media and mobile payment startups such as Square to their advantage. A census of Northern California in 1850 shows the female population was 8 percent of the total and dropped below 2 percent in mining areas. Prostitution was lucrative business then and the arrival of a woman in one mining town even prompted street celebrations complete with brass band.

I would like to think John Sutter would be proud of startups genuinely trying to improve collaboration with enduring businesses such as Siasto, Github and Evernote. He would, at least, tell us all to ‘beware the swindlers’.