Explaining Southern California's economy

Steve Jobs and the California Way of Business

Steve Jobs' childhood home, with the garage where he and Steve Wozniak started Apple.

Kevork Djansezian/Getty Images

Steve Jobs' childhood home, with the garage where he and Steve Wozniak started Apple.

Apple co-founder Steve Jobs' death at 56 has provided ample opportunity to reflect on his life and his status as an American visionary, a character out of one of Apple's "Think Different" ads. But Jobs was also a Californian, and it's worth asking whether he represented a "California Way of Business."

Gov. Jerry Brown certainly thought so. This is from the Wall Street Journal, and includes Brown's reaction to Jobs' death:

California governor Jerry Brown, who knew Apple Inc.’s Steve Jobs since his first governorship when Mr. Jobs sat on a innovation commission he created, said Wednesday of the Apple co-founder’s death: “Steve Jobs was a great California innovator who demonstrated what a totally independent and creative mind can accomplish. Few people have made such a powerful and elegant imprint on our lives…"

Apple's founding legend is pure California. A college dropout who's into the Beatles, Bob Dylan, psychedelic experiences and Eastern spirituality is casting about for something to feel passionate about. He learns about a bunch of scruffy guys in the Bay Area who are building their own computers, at a time when computers were thought of as massive room-size machines that only scientists and governments could understand, much less use. 

He checks out the scene and has his burning bush moment. He and his pal Steve Wozniak set up shop in the proverbial garage, and the rest is history. Before Apple, computers were a gearhead preoccupation. After Apple, they are an emotional product. The company endures its struggles, but it never loses its core DNA: Jobs' belief that technology is something for everyone to use in pleasing ways to make their lives' better.

Jobs has been compared to everyone from Thomas Edison to Leonardo da Vinci, but his obvious precursor is Walt Disney. When you see this connection, you realize that what California have given rise to as a cultural, economic, and business environment powerfully enabled both men. Southern California inculcated the dream factory that allowed Disney to create the world's best-known entertainment brand, spanning numerous generations and bringing an idealized version of American life to movie screens, televisions, and theme parks. 

For Jobs, Northern California nurtured both the 1960s counterculture that rejected Disney's 1950s ideas about happiness — you'll note that California had room for both, Jim Morrison sharing space with Richard Nixon — and the emerging personal-computer scene. More so than anyone else at the time, Jobs was able to bring these two seemingly disparate groups together. What could hippie Luddites who just wanted to turn on, tune in and drop out have in common with electrical engineering geeks soldering together their personal versions of IBM's mainframes? 

Jobs, being a Californian, was oriented toward the future, not the past. He saw that hippies and techies shared a similarly idealistic vision, one that just needed the right packaging, marketing, and promotion. Critically, he recognized that esoteric countercultural ideals about remaking society and hobbyist computer nerds' obsession with making machines do smart things required something appealing in the physical world to attract mass support.

In the same way that Walt Disney knew that he needed to create Disneyland to make his vision real and tangible, Jobs knew that he needed to create a computer that really didn't look or act like a computer to make people want to take it home (and, eventually, carry it around in their pockets). 

California's business environment made it possible for both men achieve and ultimately exceed their individual dreams. No one was telling them what their business should be. They were defining it as they went along. And it's almost too perfect that Jobs, during his exile from Apple, assumed Disney's mantle by turning Pixar into a sort of New Disney — and then sold it to Disney itself, in the process becoming one of the company's largest shareholders.

California's business environment also rewarded them for their achievements and forgave their transgressions. In Disney's case, it was alleged anti-semitism and his definite anti-communism. In Jobs', it was his blind spot regarding charitable giving.

That's probably progress and evidence of how business in California has changed over the years.

Business in America has moved on a east-to-west vector. The question now is whether California has exhausted its moment and is in decline, with the vector reversing. Texas is now often named as America's best state for business. Massachusetts attracts venture capital investment in biotech and green energy. Wall Street is still Wall Street, even after its second major setback in the past 100 years. Detroit has begun to revive itself, as the Big Three carmakers have come back from near-death.

But when it comes to innovation — the most important word in business right now — California still has the advantage. Disney proved it. Jobs proved it. Jerry Brown recognized it and continues to stress it.

So what's next? No one knew that Disney would become Disney when Walt and his brother Roy set up shop in Hollywood in the 1920s. When Jobs and Wozniak formed Apple in 1976, a market cap of $350 billion seemed more than light years away. Something is percolating somewhere in California right now that will redefine an industry in 30 years. You can almost bet on it. It's the California Way.

Photo: Kevork Djansezian/Getty Images

blog comments powered by Disqus