Interview With Governor John Hickenlooper

Thank you, Governor, for the honor of interviewing you for the American Business Magazine for small business owners. You’re one of the few governors who was a small business owner before running for office. Tell us the story of how you went from being a geologist in the oil business to becoming an entrepreneur in Denver as one of the founders of Wynkoop Brewing Company.

In the beginning, I didn’t have a choice. The price of oil collapsed in the mid 1980’s and Colorado went into a deep recession. Our company was sold, everyone got laid off. We all got handsome severance packages, but there were no jobs. After a couple of years, I ended up — I was out helping my brother fix his roof in Berkeley, California and saw a brew pub out there. I said, “I’d drive 20 minutes out of my way, I’d pay an extra 50 cents to have a beer of this quality.”

I came back, just mentioned it conversationally and people got excited. People offered to invest. I’d never worked in a restaurant. We went to the library, got out a book on how to write a business plan and opened the brew pub. The first day that we were in business, I knew that I was going to be 100 times better at running a business — at running a brew pub than I ever was as being a geologist.

Like anybody who starts a business, first 4 or 5 years, we worked 70 hours a week. We didn’t take any days off. We almost went out of business a few times. We were in this historic building downtown, but downtown in 1988 was pretty abandoned. We struggled and we had to fight, but after a couple of years, we opened one up in Ft. Collins, called Coopersmith’s Pub and Brewing Company.

A year after that, we opened one down in Colorado Springs, and suddenly, they all started doing well. We opened one up in Omaha, called the Upstream Brewing Company. Suddenly, it took off. I didn’t have to work. After working years and years — 10, 12 years of — originally 70 hours a week — even when I slowed down I was working 55 hours a week. Those were long weeks. I loved it. Many times, it didn’t feel like work.

I, suddenly, came to the realization that I was making many hundreds of thousands of dollars a year. I’m a very frugal person, so I had far more than my needs, and that’s how I got into politics. All my customers kept pushing and saying, they hated every city council member, every county commissioner, every congress person. I kept saying, this is America. They are us. If you don’t like them, you should go run yourself. Some how they turned that on me.

As you know, small business owners are known as risk-takers who often make gut decisions about their business. You once said that you “must have rocks in your head” picking the location for the Wynkoop Brewing Company in LoDo. You took the risk; you made it pay off with a successful venture. What do you think was the key to your success?

I’d say the two biggest keys were — we worked harder than I could ever have imagined. Hard work is behind almost every great success. We worked very hard to minimize risk. People think entrepreneurs love risk. Most good entrepreneurs do everything they can to limit risk and diminish risk so that, ultimately, what looks like a risky venture isn’t as risky. In the case of the Wynkoop Brewing Company, one argument would say, you went into this part-time where there had been no successes and you were taking a real risk. On the other hand, we were only paying $1,200 a month in rent, so we had the benefit and diminished the risk, that we couldn’t make our monthly nut — we couldn’t make our monthly payment.

The last thing I’d say hard work, diminishing risk, and I’d say we were lucky. As hard as we worked — working hard is, kind of, the ante — it lets you sit at the table and play the game. Craft beer took off in the mid ‘90’s — became very, very popular. It didn’t just happen in Denver; it happened all over the country. We can’t claim we created that. We were part of it, but we didn’t create it.

Historic buildings — when we first signed the lease in 1987, in lower downtown Denver, many historic districts in American cities were in a decline. People didn’t value those neighborhoods, those buildings. As we did these brew pubs in Ft. Collins and Colorado Springs and Omaha and Green Bay, Wisconsin, we only picked historic buildings downtown. Again, we were minimizing risk — they were less expensive, but we also got lucky in that they just — all of a sudden, in the late ‘90’s, they became fashionable, again. Whole neighborhoods would spring up, not just in Denver, but all over the country around these historic districts.

Why did you decide to run for mayor of Denver where you served two terms and then, for Governor of Colorado where you were first elected in 2010 and then, re-elected in 2014?

Part of it was, we had worked so hard. I had been doing the restaurant for 15 years. At that point, I think, we had 14 restaurants. As long as I didn’t want to have a private jet, I never had to work again. So many of my customers were so angry at all elected officials. I thought, if the country is going to work people have to believe in America. You can’t believe in America if you don’t believe in your government. I thought that I would try to prove that a person from a small business background, with no political experience, not a lot of partisanship, who made a commitment never to do negative ads and all those things that most of us look at politics and say, “Why does it have to be that way?” We were going to do it in a different way with the hope of getting people to believe in government — with mixed results.

In Colorado, I think, more people do believe the state’s going in the right direction. We have a lot of positive polls. Nationally, not so much. An awful lot of people — even here in Colorado, people look at Washington and Congress and they think — it’s a mess. Why can’t we have decent government that works?

I wanted to run because I wanted to get people to believe in their government — in a funny way, that becomes believing in yourself. I just wanted people to believe. I went around the country — I visited with six big city mayors around the country. I visited with six suburban mayors because, at that time, all the suburbs hated Denver, Denver hated all the suburbs. It had been going on for decades. I was the first Denver mayor to be elected governor in 140 years. That goes back a long time. That’s one of those things that you look at and you go, “Holy smokes, why is that animosity there?” That compelled me to get involved, to demonstrate that you didn’t have to use negative ads, you didn’t have to play dirty. You could have a positive image. You could bring common sense and transparency, accountability — all the things that make most businesses successful, good businesses. Bring them into government.

One of the things you hear about government is that it needs to apply some of the lessons found in the private sector. What are some of the things that you learned in business that have helped you as mayor of Denver and now as governor of Colorado?

It’s a long list. Anybody who works in a good retail business — let’s say, a restaurant — you learn within a couple weeks that there’s no margin in having enemies. One angry customer — if you can’t build a relationship — even if they’re not perfectly happy — they know that you care about the relationship. They know that it matters. That angry customer could go out and, over the next six months, ruin your reputation in all kinds of social settings, and you don’t get a chance to defend yourself. You were this, you were that. They can say all these bad things. That sense that there’s no profit in having enemies, that would be better in politics.

In politics, it’s almost like a lot of politicians try to define themselves by, who is their opponent, who is their enemy and how much they can disrespect and diminish them. That’s just not healthy because once the election is over, you need to work with all these people.

When I ran for mayor, I won two to one. They promised me that I would never win. To this day, no one can really figure it out. After the election, I had been very careful — I never said a negative word about anybody. If I’d have attacked all my opponents, then all of their followers would have been pretty suspicious, and, probably, not inclined to support me. The opposite was true, so even those folks who didn’t vote for me, still respected me. I made a big point — I talked in every forum, every debate — I talked about the importance of treating each other with respect and we were going to try to get to a point were, after the election, no matter who won, this would be — we’d create a circumstance where the city could move forward.

Back in the beginning, all of the other candidates — there were seven other candidates — five of them were serious — had lifetime resumes and very strong political backgrounds. I was at three or four percent of the polls so they didn’t give me a second thought. When I asked them, would you make an agreement that you will not do any negative ads and I won’t do anything against you. They’d all say, “Yeah, absolutely,” shake hands with me in front of TV cameras; they all thought there were going to do attack ads against each other. But then, when it became me that popped out of the group and got far ahead, they had all publicly said, no attack ads, no negative campaigns — that helped. That lesson is a classic lesson — don’t have enemies.

The other thing is, when you’re a small business, you treat every dollar like it’s your own. Even if you’ve got partners or investors, it’s just the way the world works. That’s a big part of what we try to make the culture of state government and city government. We want people to use every single dollar as if it was their own. To measure everything. Don’t just say, it sounds like a good idea, we’ll put $2 million in the budget, I hope it works. If you’re going to put something in the budget, you should know what you’re trying to achieve and you should have some way of measuring that. Again, that’s one of those issues that frustrates a lot of people with government — so often government doesn’t try to measure. It doesn’t decide, this is successful, this is not successful. I could go on for hours about the lessons from business. We spent a lot of time trying to bring more people from business into government.

When I first got elected governor, we had the senior vice president from Global IT Services for Oracle, become our secretary of technology. She was a breath of fresh air. She brought in all this energy and she had great respect, she was a leader. Really talented young woman. So many people in government, it’s always been about a certain style of person — someone who is very-well-intentioned — it’s amazing how many people in government — they do work hard to make the world a better place. They try to deliver services or whatever it is that citizens need from their state; these folks try to do it. But, they are risk-adverse. Not always, but often, risk-adverse. They don’t want to take too many chances. How do people from the outside — from business — come in and say, “Wait, a little risk is okay as long as you know what you’re doing and you understand the risk.” Then, maybe, it makes sense to make sure that risks are taken that are worth the reward.

Ultimately, that’s one of the key things you bring in from small businesses that you’re constantly trying to measure every investment you make. If this works, is the reward going to be worth the risk that I take, if it doesn’t.

Following-up on your statement that government needs to measure, just like business does, tell us about the Governor’s dashboard.

A couple of years ago, I was lucky enough to hire a guy named David Petrino. He had been working for the Boston Consulting Group, a partner, a rising star — early to mid 30’s. His wife was from Colorado so she wanted to move back here. I desperately wanted to be able to create a system where every state agency was transparent in what their mission was. What they were going to try to accomplish in measurable terms. I was passionate about figuring out some way that we could be an open book. I tried to run my restaurant as an open-book business. We told our employees exactly how much money we made. I think it strengthened the company. I wanted to have that same kind of transparency and accountability. David Petrino agreed to come. We had been working with Henry Sobonet, who is the head of our Office Management and Budget.

Henry Sobonet had been working on issues in lean processes, just like Toyota created to have bottom-to-top evaluations of your processes and delivering services or products to your customers or your citizens. Henry Sobonet had partnered up with David Petrino to create a system of measuring, what is it that each state agency accomplishes, and let’s put that out to the public.

We then rolled out the Governor’s Dashboard which is just a way of measuring each agency. Here’s what you said you were going to do. Here’s how far along on that path of achievement you are, and here’s where you’re not staying up-to-date and here’s where you’re ahead of schedule.

You have sought to make government employees more accountable, just like in the private sector. You created a Governor’s Elevation Award. Tell us about that and what the inspiration was for that.

The Governor’s Elevation Award is trying to celebrate and, almost, create celebrities from that celebration out of, not necessarily, the cabinet members but individuals in state government who have gone above and beyond and used innovation — new ideas to deliver more than what people expected. Any successful business finds ways to celebrate those people that are responsible for the success of the enterprise. State government doesn’t do as good a job. More often, they’ll give everybody a badge or give everybody a pat on the back. We wanted to have a chance, especially, for specific projects. We took on the wait times for the Department of Motor Vehicles. Why is it taking 65 minutes? — the average wait time, when I got elected, was 65 minutes for people to get their driver’s license. That’s crazy.

We spent a year studying it; we said we are going to spend four years and we’re going to get it down to 10 minutes. We look at that and say, here’s an ambitious effort. We’ve got one or two people who are running that show. We want to celebrate it. They haven’t gotten there, yet. They’re a little behind schedule, but they know that and they’re working hard. I think they will get there and achieve that on schedule. I want to make sure we celebrate those kinds of successes. Once you start celebrating that in one agency — we try to do half a dozen agencies every year — once you’re doing that other agencies are paying attention and saying, “I want to see what that tastes like. That looks good.” The goal is we’re trying to change the whole culture of all the 30,000 state workers.

Governor, one of the most important things which can determine the success for small business is finding skilled workers. What can you, as governor of Colorado, do to help bridge the gap between the needs of small business and the ever-changing workforce?

We’re in a battle all the time now for employees, but really a battle for jobs. Every governor is trying to figure out how do I get higher-quality jobs to my state. It occurred to me — a couple of things — one, it all comes down to the workers. We’re in a competition for talent. It’s a war of talent. One thing you can do is be as attractive a place for young millennial or tech-oriented or innovation-oriented workers. Make your state, your city the place where they want to be. More bike trails, more craft breweries, more brew pubs. They’ve become so popular. More music and more celebrations. More live music venues. That’s part of it.

The second part of it is, how do you — that’ll help you attract and retain talented workers. But, how do you train your own? That’s become even more important. We’ve put together an apprenticeship program called — overseeing bodies — it’s the BEL Commission. BEL is Business Experiential Learning. We’re setting it up so the kids, in their junior year, when they’re 17, they can go to work and make $10, $12, $15 an hour. It’s not just for learning to be an electrician or a pipe fitter or a trade, they can go to work at a bank, insurance companies, advanced manufacturing, cyber security, technology. The goal is that they will go to work for three days while they would otherwise have been in their junior year of high school — they’ll do three days of work and two days they’ll go back to school. What they will study is the curriculum as designated by the industry in which they’re working. They’ll be learning what is relevant to being successful at their job. What a concept! Businesses love this and the kids love this.

The other thing we’re working on is with the Markel Foundation and LinkedIn, as a partner — creating a website called Skillful, that changes the dialogue, not to —“What degree do you have?” One third of our kids are never going to go to a community college — never even matriculate. What we need to do is transform the discussion that they’re having away from — “Here’s your degree, what degree do you have, what degree do you not have? Why am I a failure because I don’t have a degree?” Let’s look at what skills they have. LinkedIn is going to allow people to aggregate all these various skills and keep track of them so that if a potential employer says, “Those are the skills that we need for this position.”

We’re also looking at how to get whole professions that have been automated — bank tellers — we’re going to see a lot fewer bank tellers in the next five or 10 years. What are the skills bank tellers have? They’re numerate, they have a high sense of precision, they have to be collaborative and work with others, they’ve got to have a sense of urgency. We’re losing that profession, but those are the skills — what are those skills useful for? In Colorado, we have Space Com. In Colorado Springs we are a center for cyber security. Right now, we have 8,500, 9,000 job openings for cyber security professionals. More than half of them — probably, two-thirds of them — don’t need a college degree. What skills do they need? They need to be numerate, high sense of precision, collaborative when they work with other people, they’ve got to have a high sense of urgency. It’s the same skills as a bank teller. Now, they would also have — a bank teller would have to take a six-month class on how to connect Internet code or write software — the little connecting pieces of software or patches, or connect code. They wouldn’t just immediately go into this job, but with a six-month class, all of a sudden, they get a $5,000 or $10,000-a-year raise. More importantly, they haven’t been left behind. They don’t feel that their years of work have been wasted.

Today, as you know, we have a global economy. Even small businesses can sell their products and services Internationally. What do you see for the future of small business in Colorado on the world stage?

I believe in trade and I believe in exports — crucially important to the economy of any community or any state. I’m not saying we couldn’t improve our trade agreements. I would say, you don’t want to throw NAFTA out the window. But, let’s make sure it’s fair, making sure that we’re trying to make more winners and less losers. I look at it from the standpoint of small businesses. The Internet has opened up the entire world as a place where small businesses can sell. Part of our job as government is to make sure they have access to capital as much as possible. We worked a lot with the U.S. Export/Import Bank which will help finance exports from smaller businesses. Oftentimes, at a fair price. My guess is that, long-term, we will see more and more small businesses grow as the Internet becomes more commonplace all over the world.

Colorado is in a unique position in being in a crossroads between oil and gas industry and the clean energy industry of wind and solar. What opportunities do you see for small business as you look into the future of energy?

Colorado is in all of the above, as you say. We’re one of the leading states for wind and solar, but we’re one of the leading states for natural gas and oil. We now have over 60,000 employees in clean tech. Being a wind-generation technician is one of the fastest growing trades we’ve got in the state. Vestas has almost 5,000 employees here now. It’s a wonderful time to look at energy as a career and try to figure out, what are those opportunities that will cross this transition. We know we’re moving to cleaner energy, whether we like it or not. In Colorado, we’ve worked very hard to make sure that transition is as inexpensive as possible to household budgets of our citizens. We set a ceiling of — we’re not going to see our electrical bill go up by more than 2 percent — or inflation — whichever is less, as we try and make this transition into cleaner energy. That’s been very well received. Almost everyone — not everybody — but, almost everyone believes in cleaner energy. They just worry about the cost. But, if you can give them cleaner energy for the cost of inflation, essentially, for nothing, I think it’s government malpractice not to do it.

One of the unexpected challenges you faced was when the voters passed an initiative to legalize the sale and personal possession of marijuana. It was not the type of small business development that you were advocating for Colorado, but now it’s here to stay. It’s been both a boom to the Colorado economy and for tax revenues for the state. How do you look at the economic benefits of Colorado, the public health challenges you face as governor with this initiative, and how to use these additional tax revenues?

Marijuana is one of those things — most of us opposed it. It’s not a good thing to be in conflict with the federal government and federal law. But, it passed 55/45. It, probably, has more than 60 percent support in the polls, right now. We’re going to do everything we can to make it work; create a regulatory system from the bottom up. We’re the first government — even Amsterdam and Copenhagen never legalized and taxed marijuana — they just decriminalized it. We try to look at how to do it in a way that’s fair to everyone and that really does try to anticipate unexpected consequences.

One thing we do say — you should never go for the tax revenue. The old system where we had a lot of young people sentenced to long prison terms for non-violent crimes; you don’t want to obey that law. You just can’t have a law that no one obeys. That being said, now that we’ve legalized recreational marijuana, we don’t want to have the state be dependent on the tax revenues. That’s a real trick here. Colorado is a $27 billion/year economy. Last year we got about $145 million in marijuana tax revenues — all the different taxes put together. That’s a drop in the bucket.

We spent $4.5 billion just from the state side of funding K-12 education — $4.5 billion for education, $145 million over here for marijuana taxes. It’s not going to solve any of our fiscal problems. What we are using it for is to make sure we have TV ads to tell teenagers, do not ingest this high THC marijuana. If you’re under the age of 24, there’s a high probability when you take this intense marijuana, you will lose a sliver of your long-term memory forever. We try to make sure that we have money to regulate it. If there’s a black market, we can clamp down on that. We want to make sure that we have the resources to make sure people aren’t getting high and driving. We want to make sure that we protect public health and that we protect the rights of our kids as much as humanly possible.

But, if marijuana is, truly, here to stay — and we will find out what the attorney general in Washington says — but I think it is. I agree with you. I think it’s here to stay. That responsibility — it’s going to be here to stay — puts more of a burden on all of our shoulders to make sure that we get the regulations right. We are already beginning to see less drug dealers. Again, a hard thing to measure. There’s no surveys of how many drug dealers we have in this community. Anecdotally, that appears to be the case — which makes sense, if marijuana is 40 to 50 percent of the total drug trade, and you’re legitimizing that — getting rid of the black market. If the pipeline is selling half as much product as it used to, you assume it would have many fewer salesmen. Drug dealers don’t care who they sell to. If we get rid of the black market and the drug dealers, there’s a legitimate argument there that, we will cut down on the accessibility of this strong marijuana to teenagers.

Is there anything else you’d like to add about small business?

In the end, when you talk about small business, everyone talks about how that’s really where the jobs are. I would also argue that small businesses are where the glue that holds society together resides. You can look at little-league baseball teams or soccer teams and who sponsors them. If you look at the people that help their local church with their fundraiser or make efforts on behalf of the community center — the Boys and Girls Club — sometimes it’s big corporations. But, generally, it’s the small businesses that — some employee at that business really cares about that specific mission and they get some other people who are employees of that company to get involved. The next thing you know, the company is helping make their community a better place. That is a uniquely American trait — this notion of nonprofits and the community supports them. Not just government — but the community directly supports them. Small business is a big part of that success. Whenever I’m in one of those functions — a gala of some sort for one cause or another, I always try to find, who are those small businesses that are putting in the time — not just money — putting in the time and the effort to help these organizations to succeed. I try to go out of my way to thank them.

You once quoted Abraham Lincoln who said, “I am a firm believer in the people. If given the truth, they could be dependent upon to meet any national crisis. The great point is to bring them the real facts and beer.” The last question must be — do you miss the beer business? Or, I would imagine it was a lot easier to please all your customers with a variety of beers on tap than it is today to please all your constituents with a variety of opinions on what you should do as governor.

I do miss the beer business and the restaurant business. I’m the first brewer to be elected governor since Sam Adams in 1792. It’s been a while. There’s an energy in a successful restaurant. When everything is going well, everybody works together. It doesn’t matter whether you’re tall or short, whether you’re black or white, whether you’re straight or gay. Everybody works together when you’re in the weeds. It creates this wonderful — you get to see what a community should look like. Everyone sticks together. I remember, I spoke to the — there’s a political action meeting in Washington, D.C., every year, that the National Restaurant Association puts together.

They get 20 people from every state — they’re almost all restaurant owners — the vast majority are Republicans, small business people. They ask me to come speak and tell my story after I’ve been mayor for a few years — Time Magazine called me one of the top city mayors in America. I said, what can I talk about — anything? They said, yeah. You can tell your story, whatever you want. I said “Can I talk about illegal immigration and how we restaurant people have first-hand experience, and we should be helping find the right compromise to resolve this issue?” The guy looked a little nervous and he said, “You can talk about that. Talk about anything you want.”

I told my story and I said exactly that about undocumented labor and illegal immigrants. There was kind of a pause in the audience. There were 400 to 500 people there, almost all restaurant owners. One guy in the back started clapping. That emboldened me, and more people clapped. I said, “Most of us have some members of our family, of our workforce, of our team, who are gay. Isn’t it fair that they get the same legal rights as everybody else? They should be able to get married if they’re in love. Here’s this room, almost all Republicans, and I got a standing ovation.

One thing I love about the restaurant business is you can’t predict how people are going to care about things, but it almost always is people-based. It’s about your staff and your team; it’s about your customers. I think that every elected official — every mayor or governor — everyone in an executive elected position should have to spend at least two years working in a restaurant. I’m not sure I’m going to get very far with that proposal. I miss the restaurant and I miss the brewery, pretty much, every day.

Governor thank you very much. This has been a pleasure to get your insights, and we thank you for giving us this interview today.

It’s been my pleasure.