I think “sell picks and shovels” is the wrong lesson for AI startups. The Gold Rush analogy is weaker than the Industrial Revolution. Gold is a single pile that runs out. Machines keep making everything cheaper. Far more people got rich using the new machines than building them.

What happened

I think “sell picks and shovels” is the wrong lesson for AI startups. The Gold Rush analogy is weaker than the Industrial Revolution. Gold is a single pile that runs out. Machines keep making everything cheaper. Far more people got rich using the new machines than building them.

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The story so far

Ethan Mollick challenged the advice that AI startups should “sell picks and shovels,” arguing that the Industrial Revolution offers a better analogy than the Gold Rush for thinking about AI businesses. In a post on X, Mollick contrasted gold, which he described as a finite resource, with machines that keep making goods cheaper. He argued that far more people became rich by using the new machines than by building them, making his case for startups that apply AI rather than supply its tools.