The Internet is so incredible it is hard to get the right analogy for it. A lot of how we decide how we react to things and what to expect about the future depends on how we categorize them. The tempting analogy for the boom/bust of the Internet is The Gold Rush.

How The Internet Rush and The Gold Rush were similar: Both were very real. Huge boom. Huge bust. Lots of hype. So many people left what they were doing to join both The Gold Rush and The Internet Rush.

In The Gold Rush people literally jumped ship. San Francisco harbor was clogged with 600 abandoned ships. Entrepreneurs turned the ships into hotels.

They had a bad burn rate in The Gold Rush. They loaded up their mules and horses and didn’t plan right. They didn’t know how far they had to go. It was so bad most of the horses died before they could get where they were going.

The same thing happened in The Internet Rush. Very bad burn rate calculations. OurBeginning.com spent $3.5 million on an ad for the Super Bowl when they had $1 million in revenue.

Where the analogy starts to diverge: In a gold rush when it is over it is over.

There is a much better analogy that allows you to be incredibly optimistic and that analogy is the electric industry. There are a lot of similarities between the Internet and the electric industry.

They are both thin, horizontal, enabling layers that go across lots of different industries. It is not a specific thing. They both can be used as incredible means of transmitting power. They both are an incredible means of communicating information flows.

The part of the electric revolution I want to focus on is the golden age of appliances. The killer app that got the world ready for appliances was the light bulb. They weren’t thinking about appliances when they wired the world. They weren’t putting electricity into the home. They were putting lighting into the home.

Appliances benefited from the heavy infrastructure that was laid down by the electric revolution. The Internet got to stand on top of all the heavy infrastructure that was put in place because of the long distance telephone network.

[At the beginning of the golden age of appliances] They hadn't yet invented the off switch. That came much later. They hadn’t invented the electrical outlet either.

If you think of the Internet in terms of The Gold Rush you would be pretty depressed right now. The last nugget of gold would be gone. With innovation there isn’t a last nugget. Every new thing creates two new questions and two new opportunities.

We are at the 1908 Hurley Washing Machine stage of the Internet. That is the level of primitiveness of where we are.

If you really do believe it is the very very beginning then you are incredibly optimistic. I do think there is more innovation ahead of us than there is behind us. We are very very early.

Full video here.

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Jeff Bezos on The Electricity Metaphor for the Web's Future

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