The Power of Making Connections

In 1897, something unprecedented was unfolding. Here’s an account of it from the National Park Service website belonging to the US Department of the Interior:

On July 17th, 1897, the steamship Portland docked in Seattle from St Michael, Alaska, carrying 68 prospectors and what newspapers said was “a ton of gold.” Two days earlier a similarly laden ship had arrived in San Francisco from Alaska. What had been just a few hundred prospectors sailing from Seattle each week, soon turned into a stampede of thousands. Newspapers spread word that a great quantity of gold had been found along a remote river in what is today the Yukon Territory of Canada. The Klondike Gold Rush had begun.

Seattle merchants quickly exploited their port status. Advertisements far and wide declared Seattle as the “Gateway to the Gold Fields” — the place where all one’s Klondike needs, from food and warm clothing to tents and transportation-could easily be fulfilled. As a result, some 30,000 to 40,000 of the estimated 70,000 stampeders, who outfitted to go to the Klondike, bought their “ton of provisions” in Seattle. The city prospered.

This is my version of the same phenomenon, with a tip of the hat to the podcasters of Product, Explained for first spotting it. The one I describe below happened more than a century after the gold rush. It is also better known.

2004 saw the birth of Shopify. Tobias Lütke wanted to sell snowboarding gear online. Off-the-shelf solutions at that time, like Yahoo! Stores, were not very accommodating of his ambition. Tobias was not happy. Over the next couple of years he and Scott Lake, Canadians both, built what they wanted themselves: an e-commerce tool that allowed them to set up shop online. Then they made the tool available to other merchants like them. Gradually, they moved from providing merchants tools to build their own site to offering them a platform to run their business online. When Shopify vertically integrated payments, analytics, fulfilment into an ecosystem available as a subscription, it made it possible for anyone to become an entrepreneur. Just like the denizens of Seattle enabled anyone to hunt for gold by providing them with food, shelter, and transportation, Shopify allowed anyone to harbor their dream of running their own business.

Making connections across time

Humans mimic successful strategies, consciously or not, all the time.

Think of what is common to the scientific process of phased clinical trials en route to a vaccine or a drug AND the product development process of making a prototype and testing it with beta testers before launch. Both enable us to avoid the risk of investing big in a product before it proves its value. Both involve shooting bullets before firing cannonballs.

Think science-fiction writing and product design — both are driven by a common urge to articulate a vision for the future by translating an idea from the head to something tangible.

Think brokers and two-sided marketplaces — both matchmakers.

In each pair of phenomena, the same core concepts mimetically appear again in a different time. These concepts are so relatable we can label those who apply them successfully.

The Dream Makers: These provide tools to make your dreams come true. They don’t build things themselves so much as they make it possible for others to build things of value. They prosper by letting others dream. The Klondike Gold Rush in 1897, Shopify since 2004.

The ‘Will You Try Our Beta’ Brigade: The ones with an idea for something new that they want to vet with utility tests before they build it big.

The Designers: These make wonderfully intricate and accurate models of things that otherwise only exist in people’s heads and/or have few reference points. Nineteen Eighty-Four, arguably the best-known dystopian work, was first published in 1949. The first iPhone was launched in 2007. Both were embodiments of something deep in our recesses.

The Matchmakers: These are probably the most familiar of the lot. Human beings have thrived on social cooperation and nothing realizes that goal better than matchmaking does. Today we get our softwares and platforms to mimic what we have perfected in life as humans.

When we see a Shopify-powered e-commerce rush and the Seattle gold rush in the same frame, we expand our field of vision and make a connection across time. The ability to do so is invaluable in business and in life. It enables us to look at history and benefit from others’ folly and ingenuity.

Making connections across space

Looking back is not the only way to spot patterns. Looking around helps as well. The same lesson can manifest not just across time but also across space.

In her book Thinking in Bets, Annie Duke, ex-poker professional, says: “Every hand (and therefore every decision) has immediate financial consequences. In a tournament or a high-stakes game, each decision can be worth more than the cost of an average three-bedroom house, and players have to make those decisions more quickly than we decide what to order in a restaurant.” Today Annie makes her living teaching not poker players but CEOs and business owners about decision strategy. She spotted and leveraged on what is common to a successful poker player and a successful CEO: decision making.

If you are raising a child and bootstrapping a startup you’re playing the same game at home and work. You have little idea of what it takes but you cannot excuse yourself from anything. You cannot take time off and that forces you to manage your time better. If you do well in one vocation, the other will benefit as well because you will most likely apply lessons learnt from one to the other.

Conclusion

When we say Dream making is big business or parenting is entrepreneurship, we are hinting at a fundamental concept connecting different things. In doing so, we have simplified for ourselves and for others the way the world works. Once we recognize a fundamental truth, we can then transport it and apply it in entirely new surroundings with unprecedented success.

Not everyone comes out a king from a gold rush. Yet, each one needs to believe they can be king one day, or they just wouldn’t try. The smart bet then would be on providing services that reinforce this belief. If you understand what dream making is about, you will also notice that cloud computing is nothing but that. What AWS and Microsoft offer to digital businesses (incidentally from Seattle!) are the modern-day pick-and-shovel equivalent of what happened in 1897.

So then, what connections can you see?

The second part of this series will talk about how we can learn to make connections.

Thanks to Atul Sinha for reviewing drafts of this piece.

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