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The short, tormented life of computer genius Phil Katz
By Lee Hawkins Jr.
of the Journal Sentinel staff
Last Updated: May 20, 2000

Then he was found dead April 14, Phil Katz was slumped against a
nightstand in a south side hotel, cradling an empty bottle of
peppermint schnapps.

The genius who built a multimillion-dollar software company known
worldwide for its pioneering "zip" files had died of acute
pancreatic bleeding caused by chronic alcoholism.

He was alone, estranged long ago from his family and a virtual
stranger to employees of his own company, PKWare Inc. of Brown Deer.

He was 37.

It was an ignominious end for a man who created one of the most
influential pieces of software in the world - PKZip - and it
attracted the attention not only of the techno-faithful but of the
mainstream press across the nation.

Katz's inventions shrink computer files 50% to 70% to conserve
precious space on hard disks. His compression software helped set a
standard so widespread that "zipping" - compressing a file - became
a part of the lexicon of PC users worldwide.

But the riches his genius produced were no balm for what had become
a hellish life of paranoia, booze and strip clubs. Toward the end,
Katz worked only sporadically, firing up his computer late at night,
while filling his days with prodigious bouts of drinking and trysts
with exotic dancers.

Katz owned a condominium in Mequon but rarely stayed there.
Desperate to avoid warrants for his arrest, he bounced between cheap
hotels near the airport. He got his mail at a Mailboxes Etc. store
in Franklin.

"This guy did not have one friend in the world. I mean, a true
friend," says Chastity Fischer, an exotic dancer who often spent
time with Katz and was one of the last people to see him alive.

"Just imagine having nobody in your life. Not anybody to call.
Nobody."

High School Outcast

Phil Katz was a quiet, asthmatic child whose athletic pursuits as a
kid went no further than riding dirt bikes in his Glendale
neighborhood.

A 1980 graduate of Nicolet High School, Katz was a "geek" long
before that term was linked with dot-com companies and piles of
money.

"He was an outcast, definitely someone who was picked on," says Rick
Mayer, who graduated with Katz. "He spoke in a somewhat nasal tone.
He was short, and, well I don't want to say homely, so I'll say he
was plain looking."

After hearing of Katz's death, Ray Fedderly, a Milwaukee
cardiologist who sat next to Katz in high school honors math and
physics classes, opened his high school yearbook and found an
angst-ridden message.

"I enjoyed working with you in mathematics and physics classes
through the four terrible, long, unbearable, tortuous, but wonderful
years at Nicolet," Katz wrote. "I hope your future is bright and
your life is happy (if possible). May a calculator bring great
happiness to you."

"If I were a physician as I am now when I was 18, I would have known
what to do with that note," Fedderly says. "I now know that that was
a call for help. That was not a joke."

A loner by nature, Katz gravitated to analytical pursuits.

Katz and his father, Walter, spent weekend afternoons playing chess
and evenings writing code for programmable calculators in the days
before PCs forever changed computing.

Since programmable calculators had very little memory, Phil and
Walter had to work very efficiently.

"The earliest program I remember him writing was a game program that
dealt with landing on the moon," says Brian Kiehnau, Katz's former
brother-in-law who met him in 1977.

"It was very crude and simple, but it was complex for what he had in
terms of hardware. He got real good at optimizing programs, and he
learned to get the job done with the least amount of instructions
and running times."

In 1980, Katz entered the computer science program at the University
of Wisconsin-Milwaukee. Around the same time, Walter and Hildegard
Katz bought Phil his first computer, an original IBM PC. It had two
floppy drives, a monochrome monitor and 64K of memory, an
astoundingly small amount compared with today's machines.

Once he got the PC, Katz started writing programs, spending most of
his free time on electronic bulletin board services, the precursors
of the Internet.

The services quickly became Katz's social circle, a place where he
hooked up with others who understood his sophisticated programming
techniques and shared his passion for computers.

Gradually, Katz developed a fondness for sharing information on the
services, since interacting with others helped make his programs
better. Those experiences would influence Katz to embrace the
"shareware" approach to distributing PKWare's software. With
shareware, users try a product, and if they find it valuable, pay
the person who created it. In the case of PKWare, users paid $47 and
received a manual and free upgrades.

"He spent many, many hours talking to people and helping people. He
would go to computer user groups and spend hours with them,"
Hildegard Katz says. "He was very, very, giving. This was his great
love."

But in the spring of 1981, tragedy overtook the family, and things
would never be the same for Phil Katz.

Walter, 55, plagued by recurring chest pains, underwent open heart
surgery. Within hours, he was dead.

Phil Katz took his father's death very hard. Years later, in the
haze of his drinking binges, Katz told Fischer how the loss had
affected him.

"It tore him up inside when his father died. One time we went to his
grave," Fischer says. "He'd always say that when his father was
alive they'd go fishing and do man things."

Walter's death drove his son further into solitude and deeper into a
one-on-one relationship with his computer, say friends and family
members.

Writing Programs at Night

Katz graduated with a computer science degree in 1984 and was hired
as a programmer for Allen-Bradley Co. He wrote code to run
"programmable logic controllers," which operate manufacturing
equipment on shop floors worldwide for Allen-Bradley's customers.

Katz left Allen-Bradley in 1986 to work for Graysoft, a
Milwaukee-based software company. He spent evenings holed up in his
bedroom writing his own programs.

His project: An alternative to Arc, the then-common program for
compressing files. Using algorithms, Katz wrote programs that
imploded information by telling it, for example, to take every
"a-n-d" out of text. That would eliminate every "and," "hand," and
"sand." A good program takes out these and thousands of other
combinations of letters and restores them when needed.

Katz bounced early versions of the software, called PKArc, off his
buddies on the bulletin boards and spent countless hours refining
it. By 1987, the software had created such a buzz online that PKArc
started to steal market share from Arc's creator, System Enhancement
Associates of New Jersey.

"I got a check in the mail and I thought, 'Gee!' that's pretty
neat," Katz said in a 1994 interview with the Journal Sentinel.
"Then over the next few months, I got more checks in the mail."

He turned to his mother for help.

"People kept calling him saying, 'We would like to use your
software, and we want to pay you money for it,' " Hildegard says.

Katz left Graysoft in 1987 to strike out on his own. PKArc's sales
dwarfed his Graysoft salary, which was in the low-$30,000 range,
says Steve Burg, a former Graysoft programmer who joined PKWare in
1988.

In the beginning, Katz did most of his work at Hildegard's kitchen
table. They hired an answering service to handle the flood of phone
calls, and offered Burg a job as a developer.

Colleagues were impressed by his intellect.

"He was extremely intelligent," says Doug Hay, who joined the
company in 1988 and stayed until June of last year. "He had all the
equations from exams memorized from 10 years earlier, things you
generally forget 20 minutes after the test."

Almost overnight, denizens of the bulletin boards switched from .arc
compression to .zip in what became known as the arc wars.

System Enhancement sued PKWare in 1988 for copyright and trademark
infringement. In 1989, as his legal costs mounted, Katz agreed to
settle. Full terms of the settlement were not disclosed, but
representatives of the New Jersey company may have been surprised
when they finally met their nemesis.

"The lawyer for System Enhancement showed up at Hildegard's house
expecting a big company," Kiehnau says. "He had an address from the
bulletin boards, so he thought there would be a big glass building
or something. It was really funny."

Publicity about the lawsuit on bulletin board services nationwide
helped fuel a backlash against System Enhancement, which accelerated
the death of .arc as PKWare introduced new, incompatible archival
tools with better compression algorithms.

Money poured in.

"Phil became a very wealthy man in a very short period of time,"
Burg says.

While Hildegard worked to keep business matters in check, Katz
devoted nearly all his time to programming. He didn't come to work
until late afternoon and worked well into the night, so he could
have complete silence and not have to interact with anybody, early
PKWare employees say.

"He was rarely around. He did what he had to," Kiehnau says. "If the
business would have went belly up two years after it started, I
don't think he would have cared."

But Katz's unpredictable schedule frustrated his family. "They'd say
'You have this business, and it's growing. Why aren't you here?"
Kiehnau says.

During his frequent absences, Katz kept in touch with Hildegard and
PKWare executives through electronic fax services. He oversaw
product upgrades and revisions, and occasionally gave Hildegard
instructions on business matters.

As his business grew, his personal life unraveled. Hildegard heard
rumors her son was going to strip bars, cavorting with women and
drinking heavily. She questioned him about his personal affairs,
people who know the family say, and the relationship between the
worried mom and wayward son began to fray.

They also squabbled when Katz tried to take money out of PKWare. He
sometimes wanted as much as $25,000, Kiehnau says.

"He thought it was ridiculous that a 30-year-old man would have to
beg his mother for a check from his own company," Kiehnau says.

Katz grew bitter over his mother's interference in his affairs.
Eventually, he stopped talking to her altogether. The end came one
day in 1995.

Hildegard received a fax informing her that her son planned a
hostile buyout of her 25% equity stake. He had fired his own mother.

"It was like a funeral the day it happened," Kiehnau recalls. "It
was his product, but it was her business. (Kiehnau's former wife)
Cindi and I got called over to her house and she was crying and
crying, 'Why would Phil do this?' "

That same year, Katz hired Robert Gorman as director of marketing
and sales. Gorman had previously worked in sales for Frontier
Technologies, a Milwaukee-based developer of Internet software.

Gorman maintains that Katz continued to manage the company, but
others close to the situation say Katz's day-to-day role was
minimal. Although he signed off on major decisions and worked on
product upgrades, the company was run by PKWare management, they
say.

Despite the turmoil, PKWare's business remained strong through the
1990s, says Richard Holler, executive director of the Association of
Shareware Professionals in Greenwood, Ind.

It is difficult to measure the company's market share because not
all shareware users end up licensing the product. But even as
Windows-based "zip" products nibbled into PKWare's sales, the
company's business held up, he says.

"They are still a big player in the commercial marketplace. They
have a lot of ongoing relationships with other software developers
that use the PKZip compression algorithm within their own products,"
Holler says.

At the time of his death, Phil Katz was remembered among the world's
elite programmers for writing a truly revolutionary piece of
software. But that single accomplishment, as significant and
profitable as it was, couldn't save Katz's life.

Alcohol Takes its Toll

Katz talked freer, laughed harder, stayed up longer and dreamed
bigger when he had a drink in his hand, friends say. Drinking
brought a painfully shy man out of his shell.

"As soon as he started drinking, you could see a little smile on his
face. That's when he could talk to people, or tell a joke. When he
didn't drink, he would pick jokes apart. He would think really deep
and wouldn't have as much fun," says Fischer, the dancer who met
Katz in 1994 and grew fond of him.

But the alcohol was ripping his life from its moorings.

On May 7, 1991, as he was driving his 1990 Nissan 300ZX with plates
that read PKWARE, a police officer ordered Katz to pull over. Katz
was sitting in the driver's seat, his glassy eyes nearly closed,
according to the police report. He was convicted of operating under
the influence of an intoxicant.

It was the first in a torrent of legal troubles.

About a year later, Katz was again convicted of drunken driving.
Between 1994 and September 1999, Katz was arrested five times for
operating after suspension or revocation of his license. Records
show that courts issued six warrants related to his driving,
including two for bail jumping.

Once the authorities starting looking for him, Katz started showing
up at work a lot less often.

"He just disappeared," Hay says. "Sometimes you would see him at
trade shows, but that was about it."

When Katz did go to work, the strain was evident, former employees
say.

"He lived in a state of paranoia," says one former employee, who
asked not to be identified. "He thought that (WITI-TV Channel 6)
across the street from us was watching him."

Katz knew that if authorities were looking for him at PKWare, they
probably were also trying to find him at the handsome, brown-brick
luxury condominium he owned near Mequon Country Club.

His neighbors, unaware of his legal problems, were baffled by Katz's
reclusive nature. Many say they had never seen or met Katz even
though he supposedly had lived there for almost five years.

"I never saw a light on, I never saw tire tracks in his driveway,
and I live across the street. It was almost spooky," says Peter
Picus, a neighbor.

The condominium was in the eye of a publicity storm in August 1997
after neighbors complained about a stench emanating from the home
and mice and insects scurrying near the unit.

Mequon authorities obtained a search warrant to enter the
condominium, after neighbors and inspectors were unable to locate
Katz. They found a stinking mass of garbage, sex magazines, videos
and sex toys like whips and chains, according to Kenneth Metzger,
former general sanitarian for the City of Mequon.

"It was a mess. I had been in the business for more than 40 years,
and it was one of the worst that I had seen," Metzger says. "It was
knee deep in garbage. There were bottles, cans and rotting fast-food
stuff all over the place. Whatever happened to that man, he went off
the deep end."

Though Metzger and his crew knew little about the evasive Katz, they
could tell that he was wealthy. Among all the rubbish, they found
credit cards, money, a laptop computer and jewelry that had never
been opened.

Publicity about the discoveries hurt Katz deeply, friends say, and
some say it marked the beginning of the end.

"When they raided his house, they exploited it and told everybody at
his company about his fetish. His mother found out, everybody found
out," Fischer says.

"He knew people would jump to conclusions about him," she says. "He
felt really violated. That's the day he completely stopped going
into PKWare. He didn't want his personal life mixed in with his
employees. Nobody really does."

By this time, Katz's closest acquaintances were the dancers at the
strip bars he frequented.

Fischer says Katz showered her and other dancers with gifts, often
taking groups of them with him to Las Vegas. Several of them
accompanied him to the 1998 Comdex computer show there.

"I would sleep with him in the same bed. He never would touch or
sneak a peek or anything like that," she says. "Sometimes he would
cry and be like, 'Hold me, Chastity.' You'd just have to hold him
all night long."

"There was never anything dirty about him," she says. "He was not a
pervert. I swear on my Bible. He was the most harmless, most
generous, unselfish guy I have ever known."

Some of his stripper friends took advantage of his generosity,
stealing his credit card numbers and buying things for themselves.
It intensified his paranoia. Katz began to keep any receipt or piece
of mail bearing his name or account numbers. He piled it all into
the back of his 1991 Nissan Pathfinder.

"That Pathfinder was so disgusting. It literally had no back seat,"
Fischer says. "It was papers from the ground up."

Fearful of the arrest warrants, Katz kept on the move. In addition
to the drunken-driving convictions, he had a half-dozen judgments
against him from financial institutions totaling more than $30,000,
court records show.

Katz hopscotched along a strip of hotels near Mitchell International
Airport, staying at one for three or four days, then moving to the
next, usually less than a few hundred yards away.

"You know what he did? He sat in his hotel room every single day,"
Fischer says. "The only time he got out of the hotel room was maybe
to go have dinner."

Fischer says Katz sometimes called her answering machine late at
night, pleading with her to join him. During their conversations, he
sometimes spoke candidly about his family, his company, and his
childhood, Fischer says.

He said that his separation from his mother and sister was
difficult, and that he continued to send Hildegard flowers and
e-mails, even though they hadn't talked since he fired her from the
company.

Through it all, Katz drank heavily.

Fischer says he drank at least a liter of Rumple minze and two
bottles of Bacardi rum a day.

"He would drink until he'd puke. We'd have to see this. I never was
with an alcoholic where you'd have to see it. After a while it was
starting to make us sick," Fischer says. "We'd say Phil, you know,
this is sickening. You're killing yourself, and we're watching you
do it."

Hildegard Katz says her son underwent treatment for alcohol abuse.
"We all tried to help. As with almost any alcoholic, the more you
tell them to get some help, they begin to isolate themselves because
they don't want to hear it," Hildegard says.

"I guess we really thought he turned the corner after he went
through rehab."

But he had not turned the corner.

Fischer says she realized Katz was near the end when she visited him
at a south side hotel a few weeks before his death. Clad in nothing
but underwear, he was suffering from uncontrollable hiccups and
burdened by a horribly swollen stomach.

"He took some Valium so he could sleep. That was the only time he
could sleep," she says. "Then he would have the alcohol shakes. I'd
try to play computer games with him, but he'd run to the bathroom
all the time."

"He was so bad to the point where he would start (urinating) in his
pants involuntarily. His liver was just going. He was puking up
blood," she says.

After helping Katz change his pants, Fischer left Katz's hotel room.

She never saw him again.

Katz had been dead for two days before his body was found. PKWare
employees learned of his death almost a week later.

In the days that followed, the company was flooded with hundreds of
e-mails offering condolences from software junkies around the world.
Most had never met Katz but were aware of what he had done. Stories
of his death were printed in such far-flung media as the London
Times, the New York Times and abcnews.com.

But the sadness was deepest for those who had suffered the longest
as Phil Katz's life came unglued. Hildegard had to make the sad trip
to identify the son she hadn't seen in five years.

Later, she reflected on the loss.

"I get the e-mails people are sending, and it is amazing how many
people say that even though they never met him or talked to him they
are ever grateful for what he did. One man said he saved my butt
many times. Phil was concerned with helping people.

"It is a tragic waste of such a very vital person, and of his energy
and abilities."

Appeared in the Milwaukee Journal Sentinel on May 21, 2000.