15. The Nabataeans - The Last Days of Petra

“When Roman Emperor Augustus sent Prefect Aelius Gallus to explore southern Arabia and establish direct trade routes to cut out the Nabataean middlemen, the Nabataeans offered to help. They sent a guide named Sylaeus, a cunning politician. Sylaeus faced an unenviable task: appear to cooperate so as not to arouse Rome's anger, but ensure the expedition failed.”— Strabo

Strategy & Decision Making · Psychology & Behavior · Leadership & Management

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Cooperation as cover for sabotage

“When Antigonus' son Demetrius returned with 4,000 foot soldiers and 4,000 cavalry, the Nabataeans had placed watchmen on hills who spotted the advancing Greeks and lit warning beacons. The people scattered their flocks and goods, taking everything to a mountain stronghold. When Demetrius approached, someone called down: 'With what desire or under what compulsion do you war against us who live in the desert and in a land that has neither water, nor grain, nor wine?”— Nabataean spokesman

Strategy & Decision Making · Psychology & Behavior

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Made siege impossible then offered payment

“They built a system of secret hidden reservoirs across the desert, meaning only they could take advantage of them, ensuring no competitors could move in on their lucrative trade routes. They prepared subterranean reservoirs lined with stucco, with very small openings which they made even with the rest of the ground, leaving signs known to themselves but unrecognizable by others. This meant they could flee through waterless places without needing continuous water supply.”— Diodorus of Sicily

Strategy & Decision Making · Operations & Execution

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Secret infrastructure known only to them

“The Nabataeans were able to charge a tax equal to a full quarter of all the goods that passed through their lands. They didn't own the goods, didn't manufacture them, but controlled the chokepoint through which they flowed. Their control of scarce water resources and secret desert reservoirs meant competitors couldn't move in on their lucrative trade routes, and in times of war gave them advantage against enemies.”

Strategy & Decision Making · Operations & Execution · Economics & Markets

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25% tax on all goods without ownership

“Diodorus records that the Nabataeans followed the custom of living in the open air and refusing to plant grain, set out fruit-bearing trees, use wine, or construct houses. Death was the penalty for anyone acting contrary to this. They believed those who possess these things are, in order to retain use of them, easily compelled by the powerful to do their bidding. This was their strategy for preserving liberty.”— Diodorus of Sicily

Strategy & Decision Making · Philosophy & Reasoning

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Ownership creates vulnerability

“The Nabataeans' unique survival strategy was not built out of conquest and death but out of the trickle of fresh water from desert rocks and the endless clinking of silver pieces moving across the desert from hand to hand. They deployed both their great strengths: strategic control of water secreted in hidden reservoirs meant protracted siege was impossible, and their enormous wealth meant they could simply pay off enemies.”

Strategy & Decision Making · Economics & Markets

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Defense through structure and capital

“To farm in the desert, the Nabataeans contoured large areas into shallow funnels sloping to a single point where they planted one fruit tree. When rains came, water drained to this central point and the tree survived. To plant an orchard this way requires about 50 times the normal space, but it was effective. And out in the desert, one thing they had no shortage of was space.”

Operations & Execution · Strategy & Decision Making

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50x space for water efficiency

“Early Christians were keen to emphasize difference from pagan temples, so they did not use incense in ceremonies. As pagan temples shut down, demand for incense crashed and prices fell. This cultural shift came as Egyptian ports began to supersede land-based trade routes. Romans began extracting incense by sea to Egypt rather than arduous desert roads. The very thing Nabataeans feared came to pass: Petra's importance as a trading hub began to fall.”

Strategy & Decision Making · Economics & Markets · Culture & Society

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Strength becomes weakness

“The cultivation of frankincense and myrrh trees was veiled in secrecy, giving rise to outlandish myths. Herodotus recorded that the trees were guarded by winged serpents, small in size and of various colors, which could only be driven away by the smoke of storax. Whether this was simple legend or purposeful disinformation spread by Arab farmers to scare others away from their lucrative industry, we will never know. If the latter was the case, it seems to have worked.”

Strategy & Decision Making · Psychology & Behavior

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Mythology as competitive moat

“The Nabataeans built complex water control systems, cutting aqueducts into sandstone mountains and building underground plumbing from terracotta pipes to divert several springs into the city. They lined natural pools with hard stucco plaster so water wouldn't drain through porous sandstone. They built large dams across valleys to gather rainwater into reservoirs.”

Operations & Execution · Technology & Engineering · Strategy & Decision Making

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Water control enabled 20K population

“The Nabataeans had no fixed towns or cities initially, moving restlessly with their herds like the desert sands. They survived by raising animals and hunting, but discovered it was more profitable not to rob trade caravans but to offer them protection to pass through their territory for a price. From there, it was only one small step to organizing the caravans themselves.”

Strategy & Decision Making · Business & Entrepreneurship · Economics & Markets

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From piracy to protection to organization

“Since ancient times, people noticed the connection between bad smells and illness and death. They considered bad smells evidence of evil spirits waiting to cause disease. A large part of a temple's responsibility was creating a space where these putrid smells and the evil associated with them were not allowed entry. This use of incense to create holy space was truly ancient. From this connection to the divine, incense became integral to royalty. It was used in anointing rituals and embalming.”

Psychology & Behavior · Culture & Society · Economics & Markets

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Sensory markers construct authority

“On May 18, 363 AD, an earthquake shook the region. More than half of Petra was destroyed. One house excavated by archaeologists was reduced to rubble. Beneath the collapsed roof were everyday items: lamps, shattered ceramics, spindles, coins, even a copper pot. Near the door, a smashed pot contained 85 small-denomination copper coins kept for everyday expenses.”

Operations & Execution · Strategy & Decision Making

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Infrastructure collapse means system collapse

“The Nabataeans were not a warrior people, and it seems they preferred, wherever possible, not to fight. But when Antigonus sent General Athenaeus with 4,000 foot soldiers and 600 cavalry to raid Petra at night, they responded decisively. Only hours after the Greeks left with prisoners and 14 tonnes of silver, 8,000 Nabataean camel riders gathered and caught up to the Greek camp by nightfall. They attacked under cover of darkness and slaughtered nearly every Greek soldier.”

Strategy & Decision Making · Leadership & Management

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Overwhelming response then diplomatic reset

“Rome was an enormous consumer of incense. At the height of trade, over a million kilograms of frankincense was imported into the Roman Empire annually. Considering the 25% tax the Nabataeans charged, Romans began considering ways of cutting out the middleman and taking charge of the incense trade themselves. But when direct control proved impossible, Rome eventually just absorbed Nabataea entirely.”

Strategy & Decision Making · Economics & Markets

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Customer becomes competitor

“Petra sat at the center of a spider's web of trade routes. To the east, desert roads led to Persian Gulf ports where spices from East Asia flowed. From the south, frankincense and myrrh poured in from Yemen and Oman. Petra connected the Red Sea port with the Mediterranean, linking Eastern Africa with Europe. Roads to the north led to Damascus and Antioch. Roads west led to Egypt.”

Strategy & Decision Making · Economics & Markets

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Hub position enables extraction

“The Nabataeans followed the custom of having few slaves, being served instead by their kinsfolk, by one another, or by themselves, so that the custom extended even to their kings. They held many drinking bouts in magnificent style, but no one drank more than 11 cupfuls, each time using a different golden cup. The king was so democratic that, in addition to serving himself, he sometimes even served the rest himself in his turn.”— Strabo

Leadership & Management · Culture & Society

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King served others in his turn