Forbes magazine publisher Rich Karlgaard found himself in a squeeze. Lightning bolts cracking the gray sky. A wall of clouds surrounding him on the left, the right
and overhead. A bubbling brew of darkness rising from below him. Piloting a small, four-seat Cessna into Minneapolis airspace, Karlgaard began questioning why he was over Minnesota in the first place.
"Normally I get 30 or 40 e-mails in response to my Forbes column, usually short blurbs saying that I am an idiot and that Steve Forbes ought to drag me over hot coals and then fire me," Karlgaard wrote on his website. "Within a month of the Boonyack column being published, however, I had received more than 200 e-mails. These were not spitballs aimed at my head, but something much different: They were tales of the search for sanity and of the need to balance life and work. Many were sincere outpourings of deep life-transition stories. Most were from people who had undergone life-changing shifts in perspective.
"Michael Stemo of Grand Rapids, Mich., summed it up: If folks start to take a tally of their lifestyle, cost of living and the lack of leisure time, they’ll realize that the quality of life cost is just too high."
Karlgaard, an accomplished entrepreneur and regular guest on Fox News, ABC’s "Nightline" and CNN’s "Digital Jam," lives with his family in Silicon Valley in the San Francisco Bay area. He spoke with Edge Life by phone about his new book, Life 2.0: How People Across America are Transforming Their Lives by Finding the Where of Their Happiness (Crown Business).
In your Forbes column two years ago that began this journey for you, you wrote that small cities could very well outperform larger cities economically over the next decade. What led you to suggest that and what kind of response did you get to the column?
Rich Karlgaard: Well, there are two. I was noting two economic and technology trends. The first was an economic trend that the price of houses in America were then going up and nothing has changed since 2002. They keep going up.
But the price gap between urban coastal houses in Massachusetts, New York, Florida, Washington, D.C., and California versus the rest of the country had grown large. There’s always been a gap. People always pay a premium to live on the coast or near the coastal cities, but the gap on a percentage basis had grown to the largest that it had ever been since people were measuring this. And yet, at the same time, the sophistication gap between the urban coastal centers and heartland America was shrinking.
Sinclair Lewis wrote Main Street and became the first American to win the Nobel prize in Literature. He skewered small town America and that became a kind of literary and academic fashion that we still live with. But a generation of overnight delivery services, cable TV and broadband internet have really reduced the sophistication gap between large and small cities.
I thought, "You know, this is a great!" That means that if you are a knowledge-worker, if you have a white collar job and, particularly one that permits flexibility, or you have a white collar kind of a business, what a great opportunity this is to lower your cost of living and all the stresses that go with that, avail yourself of this technology and maybe find a life that is much more, much more balanced. I mean, life on the urban coast can be very stimulating, but the flip side of stimulating is stressful.
Maybe a percentage of the population really likes that stimulation, but for many others it is an overstimulation, particularly for young families. Urban coastal cities are great when you’re young and single. They’re great if you make a ton of money. They’re not so great if you’re a middle class American with a family. They’re not so great if you’re a middle-aged baby boomer whose been laid off from a job and has a declining prospect of replacing that income.
It just adds to the stress in that case.
Karlgaard: Hugely. So, that was the opportunity I saw. Part two was that I got an overwhelming response from people who had discovered this fact themselves and had either done that or were thinking about doing that. Throughout the book there are little sidebar boxes that are based on e-mail correspondences from the people that I’d met who had written in to respond to the column.
You mention Midwestern states like Minnesota and the Dakotas as being part of the Brain Belt, because of high student test scores, and you also suggest that the most valuable natural resource in the 21st century is brains. Why is that and how does it relate to Life 2.0?
Karlgaard: The Upper Midwest is still one of the few places left in the country where there is big public support for K-12 education. In Minnesota, Wisconsin, the Dakotas and Iowa, you can still get a pretty good tax base going for K-12.
Some of these states are down-right conservative. The Dakotas are pretty conservative, and Minnesota and Wisconsin and Iowa are actually trending conservative. They were all up for grabs in the 2004 election. It isn’t that they love taxes, but when it comes to public amenities that you can feel and touch, they still support them there, so the support for education tends to be pretty high.
That brains are the natural resource of the 21st century is pretty easy to imagine. There isn’t an industry on Earth, whether it’s agriculture or transportation or medicine that isn’t touched by information technology, biotechnology, or soon, nanotechnology. In some cases, like medicine, all three apply.
Employers who are going to be competitive in an increasingly competitive global economy are going to have to have really bright people working at their companies. That’s why I think university towns in the Heartland are maybe the best deals right now. They are places where an employer can find a really good work force base at a reasonable cost, and refugees from urban, coastal areas can still find a place to live that is low cost while at the same time enjoy the kind of urban amenities they like: intellectual stimulation, good coffee shops, restaurants, some degree of ethnic and lifestyle diversity and so on.
If you look in the Heartland, in most states the fastest growing city in the state is the university town: Columbus in Ohio (of course, it’s the capitol, too); Madison in Wisconsin, ditto; Boseman and Missoula, Montana; the Fort Collins area north of Denver where Colorado State is. Both employers and urban refugees are figuring out the college towns are pretty neat and offer a pretty good set of packages.
How responsible is the information age for new migration patterns in America?
Karlgaard: Oh, huge! It has closed the sophistication gap. I’ll give you an example. I was born and raised in Bismarck, N.D., and it was pretty out of it when I left in the 1970s. We had two television stations, you couldn’t get the New York Times or Wall Street Journal, and in fact nobody I knew even thought to try to get it.
In fashion, if you wore eyeglasses there were two styles available: nerd and work.
I was back in January. My parents still live there and they had a bowl full of fresh avocados. I mean, perfect to the day. One more day and they would have turned brown and the day before they might have been a little too hard. That shows you what the information age and overnight delivery services has made possible. Those avocados probably came from Chile or Peru.
That’s just one little example of how living in smaller communities is not the kind of backwater, Hooterville thing it was maybe a generation ago.
What is the "cheap revolution" you write about and how is that affecting where people choose to live?
Karlgaard: The cheap revolution is that technology has become so cheap. The second order effect of that is hundreds of millions of people in China, India, Southeast Asia, Eastern Europe and soon Africa are getting their first portals to the internet. If you’re portaled to the internet and the global grid of information with a $2,000 or $3,000 computer, then we wouldn’t be talking about China and India and these other countries. Such a small percentage of people there can afford that. But, when it’s a $500 computer or a $200 handheld web browser, suddenly people around the world can begin to afford this.
The population of cell phones in China is now 350 million, about the same as it is in North America. Cheap technology has made it possible for cheap knowledge workers to offer their services in this global economy. The New York Times had a story a year ago on Massachusetts General Hospital e-mailing MRIs to India, where they’re read by radiologists who make $24,000 a year versus the American median of $350,000 a year for a radiologist. All of a sudden, the U.S. finds itself in a global economy where work can be sent anywhere and done anywhere.
We have a pretty high cost structure compared to most places in the global economy- and so does Japan and Western Europe. We’re all in this dilemma together. I believe the indirect effect of that is that businesses located in the highest cost areas, like coastal California and the urban Northeast, are going to have to really work hard to justify their high cost structure. Why would the customer want to pay that, now that he or she can use search tools like Google to find other sources of goods and services.
This move to smaller, cheaper America is how many employers and many people will find a way to make themselves a little more competitive in a global economy, one that is not going to tolerate high cost structures.
Regarding the global economy, with a growing connection to the internet and technology abroad, do you think a trend might be for more Americans to move overseas?
Karlgaard: I hear of more Americans than I would have thought who have a streak of adventure in them talking about moving to China, because they like to be where the frontiers are. These are people that you meet in California who moved to Silicon Valley because it was a frontier in the 1980s and 1990s. It’s probably a small percentage, but, yes, I think you’re going to find what all this information technology does is really allow people to use geography in their thinking about what kind of life they want to have. It’s really no longer a limiting factor.
What effect did actually visiting the people in your book in their newly chosen communities have on you, as opposed to if you had just picked up the phone and talked to them?
Karlgaard: Well, I really saw that it was was true.
That it was real.
Karlgaard: That is was real. I got a little criticism that I focused too much on entrepreneurs, the kind of people who were going to be successful anywhere they went – like Doug Burgum, who founded Great Plains, or like Rick Randall, the medical device entrepreneur in Lake Placid, N.Y. – and that’s true. Those two would have been successful and had been successful wherever they went.
But then I saw guys like Andrew Field of printingforless.com in Livingston, Mont., and Andrew struck me as the kind of guy who could only be successful in the way that he has in a small town, because he didn’t have the college connections. And then I met a laid-off insurance executive who moved to Des Moines, Iowa. I was able to look in his eyes and just see the joy in his eyes of this life that was in tatters and had been recovered. You kind of can’t get that in an e-mail correspondence or even a phone call. You see somebody who felt like his life had been saved.
How has your feeling, or relationship, with the nation as a whole changed as a result of your extensive flight across America?
Karlgaard: Well, I think that we’re awfully lucky to live in the United States, because it is the land of such diversity. It’s a land of geographical diversity, climate diversity and political diversity, and it really offers people a chance to put themselves into an environment that is most congenial to them, that most rewards their particular set of skills and way of looking at life. There probably isn’t a country around the world that comes close to being able to do that, because most countries aren’t as big so they’re not going to have the physical and geographical diversity.
Take two comparably sized cities: Cincinnati, Ohio, and Portland, Ore. They represent a pretty wide skew of political thought. I don’t know a conservative from Portland. I don’t know a liberal in Cincinnati. I’m a kind of conservative guy living in the San Francisco Bay area, which means that anywhere else I go, I’m probably pretty close to the middle.
In Cincinnati, I saw a brand of conservatism that embarrassed me. On the other hand, I don’t know that I’d want to be in Portland either, where there’s sort of an assumption that business people are doing bad things. Look at entrepreneur Phil Knight of Nike, who routinely is questioned because his company isn’t paying U.S. wages to people working in Southeast Asia.
The fact that we can choose where to live in this country is a wonderful thing.
The subtitle of your book is "How people across America are transforming their lives by finding the where of their happiness. What did you discover about the relationship of a person’s physical location to his or her happiness?
Karlgaard: I think that’s something most Americans don’t think about. Maybe they fantasize. They come back from a vacation and they say, "Gosh, I could be happy there." But, of course, they’re on vacation. A friend of mine calls this the Ballpark Frank Syndrome. Hotdogs do not taste particularly good when you make them at home.
No, not like they are at the ballpark.
Karlgaard: Yes, or the open air anywhere you go. Vacations will always do that for you. But we do respond to our environment. I think one increases his probability of happiness if he is in an environment that rewards them, or maps well to their skills. I mean, some people are mildly annoyed if they go 60 days without seeing the sun, and some people would get severely depressed.
So with Seattle, which is a town of a lot of stimulation – it’s a great entrepreneurial city with Microsoft and Starbucks and Real Networks and many other companies – the one thing that might do you in is the weather. That’s an obvious and more surface example. I think there are cultural attitudes that are hard on people, and they may not know it. In some communities, conformity is more valued than it is in other communities. If you’re a non-conformist in a community that values conformity, that may depress you if you don’t have the self-confidence to overcome it or use it as an irritant the way that a pearl in an oyster does.
The goal of the book was to say, "Look, technology is this tool now that allows you to think about this in creative ways."
What did you learn about yourself as a result of writing Life 2.0?
Karlgaard: As a journalist, it really helped me see that I’ve got to go out and talk to people and do more reporting and arrive at ideas independently, as opposed to sort of reasoning things out in an ivory tower. As I said in the beginning of the book, I drank the Silicon Valley Kool-Aid too heavily. This is where I’m from. Silicon Valley has created great companies and great innovations and continues to do so. Even since I wrote the book, we’ve had the rise of the iPod, the rise of Google and other things that are changing the world, but it’s easy to be too imbedded in its bubble. In the 1990s, there were some people who were really manipulating investors. I sensed that they were out there but I didn’t follow up on that. I wrote columns in praise of companies like Global Crossing when I should have warned readers against them. That just said to me that my view of the world was too narrow and I had to get out of the ivory tower.
I’ve also come to see that people who are happiest are not pursuing happiness directly. It’s a mistake to pursue it directly, just as it’s a mistake to pursue achievement directly. It takes you down a path that is not that different from being an addict of gambling, drugs, alcohol or anything else. It makes you self-obsessed, and self-obsession never leads to happiness in the long run.
These are some thoughts that I’ve had, not only from doing the book, but thinking about the book in the year that’s followed. I had an interview with Peter Drucker, the management consultant, back in November on his 95th birthday. He’s written about leadership for 65 years. He’s in decline and won’t be with us much longer, but you have to figure that whatever he’s saying now is what he really thinks and really believes to be true.
What he saying is that we need to get people to think about contribution, rather than achievement.
Service.
Karlgaard: Yes. You can achieve fantastic things and make a lot of money if you learn how to contribute within a capitalist system – or in the non-profit sector. You won’t make the same amount of money, but if you contribute, you will achieve. If you set out to achieve, you may achieve, but they may be the wrong things.
Enron was an achievement-driven culture. Very meritocratic, very high IQ, very hard-working, very goal-oriented. They just pursued the wrong things and they all went off a cliff together. You achieve by contributing. You also achieve happiness by not focusing on yourself and your happiness. I think you can put yourself into a position where happiness is likely to occur, and the way you do that is to have a balance – the satisfaction of making a contribution in your field, where you’re able to devote energies to your work, to your family if you have one, to your relationships, to your spiritual or religious side, to your physical fitness side. If you’re able to do that, then the odds are that happiness will sneak up on you.
People on the urban coast, because of the enormous pressures, the costs, the status competitions that I talk about in the book, have a life that is more lopsided. When you’re young, and particularly if you’re single, maybe it’s OK, but as you get older, and particularly as you get a family, it’s not OK. The things that made you happy in your twenties will not give you the same happiness in your fifties. I’m now 50 and I’m really trying to think in terms of contribution rather than achievement.
For more information on Rich Karlgaard and his book Life 2.0, visit www.life2where.com
