Sell the shovels
In a gold rush, work out who sells the shovels
Most of the money in the AI boom is being made by companies that make no AI at all. The pattern is 170 years old. Here is how to find your place in it.
In 1853 a German immigrant in San Francisco named Levi Strauss was selling cloth and supplies to men heading for the goldfields. Most of those men found little gold. Levi Strauss did very well, and the company with his name still sells trousers.
The lesson has been repeated so often it has become a cliché. In a gold rush, sell shovels.
I think it is worth saying again, because we are in one.
I wrote in February about the enormous sums going into AI data centres, and in May about the electricity they need. Here is where that money actually lands.
It lands with the chip maker whose products sit in every one of those sheds. It lands with the companies that make the memory inside the servers, where prices have risen because the sheds buy everything made. It lands with builders, electricians and cooling engineers. With the firms that make transformers and cables. With the landowners near a substation and the lawyers who write the power contracts.
Meanwhile, the companies racing to build the AI itself are spending far more than they earn from it, and they say so in their own reports.
So the question for a small business is simple. Where are you standing in this rush? There are three places.
You can be the miner. Build an AI product and hope it strikes. High reward, high risk, crowded field.
You can be the customer of the miner. Use the tools to run a better bakery, law firm or logistics company. Low cost, steady gain. Most businesses belong here, and I think it is the sensible place.
Or you can sell shovels. Not literally. But every business near the rush needs something. Training for staff who are suddenly expected to use AI. Clean data, because the models are only as good as what you feed them. Clear writing, because an AI answer engine will only name a business it can understand. Electrical work, because every office is adding load.
I run a marketing agency. I am squarely a shovel seller. Clients need their websites rewritten so the AI engines can read them. They need content produced faster. They need their processes written down so agents can follow them. None of that is AI. All of it exists because of AI.
Levi Strauss never went to the goldfields. He stayed in town and watched who walked past his shop. It is the best piece of strategy advice I know, and it is free.
