The Spirit Of Independence; On The Frontiers
George's North Slope & Sophie's Oyster Bar -- that's all one restaurant -- was packed when I went to visit George Malekos in Eagle River, Alaska. It was the first day of the Iditarod International Sled Dog Race, the classic 1,049-mile marathon from Anchorage to Nome, and it seemed as if the whole town had come to George's for breakfast before the arrival of the dog teams.
Eagle River was just a spot on a map when Malekos started cooking hamburgers out of a small, leased trailer 14 years ago. The business has grown since then: Today he employs 114, seats 1,500 patrons a day in three different dining rooms, and boasts the biggest chandelier this side of Anchorage. And Eagle River has become a town. There's not much paving yet, except the main road and George's parking lot, but the population is up to 30,000 and growing. There are churches and schools, liquor stores, a small shopping mall, and Little League teams -- one of which George sponsors.
I thought of George Malekos a lot as I completed my three months on the road. Like most of the entrepreneurs I met, he sees himself as a loner, a rebel who dared to follow his own solitary path. But there was a transformation along the way. He set out for the frontier -- and ended up at the center of a new town. What began as a search for independence and freedom blossomed into interdependence and community.
America is filled with entrepreneurs like George Malekos, men and women helping to build the future. They are the new pioneers, immigrants and children of immigrants, rebels and refugees, dreamers of every age and color. They find their frontiers not just in Alaska, but in Kansas City and Silicon Valley and New York as well. They are the builders.But they create more than just new companies; more, even, than new products and new jobs. They also create new human connections, new ways of joining people together to meet our common needs.
That is how America has always been built, by pioneers, coming together to push back the frontiers.
"So the state trooper says, 'If you fear for your life or the lives of your patrons, shoot the son of a bitch." -- George Malekos
George Malekos started George's North Slope restaurant in 1971.
I had been cooking up at the ARCO drilling site on the North Slope, and I came down here to look around when I had some time off. We stopped in Eagle River to get ice cream cones. There were no buildings here -- just this Tastee Freez and a little cafe up by the bowling alley, the Owl Cafe.
I always knew that sometime in my life I wanted to do something. This light bulb came on in my head and I said, "It can't miss." A restaurant, right in the middle of town. Why doesn't anybody see it? My friends thought I was nuts, but I could see something. I only had $3,000, but I found this trailer I could lease, and a piece of property I could get on a handshake.
I can remember calling the state troopers 15 years ago saying, "I got a group of motorcycle guys out here and I don't know what to do with them." The trooper said to me, "Do you own a gun?" I said, yeah. He said, "Do you know how to shoot it?" I said, yeah. He said, "If you fear for your life or the lives of your patrons, shoot the son of a bitch." There was more than one night I spent up on the roof with a shotgun. Nobody was going to run me out of here. Period. But since I started the restaurant, we've created our own borough out here. We elected our own mayor. We started our own police force.
Sometimes I half-believe it was ignorance that kept me here. There have been times, sir, when I wished I could burn this son of a bitch down. A guy has to be crazy to stay up here in all this snow and ice. I don't know if I can explain it.
Alaskans have changed. That is why you see my restaurant with wallpaper and curtains and chandeliers, as opposed to the trailer it was many years back. I used to have a mud hole in front of my restaurant. Then as I got busy, the mud got so bad, I put a piece of plywood over it. It would be nothing to see people stepping out of Cadillacs and getting their high heels wet to come in and eat my hamburgers. They didn't mind. They had to cross a mud hole to go into their houses. But we've got some paving now; we've had it for three years.
There are still lots more things for me to build. This town could use a hotel. Something modern. Something nice. Start with 80 rooms, banquet rooms, lounges. Maybe build a parking garage, someday, underground. Someday, this town is going to need a parketing garage.
"You'd find Spam that had come in '74, '75, and '76, because Seattle knew the natives ate Spam." -- Allan Gallant
Allan Gallant was the consultant who arranged the sale of Northern Commercial Co. from a Seattle-based conglomerate to Community Enterprise Development Corp. of Alaska, a community action group.Since the sale, he has served as CEO of the renamed Alaska Commercial Co., headquartered in Anchorage.
We're the most visible institution in the lives of the people we touch.We're the bank, the finance company, the fur-buying agency, the retailing and social hubs of the village. Our company started in 1867, when Russia sold the territory to the United States. It is the oldest company in the state, general merchants in the classic sense of the word.
By 1977, the owners in Seattle wanted out. It was an old, old company with old people in it, and they weren't making any money. They didn't care. The company was run on the basis of, "We know what those natives want, and we're going to ship it in once a year by barge when the water breaks." You'd find Spam that had come in on '74 barges, '75 barges, and '76 barges, because Seattle knew the natives ate Spam and Dinty Moore Beef Stew.
We believed that the company could be expanded dramatically, but we had no idea how far we could take it. When we bought the company in 1977, there were 9 stores doing $10 million. My projections were $20 million to $24 million with a few more stores. Instead, we have 23 stores, and we're doing $60 million.
We believed we could run up the business and run up the profits, but we had major social goals as well: the employment and development of natives, lower prices, and better service for the people. All of those noble goals, and the fact of the matter is, we did every one of them.And I just convinced by board of directors to sell 33% of the company to the employees.
"Not everybody is out there lighting fires and stealing transistor radios." -- Rafael Collado
Rafael Collado, 31 years old, founded Protocom Devices Inc. in 1983. It is a computer data-communications equipment manufacture with $7 million in projected sales this year. In September 1984, Collado shifted the company's base of operations from Greenwich, Conn., to the South Bronx in New York City.
The people in the inner cities, the people in the South Bronx, are being left behind. America is becoming almost a two-tier society, those who are computer literate and information oriented, and those who are left behind, an underclass. We feel that we can't let that happen. So we plan to develop this company right here in the Bronx.
I was born not very far from here, three or four blocks away. When I was in college, I had summer jobs here. My friends are here. Not everybody is out there lighting fires and stealing transistor radios. There are a lot of people here who are going to make it. And we're going to make it with them.
This is a very good place to be, and to sell it short has been the mistake of the politicians, the banks, and the financial community. Sometimes even the people who live here sell it short. We're not here just pro bono, though. There are 16 major universities and the largest communications users in the world within 10 miles from here. If any place has a claim to being a technological hotbed, it should be the Bronx and New York City.
I used to work for GTE, and they treated me exceptionally well. But it was no longer a challenge. I wanted to wake up and come to work every day and see something that might not have been there if it wasn't for me. There are too many pseudo-entrepreneurs today.They want the BMW and the big house, come up with some scam and take it public in three years. But that's not what it's about; the work is too hard if that's all it is for. There's constant adversity; the only thing that can sustain you is your vision.
We've got a task to do. We're trying to build a Silicon Valley in the South Bronx.
"America is truly the land of opportunity; they'll let you get as deep into debt as you want." -- David Goldhor
David Goldhor founded Eagle Eye Film Co., an equipment-rental firm, in Los Angeles in 1971.
My grandfather on my mother's side of the family was from Poland; he was the big man in his village. He kept seeing the Christian peasants go to America, and they'd come back well-dressed and looking prosperous. So he said to himself, "If these people go there and come back like this, what would happen to a man like me?" My mother was born in Poland; they came here when she was 13, and I was the first male child born to my family in America.
One of my uncles ran a general store, then he ran speakeasies during Prohibition. Another one started a box-lunch company in World War II and made a fortune in the shipyards. His children went on to be big restaurateurs, and they own a winery in upstate New York. So it's in my blood.
I'd like to feel that what I did coming across the country mirrored my grandfather's immigrant experience. I came to Los Angeles from New York in 1967. I came here stone-cold. I had no contacts and I had no money. I had wanted to be a filmmaker, but obviously I did not become a Coppola or a Spielberg or a Lucas. So I decided to hedge my bets and I started a business renting editing equipment to other filmmakers.
I used to have to deliver newspapers to make ends meet. I delivered The Wall Street Journal in Bel Air from 11 at night until 3 in the morning. Now nothing can get in my way. We're a $2.2-million company today, but we plan to build this into a $10-million company.
It was astounding; I was able to bootstrap a company in a capital-intensive business. America is truly the land of opportunity -- they'll let you get as deep into debt as you want.
"These patients had 6, 12, maybe 18 months to live. We could make that less painful." -- Donald J. Lyman
Donald Lyman founded Vascular International Inc. to pursue the transfer of polymer chemistry from his laboratory in Salt Lake City to medical transplants within the human body.
I like doing basic research, but I like to see things be used, too. I want to make sure that when I do find something in the lab, it gets to people.
Most of the medical-products industry is using the materials they've been using for many years. Dacron was made for wash-and-wear clothes. It works well for medical products, but in limited applications. Teflon was made for nonstick pans, and it works moderately well for certain applications. But the body is a unique place. Let's understand the material interaction with the living system, then create the polymers that give us the response we want.
We get approached by patients daily, asking if we can do anything to help them. For example, we were approached by ostomy patients. Had we ever thought of doing something in the ostomy field? Boy, there really is a need there. There are close to four-and-a-half million ostomy patients in the United States today. It's getting to be a routine procedure, but the techniques are very archaic.
We looked at some of the problems, and at what we could do to develop new materials that would help. We started with what was probably the simplest problem, where the tumor compromised the ureter. Those patients had 6 to 12, maybe 18 months to live. We could make that less painful. Instead of adding a collection bag on top of all the other trauma they were going through, we could use our material to bypass the tumor right into the bladder, and let them void in a normal manner.
"My banker said, 'Mr. Hyatt, we presume rational behavior on your part.' I got up, and on my way to the door, I said, 'You presume whatever the hell you want." -- Joel Hyatt
Joel Hyatt left the New York City law firm of Paul, Weiss, Rifkind, Wharton & Garrison to found Hyatt Legal Services in Cleveland in 1977; today, the firm has u60 offices and 460 attorneys serving more than 250,000 clients yearly. His wife, Susan, serves as a senior partner. In 1980, the Hyatts moved to Kansas City, Mo., and set up Block Management Co. as a subsidiary of H&R Block Inc., the 8,997-office tax service started by Henry and Richard Bloch in 1954.
Susan: Friends said to me, "We have a friend that we think you'd get along with. He likes law and politics." I told them I don't like blind dates. They said, "You don't have to marry him, just go out with him." Joel and I used to take walks. We talked about law. We talked about politics. We talked about civil rights. And I saw him as an individual who believed that he had a responsibility to do something.
We wanted to go back to Ohio and set up a network of legal offices to provide services to middle-income people at standard fees. I was the one who set up what the legal assistants did, the communications, how people answer the phone. But Joel is the entrepreneur. I'm the rock.
Joel: People ask, "Why did you leave a prestigious New York City law firm to take such a financial and professional risk?" The answer is because I saw what it could become, and it never occurred to me that we wouldn't get to that point.
As a kid, I had never thought of going into business. Hyatt Legal Services started off as a commitment to trying to develop a delivery system that would enable more people to have access to legal services. And that came out of my upbringing.My father was a small businessman in Cleveland, but he was born in Eastern Europe and schooled in France. He was an agricultural engineer before the war, and the Holocaust uprooted him. My upbringing emphasized education and social involvement.
When the Supreme Court decision allowing lawyers to advertise came down, I remember sitting at my desk and saying, "This creates an opportunity to start a new kind of law firm." And I decided I was going to move back to Cleveland, open offices throughout the metropolitan area, keep them open nights and Saturdays, have standard fees, and advertise on television. Now we provide services to about 20,000 new clients a month, half of whom have never seen a lawyer before. And we've become a big business.
The biggest problem was with the bank we had our major loan with. It was a demand note, and they got nervous. They had my signature and my partner's signature, and we were worth at the time about $12, if that. So one day, a big shot at the bank wants to see me. He said, "Mr. Hyatt, we're very concerned about how your business is developing. Please let us know within seven days how you're going to repay the note." I'm sure they figured I would find my money somewhere else and get them off the hook.
I leaned back and said, "Look, you have a demand note. If you want to call it, call it. That will put us under and you'll get nothing, which strikes me as a very stupid thing to do." He said, "Mr. Hyatt, we presume rational behavior on your part." To which I got up, and on my way to the door, I said, "You presume whatever the hell you want." I don't think I've changed a lot since then.
"There's an excitement among students when they see what someone like Michael Hollis has achieved with Air Atlanta. They see those big airplanes, and they say, 'My Lord, he's a black guy from Booker T. Washington High School." -- Maynard Jackson
Maynard Jackson, formerly mayor of Atlanta, is currently a partner with the law firm of Chapman and Cutler.
Life is still not a bowl of cherries on the racial question, but it is dramatically better than it used to be for many people.Interestingly, many of those people for whom it is much better are the entrepreneurs, the small businesspeople who've gotten out there and taken a chance. Afro-Americans and other minorities are natural entrepreneurs. We are accustomed to making it, somehow. To surviving, somehow. We have the instincts, the attitudes -- and what do we have to lose?
Most of the minority entrepreneurs who are out there today have come out of similar backgrounds -- minimum comfort, great emphasis on education, and a strong force in the home. Somebody kept saying, "Believe in yourself. You can do it." Every entrepreneur has to have that confidence. Entrepreneurship does not have a color to it, except where capital is concerned.
This next generation understands that. There's an excitement among students when they see what someone like Michael Hollis has achieved with Air Atlanta. They see those big airplanes, and they say, "My Lord, he's a black guy from Booker T. Washington High School. If he can do it, so can I." This is a generation that has a grasp on possibilities.
"All the great free-world leaders are essentially pursuing an entrepreneurially oriented economic policy." -- Lawrence Kudlow
Prior to starting his Washington, D.C., economic consulting firm, Lawrence Kudlow was associate director for economics and planning in the Office of Management and Budget during President Reagan's first term.
All the great free-world leaders are essentially pursuing an entrepreneurially oriented economic policy, with varying degrees of success. It's Reagan; it's Thatcher; it's Kohl; it's Nakasone. The thrust is no longer toward big government fine-tuning. I regard that as a sea change in the making of economic policy.
What we're seeing now is unprecedented mobility of capital and labor, which I think is an extremely positive development. There are always going to be some displacements, frictions, and job losses. But it's important not to fall into the trap of single-entry bookkeeping when you're talking about economics. Because on the other side, jobs are being created, opportunities are being created.
America has always had tremendous entrepreneurial desires. But the question has been how conducive to entrepreneurship the economic environment has been. You need growth, market stability, and low inflation. If we go back to double-digit inflation with a 16% or 17% prime rate, that'll kill it. So the federal budget deficit looms as a storm cloud. It's the entrepreneur who will be crowded out.
All things considered, we're in a lot better shape now than in the '70s, though. Things may not be quite as good in the next few years, but on the whole, there is reason to be optimistic. Governments do not create growth; people create growth.
"The younger generation, people from Mexico, people from Vietnam -- the road has been paved for anyone who has a dream." -- Rosemary Ruiz
They were just there average American workers: Rosie Ruiz, Irma Linda Diaz, and Kwok Ming Wong. Frustrated by the lack of opportunity at Aluminum Forge, they started their own business, Independent Forge Co., in 1975. That year, the three partners earned nothing. Last year, the company had 39 employees and $3.5 million in sales.
Ruiz: When they hired me, I hated the forge at first, all that noise and dirt. So I just made up my mind that I would play races against time to keep from getting bored. After a month, I was in supervision, taking care of the bench and showing people how to do the work. Once you start training people, you realize they're just like you: They need the job very bad. So you try and teach them as much as you can so they will stay, and eventually they'll get their raise, and you'll get a raise.
I was the only woman supervisor they had, so I wanted to learn everything, be better than anybody else in that company. And I felt that I was very, very good. I felt morally obligated to work hard; I did have a job there, and they paid me. The company kept growing, and I kept getting more people. After three or four years, I was training boys younger than I was, and they often became my boss. But I knew I'd never get promoted.
So I worked and worked, for 17 years. I think what set me off was when the union tried to get in. One day, they called in all the supervisors, sat us down in a big office, offered us coffee and sweet rolls. Then the president of the company started buttering us up. I was the only woman in the whole room, and he asked me, "Would you like to become a foreman?" I just looked at him. Then I got up and I walked out.
I was mad. Why did he want me to be foreman now after all these years? He wanted me to be on salary, so I couldn't take sides. He wanted me to tell the people who worked under me not to vote for the union. And I realized I didn't want to hassle with him anymore -- or with the union, either, although I felt they needed a union there.
My foreman was so mad at me. He said I was rude.I said, "I don't care, I'm going to quit. My partners and I are going to do our own little thing."
He said, "But you don't know anything about business." "But we know how to work," I said. "We've got to try." When I'm 80 or 90 years old, I'll look back on my life, and if I don't even try, I'll never know if I could have done it or not. You can do anything you want to as long as you live in the United States. You set your goals and stretch your limits, and you can do it. My partners and I had been talking.
Wong: We started at about $1.50 an hour, pretty good wages at that time. We all three worked together 17 years. All in different departments, so we learned the trade pretty good. But we'd always wanted some kind of business. Working for somebody else, you're never secure. You could be the best today, and tomorrow they decide to let you go. But if you own the business, what the heck. You might have to work twice as hard, maybe three times, but at least you're your own boss. Nobody can say we don't need you anymore.
Ruiz: So we started looking for things, looking at papers. We knew what we had to have to start a business. First, a building. Then we had to have a forging press; I think we paid $30,000 for that. It was all the money all three of us had saved over 17 years. We used to work a lot of overtime so we could save. One time I worked four years without a day off, seven days a week without a vacation, without anything, just to save.
We tried going to the bank for money, but they said no. We didn't have a track record, we didn't have any education, we didn't have any business experience.
We'd come to work every single day. Then we'd go out and look for small jobs, things too small for anybody else. I would beat the bushes for a job, then Irma and Wong would work on it. I'd help them when I came back. As soon as we were done, I'd hop in Wong's old truck and try to find some more.
Our landlord was always trying to evict us 'cause we didn't have money to pay the rent.Thirteen hundred dollars, when you don't have it, is a lot of money. We had to pay our phone bills, we had to pay our light, our water. We didn't draw any salary for three-and-a-half years, just held back enough from each small job to get by. We figured if we could keep $500 in the bank, we would somehow find a little bit more to go with it in order to pay the rent. That's why I say the good Lord will provide. He did.
Diaz: We used to go home, we'd have nothing to eat. Just a piece of bread or some rice. Maybe tomorrow, we'd think, we'll get money. We used to go from building to building asking for work. That's the way we survived for three years. We were always here at six or seven in the morning, until eight or nine at night. Sometimes I used to clean the office, because there was nothing else to do. Then we'd go door-to-door some more.
Ruiz: Our break came in 1977. We had only been able to get small jobs before that. Our biggest bill was just over $2,200. And to us, it seemed like so much. Then we got a big job from Northrop. They ordered 19,000 pieces, a total bill of $94,000. There were just so many zeros. I looked at this bill when it came in, and I ran and told Irma. I said, "Look, they must have made a mistake." Then I called the buyer. I said, "I received your purchase order; I think the computer made a mistake." But he said, "No, that is the right amount."
That was the first year we made any money. Then by 1978, we had something like $150,000 in the bank, and the accountant said, "It's time you people start drawing salaries." He made our paychecks out, and told us to take them home. But we left them in the desk.We were going to leave them there for at least one month, in case the company needed the money.
I get a lot of harassment about being a woman still, although it's more accepted now. I'd go sit in the lobby at Northrop or Lockheed or Douglas, and I'd never see women in there. Being Mexican-American made it harder, too. People shouldn't have to give you work because you're a woman or because of the color of your skin. It should all depend on your ability to prove yourself. But if they would just look at you as a human being, then they would give you a chance.
I think it is easier for women and minorities today, though. The barriers are being broken. The younger generation, people from Mexico, people from Vietnam -- the road has been paved for anyone who has a dream. Not that it will be easy. They'll still have to go through that curve of learning. First of all, know who they really are, accept it, and make the best of it. But we're all very, very fortunate that we live in this country. Your dreams can be fulfilled here.
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