Hostages Strapped to the Tank: Coastal Commission Stories – Lesson 2

“Never attempt to win by force what can be won by deception.”
Niccolò Machiavelli, The Prince

For six and a half years I served as a public official on the California Coastal Commission.Commissoner Badge Since it’s been a year since I resigned, it’s time to tell a few stories about what I learned as a Coastal Commissioner.

Each and every month I learned something new about human nature, deception and greed.

Here’s Lesson 2: Hostages Strapped to the Tank. (see here for Lesson 1.)

Background
The California coast is a panorama of open farm fields and hundreds of miles of undeveloped land. Highway 1 (the Pacific Coast Highway) follows the coast for almost the entire length of the state. The kind of road you see in car ads and movies, it looks like it was built to be driven in a sports car with the top down. The almost 400 mile coast drive from Los Angeles to San Francisco is one of the road trips you need to do before you die. With 39 million people in the state, there’s no rational reason there aren’t condos, hotels, houses, shopping centers and freeways, wall-to-wall for most of the length of our state’s coast (instead of just in Southern California). shutterstock_54025939

In 1976 the state legislature passed the Coastal Act, creating the California Coastal Commission, which acts as California’s planning commission for all 1,100 miles of the California coast. The Coastal Act saved California from looking like the coast of New Jersey, giving us the most pristine and undeveloped coast in the country — with recreation and access for all.

To achieve this amazing accomplishment, the coastal zone has the strictest zoning and planning requirements in the country.

As a new commissioner I got a very quick education on what developers would do to bypass those requirements. My first lesson was farming for developers. The second lesson was learning that developers would strap hostages on the front of the tank to get a project approved.

How Do We Fix This?
The business model for real estate developers isn’t hard to understand: buy farms and/or ranches then build commercial buildings or houses and sell them off. They make money from the difference between the raw land and net profit on the houses or the commercial buildings. But there’s a lot that has to happen before developers can realize their profits. If they’re building homes, they need to get approvals to rezone and subdivide the property, bring in utilities (water, sewer, electricity, phone, internet), build infrastructure (roads, sidewalks, street lights, etc.), get approvals to build the units, etc. A lot of capital is at play.

At times developers building in the Coastal Zone know that their proposed project violates major provisions of the Coastal Act like building in Environmentally Sensitive Habitat Area (ESHA) or bulldozing Wetlands or attempting to rezone land reserved for farming or open space, blocking coastal views, busting the urban rural boundaries or building a project too large for the site, or lacking public services like insufficient water, or sewers. Some of these projects are such egregious violations of almost every part of city, county and coastal zoning that I wondered, “What on earth are they thinking? This will never be approved.” Part of my education as a commissioner was learning how developers took projects that appeared headed for instant denial and turned them into projects that had a good shot at an approval.

We’re Doing This For Our Community
I soon learned that developers love new soccer fields, new parks, new schools, homes for the disabled, and they generously offer these and other improvements to the local community as part of a package – approve this project and I’ll throw in this benefit.

When I first encountered this, I thought, “Wow what a great deal. The developers are generously helping the community by offering needed amenities and services that the community can’t afford.“

Boy was I dumb.

In these projects the developers calculate that if they add a component to the project that the local community really needs, wants, and most important – can get passionate about – community support might overwhelm local elected officials. So developers promise to build needed soccer fields to get the soccer parents supporting their project or offer to build a new building for the local Boys and Girls club or pay for a long needed school. Then they actively help the community organize an “independent” advocacy group to support and lobby for this project.

In all these cases, the developer’s goal is to move the scrutiny away from the specifics of their development to get all eyes focused on the benefit. To them it’s simply math – if they can’t get a project approved by itself, try throwing in a school or soccer field if it’s still profitable. They get the local community so focused on these extra benefits that no one objects to everything else about the project that’s damaging – not only to their own community but to the rest of 39 million people in the state who share their coast.

Developers calculate that in the face of overwhelming public support for their project, local elected officials will look at a roomful of supporters, remember that the attendees passionate about this project vote at election time, and approve a project in spite of its obvious violations of local and state zoning. However, while local projects in the Coastal Zone typically start by getting city or county approval, if someone appeals the project claiming it violates the Coastal Act, these projects invariably end up in front of the Coastal Commission. As a coastal commissioner, that’s when I got involved.

Our Coastal Commission staff would do a thorough analysis of the entire project (not just the tacked on benefit) and propose their recommendations to us. Then the theater would happen. Developers would bus in the local supporters to fill the Coastal Commission meeting with enthusiastic locals waving signs and passionately extolling the virtue of the soccer field on the bulldozed wetland or conveniently ignoring the wall-to-wall condos that would block coastal access for the other 39 million Californians or the freeway about to destroy a favored surfing spot. The developers hoped the momentum of community support would overwhelm the twelve Coastal Commissioners, six of whom were also local elected city or county officials.

After a while I realized that the worse the project, the more appealing the benefit a developer would offer.

Hostages Strapped to the Tank
I thought I had seen it all until one project came to the Commission on appeal that felt like the developers had strapped hostages onto the front of a tank and dared the county and Coastal Commission to deny the project.

The developers wanted to build 8 office buildings totaling 225,000 square feet (twice the size of an average Wal-Mart) plus a parking lot with 640 spaces, all of this in an area without public services. To get the water the project needed, the developers proposed to convert an agricultural well as its domestic water source and dump part of their wastewater into the public sewer system. And there was more. Traffic from this huge project would fill local roads not designed for this density/development, and this traffic would impact the public’s beach access. Given all this, how did they get unanimous approval from the county’s Board of Supervisors?

It was brilliant. They proposed that after building these eight office buildings, they would build a housing facility for 57 developmentally disabled adults. They had convinced the dedicated, deserving and passionate parents of this group that this project was the only hope these families would ever have to secure housing for their children (neglecting to tell them they had located the housing in a tsunami inundation area.)

Naturally these parents were vociferous advocates for the project. They brought their disabled children to the hearings and did exactly what the developers had hoped – moved the attention from a project that violated local and state zoning onto a small and deserving group of individuals. It was heartbreaking. The developers dared us to shoot the hostages strapped to the front of their tank.

We did.

At the hearing there wasn’t as single commissioner with a dry eye. Yet we unanimously denied the project. The commissioners explained to the parents that while the goal of providing housing for developmentally disabled adults was eminently laudable, the developers had exploited the parents’ pain to get the project approved. We pointed out that the Coastal Commission staff had attempted to negotiate with the developer to reduce the size and scale of the project before the hearing. But they had refused (as some suggested because they were certain that since their strategy had worked to get the county to approve the project, would force the Coastal Commission to roll over as well.) We told the developer we applauded their desire to build housing for the developmental disabled and to come back with a project that met local and state Coastal Act requirements.

While I learned a lot about what someone would do for profit, I hated this lesson.

Lessons Learned

  • Developers offer “shiny objects” to distract attention from the rest of their project
  • Often, the worse the project, the more appealing the benefit a developer offers
  • At times developers dared the Commission to shoot the hostages strapped to the front of their tank
  • At times, we did

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Farming for Developers: Coastal Commission Stories – Lesson 1

“Oh, what a tangled web we weave…when first we practice to deceive.”
Walter Scott, Marmion

Last week I got an email last week from a New York VC asking for advice about building a house in the California Coastal Zone. For six and a half years I served as a public official on the California Coastal Commission.Commissoner Badge

The call reminded me that it’s been a year since I resigned, and it’s time to tell a few stories of what I learned as a Coastal Commissioner. Each and every month I learned that not everything was how it seemed.

Here’s Lesson 1: Farming for Developers.

Background
The California coast is a panorama of open farm fields and hundreds of miles of undeveloped land. Highway 1 (the Pacific Coast Highway) follows the coast for almost the entire length of the state. The kind of road you see in car ads and movies, it looks like it was built to be driven in a sports car with the top down. The almost 400 mile coast drive from Los Angeles to San Francisco is one of the road trips you need to do before you die.

With 39 million people in the state, there’s no rational reason there aren’t condos, hotels, houses, shopping centers and freeways, wall-to-wall for most of the length of our state’s coast (instead of just in Southern California).

The Coastal Act saved California from looking like the coast of New Jersey.California Coast

Almost 40 years ago the people of California passed Proposition 20 – the Coastal Initiative – and in 1976, the state legislature followed with the Coastal Act, which created the California Coastal Commission. Essentially the Coastal Commission acts as California’s planning commission of last resort for all 1,100 miles of the California coast.

Thanks to the Coastal Act and the Coastal Commission, generations of Californians and our visitors enjoy the most pristine and undeveloped coast in the country, with recreation and access for all. It’s an amazing accomplishment.

The downside is that the coastal zone has the strictest zoning and planning requirements in the country.

As a new commissioner I learned quickly what developers would do to bypass those requirements.

A Different Type of Developer
After 30 years in Silicon Valley I thought I knew what a developer was: a software programmer building a web site, app, game, firmware, etc. But as a Coastal Commissioner, I was dealing with a different type of developer – a real estate developer – someone who acquires land and builds housing and commercial buildings.

The business model for real estate developers isn’t hard to understand: buy farms and/or ranches then build commercial buildings or houses and sell them off. Real estate developers make their money off the difference between the raw land and the net profit on the houses or the commercial buildings.

But a lot must happen before they can make money. If they’re building homes, they need to get approvals to rezone and subdivide the property, bring in utilities (water, sewer, electricity, phone, internet); build infrastructure (roads, sidewalks, street lights, etc.), get approvals to build the units, etc. A lot of capital is at play. Naturally if you’re a developer you want to maximize your return on invested capital. The easiest way to do that is to ensure that you can build as many units (apartments, condos, houses, etc.) as you can on the parcel you own.

Absent any zoning or regional planning, each developer will naturally maximize the development density of a parcel while leaving the impacts on traffic, views, water, wildlife, ecosystem, community character for others to worry about. The result is what’s called the tragedy of the commons (individuals acting independently end up depleting shared resources.) An example of this are the wall-to-wall housing developments on the Southern California coast and resulting gridlock on the freeways.

The Coastal Act has tried to protect the remaining parts of the California Coast. The opening section of the Act starts by stating, “…the permanent protection of the state’s natural and scenic resources is a paramount concern to present and future residents of the state and nation.”  It follows with, “…it is necessary to protect the ecological balance of the coastal zone and prevent its deterioration and destruction.” One of the ways it protects the coast is that you can’t build on land that has been designated an Environmentally Sensitive Habitat Area (ESHA) or on lands that are Wetlands.

Part of my education as a commissioner was seeing how housing developers attempted to avoid these rules.

Farming for Developers
My first lesson was learning that developers love farmers.

In fact, developers think farms and farmers are the best thing to ever happen to the coast of California. Developers love buying farms. They buy-out family farms for prices that far exceed what the farmers could ever get from selling their crops. And often developers let the farmer stay on the farm, leasing them back the land so they can continue to farm it. Developers even help farmers optimize their output by making sure that they plant multiple crops each year and insisting that each time they plant they till each and every inch of their fields. And the farmers are told to make sure the fields are perfectly level so no water can collect or pond on the fields, regardless of how small.

When I first ran into this I thought, “Wow what a great deal. The developers are helping farmers maximize their yields by making all these improvements to California farming. “

Boy was I dumb.

The developers knew that if the farm fields were to remain fallow, many of them would return to the native wetlands or sensitive habitats that are protected by the Coastal Act and when that happened, developers couldn’t build on them. If enough of the farm would be found to have ESHA or Wetland, it would limit the number of houses that could be built (reducing the value of the project) or might even make the entire project economically unfeasible.

The reality was that the real estate developers could care less about farming or the crops. Tilling every inch of the farm and pouring pesticides on it meant nothing but a single crop could grow. Making it perfectly level meant that no water could pool and start a wetland. Developers were using the farmers to ensure the continued eradication of any Environmentally Sensitive Habitat Area (ESHA) or Wetland.

So the developers keep the farmers plowing the fields as the developers work on changing the zoning and getting approvals, and when they do, the bulldozers show up to start building the condos or houses that have buried Southern California. And the farmers retire.

That’s why developers on the California coast love farming.

Lessons Learned

  • The Coastal Act prohibits development in Environmentally Sensitive Habitat Areas (ESHA) or Wetlands
  • Existing farms have previously eradicated ESHA or Wetland
  • Keeping the farming going while developers get approvals minimizes environmental objections

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In Defense of Unreasonableness – Saving the California Coast

CLCV Enviro AwardsLast night Alison and I along with others were honored for environmental leadership by the California League of Conservation Voters. Here are the remarks I made.

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Alison and I both grew up on the East Coast but we’ve been fortunate to live in California for 30 years.  One of the things we love most about living here is how beautiful the natural landscapes are and how close nature is to urban areas.  When we had kids, we began to think about our role in protecting these California landscapes for future generations.

Alison got a head start on me by joining the board of the State Parks Foundation. I soon followed by joining the board of Audubon, Peninsula Open Space Trust and the California League of Conservation Voters. And 6 ½ years ago I was appointed to the California Coastal Commission.

As you know, for the last 35 years we’ve been running a science experiment on the California Coast: How would the Coastal Act affect California’s coastal economy?

The results are now in.

California has some of the most expensive land in the country and as we all know, our economy is organized to extract the maximum revenue and profits from any asset. Visitors are amazed that there aren’t condos, hotels, houses, shopping centers and freeways, wall-to-wall, for most of the length of our state’s coast.shutterstock_127554866

It was the Coastal Act that saved California from looking like the coast of New Jersey.

In 1976 the voters of California wisely supported the Coastal Act and the creation of a California Coastal Commission with 2 goals.

First, to maximize public access and public recreational opportunities in the coastal zone while preserving the  rights of private property owners, and

Second, to assure priority for coastal-dependent and coastal-related development over other development on the coast.

For the last three decades, the Coastal Commission has upheld these directives while miraculously managing to avoid regulatory capture. It was able to do so because of three forces that sustained it: 1) an uncompromising executive director, 2) a majority of commissioners who looked past local parochial interests and voted for the interests of all Californians, and 3) an environmental community that acted as a tenacious watchdog.

The Commission has been able to stave off the tragedy of the commons for the California coast. Upholding the Coastal Act meant the Commission took unpopular positions upsetting developers who have fought with the agency over seaside projects, homeowners who strongly feel that private property rights unconditionally trump public access, and local governments who believe they should have the final say in what’s right for their community, regardless of its impact on the rest of the state.

During the last three decades, Peter Douglas ran the Coastal Commission. Unlike Robert Moses who built modern New York City’s or Baron Haussmann who built 19th century Paris in concrete and steel, the legacy of Peter Douglas is all the things you don’t see in the 1,100 miles of the California coast: wetlands that have not been filled, public access that has not been lost, coastal views that have not been blocked by hotels or condominiums. Douglas did this by standing up to developers, speakers of the state assembly, governors, and others who wanted him to be “reasonable” and to come to a “compromised solution”.

I was appointed to the Coastal Commission by a governor hoping to find a candidate with “green enough” credentials who would be “reasonable” and understand how “compromises” are made in California politics.

And for the first few years, I was reasonable.  New development, sure –just avoid the wetland.  More condos—OK but watch out for the Environmentally Sensitive Habitat Areas (ESHA).

I’m a slow learner but over the last few years, I realized that the coast of California exists as it is because the Commission had an unreasonable leader, who refused the political allure of “compromise” and who managed to keep the commission independent despite enormous pressure. And we as commissioners had to stand up to those pressures and be at times unreasonable in order to not compromise the essence of the Coastal Act.

Unfortunately Peter Douglas is gone and his unbending vision to save the coast is fading. Some current commissioners seem to want the Commission to be reasonable, and understand the reality of politics. In fact, some may even want a new “reasonable” executive director who will turn the commission into just another regulatory organization driven by the people they are supposed to regulate.

Sadly, even today with the results of an independent commission in front of us, some of our appointing authorities haven’t understood the gift that has been handed them – 100’s of miles of Pacific coastline, much of it unspoiled and accessible to all. And unlike other regulatory agencies, the unspoiled California Coast is finite, and bad decisions are virtually impossible to turn back once a development decision is implemented.

Over the last few years I learned that unless there is a vigilant and engaged public, lobbyists and developers will take over the commission using “reasonableness” and “fair compromise” as their watch words. It is up to individuals and our environmental organizations to become more active on coastal issues.

As Peter Douglas used to say, the coast is never saved, rather it is being saved every day,” as an ongoing process.

Unless we insist that our elected officials appoint people who are willing to prioritize the principals of the Coastal Act over both their own careers and the notion of being “reasonable” within the larger ecosystem of day-to-day California Politics, our children may one day look back at pictures of the California coast and wistfully say, “Look what our parents lost.”

Today it was with a feeling of a mission yet to be accomplished, I let the governor know that I am resigning from the Coastal Commission. My work on innovation, job creation and entrepreneurship for the Federal Government is taking an increasing amount of my time.

I’ve had a great time at the Commission. I’ve learned a lot from my fellow commissioners and hope I’ve done my part for my fellow Californians. I’d like to thank my alternate Jim Wickett on the Commision who has also dedicated his time and uncompromising votes towards carrying out the Coastal Act.

Most of all, I’m proud to have been “unreasonable” and “uncompromising” in defense of the California Coast. To be anything less risks the loss of what the Coastal Act and Peter Douglas has uniquely brought to all Californians.

Thank you for this award, and I very much appreciate all the support you have provided to me to be able to make my contribution to the California Coast and the Environment.

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There’s Always a Plan B

Everyone has a plan ’till they get punched in the mouth. 
Mike Tyson

One of the key distinctions between an entrepreneur and an operating executive is an entrepreneur’s almost seamless agility in the face of changing circumstances versus an operating executive’s intense execution focus on a plan. World-class entrepreneurs learn how to combine both.

WTF?
Driving home over the mountains from a Coastal Commission hearing, I had time to ponder an email I received from a city official as the road wound through the Redwood trees. The Coastal Commission had found that a zoning change his city requested didn’t conform to the Coastal Act, and we denied it. I felt sorry for him because he had put together a project that depended upon the property owner, developer, unions, hotel operator, local neighbors, city council, weather, wind speed, phase of the moon and astrological sign all aligning just to get the project in front of us. It was like herding cats and pushing water uphill. Reading his email I was sympathetic realizing that if you substituted customers, channel, product development, hiring, board of directors, and fund raising, he was describing a typical day at a startup. I felt real kinship until I got to his last sentence:

“Now we’re screwed because we had no Plan B.”

Say what?

I had to read his email a few times to let this sink in. I kept thinking, “What do you mean there’s no plan B?” When I shared it with the other commissioners who were public officials, all of them could see that there could have been tons of alternate plans to get a project approved, and there were still several options going forward.  But the mayor just had been so intently focussed on executing a complex Plan A he never considered that he might need a Plan B.

By the time the mountain road unwound into rolling pastures and then flattened into the farmland just south of Silicon Valley, I realized that this was a real-world example of the difference between an entrepreneur and an operating executive.

There’s Always a Plan B
My formal definition of a startup is a temporary organization in search of a scalable and repeatable business model. Yet if you’ve founded a company you know that regardless of any formal definition, startups are inherently pure chaos. As a founder, keeping your company alive requires you to think creatively and independently because more often than not, conditions on the ground will change so rapidly that any original well-thought-out plan quickly becomes irrelevant. (It’s equally true for startups, war, love and life.)

The reality is that to survive requires a mindset which can quickly separate the crucial from the irrelevant, synthesize the output, and use this intelligence to create islands of order in the all-out chaos of a startup.  

To do this you are instinctually creating and testing multiple hypotheses which are creating an infinite number of possible future plans. And when the inevitable happens and some or all your assumptions were wrong, you pivot your model into the next plan and continue forward.  You do this until you find a scalable and repeatable business model or you die by running out of money.

Great entrepreneurs don’t just have a Plan B, they have Plans B through

Lessons Learned

  • A startup is initially about the search for a repeatable and scalable business model
  • Most of the time your hypotheses about Plan A, B and C are wrong
  • Searching requires agility, tenacity, resilience, curiosity, opportunism and pattern recognition
  • Execution requires a different set of skills. At times it means bringing an operating executive
  • Operating executives excel at focussed execution
  • World-class technology CEO’s learned how to combine Searching and Execution (Gates, Jobs, Ellison, Bezos, Page, et al)

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Going Out With His Boots On

He was a man, take him for all in all, I shall not look upon his like again
Shakespeare, Hamlet Act I, Scene 2

With 37 mllion people it’s remarkable that California has one of the most pristine and unspoiled coastline in the United States. One man and the organization he’s built is responsible for protecting it.

———–

California Dreaming
California Highway 1, (the Pacific Coast Highway) is a two-lane road that hugs the coast from Mexico to the town of Leggett in Northern California. It’s carved out of the edge of the California almost designed to connect you to the Pacific Ocean in a way that no other road in the country does. In some stretches It’s breathtaking and hair-raising and in others it’s the most tranquil drive you’ll ever take.

It goes through quintessential California beach towns right out of the 1950’s. It has hair-pin turns that have you’re convinced you’re about to fall into the ocean. It has open farm fields and hundreds of miles of unspoiled and undeveloped land. It’s the kind of road you see in car ads and movies, one that looks like it was built to be driven in a Porsche with the top down.  The almost 400 mile coast drive from Los Angeles to San Francisco is one the road trips you need to do before you die.

15 air miles away, the road parallels Silicon Valley (and the 7 million people in the San Francisco Bay Area.) In that 45 mile stretch – from Half Moon Bay to Santa Cruz – there’s not a single stoplight and less than 5,000 people.

The Peoples Coast
Yet there’s no rational reason most of the 1,100 miles of the California coast should look like this. 33 million Californians live less than an hour from the coast. It’s some of the most expensive land in the country. As our economy is organized to extract the maximum revenue and profits from any asset, you wonder why there aren’t condos, hotels, houses, shopping centers and freeways, wall-to-wall for most of it’s length (except in parts of Southern California where there already is.)

The explanation is that almost 40 years ago the people of California passed Proposition 20 – the Coastal Initiative – and in 1976 the state legislature followed it up by passing the Coastal Act, which created the California Coastal Commission. Essentially the Coastal Commission acts as California’s planning commission for all 1,100 miles of the California coast. It has a staff of ~120 who recommend actions to the 12 commissioners (all political appointees) who make the final decisions.

Among other things the legislature said the goals of the Coastal Commission was to: 1) maximize public access to the coast and maximize public recreational opportunities in the coastal zone consistent with sound resources conservation principles and constitutionally protected rights of private property owners. And 2) assure priority for coastal-dependent and coastal-related development over other development on the coast.

You Can Make a Difference
This week I had my public servant hat on in my role as a California Coastal Commissioner.

I don’t write about the commission because I want to avoid any conflict in my role as a public official.  But today is different. The single individual responsible for running the Commission staff for the last 26 years, it’s executive director Peter Douglas, just announced his retirement.

Unlike Robert Moses who built modern New York City’s or Baron Haussmann who built 19th century Paris in concrete and steel, the legacy and achievements of Peter Douglas are all the things you don’t see in the 1,100 miles of the California coast; wetlands that haven’t been filled, public access that hasn’t been lost, highly scenic areas that haven’t been spoiled and destroyed.

There’s an old political science rule of thumb that says regulatory agencies become captured by the industries that they regulate within seven years. Yet for the 26 years of Peter’s tenure he’s managed to keep the commission independent despite of enormous pressure.

The Commission has been able to stave off the tragedy of the commons for the California coast. Upholding the Coastal Act had it taking unpopular positions upsetting developers who have fought with the agency over seaside projects, homeowners who strongly feel that private property rights unconditionally trump public access and local governments who believe they should have the final say in what’s right for their community.

Peter opened the commission up to public participation and promoted citizen activism. He built a world-class staff who understand what public service truly means.

Over the last 40 years the winners have been 37 million Californians and the people who drive down the coast and can’t imagine why its looks like it does. In spite of opposition the commission has carried out the public trust.

The coast is never saved, it is always being saved.  The work is never finished. The pressure to develop it is relentless, and it can be paved over with a thousand small decisions. I hope our children don’t look back at pictures of the California coast and wistfully say, “look what our parents lost.”

As commissioners it’s our job to choose Peter’s replacement. Hopefully we’ll have the wisdom in finding a worthy successor. The people of California and their children deserve as much.

Godspeed Peter Douglas.

Update
Great interview with Peter Douglas on his retirement.


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Requiem For A Roommate

And, when he shall die, Take him and cut him out in little stars,
And he will make the face of Heaven so fine
That all the world will be in love with night
And pay no worship to the garish sun.
William Shakespeare

Last week I had my “public servant” hat on in my official capacity as a California Coastal Commissioner.  Walking out after a 13-hour hearing, one of my fellow commissioners asked, “Why on earth do we do this?” As I got back to the hotel, I found myself wondering the same thing.  What ever got me interested in public service and non-profits? As I tried to unwind, I turned on the hotel TV and caught part of an old movie, The Big Chill.

It reminded me that I volunteer my time because of a gift I had received my first year in college.

Unshakable Certainty
I had never been outside of New York so to me Michigan seemed like a foreign country. On the first day of college I wandered down my dorm hall introducing myself and met Michael Krzys, the guy who would one day be the best man at my wedding, making a salad on the floor of his room.  I provided the bowl and as we started talking, I was fascinated that he was from Adrian Michigan, a quintessential small town in the Midwest. He was equally curious about someone who grew up in New York. As we got to know each other, I pretty quickly I realized that I had met my match, someone with even more curiosity, creativity and a wry sense of humor.  As best friends our freshman year, we did all the crazy things that first year college students do (things I still won’t tell my kids.)

But as I got to know Michael, there was another, completely foreign part of him I didn’t understand. (It would take me another 30 years.) From the day I met him he had a commitment to public service that was deep, heartfelt, profound, unshakable and to me, mysterious and completely unfathomable. Even as a freshman, Michael already knew that his calling was to help others and to do so he was determined to become a public service lawyer. It confused and unnerved me to know someone with so much certainty about the meaning and direction of his life.  It couldn’t have been more different from mine.

After our first year our lives took different paths. When they would touch again, it would be in ways neither of us could have predicted.

Different Paths
With the Vietnam War going full tilt, I left school and joined the Air Force, spending a year and a half in Southeast Asia. Michael and I kept in touch via letters – me telling him about adventures in the military, fighter planes, electronics and foreign countries. His letters explained to me why I was an idiot, war was immoral and that while he appreciated my dedication to national service, it was public servicethat was the higher calling. Each of his letters ended with him reminding me that I was destined for a different career.

When I got back from Thailand the war was winding down and Michael was now in the University of Michigan Law School (having finished his undergrad degree in 3-years.) For my last year in the Air Force, I was stationed on a B-52 bomber base, 183 miles from Ann Arbor. I knew the exact mileage as I would drive it every weekend to see my girlfriend and hang out with Michael. Over dinner we’d argue about politics, talk about how to best save the world, and he’d tell me what he was learning that week in his law school classes.  I remember when he taught me the best way to understand an issue was to learn how to argue both sides of a case.

It didn’t take long before he was loaning me his last quarter’s law books to read during the week at the airbase where I was keeping the world safe for democracy.  (While students in law school were hiding their Playboy magazines inside their law books, I’m probably the only guy who had to hide his law books from fellow airmen under a pile of Playboy magazines.)

Remove the Tag
In his last year in law school, the high point for Michael was arguing his first pro bono case in Detroit for a tenant who he claimed was being illegally evicted. (In Michigan law students could appear and practice in limited court settings under the supervision of an admitted attorney.) When I drove down to Ann Arbor that weekend, I was regaled with Michael’s tale of his passionate defense of his first client as he stood in front of the judge waving his arms for effect in his first-ever sports coat. Michael said he was ecstatic that the judge ruled in his favor, but was a bit confused when the judge motioned him to approach the bench.  In a low voice the judge said, “Son, that was a pretty good argument for a law student. However the next time you’re in court, you may want to remove the price tag from the sleeve of your sports coat.”

When I got out of the military and went back to school, Michael was finishing up law school, and a year later he and his new wife headed to the South to work for Georgia Legal Services in McIntosh County in Georgia. I moved to Silicon Valley, and we kept up a sporadic correspondence, me trying to explain startups and Michael telling me about the world of civil rights and equal justice for the poor. If possible it seemed like his excitement for what he was doing matched mine.  I just didn’t understand why he did it.

It’s a Calling
For entrepreneurs, understanding why people dedicate their lives to working for non-profits is hard to fathom. Why work for low pay, on something that wasn’t going to deliver a product that would change the world?

Today, each time I see the staffs of those non-profits where I’m on the board, I get a glimpse of that same passion, commitment and sense of doing right that I first heard my freshman year decades ago.  For the best of them, it’s not a job, it’s a life-long calling.  The executive directors of the Coastal Commission and POST remind me of what Michael might have become.

A Life Worth Living
One fine California April day in 1981, three years in Silicon Valley now into my second startup, I got a call from someone in Michigan who had been trying to track me down.  Michael and his wife were bringing some kids to camp, and he was killed in a head-on car accident with a drunk driver.  His wife and the kids survived.

It took me a long time, but as I got older I realized that life was more than just about work, technical innovation and business. Michael and others worked to preserve and protect the values that made life worth living.  And while we were making things, they were the ones who were who changing our society into a more just place to live.

There isn’t a day that goes by on the Coastal Commission that I don’t wonder what Michael Kryzs would do. To this day he is my model as a human being who found his own compass.

I always hoped that mine would point in the same direction.

Update: after three decades I finally got to give Michael a memorial even he would have thought was fitting and proper. I established the Michael Krzys Public Interest Fellowship at the University of Michigan Law School. Details here

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Why Accountants Don’t Run Startups

This week I’m at the California Coastal Commission hearing in Ventura California wearing my other hat as a public official for the State of California.  After the hearing I drove up to Santa Barbara to give a talk to a Lean Startup Meetup.

The talk, “Why Accountants Don’t Run Startups” summarized my current thinking about startups, how and why they’re different than large companies and for good measure threw in a few thoughts about entrepreneurial education.

It was a dry run of a talk I’ll be giving at Eric Ries’ Startup Lessons Learned conference April 23 2010 in San Francisco (streaming and simulcast across the world.)  I’m a small part of what’s shaping up to be a spectacular conference and an all-star cast.

The talk is below.

Update: I’ve updated the slides to the latest version of the talk. The original can still be found here.

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