Mary Walshok – June 13, 2014
CARUSO: Today is the 13th of June, 2014. This is David Caruso. I’m with Mary Walshok at the University of California, San Diego in La Jolla, California. This is an interview as part of the San Diego Technology Archives Oral History Project. Thank you again for meeting with me to talk a bit about your experiences. As I mentioned to you what I’d like to start with is just hear a little bit about where you grew up, your general family life, where you came from.
Walshok: I’m a Swedish American. My parents were both immigrants from Sweden and most of my growing up occurred in California and in Palm Springs. Both parents came to this country before World War II and through complicated circumstances my father ended up having a very famous Swedish restaurant in Palm Springs in the ‘50s, ‘60s and ‘70s. I grew up with a lot of movie people, playing tennis but paradoxically had European parents. So went to Europe a lot but also—and this is not trivial—because of our proximity to Los Angeles, the movie industry, knew a lot of ex-pats and Holocaust survivors and others. I was born in 1942.
So it was a very rich childhood. I was a good student. It was the Sputnik era. We got fast tracked. I ended up going to Pomona College in Los Angeles. There I fell in love with learning. Graduating from college in 1964. At that time girls didn’t–well they couldn’t get into most of the business schools or law schools in the country.
CARUSO: It was only around that time and actually somewhat later that some of the major universities like Johns Hopkins and Harvard allowed…
Walshok: That’s right. I think the first female class in the Harvard Business School was ’72. So it was seven or eight years later. But I had been a reasonably good student. If I may be candid my role model was an extraordinary dean of women, Swarthmore, Penn, and Ph.D. in math. She said if you want to be a dean of women get an academic degree. So I pursued a Ph.D. in Sociology at Indiana University, but I really went to Indiana rather than Berkeley or Stanford, which were my other choices because they had an opera program and I thought I might have a career in music.
I think these random walks are important because I’ve discovered in my career here at UCSD that the dean of sciences went into minor league baseball for a while then went back and got his Ph.D. I’m convinced that part of the DNA of UCSD and of this place is it’s full of people like me who thought they wanted to be baseball players or opera singers and versatile, flexible, tenacious, but also opportunistic. In graduate school I met my husband.
CARUSO: As an undergraduate were you studying sociology as well?
Walshok: I studied sociology and anthropology and graduated cum laude and—oh, I think this is important for the record—I was in the class of ’64. One of my closest friends married Steve Pauley, the son of Ed Pauley, the regent who was the nemesis in the life of Roger Revelle, who we often think of as the founder of our campus. Bill Revelle was a year behind me at Pomona and he married Eleanor McNown and I had stayed in the Revelle’s house because I had sung in the glee club. Bob Irvine, whose family contributed the land that is now UC Irvine, was in Steve Pauley’s class. The son of the first chancellor of UC San Diego, Jim Galbraith was in my class. I just went back to my 50th reunion and saw Bill Revelle, Steve Pauley, Bob Irvine and Jim Galbraith and said, “Well folks, here I am 50 years later teaching and working at the University that was just an idea in the minds of your fathers.”
I can remember visiting those homes and knowing–Pauley Pavilion at UCLA is named after Steve’s [dad], Irvine the city and UC Irvine after Robert’s grandfather. It’s a strange series of coincidences because, again, the randomness of life. Both my sister and I dated Cal Tech boys who were two of the first Ph.D. in physics students here. So long before I got a Ph.D. in sociology, [I had connections to the UC San Diego campus,] I met my husband who got a job at San Diego State University. I trailed him as spouses did in those days. I had all these connections to this place, from La Jolla to the Torrey Pines Mesa. People who turned out to be from a historical point of view–by which I mean not just in the archives, but in lots of books–the main players in the founding of this anchor institution on the mesa.
I think these personal relationships were important when I came here. For example, Steve Pauley’s wife hosted a lunch for me when I first came because they lived in La Jolla at the time. So here I am, a young woman. I got my Ph.D. when I was 26. I met my husband when I was 25. [I come to La Jolla and am immediately integrated into the affluent, professional community because of my background.]
CARUSO: When you were pursuing your doctorate in sociology what was the rough makeup of your class?
Walshok: There were about 90 graduate students and 4 women; a nun, me, a very bright, married woman from Brooklyn who was there with her husband, and a woman from the Philippines. So it was very unusual. I was certainly one of the youngest people in my Ph.D. program.
CARUSO: Was the faculty predominantly male?
Walshok: It was all male. There was not a single woman on the faculty. In fact when I met my husband late in graduate school, who was getting a Ph.D. in political science at Indiana University, I met my first woman faculty member. At the time she was a lecturer with a husband on the faculty. She eventually became a professor at IU and got the Nobel Prize [in economics] a few years ago. She was on my husband’s Ph.D. committee.
CARUSO: Oh, who was that?
Walshok: Elinor Ostrom. At the time Elinor was a lecturer and her husband was a professor in political science. So that gives you a sense of the times. I think it’s very important because I feel my personal history maps a lot with the history of [many] other people who came here (predominantly men) in the ‘50s, ‘60s and ‘70s, and as women began to enter the scene at UCSD and in technology companies and R&D institutions in the ‘80s many had [circuitous] career paths or history. I think a lot of us were risk takers.
CARUSO: You mentioned the Swarthmore, Penn dean and going into administrative roles at universities. Is that what you wanted to do?
Walshok: Well at Pomona College, except for the French teacher, it was all men. I had fallen in love with learning. My parents were immigrants. I’d grown up in Palm Springs, pretty shallow community. I was just smitten with the academic life. So I knew I wanted to be on a campus. The only adult woman I saw on the campus was the dean of women.
CARUSO: So you come down to San Diego following your husband’s position.
CARUSO: What is it that you wound up doing when you got here?
Walshok: Well, what I should clarify is we both got jobs in 1969 in the state university system. I was at Cal State Fullerton and he was at San Diego State University. He got the exact job he wanted and I took what I could get. For three years I worked there. We lived for one year in Laguna Beach. He joined a school of public administration which was his core interest. Actually his dad was close to Pat Brown, and so some of this history is my husband and his family. His family was very active in progressive democratic politics in the State of California throughout the late ‘40s into the late ‘60s.
My spouse really wanted to come back to California more than I. So we narrowed our job choices. After a year we found a little cottage in Del Mar and we chose that place because there was a train that two or three times a day stopped in Fullerton, which was a couple of miles from the school where I was teaching. So it looked like it was going to be a good arrangement.
Again, talking about serendipity and random walk because I’d done my dissertation with the Kinsey Institute on the sexual activity of college women. Through that work I learned what Kinsey had learned in the 1940s that women who were soon to marry were more likely to have premarital intercourse and rarely used birth control. In other words, premarital intercourse was like a first step to marriage in my generation where reliable birth control was not readily available. The more active women, women who actually planned for sex and purchased diaphragms were in those days [considered] promiscuous. Women who were very career oriented, i.e., pre-law, pre-med either had no premarital sex or if they were sexually active, practiced birth control assiduously. They were women who couldn’t afford to get pregnant because they didn’t see marriage as their only path to [a successful adult life.]
CARUSO: As the end.
Walshok: As the end. So I know that sounds odd, but that research launched me on a path, which is connected to the fact that today I’m a dean of an extension program. I elucidated how financial independence and independent identity were a core part of how women organized all the other parts of their lives including planning for family, for sexuality, for other things. So my dissertation about women and their life goals emerged just at the time, 1969 (the year I got my Ph.D.) when the world was exploding. Betty Friedan had written her book about five years earlier, but the activism in the women’s movement was just then exploding. So I was doing a lot of public speaking around Los Angeles and Orange County including an event at the Nixon White House to brief folks on women’s changing roles. Actually someone at UCSD spotted me in a piece in the L.A. Times. He was in San Diego and knew my husband and said, “Why isn’t your wife down here? There is a job as director of women’s programs opening up at UC San Diego. She should apply.”
So I applied. I had no idea it was a job in the extension service which is not a core faculty unit, but an academic unit designed to be a bridge between traditional degrees and academic activities and the economic and workplace education needs of the community. As I interviewed for the job I got very excited because it represented an opportunity to be a bridge between women who were returning to school or college, young women who were thinking narrowly about college or university experiences and could help broaden their horizons. So I took a leave of absence from my professional position to come and do this. It was also ten minutes from my home in Del Mar. Not a trivial issue.
Back to the technology history because I think personal relationships are not trivial. Now I’m 30. So it’s what, seven, eight years since we’ve graduated. My Pomona College girlfriends who lived here, three or four of them were married to already very prominent men in this community. So the minute I let one of them know, “Guess what? I’m going to be at UC San Diego,” Marilyn Pauley, daughter-in-law of Regent Ed Pauley…
CARUSO: So Steve’s wife?
Walshok: Steve’s wife gives me a ladies lunch in La Jolla. As far as I’m concerned the rest is history because I entered a campus environment, which [as a consequence of civil unrest] in the late 1960s and 1970s had completely withdrawn from any kind of connection to this community. In the ‘50s and early ‘60s we were embedded because of our close connection to the defense establishment and that long history is in the archives and is in the book Abe and I wrote. We were the Division of War Research for the University of California throughout World War II and instrumental in creating—if you will—the Defense Research Establishment, the growth of the Office of Naval Research, NSF, and enormous beneficiaries of all of that.
I was living through that history, in the 1960s and 70s, which I have written about. Very, very interesting. So from 1972 until about 1980 my life here was very engaged in community outreach, women’s activism and–not activism in terms of feminist activism but setting up lecture series on women’s rights and women’s issues, developing courses and seminars on securing credit which was a big issue in those days, helping women do career planning in order to return to school and return to work.
CARUSO: So why was the University interested in that sort of engagement at that time?
Walshok: It wasn’t the University. It was the Extension. So the University had no Womens Studies program and no women faculty to speak of, but Extension–because it’s anchored in the community–was getting lots of requests and inquiries to do more, particularly for already educated, affluent women. We tend to serve the post-baccalaureate adult. So I was just inundated [with requests for education initiatives]. Every woman in the Junior League, for example–these are very conventional organizations–would enroll in a course on assertiveness training, and I would do full-day seminars on women and credit for example.
The other thing, David, that I think is important is, again, remember women were still very much marginalized at this time. So the women that I found and met to help teach these programs or to give lectures in the 1970s, within 20 years were [Congresswomen,] chief of staff for the governor of California, on the boards of Sempra Energy or Biogen Idec or Boston Scientific. In other words, we all sort of rose together. So my history is very much around the power of networks, but in my case of competent, powerful women, if that makes sense.
CARUSO: How did you find the women to give those lectures? What networks were you tapping into?
Walshok: It started with friendships. It started with that lunch with Marilyn Pauley, Cindy Rodi, Judy Parzen, and Maureen O’Connor who later became the mayor of San Diego. As you can probably tell I’m gregarious. We’d get invited to dinner parties and then I’d talk to people. It was like concentric circles of influence. The reason this all becomes important is that by 1980, ’81, ’82, then chancellor Bill McElroy (he’d been the chancellor the whole time I was here) started to think about private sector development. UCSD in the late ‘70s only had three or four people in development. We must have 150 today.
He wanted to create industry connections. He wanted to start meeting our equivalent of the captains of industry. The development person who knew me socially, knew I was on community boards. I was in the Junior League and I made speeches. So I was in the paper a lot as a sort of UCSD woman, although Helen Meyer did get the Nobel Prize. Have you heard this story about how she came to La Jolla? It’s in our book. It’s in a lot of books. But it’s one of the early apocryphal stories about this place–this is a big digression.
CARUSO: That’s fine.
Walshok: One of the early recruitment strategies of UCSD with its faculty was to hire at the most senior level. As Jim Arnold, one of our founding faculty members in chemistry said, “We only wanted people full of piss and vinegar.” He said, “But we were also smart because lots of other universities had mandatory retirement. We didn’t. Most other universities wouldn’t hire a competent spouse. We did.” So they brought the Meyers out here and two years later she got the Nobel Prize. It was her first professorship and she was in her 60s. Swear to God the headlines in The La Jolla Light were “La Jolla housewife wins Nobel Prize.” So David, that’s the world. Does that help?
Walshok: But this is not about Mary Walshok. This is–if anybody’s doing oral history or trying to understand the dynamics of a region about understanding how people become nodes in powerful networks. I think part of the story I’m telling you is because of Pomona College, because I was a writer and a speaker and one of the few women. I was drawn into social networks, which [proved to be powerful and civic] business networks and into organizations like CONNECT, which were enabled by the trust and credibility I had through those social networks. What happened with Bill McElroy was significantly amplified when Richard Atkinson came. That’s the interesting part of the technology history I can share with you. I knew everybody [in town at a moment in history when the university had significantly distanced itself from the “townies.”]
I knew the CEO of Cubic and I knew the CEO of Hewlett-Packard and I knew the guys who had started a company here called Spin Physics that was acquired by Kodak. So people started saying, “Could you help us get him to a meeting? Could you help?” –it was never her. That’s no longer true, but it was in those days. So I helped to bridge early on. I can’t remember the exact date, but I keep thinking it’s around ’81 or ’82 because it’s shortly before Dick Atkinson comes to be the chancellor.
I was just 40 and a woman facilitating roundtables where the [UCSD] question was, “We’ve been somewhat remote from the community over the last 20 years and we want to reconnect. What does industry need from us?” There was this outpouring of, “We want access to your labs. We want joint research partnerships. We’re interested in interns. We want you to be relevant to our science and technology needs.”
There’s a subtle point here and then I'll stop giving you this historical view that’s in our book and in the archives in the library. There’s a wonderful interview with Sanford Penner who came here from Cal Tech to be Vice Chancellor for Academic Affairs just as the Vietnam protest was going on and accelerating in Cambodia. In a single year on this campus a protestor, [George Winne, Jr.], self-immolated–I mean he burned himself alive. Angela Davis, who was a graduate student here, was supporting the Black Panthers. [A group of faculty was] suggesting Eldridge Cleaver as a professor in [Lumumba-Zapata] College–seriously, that’s what [Thurgood Marshall College] was called those days and this was happening in a conservative military town. The rupture was extraordinary. Because if you look at the archives, the newspaper stories, who advocated for us I mean a whole chain–representatives from the Chamber of Commerce went up to the Regents to fight Ed Pauley and stand up for Roger Revelle in the late 50s and early 60s. “We really need a university.” Twice citizens voted to give land, first Pueblo land and then Camp Matthews to create a campus on the Torrey Pines Mesa.
This community was in love with the idea of an advanced science and technology research center largely because they knew it would keep defense contracting in San Diego. But for better or for worse, all of the ruptures of the late ‘60s and 1970s had created a huge chasm between the community and the University. We were fine because we were doing basic research. We didn’t have a school of engineering. We didn’t have a school of business. We were science and basic science and we were getting all this NSF and NIH money. So we were very, very successful and had no need whatsoever for this community. But that began to change in the ‘80s.
CARUSO: Just a couple of questions. You mentioned that you had connections to a lot of individuals. In the ‘60s and ‘70s were there any–you talked about some of the lecture series from the extension school and focused on women—were there any self-organized groups in the area for those in industry?
Walshok: No. There were no industry groups that I knew of. Here’s what–you’d have to check with people who know these worlds better than I. We had started a medical school and we had acquired the county hospital which was downtown and we had a hospital auxiliary. Now you can’t laugh about these things. We had clinical faculty. So the medical school even though it was predominantly graduating researchers in medicine in the early years, not clinicians, had built a clinical faculty and had a women’s auxiliary made up of powerful women. So there was a connectivity to the community if you understand what I mean.
So if you went to the party of someone who was a medical doctor you were very likely to meet faculty from the med school because they were interacting early. Nothing like that in applied physics, chemistry, or biology. Nothing like that. Scripps Institution of Oceanography, Bill Nierenberg, he had industrial affiliates. Shell Oil, British Petroleum. Scripps was embedded in the sort of global corporate world that was interested in things like energy and climate and the sea and Roger Revelle had similar connections, but not so much to local yokels if you understand what I’m saying.
So in those two institutions prior to my coming I got many of the people I knew were in those networks, but those networks were not about commercializing or building technology companies. It was tech transfer to larger [companies].
CARUSO: I was going to be asking about Scripps as well since it has been in the area and I wasn’t sure.
Walshok: Just pivotal. In those days, David, there was so much federal money and we were so good at getting it because of the pre-existing relationships established in the ‘30s and ‘40s through the war buildup and then through the Cold War that we were fat cats. We were kind of like General Motors. “What do we need the community for?” In fact, the Vice Chancellor Wayne Kennedy, who had come from Washington, D.C. with Dick Atkinson and who I love and admire when I said to him in the 1980s, “I’m getting to know all these people in industry and they would be great supporters of the University.” He said, “Mary, the transaction costs of the small amounts of money and support we would get from any of these industries aren’t worth it. The federal government is what counts.” So the culture here was either you work for the Defense Department or you do federally-funded research. That was basically the culture here. I would say particularly from the post-World War late ‘40s well into the early ‘80s. So whenever I write or tell the story of UCSD I point out Bill McElroy was the first to put his toe in the water because he saw that enterprises such as SAIC and Linkabit were starting up and percolating here.
CARUSO: That was also going to be one of my other follow-up questions was–I don’t know if you know why, but I am curious to know why Bill McElroy, as you put it, put his toe in the water of the industrial groups. I could see what companies could use from UCSD researchers. “Oh well you’re working on this area? Come and intern with us.” That’s going to be for company development and growth. But what would be getting back to…?
Walshok: So this is what–it’s very important I think. He had a couple of vice chancellors that he brought with him from Hopkins and from Washington, D.C. Bill had been head of NSF, Dean of the Medical School or Dean of Science at Johns Hopkins. He was another example. His wife was my age. It was a second marriage. She’d never been a professor. So when Marlene–she was a great scientist–died of cancer, young–in fact her work was on the cover of Time Magazine. I mean fantastic woman. Marlene Deluca.
But when Bill and Marlene came out here [in the late 1960s], he brought Bud Sisco. He had a vice president for external or community affairs who said, “We better have a development function. We’re starting to get alumni.” So it was a very early move to create a development function at a brand new campus. They hired a man who in the history of UCSD, in my view of the history of this campus, is terribly underappreciated and unsung. His name was Ray Ramsayer. Ray had been the development director for of all places Berea College, which is a religious Bible belt college that was raising more money than most colleges at that time in America.
So Ray was—by 1970s standards—a Cracker Jack development guy. He adopted me when I came because he was lonesome. He had a small office and an alumni relations person and his job was to get to know the community and organize lunches for Bill McElroy so he could get acquainted with [business leaders including the] big defense contractors. But the problem, David, with defense contractors and again this is in our book, is that the federal government is their customer. So nobody’s going to get super rich if you’re doing exclusively defense contracting. You can make a lot of money, but you don’t become a billionaire.
CARUSO: There’s only one customer.
Walshok: Yes, there's one customer and it’s competitive bidding and you’ve got to keep your overheads low and you don’t accumulate wealth in the manner of General Motors. It’s just a different ethic I think and a different culture than in automobiles or refrigerators. You mentioned Hopkins. I think it’s very, very interesting that in my opinion the two pivotal chancellors on this campus both came from great private research universities, McElroy from Hopkins and Atkinson from Stanford. So those were the two chancellors I grew up with if that makes sense.
These were men who were extraordinarily well connected, extraordinarily influential in the basic science community but they had lived and worked on campuses that had connections, [government and industry]. So they evolve into the chancellor role at a young UC San Diego and they say, “Where are my industry advocates?” It wasn’t just about cash. It was about advocates for [the value of a research] university, particularly in Washington and in Sacramento. It was financial but not always direct financial contributions. At least that’s how I remember the history.
So that toe in the water that McElroy put created an ability and a list of names that Ray Ramsayer, his development officer, could begin to leverage as we transitioned into the 14 years with Dick Atkinson. Dick’s the one who made me–I wasn’t even Dean when Bill McElroy asked me to do that. I mean I was still women’s programs. It’s so incongruous, right?
Walshok: I can point out to you the Evans’ family who owned the Lodge and hotels downtown–she’s about ten years older than I am but she took courses and came to lectures up here and when the book that Abe and I wrote came out, the family opened the Lodge and gave me a book party at their expense for 150 people. You go, “Well why?” Well we’ve known one another for 40 years. Right? It’s friendship. But who comes to my book party? The whole damn tech community on the mesa in part because they know Anne but in part because it’s a book about innovation and it’s UCSD.
So I think the story that is powerful from my point of view, David, is there’s a tendency to think it’s all about expertise. “Isn’t this community lucky that UCSD somehow appeared and brought all this talent here? We’re the reason the tech economy works.” I think my vantage point is this university is here because there was a community that was hungry for science and technology. If you go back to early history they saw it as a path to economic growth that was antithetical to traditional industry–the gritty, grimy, automobile manufacturing steel mills of the industrial Midwest and East and that’s very much in the DNA of [those who settled here and built] this place.
But it also was that the defense companies and the military and particularly Navy and Aviation, which are our two, were here. It wasn’t Army–Marines are here, but it was really the Navy and Aviation with satellite communications and with better materials and better design. They were clean industries and they came after the world was saved for democracy by the atom bomb and Vannevar Bush. The citizens of this town embraced probably 25, 30 years before most communities in America that economic prosperity for them was going to be tied to building R&D infrastructure. They zoned this land you and I are sitting on in the ‘50s for research and light industry. It could have been high cost housing. It could have been resorts. It could have been more golf courses, but it wasn’t.
So my early history is part of that history. I happened to get a Ph.D. in Sociology, right? I happened to follow my husband and get a job here at UCSD. I happened to get to know Bill McElroy and Ray Ramsayer and then most importantly Dick Atkinson. All of that personal history and those personal connections kicked in in a way that allowed me to make modest contributions to the evolution of the campus.
CARUSO: So one thing I’m curious about is–I can understand where people in the ‘40s and ‘50s were coming from in terms of developing zoning laws with the hope that bringing R&D is going to bring prosperity–but I’m assuming that the people who were doing that in the ‘40s and ‘50s weren’t necessarily there to keep that vision going into the ‘60s, ‘70s and ‘80s. So I’m wondering how that continued.
Walshok:Yes. I think you’re making a very good point and we try to make it in the book. There’s so much fricking luck in the history of this place, just damn good luck. Because you are absolutely right. There a chasm grew between civic leaders. In other words, people in the same positions who in the ‘40s, ‘50s–well, let’s go back to the ‘20s when the Chamber of Commerce created a fund–no, 1917.
The Chamber of Commerce created a philanthropic fund to support the Marine Biological Institute in La Jolla, which became Scripps. Their money enabled Bill Ritter and guys from Berkeley to come down here. E. W. Scripps gave his yacht as a gift, which enabled them to go out and collect specimens and the rest is history. Yes, so that kind of synergy and connection—they were all at the same cocktail parties and reading groups—was essentially dismantled, I would say by the mid-‘60s, and that was Vietnam. That’s when the loyalty oath was required. That’s when the University as a whole decided it would no longer do classified research.
Up until then, hey, throughout World War II we were the UC’s Division of War Research. In ’64 we were no longer doing classified research on a UC campus. So then you have what you don’t expect because all the UC universities are where scientists are building atomic bombs and making the world safe for democracy. I don’t mean that in a disparaging way at all. However, by the ‘60s, we were seen as just a bunch of radicals who are trying to tear down American society. The newspapers were full of it. Bill McGill was chancellor for two years and was basically run out of town because he wouldn’t fire Herbert Marcuse and ask Angela Davis to leave the campus. It was a terrible, terrible time.
So the scientists who had always really just wanted to work in their labs pulled back and there was no impulse because you were getting this flow of money. So the serendipity is not only is there all this flow of money–think Vannevar Bush “Science the Endless Frontier” –it was in the mid-‘50s when all that started to happen, right? So you get all this infusion of federal research dollars, but what people forget is that in 1971 Richard Nixon declared a new war, a war on cancer and this represented a new infusion of money into the community from NIH. So in the midst of all of this hoopla, and protest, new centers of resources for basic research are emerging. We mobilize because we were a basic science campus and by then with Salk and TSRI. So the whole mesa, I think it’s a fascinating history. The science capacity of the region was growing exponentially as its isolation from the local economy and the local civil society was also growing.
CARUSO: Again, this might be a bit beyond, but–Hybritech, Ivor Royston, late 1970s. Was the University starting to think about what it should be doing with research that’s coming out of the institution?
Walshok: See, you have to remember the founders of CONNECT. That’s Hybritech, Linkabit, and [Atkinson at] UCSD, and local venture capital guys understood that a lot of companies were starting up here on the mesa [and could recharge what in the 1980s was a troubled local economy].
In our book, we point out that by the ‘60s, late ‘60s General Atomics had spun out over 30 companies, of which, SAIC, went on to become a Fortune 500 and Titan which is still here and is huge. Cubic was here and Cubic was a big defense contractor, but was moving into some commercial applications even in the late ‘60s. If you’re a civic leader, you’re saying, “Oh well we’re in great shape. General [Atomics] is employing thousands of people and SAIC has spun out and is hiring at the rate of 40 people a week, [as have lots of other companies].”
Bottom line, if you’re a civic leader and you’re following where the jobs are coming from, you start to notice something’s going on that mesa. [Downtown started] to take notice, especially, subsequent to the enormous local economic crisis—this preceded the defense wind down of the mid-80s. That crisis was the savings and loan, housing and banking crisis of the late ‘70s in which cities such as Phoenix and San Diego were just devastated. We had a couple of Fortune 500 companies; Wickes, a furniture maker moved because things started to get expensive here.
The city created an economic development corporation for the first time. We had never had one in San Diego during Mayor Pete Wilson’s administration. He’s kind of my hero in this story. He went on to be our governor and senator. He was a very progressive mayor who brought with him pro-environmental and economic development strategies that were aggressive. He was the one who amended the land use parameters for the Torrey Pines Mesa to include science and technology based companies because before that it was mostly not-for-profit R&D institutions.
He advocated for some of the first commercial buildings on the mesa—Linkabit and Hybritech—to help them establish for profit companies on the mesa. There were all these clues downtown at both the Chamber of Commerce and the newly formed economic development corporation that we needed to pay attention to the enterprises on the Torrey Pines Mesa. So people would call on McElroy, [then Chancellor of UCSD]. They would call on the director of TSRI, the director of Salk. “Is there anything we can be doing?” There was nothing that really took hold until the summer of ’84.
Again, this is a homely, personal story. Richard Atkinson by now had come to UCSD as the chancellor. I’m now Dean of Extension. Soon after his arrival here he says, “We don’t have a business school but every great research university has connections to industry especially executive programs for scientists and engineers and industry leaders.” In his first year, I became Dean of Extension and within Dick’s first year we launched an Executive Program for Scientists and Engineers. The only reason I was able to do it was because of these relationships I’d had since the ‘70s and knowing all the tech guys. We filled the class. It was a great success. We still have it. It’s 40 years later and we still have waiting lists for this executive program for scientists and engineers.
So Dick made all these moves. He expanded the development office and he insisted that every week he’d have at least two lunches in his office with community leaders or business leaders. A momentum was starting to build with the community after close to twenty years of virtual isolation. I think this is an important part of the technology history and I’m not going to get my dates right but if a historian reads this he or she can go in and find the exact dates.
By 1983, San Diego—under the leadership of the Downtown Economic Development Corporation which itself was only seven or eight years old—enrolled Dick and his very able staff member from Washington, D.C. –Bruce Darling (now at the National Academy of Sciences), Wayne Kennedy who had been at the University of Maryland Medical School, me, because of the connection to industry to contribute to engage in a number of initiatives to enhance regional competitiveness. In the early ‘80s the specter of the advances in German and Japanese technology was overwhelming the American industry; cars, televisions, computers, general electronics.
It was the tipping point in this region. So you had consortia of U.S. companies coming together, SEMATECH, MCC, to accelerate innovation in technologies. There were two or three others, but those are the two I remember because we went after those. They would basically say, “We’re Fortune 500 companies; 3M, Xerox, IBM and we’re going to locate a [major R & D] center in a U.S. city in order to invest in basic research that will enhance our global competitiveness.” The U.S. Council on Competitiveness was established at this time. Young, the CEO of Hewlett-Packard and Charlie Vest, the President of MIT were the co-chairs and enrolled the big research universities and the big American technology companies. “We’re coming together to make sure we have education and research strategies that don’t allow the Germans, the Swedes, the Japanese to ‘eat our lunch.” So all of this was happening when Dick Atkinson arrived as chancellor.
So we participated in two different bids to get these large consortia here. MCC was chaired by Bobby Inman who was on the board of SAIC by then a retired admiral from Texas. That went to Austin. SEMATECH, I didn’t know those players as well, but that went to Northern Virginia. Nobody in San Diego could believe it. How could they? We have better research institutions. Why would you live in Virginia if you could live in La Jolla, right? Why would you live in Austin? This was before Austin City Limits. It really was a regional crisis. So remember we’re small town, David. We’re not Philadelphia. We’re not Boston. We’re not San Francisco. We’re not L.A. You can get everybody in one room in this town, particularly then. It was a real crisis.
Why do I say the summer of ’84 was so pivotal? Because the man in that photograph on the far right, not a technology guy, graduate of L.A. State University who drinks Coca-Cola from 7:00 in the morning till 7:00 at night by the name of Dan Pegg was the head of the [Regional] Economic Development Corporation and he hired an intern, undergraduate intern from Stanford University who grew up here. I recently chaired the board of a foundation he runs as he’s now back in town, Richard Kiy, to do an analysis of what San Diego needed to be able to grow its own companies.
There was a very clear consensus among civic leaders, (again, University’s not a part of this at all, David) by ’83 that the only path to the future is to create and grow [new technology] companies. It wasn’t just that we lost the two consortia but what economic development corporations were doing in the early ‘80s. A lot of them were engaged primarily in business attraction, [not creation]. The “If we could just get a big employer to move here” strategy. We could see the defense downturn coming and we’d had the downturn, right, because of the Savings and Loan and real estate crisis. So unemployment here was close to 10 percent, not on the Mesa, but everywhere else.
So when I tell the story I say thank you to all the car [dealerships], real estate developers and retail mall owners. [They were largely why we got a commitment to technology commercialization in San Diego because they understood having watched early developments on the Mesa.] If we wanted to grow the economy, grow the workforce, particularly a high wage workforce, we needed to focus on the Mesa and we needed to focus on creating companies out of advances in science. After all, that little company, Linkabit, did so well. Look what happened with SAIC. Look what happened with Titan. Look at this little company, Hybritech on the Mesa. Aren’t they in negotiations right now to be sold to Lilly?
IMED and IVAC were two medical device companies, which had previously sold to Lilly [and Warner Lambert]. So if you and I took the time and my research team can do this, we could document all the companies that were being created and sold or growing through that period of the 1970s and early ‘80s. It wasn’t hundreds but it was dozens. So what this young [EDC intern], Richard Kiy did was ask, “How would you turn these early successes into a new force for regional growth?”
His conclusion was San Diego needed to move beyond just being a Defense contracting culture and begin to grow an entrepreneurial culture. So his recommendation was to build a school for entrepreneurs at UCSD, which was impossible. Nonetheless it opened the door to what turned out to be the next tipping point. UCSD still didn’t have a school of engineering. Our medical school was still producing as many researchers as clinical graduates. There was no [business] school on campus. There was no [professional school culture at UCSD] at that time.
The chancellor saw Kiy's ideas as very interesting–he in fact made a very strong case for the entrepreneurial culture in the Silicon Valley and how important that ecosystem had been to getting technology out of the University and into commercialization. In other words, Dick got it. He knew it. But he knew UCSD was not Stanford, [with its strong entrepreneurial culture and professional schools]. I don’t have a business school. I’m in all these meetings. I am dean of Extension and Extension is the closest thing to a professional school at UCSD at that time.
He realizes all he has is an extension school. We had an executive program for scientists and engineers [filling the class in 24 hours]. We had gotten all these companies in our pockets. So Dick said “Mary, go out and talk to people. Find out if there’s something we can do in the entrepreneurship space even though we don’t have any faculty, any capability on campus” [at that time]. That’s how the CONNECT program got started.
I need to tell you that I had had a fellowship from the Kellogg Foundation over a three year period, [1984-1987], to focus my research on innovation economies. So it enabled me to travel to Sweden and it enabled me to go to the U.K. and also to spend some time in the Silicon Valley. Who I talked to were employers and players in the Valley [and I began to understand the dynamics Dick saw as entering in the San Diego region].
For the campus I did some interviews and I was the messenger, the interpreter, about what people needed. Dick said, “Talk to Irwin Jacobs. Talk to David Hale. Talk to some of these guys in the community and come back and tell me that we’re going to do something.” He told the [EDC] delegation. “We’re not going to start a school of entrepreneurship but we’re going to do something to help grow companies.” So again, the benefit of networks [kicked in as I began these interviews for him].
I was able to easily get into offices of managing partners at law firms and banks and others as well as talk to some of the CEOs. I heard two stories. The downtown business leadership and all the businesses anchored downtown, all the law firms, all the accounting firms, all the banks based downtown would look at me and say, “Mary, if we’re going to grow entrepreneurial companies based on science and technology, the University has to do something to teach scientists and engineers about business and about markets. They’re all “in love” with their technology but they never take the time to think about how to turn their idea into a product or a service or if there's a competitive marketplace and how you get it financed. So you’ve got to do really good business education.” Because I knew a lot of engineers and scientists, I also talked to them.
Here’s the story I heard. “Oh I’ve just been lucky. I had a lot of defense contracts and I was able to get good advice from my buddy in the Silicon Valley or I get financing from the Silicon Valley (Hybritech) and I get my legal services in San Francisco and actually we do our marketing out of New York.” You know what the really big problem here is? You’ll never get a large number of entrepreneurial companies if you don’t change the local business culture because everybody in law, marketing, accounting, and banking is anchored in retail, in real estate development. What corporate law we have is defense contracting. “Nobody understands I.P., what it means. Nobody understands angel, venture, boot strap financing. Nobody understands that our compensation systems have to be different when you’re building an entrepreneurial company. So we can’t even get the kind of HR help much less expertise on marketing a science-based product. It’s not like selling [real estate], hamburgers, or appliances. You’ve got to be able to educate people about the superiority of your technology first and then whiz bang marketing and promotion kind of stuff.”
So I came back to this little group around Dick Atkinson’s table and shared this and said, “I think we need to create something that brings all of these players into the room. We have to do something that educates scientists and technologists about the business side of the equation, but we’re also going to have to increase the technological literacy of our business community.” I think that was an important contribution that just came out of listening and everybody agreed.
So we launched the UCSD program in technology and entrepreneurship. We linked the two. It was administered by Extension. We raised about $70,000 through letters to people in the community signed by Dick Atkinson. I wrote the letter [and the chancellor signed asking for private support]. These guys, my business friends, made the follow-up phone calls. “I want you to put $2,000 in. I’m putting $2,000 in. Ray Ramsayer is in the room, also the development guy. We got it up and running.
A second critical thing that I think is important about this story. By now I’m 40, I now have more self-confidence. I’ve had success working with these guys. Out of the woodwork come retired executives and admirals from La Jolla and Rancho Santa Fe who call the chancellor because now the chancellor is cultivating big donors through development. “You know I have wonderful business experience and I understand you’re starting a new program and I should be the director of that program.” So I’m pushing away old guys from old industrial companies and begging Irwin [Jacobs] and Buzz [Woolley] and others, “Help us find an entrepreneur because we need a real entrepreneur to lead [this initiative].”
So it took us ten months. The toughest part of getting CONNECT up and running was what the chancellor did which is what chancellor’s do, “Oh go talk to Mary Walshok. She’s working with our advisory board. She’s got this fund. They’re putting it together.” We were doing a few events; Meet the Researcher, Meet the Entrepreneur, stuff like that.
So here’s the punch line. The Junior League. We go back to the Marilyn Pauley lunch. I had joined the Junior League years earlier. One of my good friends in the Junior League was a woman by the name of Anne Otterson. I knew her husband was in tech [and he was a super salesman]. They’d sold their company eventually for $40/50 million which wasn’t bad in the ‘80s. She took me to breakfast and she said, “Why aren’t you talking to Bill?” I said, “What do you mean?” “He’s driving me crazy at home and I think he could really help you [with this tech entrepreneur’s initiative].”
So I go back to the working committee and I learn that Buzz Woolley, one of our critical supporters, five years earlier had fired Bill because he wasn’t effectively leading the company, which eventually sold. He said, “You’ve got to be kidding. You're going to bring in the guy I fired?” I said, “Well he’s potentially available [and full of enthusiasm and energy].” Then when I go to meet with Bill who I’ve only known casually, I take the abuse that only a guy who is ten years older than I would feel free to express–now remember the history of women and men–he said such thing as “So are you saying if I were interested in this I’d be working for you?” I said, “No, no. You wouldn’t be working for me. You’d be with me. This program is anchored in extension but it’s financed by the business community. We’ve got an advisory committee.” I described the people.
He said, “I haven’t had a woman work for me much less ever worked for a woman.” He was [provocative, thinking] he was being cute. He was being cute. It took two or three meetings and it also took two or three of the guys to weigh in but we got Bill. He said, “Okay, I’ll try it for six months.” Well it lasted 14 years. He transformed [our idea into a vital reality]. Within months it was no longer the UCSD program in technology and entrepreneurship, but rebranded CONNECT with programs such as Irwin Jacobs talking about how he started Linkabit. I mean it would have died without Bill. It was a great idea incubated by a team, but only realized because of the tenacity, imagination and chutzpah of Bill Otterson. So developing the right idea and then getting the right person to implement it—I think is what UCSD did. Dick Atkinson was absolutely critical to all of that, every step of the way. He hosted lunches. He signed letters. He showed up at events. [He supported my/our choice of Bill.]
Maybe what we can do after the break is that I can describe to you the quality of the faculty who we were able to recruit to this effort, not just of the business people. The magic of CONNECT, David, is that suddenly it’s ’85, and now the University is starting to function like it did in ’55 and the early ‘60s where you’ve got industry leaders and research leaders in the same room at the same table talking about the transformative basic research developments that are happening and what’s near-term and what’s long-term so that the business guys can start thinking about how you commercialize in the near-term, but with absolute respect, absolute respect for the importance of the basic research for the long-term. For that culture even within a small group–now it’s community wide, but in a small group of stakeholders to develop here in the early 1980s was essential. I mean, it was in the Silicon Valley. It was in Boston, but it wasn’t in many other places in the United States. So it was a wonderful time.
CARUSO: As I mentioned, one thing that I am a little curious about—and you can say something about it now or just incorporate it into discussing CONNECT from’85 to about 2005—is the presence of women in the involvement of this process, what Bill was thinking, who he was talking to and everyone else’s thoughts.
Walshok: Well, what is complicated about my generation and to some extent the women who came ten years after me is that women weren’t getting into the pipeline where they could develop these valuable competencies you needed to be on the front end of technology and innovation. If you hadn’t gone to Stanford Law or Harvard Law or Harvard Business School or if you hadn’t gone and gotten a Ph.D. in chemistry or physics–[it was difficult]. There were only handfuls of such women. Many, many, many more men. So there was a pipeline issue.
At the same time my experience–I think it’s why I’ve stayed here this whole time and in some ways to my disadvantage financially and–not reputationally, but positionally is that in these very innovative science-based arenas competency is king. So it doesn’t matter if you wear a turban. It doesn’t matter if you wear four earrings and you paint your face. I don’t care if you’re male or female. If you’re smart, if you're good, you can move fast. If your technology’s good, and you have good networks you’re on the team.
So there were women in the 1980s. One of the key partners, I wouldn’t say partners, but key players in the Linkabit success was a woman by the name of Martha Dennis, Ph.D. from MIT. At Hybritech there were actually two significant women one of whom, a Ph.D. scientist, just sold her own company 40 years or 35 years later for–I don’t know– $40, $50, $60 million, even women who were made millionaires in the old days. Nothing compared to the men. So I don’t think there was simply bias against women. There was bias for tenacity–well first of all, competence, the willingness to work around the clock. So that would remove some of the competent people male and female and you need guts and taking risks—which also removes lots of men and women—but in those days maybe even today fewer women have these inclinations. So I think that’s why you saw in the early days so few female faces.
CARUSO: Also I wonder if it was a product of the earlier time period. Women in college getting advanced degrees as well, which was a less frequent occurrence.
Walshok:Oh yes, that’s what I’m saying. There were so few of us with advanced degrees. Martha and I have the same birthday and we talk about it. There just were no women to speak of. I’m a widow. I have a companion who got his Ph.D. in economics at Harvard in ’69. There were four women in the Harvard class. I mean that was a large number. Really large number who got Ph.Ds. in ’69 in economics. Those four women have gone on to extraordinarily powerful roles in society.
Today I think half the economic Ph.Ds. are women. That’s what I mean by the pipeline. They weren’t encouraged. They weren’t welcomed. It’s interesting that Martha’s father was a university professor. My father was very ambitious for me. So you buck the system because you had supports elsewhere and we were all lucky to marry good men which is also a big piece of it.
But in the case of getting Bill Otterson to lead CONNECT that was a coup. He was not well-known in this community and in fact he was known [to have left his company before its big success]. He used to give talks about how he was ready to close down Cipher Data Products–that was his company–because they just didn’t have any more financing and they just weren’t getting product to market. He literally was playing tennis in La Jolla with Buzz Woolley, a venture capitalist and talking about this pending crisis. Buzz said, “Oh well I’m doing a little venture capital with a couple of partners,” former General Atomics and SAIC guys, by the way. Buzz had made his money in real estate, not in tech. But they’d created a little venture fund.
He said, “We might be interested in your company.” Bill responded, “I’m probably going to have to close it down next week. So we need to talk now.” Buzz replied, “It’s Easter Sunday tomorrow, Bill.” “It can’t wait. It can’t wait.” So Easter Sunday afternoon in Buzz Woolley’s home Bill gets the check he needs to keep the company going and then within a year or two the guys who invested said, “We no longer need you in order to take this company where it needs to go.” There was a lot of that stuff going on. [A few years later, all of us, including Buzz, were convinced Otterson was who we needed to help get a program going. Within a matter of weeks another friend of Buzz entered the picture, Barbara Bry.]
At the time she was a stay at home mom with two small children. She had been in the first class of women at Harvard to get an MBA and had been a financial reporter for The L.A. Times. So she came out to do financial reporting for The L.A. Times. Her mother who had cancer lived in La Jolla. So she ended up here, met a guy, got married, had kids and as smart as a button. The man she married was a wealthy real estate developer, good friend to Buzz Woolley.
Buzz called me as soon as we hired Bill and he said, “Bill’s a loose cannon. I want you to meet a young woman who I think can afford to volunteer and help him keep on track.” So within about three weeks of Bill Otterson saying yes, we brought Barbara Bry in. These two people for over a year gave tirelessly of their time. We gave them parking permits. We had just opened the Faculty Club, they had division’s Faculty Club card.
Ivor Royston, founder of Hybritech was still on the campus in the medical school and he had a full-time secretary. He offered her to be support in the afternoons for Bill and Barbara. So she’d work at the medical school in the morning and come over here in the afternoon. That’s how he contributed to CONNECT. We bootstrapped an organization. In other words, we were an entrepreneurial start-up focused on this mission that for more than a year we had heard loud and clear. You have to help create a technologically literate business community simultaneous with creating more business savvy in the scientific and technological community. Because that’s what CONNECT focused on I think it helped accelerate significantly the growth of the clusters that occurred here from about ’85 on.
It’s important for you to know that when we were starting CONNECT, David Hale—who’s in that photo on my desk—was flying to Indianapolis to negotiate the sale [of Hybritech] to Lilly. While we were starting CONNECT, Irwin Jacobs had already sold Linkabit. He’d been off campus for almost ten years and was just beginning to incubate the idea of QUALCOMM. He started QUALCOMM in the spring of ’85. We started CONNECT in the fall of ’84. So the robust clusters that we have today especially in wireless and biotech didn’t exist in ’84, ’85. There was that promise.
With my grandson I’ve planted all these plants to attract butterflies who leave their larvae which become caterpillars which make the cocoons [from which Monarch butterflies emerge. Tech grew here in an analogous manner]; start with 15 or 20 caterpillars and then you’ve got a few cocoons and out of those we’ll get a few butterflies. But it starts to grow. There was enough here [in the 1980’s in terms of early companies that we could see the promise]. Newspapers did not cover science and technology. Business pages didn’t talk about tech companies. That chasm was still there [between the research mesa] and the downtown establishment, except for a few key leaders in the downtown business community. Do you want me to describe some of the early programs of what was quickly branded as CONNECT?
CARUSO: Yes. It will be good to know the programs, their growth, who was getting buy in and what they were getting out of it and also what the University if anything started to get out of being associated with them.
Walshok: Yes. So it’s very important to understand because CONNECT eventually spun out of the University. I think it’s very important to understand that Dick Atkinson’s primary interest was in building a great research university and he was interested in the community to the extent that it would contribute to that growth. He had co-authored the Bayh-Dole [act and helped move it through Congress]. He started the SBIR and STTR programs when he was the head of NSF. So don’t misunderstand me, [he understood commercialization], but what he focused on was that he was the steward of this very, very dynamic, exciting, young research university that had been propelled into the top ranks within 20 years. We got our AAU membership I think the first or second year he was here. I mean phenomenal after 20 years to get into the AAU.
So the role that CONNECT played was very pivotal. When we started CONNECT the dean of the medical school, one of our leading researchers [in biology], Don Helenski who was working in the area of bioluminescence; Lea Rudee who was founding dean of the division of engineering–it wasn’t yet a school of engineering–were pivotal. We had representation from the department of economics and I can’t remember if it was Ted Groves or–I’m sorry, I’m not remembering the exact person, but those three scientists were really pivotal. Then of course, we had Buzz Woolley, we had David Hale and we had the head of the EDC and we had–I’m trying to remember the tech–I can go back and get you those names. We’re talking 30 years ago.
CARUSO: Was the head of the EDC still Pegg or…
Walshok: Yes, it was still Pegg. It was a small group and we would meet monthly. Always talking about programs that would engage the faculty in briefings and round tables to inform the business community as well as programs that would introduce the faculty—to entrepreneurial practices. So in those early days—somebody who wants to do serious history can go into the documents and the newspaper stories—but let me give you two or three highlights that, I think, were really pivotal to catalyzing the sense of excitement that there’s something really going on in this region of value and of promise.
As Bill joined us, he knew a lot of people in the tech world, not in the downtown world. We started a Meet the Entrepreneur series. It was jammed. It was young people. It was the traditional business community and it was the occasional researcher and scientist. Not a lot of UCSD people.
CARUSO: That’s what I was going to ask.
Walshok:Yeah. No, no. All along and there’s going to be a punch line here because there’s very good research that a colleague is doing at Keck that describes the extent to which innovation and entrepreneurship in San Diego is driven by entrepreneurs in contrast to the Bay Area where it’s much more science driven. He’s got some wonderful metrics to make this point. But what was critical is that most of these entrepreneurs were themselves scientists or engineers.
So you had somebody like Jerry Caulder who had been with Monsanto and created Mycogen and nobody knew what Mycogen was and suddenly I met Jerry and, oh my god. Irwin [Jacobs], nobody knew who Irwin was, talking about Linkabit and, “Now we’re starting another company called QUALCOMM,” blah, blah, blah, blah. John Thornton from Continuous Curve, Peter Preuss from ISCO, a computer graphics pioneer who had been a Ph.D. student here. Never finished [his degree], but started a [super] company.
We expected 80 people. We would get 200 or 300. Newspaper reporters covering events in the business pages. Now this is because Barbara Bry who worked for The L.A. Times knew how to engage the newspaper crowd. Bill Otterson was calling all his buddies and always started meetings with wine and food. “Get your business cards out. Exchange your business cards. You all need to know one another. You never know when you’re going to want to do a deal together.” I mean outrageous and people would do it. People would do it because it was fun. Thank you Bill, because Bill Otterson had gone to Stanford and he sailed with [the likes of] Brook Byers and Tom Peters and he knew everybody in tech here and in the Silicon Valley and he shared with everyone who and what he knew.
So we get all these guys down here at no cost. Bill calls them. “You have your own plane. We don’t have to pay you. I’ll buy you dinner at the beach club.” It was that kind of approach. Nolan Bushnell who built the Apple campaign came down and talked about marketing high-tech products. So what happens out of that, David, is terribly important. One is the community gets sophisticated about ideas and processes that are unfamiliar. Two, the community becomes networked across functions and across disciplines that they’ve never engaged before.
When I came to UCSD, there was actually a Faculty Wives Club. There was the Lawyers’ Wives Club in town. There was the Hospital Auxiliary. People networked within their fields. They didn’t network across fields. What CONNECT did was create that [cross-disciplinary], cross-functional traffic by creating events that had a social dimension that were fun, that were informative and ultimately helped build a community of trust with a shared language and a shared understanding of technology entrepreneurship. So that was number two.
Also, a guest speaker would go back to the Silicon Valley or L.A. or New York and say, “God, something’s going on in San Diego.” We did these “Meet the Entrepreneur” events and then we did the “Meet the Researcher” events with some trepidation. “Would anybody come and hear about research?” Again, because there was a burgeoning venture capital community and because so many of these early, early stage companies were science based we chose strategically. Don Helenski working on bioluminescence—his bright green maple leaf had been on the cover of Time Magazine— [so he was an early speaker]. Well everybody shows up to hear Don. He’s delighted. We structure it so he’s actually interesting. He’s not giving a seminar. He’s talking about his work to an intelligent audience of professionals. So we did that as a series.
Then the third thing we did and remember, I’m just describing to you the first two or three years. We engaged with a lot of the accounting firms and other financial institutions to do capital venture forums. I was in this very office when all of this was happening. We did a venture capital forum. Then we did a Corporate Partnering forum because in the mid and late ‘80s we had companies in town [had significant such as] Hybritech who that corporate and institutional investors. These former Hybritech execs were all starting companies you can see that on the begatting charts [we developed].
So David Hale, the former CEO–God’s truth–meets his next company through a CONNECT event. He was doing a seminar on marketing technology products abroad. He took 13 [one-on-one] meetings after the event–this is a true story–and he decided to become the CEO of one of the companies he met with, Gensia. Within months that company had financing from Silicon Valley, a Swedish [health] pension fund called Practicargejerst, and Kiren Beer in Japan. So David convinces us–he’s on our advisory board–that we need to do a corporate venturing firm because of his experience securing institutional investors in very high-risk ventures. He says, “We’ve got to get the Japanese to come.” I hire Japanese speaking graduate students from IRPS and they sit in the little cubicle down the hall [from my offices] with phone numbers and names of contacts in Japan [from David]. [Remember, this is before the Internet and we only have fax and phone] with a little script that David has written following up, “You received a letter from David Hale.” By the way, David doesn’t have a Ph.D. He went to the University of Alabama; first in his family but he’s a real entrepreneur and he worked with Ted Greene and Ivor [Royston] and all the smart guys. Believe it or not, [from those calls] we got half a dozen major Japanese investors to show up for this event.
As we say, the rest is history. For these first events everybody in our network opened their Rolodexes [and shared connections]. That’s what I’m trying to [underscore] is what people don’t understand. You don’t just print a brochure. You don’t just invite people to a party. You use your personal relationships and that’s what Bill Otterson and CONNECT were able to do. “Malin Burnham", for example, Bill would say to Malin, “I know you’re a third generation San Diegan, but your roommate at Stanford is now the head of whatever equity bank in New York City. Call him. Tell him to come out here. Tell him you’ll take him sailing after the forum.” It was that personal in the beginning.
CARUSO: One thing I’m curious about, especially thinking about having all these individuals come together. They aren’t in direct competition with each other, but there’s a lot of potential for competitive practices.
Walshok: Yes. Right.
CARUSO: I’m wondering if you have a sense of what it was that kept the competitiveness down and kept it more of a collaborative process.
Walshok: Right. Well, that’s my Stanford book [laughter]. The whole book that Abe and I wrote. We had to start with the early history and getting the military here first and then the defense contractors here and then the University and research institutions and then the commercialization clusters. That whole history is about the little town that could. So no legacy industries like Boeing or General Motors that could fund or dominate the economic landscape, no intergenerational wealthy families to speak of. Big wealth is a very new phenomenon here. Wealth, yes, but not wealth like Mellons and Carnegies and Rockefellers and even Haas in Northern California. Coming out of the Gold Rush the Haas family, Levis and others [created great wealth]. So none of that to fall back on. There was also an antagonism to government. Right?
So in California compared to New York and other states the level of government largess is way, way down and cities won’t tax themselves, nor do counties. All the things you love to hate about California turn out to be very useful if people have to be self-organizing, co-invest and collaborate in order to compete. So there’s a long history here of enemies or competitors collaborating because they have been able to see [an opportunity] for which no one of them has enough resources to make anything happen. It’s really important.
I’ve done a lot of work in St. Louis, Missouri. The Danforth family alone put $30 million into a bioscience incubator that’s empty. Until recently nobody could do that here. So you had to pool talent, resources, and connections in order to get a big win and you had to believe that the big win would benefit all players, which it did. Right? History has borne this out. So I think that is what differentiates us. In other words, what were considered huge liabilities in the ‘40s, ‘50s and ‘60s–no major families, no Fortune 500 companies; we’re just a little backwater; you can’t do anything great here because you don’t have great wealth or great leadership–paradoxically creates a set of community capabilities that are very well-suited to a fast paced, rapidly changing “industries rise, industries fall,” 21st century economy.
Trust me, [if] QUALCOMM dies tomorrow, we don’t die because we have this capacity that continues–that’s why we called the book Invention and Reinvention. It’s [an attitude and] a set of skills. It’s a set of relationships that you’re able to activate. I think it’s really core to this innovation economy. It happened in the early days in terms of getting the military and then defense contracting, but also because most of the early people who came here, [came with big dreams and important experiences]. I’d love to do this study, David. I can tell you informally that the seven guys or eight guys that started the first industrial affiliates program in the school of engineering had all gone to MIT or Stanford. People brought their culture with them. By which I mean the culture that you can take risks and that you need to have university/industry connections, but all of them were small players if you understand what I’m saying. So they had to work together.
CARUSO: It sounds like almost from the outset there was this structure that wound up being very productive for CONNECT being a purposeful and useful thing for the community that it was serving.
CARUSO: Part of it sounds like it comes out of lots of individuals’ work. You mentioned that Bill was there for 14 years.
CARUSO: In that 14 year period was there a lot of stability in terms of the types of programs?
Walshok:So here’s what I think is most interesting about UCSD and the community in that 14 year period. Where lots of other places would try to centralize, consolidate and make coherent their innovation strategy—we were chaotic. So CONNECT ended up being the incubator for what in other cities would be its competitors, but we didn’t see it that way. So you start to get a really robust life sciences group when we have a water crisis. So the guys in CONNECT that are in that group create a group [which becomes Bio and ultimately Bio-Com].
“We have got to go talk to the mayor. We got to go to Sacramento. We got to let people know that we’ve got these problems around water.” Then they come to realize they are becoming a big enough cluster with their own problems that needs an organization that focuses just on the life sciences. So you get [Bio-Com whose] leader is Joe Panetta who was the vice president of marketing for Mycogen, Jerry Caulder’s company. Jerry’s on the board of CONNECT. So you get BIO.
Then you get what today is [EvoNexus, which originally was AEA] and then a software industry council. Then you get the Venture Group. “We’re not getting enough venture capital, venture capital is really important to our growth. We should start our own association.” So when CONNECT started there was no critical mass anywhere. Five years later all these other organizations get launched because new clusters are [flourishing]. Does that make sense?
Walshok: In the early 1980’s there were just flashes of opportunity, pieces of a puzzle, and competencies distributed all over the place. As the momentum began to build and you started to get the critical mass of companies. It’s really an important part of this history that as long as Dick Atkinson was Chancellor at UCSD, CONNECT was a community-wide, Torrey Pines Mesa-wide resource. So we were capitalizing on relationships at Salk, TSRI, what is now Sanford Burnham. Do you understand?
So it was really about a regional innovation play. So UCSD can’t take all the credit. In fact UCSD was only one among the institutions here, only about 10 percent of the patents in the region are coming from us, less than 10 percent of patents, and a handful of companies. We have the data. Again, you don’t need it for the oral history, but it is there. We do an innovation report and over the last ten years every day a new technology company gets started. That’s 365 a year. We also have data that companies that work with Bio and CONNECT and others have a longer lifespan. UCSD gets excited if it spins out 13 or 14 companies a year. Do you understand? So what’s happening and what data now shows us is that companies spin out of companies more than out of universities or research labs. So getting that critical mass of companies, that was the magic to growing the technology economy.
I just published a chapter in another Stanford book about the wireless industry and Irwin Jacobs. There are only a few patents or licenses [from UCSD] to Linkabit or QUALCOMM. It’s a handful even though those became huge anchor companies. Today, there’s something like 3,000 IT and wireless companies in that space. UCSD claims that nine or ten of its alums spun out companies. No. Nine or ten of its alums went to work for Linkabit and then they spun out companies from Linkabit. But guess what? That’s what’s happening in Berkeley and the Stanford area, too. So it’s not so much the direct spinouts. It’s helping to create that core platform of companies which is what Hybritech and Ivor Royston did, which is what Irwin did.
In our book we point out that and fortunately times have changed, both Irwin and Ivor, the men credited with creating these anchor [campuses] for two of our most globally competitive clusters were rebuffed by faculty colleagues. We have a letter from the chair of the [electrical engineering] department about, “Well Dr. Jacobs is much more interested in his business affairs than our students or research. I seriously doubt he will ever return to the campus.” Of course, he did not. Fourteen years later, he started QUALCOMM and all UCSD chancellors still claim QUALCOMM as a UCSD spinout. Go figure.
Ivor Royston, whose technology was at the heart of Hybritech, made the mistake of buying a very fast, fancy car. I think it might have even been a Maserati which in the ‘80s was much worse than today before conspicuous consumption became acceptable. He’s a ladder-ranked faculty member and the Dean of the Medical School calls him in and says, “Ivor I think we should actually make your appointment a clinical appointment.” You understand what that means, right? “Because you’ve got so many business interests.” Ivor left. So the University did not celebrate these guys in the ‘80s. This was not what you wanted to do to be a hero. In fact, you were distanced. Both of these men [were not UCSD heroes], but the University got them here in the first place, [as young professors]. That’s what’s important.
They helped grow this ecosystem that created enough of a critical mass that now things spin out, new companies get started. Sometimes it’s UC technology, sometimes it’s Salk. But it’s a very, very interesting dynamic.
So in that first five to ten year period that’s what was happening. There weren’t a lot of homeruns [they built over time]. Look at Biogen Idec. I don’t know if you know that company. Or look at Life Technologies which sold to ThermoFusion for $13 billion. Idec was invested in by Genentech and then Roche. Then it was acquired by Biogen. It’s one of the biggest global bio medical companies, now headquartered in Boston. But all of that came out of [the principals around] Hybritech.
QUALCOMM then of course seeded [multiple companies]. But then you also have–we can’t walk away from all these defense contracting companies that are more and more based on advanced technology. So General Atomics (out of which SAIC and Titan spun) is the designer, manufacturer of predators, the first unmanned aerial vehicles. You see? So all of this stuff is starting to coalesce in the late ‘80s and early ‘90s so that by the early ‘90s Fortune Magazine and others are starting to write about what’s going on in San Diego. But I think that critical period there from about ’80 to ’90 overlaps McElroy a little, brings Atkinson in, parallels the success of IVAC, IMED and then Hybritech, all sold to Lilly. Then the Linkabit/QUALCOMM story are very important. So CONNECT is leveraging these early successes, making them public, celebrating them and networking people around them so that people who were perfect strangers in the ‘80s, are today’s iconic civic leaders.
Now the story that I’m not telling you enough of David is that UCSD is only $1 billion of the $2 billion [plus] in research that’s going on here. So the story of Salk and its contributions to spinouts and technology commercialization, of TSRI and its big partnerships with Sanofi and Johnson and Johnson, of Sanford Burnham in my opinion are equally significant in terms of the science piece of it. But what’s important about the technology piece is that the science translated and commercialized because you have a coherent community that was originally established by CONNECT but, CONNECT in no way has a monopoly on it.
CARUSO: So based on what you were saying one of the questions that I had was throughout this process what is it that UCSD was getting out of this? It’s almost kind of like the café value in the long run.
Walshok: Right. You have to go back because chancellors matter. What Dick Atkinson and his team [understood were] two or three things that have now proven to be invaluable. One is [early] connections to industry leaders turns then into research partners and investors in major initiatives. Calit2 couldn’t have happened without QUALCOMM and Erickson and the network of companies that matched [public funding]. I don’t know if you know about these, centers of excellence that were created in the late ‘90s here in California, but the state put up $100 million if [a campus] could raise $200 matching money and we did.
There were periods when animal rights activists were on the brink of closing down medical school laboratories and the CONNECT community mobilized to buy ads showing children with polio and other things as a counter. All right? There were periods–this was all during the Atkinson time–when the state legislature–UC San Diego is always number three when it comes to support from the regents, from the legislature. Right? It’s Berkeley and UCLA. Delegations of CONNECT member companies would walk the halls in Sacramento advocating for research buildings, advocating for things we needed at UCSD.
So in the short run I think what Atkinson and his leadership team saw is our future, because so much depended on state funding and federal and state regulatory issues, our future research agenda was enhanced by the advocacy of business and industry. So wherever possible we could serve them. So CONNECT, was almost like a support group for the research enterprise but eventually as many of these companies became successful–I’m not sure of the number again; a historian would have to check them–but we didn’t have any endowed chairs at UCSD when Dick Atkinson came. I think we had 100 when he left, probably half of them from CONNECT-aided companies. Do you see?
Having been at Stanford–and also we didn’t have a technology transfer office when we started CONNECT. It was still managed by Berkeley. At Stanford they knew in the ‘80s which we’re only figuring out in the UC system 30 years later that a gift from a grateful alum is going to be of much more value than the earnings on patents. We had our priorities straight and history has borne out that it turned out this way. I’m sorry. I’m tripping out and maybe we lost track of where your question wanted me to go.
CARUSO: No, it was just getting a sense of–because you talked about McElroy and wanting to dip the toe in the water. So the question of, “What was UCSD getting out of its involvement or support of this?”
Walshok: Right. So Atkinson was pivotal. The chancellor who followed Atkinson created a different kind of environment and he had been vice chancellor for a couple of years which meant I reported to him. This is Bob Dynes who’s a friend and a man I respect, but with regard to CONNECT–he’d come out of Bell Labs. Big science, big labs. Came to UCSD to be chair of the department of physics, then vice chancellor then chancellor. So his first question was, “What’s CONNECT doing for UCSD?” That was the first time in something like 15, 16 years of working with these guys I got, “It should be helping us. It should be helping us spinout companies. It should be helping us solve our tech transfer needs.”
So we brought in a director that was not hired, if you will, by the community or me, but by the campus and within four years we were almost bankrupt because the raison d’être which would make the community reinvest and reinvest which is, “I don’t care where the scientist comes from. I don’t care what it’s about. It’s good for the community.” We [got lost and it almost became] a UCSD instrument. Somehow we had managed for 15 years to be the honest broker [is suddenly here to promote UCSD].
So I saw the writing on the wall. I called David Hale and a few of these guys. We met in my conference room and I said, “We’re going to have to close this puppy down in another six months if we don’t make a radical change.” So we did two things which I was able to get the campus to support. One is we dismissed the director we had and two, is we put the search not in a Heidrick and Struggles education search firm. That’s who the chancellor chose, some big headhunting firm to get us a new director when Bill died. This time we put it back in the hands of the community stakeholders and out of that process Duane Roth emerged who is the second hero in this story. For eight years he rebuilt CONNECT, tripled its size and its impact. He also died last summer. So we have a new director. But within months of taking it over he proposed spinning it out of the university because he felt [CONNECT] could no longer have the credibility with all the research institutions and all the stakeholders [in the region] by being anchored in the University.
It’s important to understand UCSD. (This problem with being at a place for 44 years, that’s how long I’ve been here. Terrible.) In the early days we were very nimble. The guys that were full of piss and vinegar always could figure out ways to get around the rules. As we got larger and more bureaucratic and now we have deans of schools of engineering. We have a new school of business and–we start to look like other universities. We get real slow, lots of turf battles. “I own this. I own that.” One couldn’t start CONNECT today. Trust me, the dean of engineering, the dean of the medical school and the dean of the business school would be fighting about it. It’s very, very hard to create these kinds of nimble, collaborative, and cross-functional interdisciplinary activities and I think it happened because there was a void.
Today, CONNECT is thriving as is BIOCOM, and EvoNexus. I just gave a talk with friends to about 40–well actually it was 105 but about 40 of them were college and university presidents who were here for a meeting. They were just shocked when we said, “Oh we have about 23 organizations that are advocates for helping technology companies and we have about 40 incubators.” They’re going, “Oh my god, oh my god, that’s chaotic.” We replied, “No, no, no, no. That’s how you start one company a day.” Because you look at ten companies and only one merits start up. Then out of that you’re lucky if 10 percent succeed. We’re getting a 40 percent success rate after 5 years in this town. So there must be something about these dynamics if that makes sense.
I had an NSF grant to look at Philadelphia, for example, and look at St. Louis and you just haven’t had the same kind of coherent sense of community. There’s lots of this sense of competition. But I think it has to do with two fundamental things. The geographic dispersion in the Philadelphia and New Jersey area is just–it works against my bumping into you five times a week. That’s not trivial.
CARUSO: Right. Given the number of universities in the Philadelphia area…
Walshok: Right. And given the number pre-established university, government funded and foundation funded and old family money funded initiatives everybody thinks they’ve got the formula for innovation and they all work in parallel. Again, we didn’t have that luxury here.
CARUSO: Yes. So I know we’re pretty much out of time. The way I usually end things is I ask individuals if there’s something that they want to talk about that we haven’t covered.
Walshok: Yes, I think because we’re trying in this archive to capture the essence of the technology dynamic in this region I think that there was another pivotal moment in our history. Maybe it’s not a pivotal moment. Maybe we’re in a pivotal moment in our history. That is that even in the ‘80s when we started this the goal was big companies. Right? All we need are a few more QUALCOMMs and then we’d be stable.
Now I’ve, for complicated reasons, never had that orientation but that’s partly because I have this larger historical view. I think what has happened is there have been so many acquisitions and mergers that have scooped up what looks like–a $4 billion company, Life Technologies that gets sold for $13.8 billion and everybody goes, “Mea culpa. It’s not going to become a QUALCOMM.” But what our history is beginning to show is that the 20 people who became multi-millionaires because of that acquisition or sale or merger love living here because of our quality of life, but they also want to still be in the swim of all things [entrepreneurial]. So these guys turn around and just start the next wave of companies.
So the phenomenon of serial entrepreneurs and the notion that you can have an economy that is based on starting, incubating, growing and letting go of companies and starting the next round of incubating, growing and letting go of companies, I think is starting to take hold here because there’s so much in the Hybritech to Biogen Idec to Life Technologies story that suggests that. So I think that if you were to characterize the innovation economy today, there is this sense that it’s the critical mass. Aren’t we lucky? Six hundred companies here, 3,000 here, 250 there and they’re all churning and being reinvented. Some go out of business. Some get acquired. But that’s okay because we’ve got 30 more in the pipeline. That’s number one.
But the second thing and I think it’s happening around the United States, but it’s what you have to thank, again, Dick Atkinson a lot for this. The fact that we here–well actually we’ve got to thank the military, if you really want to go back. Here we were growing both tech, IT and electronics and now mobile and wireless and all that stuff and life sciences, renewable energy, pharmaceuticals, ag biotech, materials science on the tech side. We have an extraordinarily diverse array of clusters in the Michael Porter sense: sports innovators, renewable energy, software, pharmaceuticals, medical devices, wireless health. We’re getting convergence across disciplines.
So the region in terms of its technology future is very, very well positioned to adapt to the convergences in technology and to turn them into productive companies that will be good for the region [such as wireless health]. None of this was planned. There was no governor that decided or mayor that decided or regional foundation that decided. It was imagined. I think that dynamic innovative regions are more about imagination than about planning. If you were to look at the Silicon Valley and even Boston, [it is similar]. So people that try to replicate and I do not do much consulting because I can’t consult, but speaking around the world and I say, “This is not a management by objectives exercise. This is about releasing imagination, attracting talent, growing talent and trusting them to build value-added enterprises.” I think that is the dynamic of the technology community here.
CARUSO: Anything else? All right. Thank you very much.
END OF INTERVIEW