"I held it aloft and exclaimed, 'gold, boys, gold!'"

James W. Marshall discovered gold on the property of Johann August Sutter near Coloma, California, on January 24, 1848. A builder, Marshall was overseeing construction of a sawmill on the American River for General Sutter.

"Just when we had got partly to work…Mr. Marshall with his old wool hat in hand…exclaimed, 'Boys, I have got her now,'" James S. Brown recalled:

I…jumped from the pit and stepped to him, and on looking in his hat discovered say ten or twelve pieces of small scales of what proved to be gold. I picked up the largest piece, worth about fifty cents, and tested it with my teeth, and as it did not give, I held it aloft and exclaimed, "gold, boys, gold!" At that they all dropped their tools and gathered around.

What most people don't realize is that General Sutter was bankrupted by the gold rush that ensued. He had been forced to flee his creditors in Switzerland in 1833, at the age of 30. Ten years later, in California, he was the ruler of the Sacramento Valley, founder of Neuve Helvetia, a small sovereign. After the discovery of gold on his land he lost everything. Gold was his ruin. He never recovered from the loss of his property.

He's buried here in Lancaster County, just down the road a piece, in Lititz. I went out to his grave last year, and talked to him. He didn't have much to say in return.

That's a long way to fall. After 1833, he drifted through New York, Oregon, Vancouver, and Hawaii, ending up in California - El Dorado! - in 1839. Within a few days of arriving, he presented Governor Alvarado with a bold plan for founding a colony in the unexplored north, on the southern bank of the American River, where it joins with the Sacramento River. The governor granted him a large tract, where he planted orchards and vineyards, planted grain, and began extensive irrigation projects. In 1841, the governor visited Neuve Helvetio - Spanish for "New Switzerland" - and gave him citizenship. The success of his enterprise was phenomenal. Sutter was the richest and most respected of all Californios.

Who says there are no second acts? But there may be no third acts. Thousands overran his lands, destroying fields, harvest, and buildings. "Even my millstones were stolen", he later told Bancroft. Trying to protect his property wasn't just hopeless; it was dangerous. He fled.

In many ways, the internet is a gold rush as well. It's not the only modern gold rush, though.

In 1948, Richard Knerr and Arthur "Spud" Melin founded the Wham-O company, manufacturing a slingshot for falconry. No, they weren't trying to kill the falcons by shooting at them; they were slinging meat in the air to the falcons. Falconry being a niche interest, they had limited success.

A decade later, though, they trademarked the name Hula-Hoop and were able to sell 25 million of the $1.98 circles of Marlex within four months. It nearly bankrupted them. They kept making bigger and bigger batches of Hula Hoops to meet demand - but by the time the weather turned cold, the fad had died. The market collapsed, leaving them with a huge inventory of unsold Hula Hoops and a big pile of bills. Wham-O only survived by exporting their huge stocks to other countries.

Bowmar, of Fort Wayne, invented the hand-held calculator in 1971. The hand-held four-function "Bowmar Brain" sold for about $250 - and was a rip-roaring success. Bowmar was an LED display manufacturer, and turned to Texas Instruments to manufacture their logic chip. They borrowed heavily to ramp up production to meet demand - and ended up in bankruptcy when prices fell rapidly. The company survived - they merged with Electronic Designs to form White Electronic Designs - but only when they won a lawsuit against Texas Instruments.

Royal Crown Cola created the diet cola gold rush with Diet Rite Cola. It's invisible now. Reynolds International Pen started the ball pen gold rush. I'm not sure they even exist any more. Osborne started the gold rush for portable computers. When Adam Osborne died, he had become an obscure figure.

Forrest Gump was named for Nathan Bedford Forrest. The movie treats him as a joke, a General who lost a war, the founder of the KKK, but to military historians, Forrest was the most innovative and successful general in the American Civil War. Paramount in his strategy was to "get there fustest with the mostest", even if it meant pushing his horses at a killing pace, which he did more than once.

That was the strategy of many internet companies in the 1990s. Get Big Fast was the idea, and worry about how you were going to make your money once you owned the market. Amazon was named for the world's largest river, and the strategy worked for them. Netscape was originally named Mozilla, because they intended to be the 600-pound gorilla who conquered Mosaic, the original graphic web browser. Where does a 600-pound gorilla sleep, goes the joke. Anywhere he wants to!

The problem, though, is that a 600-pound gorilla has a big appetite. If you owe the bank a large amount that you don't have, you don't sleep well. If you owe the bank an immense ammount that you don't have, the banker doesn't sleep well.

The second internet gold rush is on, right now. It's based on "social networking". With flagging viewer numbers and viewers TiVOing through ads, advertisers were reluctant to spend money on television, and some of that money went to sites like MySpace, and Facebook, but the number of sites has ballooned, and the number of ad dollars has not. All of a sudden, websites are starting to shutter their doors.

Meanwhile, there are a lot of companies that made money online right through the first "dot-bomb" collapse, and they will continue to make money right through this one.

You can't lose money that's not at risk. This seems so fundamental, that it's hard to believe anyone over the age of 12 misses it, but there's apparently only so much blood in the human body, and when people smell profits, all the blood rushes to the nose, and there's none left for the brain.

So if you're not getting yourself out on a limb, and sawing it off, what is the key? You need to rake it in faster than you are spending it, and do that without selling off your assets.

That's not the only way to succeed, of course. If you plant walnut trees for a harvest of veneer, it may be 60 or 80 years before the crop is ready, and during those decades, those trees need to be cared for, and taxes need to be paid on the land. According to my back-of-an-envelope calculations, a veneer farm should be rather profitable. The problem is that if you're 40 when you plant the trees, you'll need to borrow heavily to get started, and you'll be dead before the trees are ready to harvest. You can buy a grove that's already established and bring it to harvest, or you can plan on selling your appreciated grove, and letting someone else nurse the crop the rest of the way.

So offer something people will pay for. It can be a product. It can be a service you perform. It can be a service your site performs.

I visit a site regularly called istockphoto. They've got a wonderful business. I can get a royalty-free image there for a buck. Great quality images, and I don't have to worry about someone claiming I'm violating copyright, as is likely to happen if I steal images, using Google's image search.

I've known many who've tried to make money from their photography. They sell framed artwork at flea markets, in restaurants, in gift shops. The problem is, they spend $12 on a frame, $5 on photolab, and they have a 50/50 chance, at best, of selling it within a year. If they get $40, and the retailer gets half that money, that's not very profitable.

They can do better producing a calendar. It costs them $1,000 to produce 1000 calendars, and since $8 is a lot cheaper than $40, they sell 400 of them. The retailer gets half that $3,200, so they get $1,600 for their images. But the market for calendars is pretty competitive, and they might only sell 20 of them. That's a $920 loss.

Those photographers can upload their photos to istockphoto, though. There's no investment in frames or lab costs, or in printing calendars that quickly lose value once the year is over. If they sell 20 copies of an image, that's only $20 income, and part of it goes to the site - but that's substantially better than the obvious alternatives.

The photographer is happy, I'm happy, and I hope the folks at istockphoto are happy as well. They had to solve some basic problems to make it work. For instance, it costs almost $1 to collect $1. They sell me 10 pictures for $10 instead, which greatly increases their income. It'd be even more profitable to sell me 50 pictures for $50, but I probably wouldn't have gone for that deal initially.

Some of my hosting customers are musicians. They offer downloads of their music. The going rate, at iTunes and others, is $1. The average customer, though might not want 10 songs by the same unknown artist. Their answer? They give away the downloads for free. They make their money by performing at wedding receptions, at festivals, etc., and they view the downloads as advertising for their live performances.

"Hey, that's catchy music you're playing. Who is that?"

"That's the group that I heard at the festival last week. They're great aren't they?"

"You bet. Hey, I wonder how expensive they are. We need entertainment for the office picnic this summer."

"Never doubt," Margaret Mead said, "that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."

Before the industrial revolution, few people had jobs. They were craftsmen, artisans, farmers, or merchants, self-employed in their life's work. Usually, they worked in their homes. As a result of being around all day, fathers played a bigger role in their children's lives.

The internet is changing the world. Once again, more and more people are working from their homes. It may not necessarily mean more income for the IRS to tax, but that doesn't mean we aren't wealthier. Our children will benefit. And you can be among the first to benefit from the change.

General Sutter tried to keep Mr. Marshall's discovery a secret. California isn't called "The Golden State" because of the minerals in the ground, but because of the vegetation. This golden dragonfly - photographed at Sutter's Creek - reminds us that all that is gold does not necessarily glitter, even if it is precious.