Multi-Millionaire Admits: The Government Helped Make Me Rich
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Editor's Note: The following is an excerpt from Brian Miller and Mike Lapham's book, The Self-Made Myth: The Truth About How Government Helps Individuals and Businesses Succeed (Berrett-Koehler Publishers, 2012). You can read AlterNet's Vision editor Sara Robinson's review of the book here.
Unless you happen to be a computer programmer, you probably don’t spend much time thinking about how a global positioning system (GPS) or a digital camera works or where the Mars rovers get their intelligence. All those devices have something in common: they’re driven by software developed by a company you’ve probably never heard of -- Wind River Systems. Based in Alameda, California, Wind River is a company born in part from government investment in research.
At the helm of Wind River for 26 years -- first as founder and CEO and then as chairman -- Jerry Fiddler knows that his success depended on many things, including public support of education, other people’s investment, US government support of the Lawrence Berkeley Laboratory, and a whole lot of happenstance. In fact, were it not for a few quirks of fate, he might be a jazz musician, a photographer, or a geologist today.
Wind River Systems was sold to Intel in 2009 for $884 million. Fiddler’s share was more than $40 million. Now Fiddler “helps people start companies” as an investor in and consultant to startups in Silicon Valley, as an adjunct professor of entrepreneurship at the University of California at Berkeley, and as guest lecturer and mentor at Stanford University.
Education played an important role in Fiddler’s success. After attending public school in Chicago, he went on to attend the University of Illinois, a land-grant college, where he majored in music and photography.
I was the first person in my family to get a college degree. I went on and got a master’s in computer science. I got out and got a job working at Lawrence Berkeley Laboratory as a computer scientist. I was making what seemed to me, at the time, to be an infinite amount of money. But I wanted something different. I wanted to affect the world in a different way. And I decided to start my own little consulting business.
I called my dad, my parents, to tell them, and I was sure they were going to try to talk me out of it because here I was kind of living the dream -- I had a stable job, responsible interesting work, prestigious?and I decided I was going to start my own business. I was 29 at the time. And my dad said, “Well it’s about damn time.” It was completely the opposite of what I expected to hear.
In addition to the importance of schooling, Fiddler acknowledges that his entrepreneurship has partially been the result of his upbringing. For him the two seem to go hand in hand: having the opportunity to attend school coupled with the support of family in his endeavors helped lead to his ability to set Wind River in motion. A product of European thinking brought up in America, Fiddler says,
Being in a family situation that supported me to develop, and in schools with teachers who also helped me to learn and develop
. . . you just don’t do it on your own. You do it with the help of parents and friends and teachers and co-workers and service providers.
My parents were both born here, but all four of my grandparents came from various parts of eastern Europe. My dad had businesses: he had a fabric store, a lingerie shop, and that was just the way those folks thought about things; you don’t work for somebody else. The way you grow up and become a real adult or mensch is you start a business, you run a business.
And I think that’s still happening, there’s still that immigrant population that to a disproportionate degree really pushes entrepreneurship. And that population of course relies very heavily on what the public makes available to them, including public education. In turn those new businesses are a crucial driver of our economy.
Fiddler started Wind River Systems as a consulting company in 1978 with his business partner, Dave Wilner, saying, “I don’t think I could have done it without him.” As they moved from consulting job to job, they built pieces of software for their own repeated use; by 1987 Wind River had become a product-based company, focused on selling that reusable software. The company grew very quickly, more than doubling in size each year for six consecutive years and going public in 1993.
Wind River’s software is now found inside everything from digital cameras, to cars and spacecraft, to the routers and the hubs that control the Internet. From a few cutting-edge ideas, Fiddler built a company that provides a critical piece of our technological infrastructure. At its peak in 2000, Wind River had 2,200 employees and was valued at $4 billion.
Fiddler attributes his success to a combination of factors. “It’s a wide variety of abilities and a willingness to take risks, coupled with a fair amount of luck.” His ideas about luck have been informed by his varied life experiences:
Something I learned as a musician is that being good is only one of many things you need to be successful. There are a million fabulous musicians out there who are never going to be successful because they don’t have the other skills or support they need. They don’t have the finance, the promotional backing, or the luck.
And business is the same. There are millions of people who have the qualities that make you successful in business but who weren’t lucky enough to be in the right place at the right time or to get the right help. So having the capabilities is necessary but nowhere near sufficient.
To Fiddler a big part of starting a successful business in the United States is the existence of a massive accounting, finance, and legal infrastructure to help companies get started and an education infrastructure to provide the needed skills.
You can have a great idea in most countries in the world, but you won’t be able to find the right advice, or the right accountants and lawyers, and you won’t be able to get it financed. So, part of it is just being in a place where the opportunity exists to start a business. The angel and venture capital community and all the support structure around it is massive and unique; it really doesn’t exist in the same way anywhere else in the world.
There’s no way I would be here if I hadn’t worked at a national lab. It was the best place in the world to learn how to do this. I probably wouldn’t have gotten that job if I hadn’t had a master’s degree, which I got from a public university. I wouldn’t have had that master’s or a bachelor’s degree if there weren’t financial aid and an assistantship in grad school. And had I not gone to a good public school, I probably wouldn’t have gotten into the university. So you just keep stepping back. Heck, if my mother hadn’t had the right prenatal care, I could have been 28 IQ points less intelligent! So where does it start?
Fiddler reflects on how his personal success has been affected by the right circumstances in his life, but he also points to the importance of well-functioning business and financial sectors. The economy functions with rules and regulations that ultimately benefit entrepreneurs and businesspeople. Fiddler believes that many are slow to recognize government’s important role:
One of the things people don’t talk about is how much we really rely on government institutions to maintain a fair playing field. Entrepreneurship is an equalizer, a way that people who aren’t wealthy can become more wealthy, can become more independent, and in the process can provide a huge amount of benefit to society as a whole. But we live in a society right now that is going in exactly the opposite direction. The disparity in wealth between the bottom and the top is growing dramatically, and the middle class is being squeezed out.
All of us, but especially entrepreneurs, rely on the government’s role of creating a level playing field, and people like the SEC and the FTC [Federal Trade Commission] and other regulating agencies are critical to entrepreneurship. Large business interests obviously put huge effort into lobbying, much of it into reducing regulation, but for small businesses, for startups, that regulation is important. The only way that you can have a healthy startup economy is if you have a level playing field that allows those companies to come into being and to compete, and that has to come back to some level of regulation; the government has to be regulating.
Noting the interdependent nature of our economic system, Fiddler continues, pointing out some of the things that most people take for granted:
And then there’s the rest of the infrastructure that we need -- the roads and the railroads, transportation and information infrastructure that makes wealth creation possible in this country.
To take it up to a higher level, as a country we are absolutely the envy of the world in terms of the intellectual horsepower we put together -- the creativity, the technology, the leadership. Why is that here? To me much of it is a product of the entrepreneurial system and of the immigrants who prized education, learning, and initiative. But most of all, it’s a product of the public education system.
Fiddler is quick to highlight the ways in which he did not create his success purely on his own. From a supportive family with entrepreneurial spirit, Fiddler had the opportunity to pursue higher education and then to begin his own business. As an entrepreneur he’s not afraid to say that he has benefited from governmental regulation. Fiddler is also not afraid to admit that he has been lucky: “It all builds. In this country there is more opportunity and mobility than anywhere else in the world. But it’s very rare that a lot of factors beyond the individual haven’t contributed, a lot of stars haven’t aligned properly to create someone’s success.”
Copyright © 2012 with permission from Berrett Koehler Publishers.