Today, Silicon Valley is a global icon. The center of wealth creation and an engine for growth and change. It’s easy to look at the mammoth spreading Valley with Teslas zooming by and assume that this was not only inevitable but that it had always been there.
Within my lifetime the Santa Clara Valley has been transformed from being the prune capital of the world–producing more than 30% of the world’s crop of that wrinkled delicacy to the economic behemoth that it is today.
On Thursday of this week, I am going to share the story of that transformation at “What’s Up Down South Conference” the SouthernUtah economic development summit in Saint George.
Frankly, the task of telling the story of the rise of Silicon Valley in just 45 minutes turned out to be harder than I thought it would be. There are so many fascinating turning points and colorful characters that many great stories died on the cutting room floor.
Mark Zuckerberg didn’t make the cut. Bill Gates and Steve Jobs only have cameo appearances in this movie. The real stars are Frederick Terman, the Stanford professor and true father of Silicon Valley, along with Hewlett and Packard (the people not their company),the Traitorous Eight and Arthur Rock.
Terman was born 100 years ago and was a thought leader in the new technology of the day–radio. He became a professor at Stanford and mentor to Bill Hewlett and Dave Packard. He was the one who not only encouraged them to start a business together but also fathered the Stanford Industrial Park that became home to many Silicon Valley startups.
It is part of the entrepreneurial creation myth to talk about companies started in a garage. The original startup and the original garage was Hewlett Packard on Addison Street in Palo Alto. Talk about bootstrapping. Packard and his new bride got the bedroom. Hewlett, a bachelor, slept in the shed out back. They manufactured in the garage. Did the books on the dining room table. And baked the paint on parts in the kitchen oven. They were original entrepreneurs who said it was better to work for yourself than someone else.
William Shockley, Nobel Prize winner for physics in 1956, was the man who put the Silicon in Silicon Valley. He created the first semiconductor lab and recruited an all-star team of scientists and technologists. In addition to being a world-class genius, he was a world-class terrible boss. Shockley Semi-Conductor (yes, they hyphenated it in those days), was a wreck as a business. But eight top executives (shown in the photo above) left to form Fairchild Semiconductor. Shockley called them the “traitorous eight” but if there’s ever a Mount Rushmore in Silicon Valley, it might well be carved in the likeness of that photo.
In that image are the men who founded the most important semiconductor companies in the Valley. Remember Moore’s Law? Gordon Moore is in that photo. So is Robert Noyce who co-founded Intel with him. Gene Kleiner is also in that photo. You might know him better as the first name on the door of Kleiner Perkins Caulfield & Byers. From Shockley and Fairchild there are three important lessons: it’s essential to attract world class talent; but it’s hard to manage world class talent; last, this is the first good example of teams forming, creating a great company, and splitting up to start other companies.
The man who isn’t in that picture is actually the one who made it all possible. Arthur Rock, a 30 year old finance exec, figured out how to get Seymour Fairchild to invest $1.5 million dollars to build the plant. Along the way, Rock also created the foundation for a venture capital business. Later he would fund a couple of startups you might have heard of–Intel and Apple. But while pitching Fairchild, he was rejected 41 times. Rock was also a great early example of the need for persistence and the ability to overcome rejection.
In some ways, the most amazing part of the story is that beyond grand vision of a world transformed by technology, no one could see where the path would lead or how the story would end. And that is the most essential truth of the tale of the Valley. To effect significant change means to leap off a cliff and trust that you’ll learn to fly before you hit the ground. It’s always been that way and it always will be.