by Joel Selvin
Everything took a sudden, drastic turn on September 8, when Lesh was having dinner with his two children. Jill Lesh was at a meeting. Lesh became suddenly, violently ill at the dinner table, vomiting blood and falling off his chair. As his vision turned gray and his hearing dimmed, he glimpsed the horrified faces of his two young sons looking down on him and flashed on five-year-old Jerry Garcia watching his father drown. He was rushed to Marin General Hospital, where Garcia had been taken when he went into a coma in 1986. In a haunting echo, band members and their families gathered around his bedside. Everybody was stricken, anxious, deeply concerned. Bob Weir, usually unsentimental about death, looked at Lesh’s gaunt, gray face and thought another one was gone.
Lesh had experienced a massive blocking of the vein in his liver and had, indeed, almost died. His hepatitis C had brought him to this—he now had end-stage liver disease and needed a transplant to live.
For the next three months, he worked his way up the waiting list for a liver at Stanford Medical Center and stayed close to home. It did not look promising. He was surrounded with support from the Dead family. Sears’s assistant Jan Simmons closed her office door and cried after she heard the news of his diagnosis. In a hospital room at Stanford University, Steve Parish sat with Lesh and watched the old black-and-white Preston Sturges movie The Great McGinty. Peter McQuaid, whose star inside the Dead world was rising alongside the gross revenues at Grateful Dead Merchandise, accompanied the Leshes to tests at UCLA.
Lesh was strong enough to take his family to go see Bruce Hornsby play an Oakland jazz club called Yoshi’s in November and he returned to the club over the weekend with Kimock to play with Hornsby. They did a few Dead tunes and a couple of Hornsby numbers. Lesh had a date on hold for December at the Fillmore for his next Phil and Friends show, but he was notified of a liver donor before he could do the show.
Weir, realizing the gravity of the situation and looking at the possibility of losing another band member, had sprung into action. His pregnant fiancée Natascha’s father, Dr. Manfred Muenter, was chief of neurology at the Mayo Clinic in Arizona. Weir called his future father-in-law and explained Lesh’s situation. Dr. Muenter expedited Lesh’s admission at the clinic’s Florida location, and, in December, a liver was found, saving his life. Weir was never sure if Lesh even knew he had made that call.
As if that wasn’t enough, about the same time Jill Lesh was diagnosed with thyroid cancer. Since her condition was less urgent, her surgery was postponed until they dealt with Phil’s crisis. These were desperate times for the seriously ill parents of two young children. They clung together all the more tightly.
The weekend before he and his family left for Florida, Deadheads organized “Five Minutes for Phil” over the Internet, the rapidly emerging communications tool that was becoming widely adopted by Dead fans. These fans planned a nationwide, coordinated prayer circle for Lesh—a gathering of the vibes. At the appointed time, Lesh and his wife went out and sat down on their front porch only to be, as Lesh later described, almost physically knocked over by the wave of psychic energy that swept over them. Four days later, December 17, surgeons at the Mayo Clinic in Jacksonville, Florida, performed a liver transplant on Lesh, giving him an organ from a teenager named Cody from Arizona killed in a car crash.
Three days after his surgery, his wife Jill wheeled him out the hospital front door to see the sunset. Lesh broke down at the sight. After months of secretly thinking he would not see many more sunsets, he was flooded with gratitude. The ordeal was over. He would live to see his children grown. He wept in thanks and relief that his life had been spared to witness such simple but profound beauty. Back from the brink of death, he determined he would live the rest of his life in the moment, without concern for the past or the future, on his own terms.
7
Grateful Dead Merchandise
WHEN REAL estate investor Neil Cumsky went looking for venture capital money for Terrapin Station, it was not surprising that he would find his way to hippie tech investor Roger McNamee of Silver Lake Partners. Not only was McNamee playing one of the hottest hands in Silicon Valley, but he led a part-time rock band called the Flying Other Brothers, a psychedelic rock group that grew out of late-night jam sessions at tech conventions.
At age forty-three, long-haired McNamee was already a figure of considerable repute in the tech investment world. In the late eighties, as a tech analyst at T. Rowe Price in Baltimore, McNamee managed the top-performing tech fund in the country and led daring but immensely successful venture investments in Electronic Arts and Sybase. He relocated to California in 1991 and immediately established himself as an outspoken Valley visionary, founding three groundbreaking tech funds, Integral Capital Partners, Silver Lake Partners, and Elevation Partners.
What Cumsky didn’t know was that McNamee was also a fiercely dedicated front-of-the-house Deadhead with two hundred shows under his belt. He had never met any members of the band or even set foot backstage, but he had played music his entire life and followed the Dead since he was a kid in upstate New York.
In fall 1998, McNamee cautiously received Cumsky’s business plan and asked to speak to someone directly affiliated with the band; Cumsky introduced McNamee to Peter McQuaid of Grateful Dead Productions, who extended an invitation to meet with the band and their advisors at the Novato headquarters. Phil Lesh, awaiting his transplant, was receptive to McNamee, enthusiastic even, but the rest were more skeptical. After meeting with the band, McNamee and Bob Weir held another session on a couple of stools before the entire staff and crew and underwent a thorough grilling. After McNamee was able to establish his Deadhead bona fides, the skeptics in the crowd calmed, but when Ram Rod and Parish showed up at his band’s next gig to help with the load-in, McNamee knew he had been accepted on an important if unspoken level.
McNamee’s standing in the financial or tech world didn’t impress them and this bunch didn’t care for outsiders. Essentially all the band wanted to know was why they should trust him. McNamee told them he knew nothing about real estate, but the Internet was something he did understand and the Dead’s little www.dead.net was already a huge success—the largest platform for direct-to-fan commerce in the world—even though its underlying technology was created not by a software engineer but by a member of the crew, who had operated it for a 10 percent commission. That may have seemed like nothing when he started but had mushroomed into serious money.
The Internet was about four years into mainstream acceptance at this point. Amazon had established the concept of cyber-retail, although the widespread advent of downloading audio on mp3 files was still off in the near future. Since the very beginning of the World Wide Web, Deadheads have been at the center. The Well, the Internet’s first practicing bulletin board and social network, was essentially the realm of Deadheads. The Internet Underground Music Archive (IUMA) was an outgrowth of the tape-trading culture fostered by the band’s most avid fans since the seventies and the first site to host a vast music library on the Net containing thousands of recordings of Dead concerts. Dead lyricist John Perry Barlow founded the Electronic Freedom Foundation, the first digital rights group, in 1990 after being visited by an FBI agent in regard to some hacking issue and realizing the agent knew far less than he did about the technology. The first news post on Yahoo was the death of Garcia, which happened the same day as the IPO for Netscape, the first popular Web browser.
Since Garcia’s death, business at Grateful Dead Merchandise had gone through the roof. In the fall of 1995, GDM operators handled more than twenty-two thousand calls in one day amidst the flood of orders. The next year the band made $50 million without touring. There were displays of Dead merchandise in Best Buy stores and Deadhead basketball star Bill Walton could be seen hawking Dead wares on cable television.
Peter McQuaid, a former Merchant Marine whose previous relevant experience was working for his brother who ran fan clubs for rock groups like Journey and others, had come aboard to head Grateful Dead Merchandi
se in 1992. The company had released two CD packages from their archive. The first, One from the Vault, had sold more than 150,000 copies and the second release had done nearly as well, but finicky Phil Lesh had declared those two the only recordings of high enough quality for release. McQuaid had to bring a box of substandard bootlegs to convince the audio-conscious band that the recordings already circulating were far inferior to the tapes in the Vault before they would dig back into their vast collection of live recordings, warts and all, to give the fans what they wanted.
In a small windowless, climate-controlled, heavily alarmed room behind the control booth in the band’s rehearsal hall, industrial shelves held rows and rows of tape recordings collected over the years by Dead sound men and women, beginning with Augustus Owsley Stanley III, the LSD king and early audio pioneer with the Dead.
The importance of Stanley—known universally in Dead circles as Bear—to the Dead cannot be overstated. Not only was he the first private party to synthesize LSD and produced the first perhaps million doses circulated to the public, he also provided the material for the acid tests, financed the band with his LSD revenue during the earliest days, and was a prime contributor to the whole concept of the Grateful Dead.
As the band’s original audio expert, Owsley instituted the unheard-of practice of recording the Dead’s live performances early in the band’s career. Almost all the 2,314 shows in the band’s history were routinely recorded, and the archive had been adroitly indexed and curated by Dead tape archivist Dick Latvala since the mid-eighties. The Grateful Dead archives, known to one and all as the Vault, was a literal King Solomon’s Mine in rock-and-roll tape collections.
In 1992, the first in the CD series Dick’s Picks, named after archivist Latvala, who was producing the releases, sold like crazy, available only through mail order from the band. They had released a second set by the time Garcia died, but after that, Grateful Dead Merchandise accelerated the release schedule, pumping out three new Vault releases a year, and they were all selling. Dick’s Picks sold a million records in the first three years after Garcia died and that was direct to fans by mail order, no middleman, all proceeds to the band. The warehouse at Novato frequently shipped more than a thousand packages a day. In a music industry about to undergo a radical transformation in the marketplace, this direct-to-fan merchandising was revolutionary.
With touring income gone, this unexpected gold mine turned into a welcome bonanza. The merchandise wing published a quarterly catalog that included $190 silk tour jackets, $120 sunglasses, “Workingman’s” briefcases, even sets of skis painted with the skull and roses. Liquid Blue, a T-shirt manufacturer the band plucked out of the parking lots at their concerts selling bootlegs in the late eighties, was putting $4 million worth of T-shirts and such into retail outlets every year without the Dead touring.
Bewildered band members would look at proposed designs of dancing bears on clothing and other merchandise and wonder why anyone would buy something so silly, much less wear it. They may not have understood it, but they allowed McQuaid to turn bootleggers into partners, a brilliant subversion of the gray market around Dead shows. The band only went into the T-shirt business on their own after being convinced they were giving up $250,000 every show in missed revenue (the last year the band toured, they made $50 million in ticket sales and $35 million in merchandise). Now Grateful Dead Merchandise had become the tail that wagged the dog. While gross revenues may have gone down, the net income grew. This was a miracle nobody saw coming that could save the organization. The two business entities—Grateful Dead Productions, the touring/band management arm, and the merchandise operation—were merged, and McQuaid replaced Cameron Sears as CEO of GDP, although Sears remained as manager of Weir and RatDog.
The nonstop wildfire of merchandise sales was one of the key factors encouraging the development of the Terrapin Station museum project. In January 1998, the band unveiled the plans in lengthy articles in the New York Times and San Francisco Chronicle. They hired one of the city’s top architects, Cathy Simon of the firm Simon Martin-Vegue Winklestein Moris, and her firm completed an exciting, attractive preliminary design. Simon was responsible for the extraordinary transformation of San Francisco’s grand but largely abandoned Ferry Building into a thriving open market and community center, one of the city’s leading tourist attractions from the day it opened. Rick Abelson continued to direct the Terrapin Station project, although he had little experience with constructing a building. Weir and Lesh would attend meetings at the architect’s downtown San Francisco office. Weir, who would often lean against windowsills throughout the meetings, demanded a feng shui consultant for the project. He liked the idea of having a roller coaster on the roof. Naturally, everything the band especially liked about the project cost a lot of money and produced little revenue. Cumsky pushed to add some income-producing condominiums to the plan (to be called “Mars Hotel”—they even trademarked the term).
The project organizers had been seeking a real estate developer partner and taken a big-shot magnate down to Shoreline Amphitheatre to see the Other Ones. He brought along his son but regretted it immediately. The man was horrified at the rampant, open drug use and declined the opportunity. They went looking for investors elsewhere. The representatives for the band held meetings with city officials and were looking at two properties seriously, while still exploring other possibilities. At this stage, the venture had been easily financed with the band’s own funds through sales of one limited-edition CD set from the Vault.
McNamee spent many hours meeting with band members, equivalent to more than a day a week for six months. In the early days, most of the interaction was with Phil Lesh, whose thoughtful and business-like approach to the Terrapin Station project was appealing. McNamee concluded that he did not have the skills to help the band succeed with a massive real estate project, but he was in a great position to help the band grow its technology-driven mail-order business. The technology underlying Dead.net needed a massive upgrade, and the band needed to decide if it wanted to finance that investment or work with outsiders. Either way, McNamee thought the best strategy was to make the Dead.net platform available to other bands for a fee.
The Dead were so far ahead of the pack in the emerging field of e-commerce that getting partners would be relatively straightforward. If the band were willing to go for the brass ring, it could take in outside capital, federate its platform to other bands, and create a uniquely valuable Web commerce platform that might one day lead to a public offering of stock. This kind of business strategy McNamee was uniquely qualified to lead.
He finally addressed a board meeting with his proposal. He would come to work with the band one day a week pro bono—and, in 1999, with the Internet and tech investments going through the roof, McNamee’s time couldn’t have been more valuable—on two conditions: (1) the Vault must never be sold and (2) no fighting among band members. McNamee, a tie-dyed-in-the-wool Deadhead, saw the Vault as a national treasure. The band had envisioned some kind of access to the tapes for fans at Terrapin Station in a room devoted to listening stations, but at this point, the mining of the collection by Dick’s Picks was tremendously successful, with no sign of slowing down. There proved to be such a large percentage of Deadheads who wanted to acquire everything the band released, it didn’t seem to matter how widely circulated a tape of a concert had been; fans wanted to buy the band’s official version of even the most common Dead tapes.
McNamee went to work developing the Dead’s Internet strategy, driving an hour or more up Highway 101 one day a week to work out of the Novato headquarters. He understood that the Dead had already created a superior model for direct relations with their fans. Phone orders were answered by operators saying “Grateful Dead,” giving the fans the assurance they were dealing directly with the band. Also aware of the powerful new attribute of the Internet to facilitate community, McNamee realized the unique opportunity the Dead had to create an even more cohesive network of followers.
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nbsp; Almost since the beginning of the band’s history, the Dead have sought autonomy in their business dealings, the exact kind of independence and freedom the Internet offered. They started Grateful Dead Records in 1973. They sent newsletters and demo discs of new releases to members of the Deadhead fan club. They built their own sound company, guitar shop, even travel agency. They pioneered their own ticket sales. They created their own merchandizing business and their own Web commerce platform. With his experience in all things tech and with a unique understanding of its role in society, McNamee was the ideal ambassador for keeping the Grateful Dead relevant in the digital domain.
Creating a wide-ranging role for the band on the rapidly emerging Internet with a state-of-the-art platform, McNamee wanted to streamline ticket and merchandise sales and expand the band’s direct connection with the fans. He also wanted to enlist other bands into a super site for rock bands. McNamee called the project Bandwagon, a comprehensive site for many bands, led by the innovative Grateful Dead. Between this inside link with Silicon Valley and the visionary museum project, the Dead appeared to be harnessing the future as the century ended.
In April 1999, just over six months after he collapsed on his dining room floor near death, and four months after a liver transplant, Phil Lesh, the formerly retired bass player, went back on the stage with another new Phil and Friends in San Francisco. For such a momentous comeback after this huge turning point in his life, Lesh needed to make a statement. Early in his recuperation, he called Steve Kimock, Lesh’s choice for lead guitar in the Other Ones, and Kimock came over and played music with him, helping Lesh find the groove again. Kimock was a guitar monk who didn’t have a car or even an apartment of his own. Joining the Other Ones meant he had to come in from the cold with the IRS as a tax outlaw because he had never made enough money before to file taxes and the government had taken most of what he earned that summer. Kimock didn’t care; he was there for the music. Lesh could use Kimock as his pocket Garcia, but his reentry had to be grand, had to serve notice. He had been lying back, studying Deadhead culture, taking notes and making plans. To complete this auspicious inaugural version of Phil and Friends he invited the two princes of jam-band America—guitarist Trey Anastasio and keyboardist Page McConnell of Phish.
