One of the books I’m reading at the moment is Age of Gold, a history of the California Gold Rush and the journeys people took to reach the opportunity of a lifetime.
One of the lenses I use to pick out new books to read is whether I think there might be some generalizable lessons or patterns I can use to fill in my latticework of mental models about the world. In this case, I was looking for the similarities between the phenomenon that drew tens of thousands of people all over the world to the Bay Area 170 years ago, and the cycles of hype and hard work that bring people to Silicon Valley and generate new ways to be productive or entertain ourselves.
On that front, there was a single phrase that’s stuck out in my mind from the earlier chapters of the book: “seeing the elephant.” Drawing from the 18th century experience of going to see the circus when it happened be in your area — at a time devoid of monthly super hero escapades on the big screen, or moving images of anything for that matter — the phrase referenced the excitement and fear of missing out that came with such opportunities. “We’re going to see the elephant — you’re not going to miss it, are you?”
This phrase took on a range of meanings during the California Gold Rush. In the broadest sense, it referred to getting to see the spectacle of seemingly endless riches getting pulled from the land and rivers of California with relative ease — at a time when cents a day could be expected as compensation for labor, the early days of the rush generated stories of “ordinary” people who were returning from their expeditions to California carrying $5,000 to $15,000 of gold extracted using unskilled manual labor and supplies bought up front with perhaps $50 of capital.
As the gold rush progressed, the phrase took on other meanings as well, often having to do with the disappointment of reality setting in during the long overland journey to California or the realization that even the “easy” gains required patience and a tolerance for sustained, back-breaking labor. Large rock formations that were used as landmarks during the journey could deceive travelers into thinking they were miles closer than they really were due to their sheer scale, and those who found themselves taking two or three times as long on their detours to visit them referred to their mistaken estimates and the resulting frustration to having seen the elephant.
The draw of easy riches, things being more challenging and taking way longer than initially expected — see any similarities to what happens in Silicon Valley?
Attending a screening of the new HBO documentary on Theranos got me thinking about the genre of startups that, through a combination of storytelling and clever technical achievement, get customers, investors, and potential hires excited to see the elephant.
Typically, the companies that are able to harness this powerful psychic hack have some material product that is somehow already a cultural touchstone ahead of actually existing in the real world. That is to say: we’ve already seen it in science fiction.
S3XY electric cars that make your V8 Biturbo Mercedes look slow and as bad for the environment as the truck guy who rolls coal. Augmented reality headsets that will eventually disappear and blend your consciousness with the instant recall and guided input of computers and software interfaces. Rockets — to the Mars colony!
The sheer spectacle of the vision provides cover for the years of work needed to develop a product that delivers on it and then bring it to market in a meaningful way. Because this approach seems to require something tangible for the enraptured to fantasize about, you’re usually talking about shipping some kind of unique hardware or otherwise acting in meat space versus doing something purely digital. And since building a hardware company or the use of lots of high skill/high headcount labor is incredibly expensive, the approach ends up requiring a periodic step-function increase in the scale of the vision to keep spinning up the flywheel of customers, investors, and talent. First you pitch the electric sports car, then the luxury sedan, then the car for everyone, then the distributed fleet.
Each iteration of this step function increase, you need to demonstrate enough progress against the last iteration’s vision to convince all three audiences that you’ll make the same or more progress during this cycle on the new vision. The new vision has to be more differentiated technologically, bringing new capabilities or reducing costs such that the assumed addressable market goes up by a lot. The gap between each vision’s potential and the last round’s progress can be explained by two factors: the challenge of living up to the goals you set for yourself explicitly or implicitly while fundraising/planning, and a “faking it” factor.
Elizabeth Holmes was clearly a genius storyteller with a natural gift for playing the game of getting people to want to see the elephant. Particularly impressive was that her grand vision was fairly abstract: cheaply gathering health information from people with minimal pain, and eventually using lots of longitudinal data to be able to recognize early signs of particular issues. She attached that vision to different tangible artifacts for different audiences: the small capsules of blood that implied you’d only need a pinch of blood that she famously posed with, and the desktop PC-sized Edison machines that made it feel natural to think you were witnessing a technological transition like that from mainframes to a computer on every desk.
What blew my mind watching the Theranos doc was that Holmes would have had an easier time of it by just doing the hard work of actually solving the problems in her way. Instead of filling her board with charmed older men, bringing on subject matter experts with extended networks of people capable of helping make progress on each turn of the vision-expansion cycle. Instead of imposing the constraints of the artifacts that entranced her sources of social and financial capital, listening to the employees who offered more realistic routes to delivering on the vision. She let the “faking it” factor expand a little bit with every turn of the crank.
Of course, it’s silly to imagine alternative histories where people have the exact same personality and upbringing but some reason act in radically different ways. It’s unclear whether Holmes ever wanted to deliver on her grand vision, or whether her long-term plan was simply to cynically using the signs associated with transformative companies to enrich herself while making just enough progress to keep the house of cards from falling apart.
Whether you’re a charming, narcissistic sociopath or a well-intentioned entrepreneur hoping to give yourself the best chances at success: if you ever happen to get people people excited to see the elephant, it will only work out in the long run if you pursue the grand vision for real. If there’s a “faking it” factor at play, the advantages that come from it should all be channeled into genuinely de-risking major problems. No one else will have it as easy as you will.
You can sustain the the allure of the elephant through disappointment and sacrifice, but there actually has to be gold in the hills.