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How the Valley was won: The birth of technology in Silicon Valley

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The tale of Bill and Dave

Like much of the United States, the Valley of Heart’s Delight would see little progress or development through the years of the First World War and the Great Depression. But the stage was set for the next leap forward when a young man by the name of Fred Terman returned to his graduate school to teach his passion: electrical engineering. The year was 1925, and the “Father of Silicon Valley,” in the midst of a serious bout of tuberculosis, had come home.

Fred Terman
Fred Terman

It didn’t take long for Terman to move up the ranks after his recovery, and by the mid-1930s he was professor and chair of Stanford’s Electrical Engineering Department – a perfect perch from which to enact his plan. As David Laws tells us, “Many Stanford graduates had to go back east for jobs, and Terman didn’t like it one bit.” In short, Terman wanted desperately to keep the original Stanford vision alive by creating local jobs for the graduates of his program. And he was willing to get unconventional to do it.

He did just that in 1938 when he helped two such graduates, we’ll call them Bill and Dave, turn a concept into reality. Seems Terman had recently learned of a device called a “resistance-tuned oscillator,” a promising but seemingly incomplete gadget Terman felt could be worked into a tangible product. He explained his idea to Bill, who in turn told Dave and then set about devising the necessary modifications. Soon, the “audio oscillator” was born.

It was clear to all three men that Bill’s prototype was a winner. Within months, Terman had secured a $1,000 grant and Bill and Dave had returned to the Valley to build more versions of their concoction. Granted, their first “shop” was but a simple garage in back of Bill and Dave’s rented Palo Alto home, but when the Walt Disney Company purchased eight audio oscillators as sound-testing equipment for its groundbreaking film Fantasia, and when more orders thereafter arrived, their meager surroundings seemed positively palatial.

Whatever became of Bill and Dave? They stuck their last names together and formed Hewlett-Packard.

Incubating the dream

But by no means was Stanford done. Even before Disney had debuted Fantasia, another Stanford prof, William Hansen, was doing his bit to build the Valley via mergers of private interests and academia. Seems that two brothers, Sigurd and Russell Varian, the latter holding a physics master’s degree from – you guessed it – Stanford, were trying to come up with a better way of detecting airplanes in situations of limited visibility. The winds of potential war were blowing heavily in Europe, and the Varian brothers were as patriotic as they come.

varian brotheres, william hansen and klystron
The Varian brothers

Hansen liked what he saw and found them space at Stanford to toil on their project. According to Laws, Stanford also invested $500 with an agreement it would share equally in future royalties of any future Varian inventions. Long story short – in 1937 the Varian brothers formulated the klystron, which quickly became an essential component in radar technology.

The brothers Varian went on to invent a whole bunch of cool stuff, and Laws tells us the financial returns, for Stanford, have been in the multimillions of dollars. That the Varians ultimately established Varian Associates, one of Silicon Valley’s first important high-tech companies and a Valley staple until 1999, is a fitting conclusion to this typically symbiotic Valley tale.

Such stories were not uncommon in the formative years. Indeed, during World War II, Laws says that “many companies used skills honed in Silicon Valley for defense applications. There was a cluster of microwave companies (microwave frequencies are used in radar receivers) in the Valley.” But after the war, Stanford, like a lot of institutions, fell into semi-hard times. And once again, it was Fred Terman to the rescue in a move that set the stage for everything that’s happened since.

Says Laws, “When Leland Stanford passed away, his will stipulated that the land he left for Stanford was not permitted to be sold.” But he didn’t say it couldn’t be leased.

Stanford Industrial Park circa 1950s
Stanford Industrial Park circa 1950s

In 1951, Stanford opened the Stanford Industrial Park, a region the university initially envisioned for any type of business, but Terman saw it as a technology center. And he promoted it as such. The first key tenants included Varian Associates, Hewlett Packard, and General Electric. The die had been cast.

Drama in the Valley of Heart’s Delight

If Fred Terman was the Father of Silicon Valley, William Shockley was its brilliant, cranky, exceedingly controversial godfather. It has been said that Shockley is the man who brought the silicon to Silicon Valley (he’s also been deemed a heretic), and his role in not just the Valley but in all things high-tech cannot be understated.

Born in London but relocated to the heart of the Valley, Palo Alto, while still a child, Shockley purportedly became enamored with physics when his neighbor, a physics teacher at Stanford, spoke with him about the subject. As he matured, he voraciously tore into it, picking up degrees and a PhD along the way (curiously not at Stanford). His passion paid off in 1947 when he and two other scientists working with him at New Jersey’s Bell Telephone Lab, John Bardeen and Walter Brattain, invented the…wait for it…transistor.

A game-changing event to be sure – and one that won him a Nobel Prize – the breakthrough nevertheless exposed Shockley’s dark side, a side he would display regularly as the years went by. Not happy sharing the credit with his Bell Labs peers, he sought to prove that his place in history was more deserved. He ultimately failed in his mission, leaving Bell in the process, alienating coworkers, and spawning a reputation that would precede him everywhere he went.

William Shockley
William Shockley

Shockley would resurface soon enough, as head honcho in 1956 of Shockley Semiconductor Labs in the Valley town of Mountain View. In what Laws tells us was essentially a rented fruit stand, he set out to prove that silicon versus germanium transistors were the way of the future – a theory initiated at Texas Instruments two years prior.

Shockley initially tried to hire former colleagues to join his crusade, but feeling the sting of rejection one too many times he instead recruited a collection of young, bright, local engineers. Amongst Shockley’s hires were Philco’s physicist, the gifted Robert Noyce, and future Intel boss Gordon Moore.

But whereas Shockley clearly knew how to find talent, he just as clearly didn’t know how to deal with it once it arrived. The arrangement lasted all of one year, when eight of the engineers – now known as The Traitorous Eight – quit. Noyce (future Intel co-founder, nicknamed the “Mayor of Silicon Valley”) initially expressed reservations over leaving the company, but according to Laws, “though he still somehow got along with Shockley, he was convinced by the others to leave.”

Rumors of Shockley’s paranoia abounded. Indeed, Moore himself has openly discussed several of the more bizarre incidents. In one, he forced his employees to take lie detector tests. In another, he accused members of his staff of maliciously placing sharp objects where people could easily cut themselves. He intentionally withheld information from team members so they were never quite sure what they were working on, and it is said he ultimately curtailed research into silicon-based semiconductors.

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