The History of Silicon Valley: Birth of Computers and the Internet
medium.com
medium.com
I'm thinking web browsers, early internet startups / bubble, social & web 2.0 and the sharing economy. Any suggestions?
Part 1: The Vietnam War; Part 2: B-52’s and the Soviet Air Defense System; Part 3: Bill Perry/ESL and the Cold War; Part 4: Undisclosed Locations; Part 5: Silicon Valley, the 2nd 100 years; Part 6a: The Endless Frontier: U.S. Science and National Industrial Policy; Part 6b: Stanford, Terman and WWII; Part 7: Stanford, Terman and the Cold War; Part 8: Stanford and the rise of Cold War Entrepreneurship; Part 9: Stanford and Electronic Intelligence; Part 10: Stanford and Weapons Systems; Part 11: The Rise of Venture Capital; Part 12: The First Valley IPO’s; Part 13: Startups with Nuclear Missiles; Part 14: Spy Satellites in Silicon Valley; Part 15: Lockheed – Silicon Valley largest employer; Part 16: Balloon Wars.
For example, why was Steve Wozniak in Silicon Valley in the first place? Answer: his father worked as an engineer at Lockheed Martin with a top secret job involving electronics.
Which leads to the question, why was Lockheed Martin working on electronics in what came to be Silicon Valley?
Now, part of the problem is that history is complex, and you might not want to track down all of these different threads. And that's okay!
But in doing so you find curious things, like this Medium essay by Founder Playbook which says at https://medium.com/founder-playbook/the-history-of-silicon-v... :
> Arthur Rock, now known as the father of Venture Capital, was the principal investor in Fairchild Semiconductor in 1961. His firm, Davis & Rock, is considered the first Venture Capital firm ever.
While https://steveblank.com/2009/10/26/the-secret-history-of-sili... writes:
> In 1946, George Doriot, founded what is considered the first “venture capital firm” – American Research & Development (ARD).
ARD funded DEC, and "Some of the very early VC’s got their venture capital education at Harvard as Doriot’s students", including Arthur Rock.
Indeed, https://en.wikipedia.org/wiki/Georges_Doriot says "In 1946, he founded American Research and Development Corporation, the world's first publicly owned venture capital firm, earning him the sobriquet "father of venture capitalism"."
Now, this is a minor point, but it makes me wonder if there is a built-in bias towards the standard (and insular) SV view of history.
And then there's:
> In the 1950s and 60s the semiconductor industry was just getting going out in Silicon Valley. William Shockley’s transistors were many times smaller and much more cost effective than vacuum tubes (part 1). Because of this, the idea of computers moved away from top secret government laboratories, and out west, where the parts it needed were becoming commercialized.
I can't make that fit into my understanding of the history. Univac was an east coast company, not a top secret government lab. As I pointed out DEC was also an east coast company. Jack Kilby was at Texas Instruments Instruments, in Texas.
While on the other hand, Lockheed-Martin was working on top secret government projects in what became SV.
However for me I what I really wanted to know about in silicon valley is less lead-up, and more the development and the technical innovation.
I fixed that statement you mentioned about Arthur Rock to specify it was the first private firm. Definitely a good distinction. Super interesting that Arthur Rock was a student of George Doriot.
George Doriot was the first person to take advantage of SBICs (government funded small business investment companies) that was created by the SBA to encourage more entrepreneurship. Where I think Arthur Rock was particularly innovative was that he raised all of this money from wealthy individuals looking to do private investing. While I agree the VC industry wouldn't have been started if it wasn't for Doriot, I think private money being used to fund startups is really the inflection point in the industry. Government money can't last forever.
I think a way to help understand the success of SV is to understand the differences between there and Route 128, ""America's Technology Highway". Quoting https://en.wikipedia.org/wiki/Massachusetts_Route_128#.22Ame... ):
> In 1955, Business Week ran an article titled "New England Highway Upsets Old Way of Life" and referred to Route 128 as "the Magic Semicircle". By 1958, it needed to be widened from six to eight lanes, and business growth continued, often driven by technology out of Harvard University and MIT.[15] In 1957, there were 99 companies employing 17,000 workers along 128; in 1965, 574; in 1973, 1,212. In the 1980s, the area was often compared to California's Silicon valley,[16][17] and the positive effects of this growth on the Massachusetts economy were dubbed the "Massachusetts Miracle".
It had many of the same ingredients as SV, but it's no longer the powerhouse of technology that it once was.
Personally, I don't have an answer for why one succeeded and the other failed.
Boston was used to the corporate mindset where information is an asset that can't be shared. That free flow of information in silicon valley made innovation progress much faster.
This is a great explanation: https://psmag.com/social-justice/innovation-thrives-richard-...
"The boston area was organized around these big, vertically integrated minicomputer companies — dec, data general. They were classic postwar american companies, with vertical hierarchies and career ladders. Planning and research happened at the top of the organization and then funneled down. Whereas in silicon valley you had, really by chance not design, a series of flat companies, with project-based teams that moved around. People moved between companies much more fluidly. At a time that technology and know-how were sort of trapped within the vertically integrated companies of route 128, they were being continually recombined in silicon valley. That gave them a real edge in innovation."
How much of that is "Silicon Valley" and how much is "California"? To start with, why did California prohibit non-compete clauses .. back in 1872(!). https://en.wikipedia.org/wiki/California_Civil_Code says the code was "revolutionary for its time".
If that helped cause openness, did that openness extend to other fields? Including the studio system during the Golden Age of Hollywood?
Given all of the companies working on secret government contracts, how open could they be?
The Pacific Standard article describes Florida's spin on a dissertation by AnnaLee Saxenian. Blank recommends Saxenian's book highly. For example, in https://steveblank.com/2009/04/20/the-secret-history-of-sili... . Blank wrote:
> I read all the popular books about the valley and they all told a variant of the same story; entrepreneurs as heroes building the Semiconductor and Personal Computer companies: Bill Hewlett and David Packard at HP, Bob Taylor and the team at Xerox PARC, Steve Jobs and Wozniak at Apple, Gordon Moore and Bob Noyce at Intel, etc. These were inspiring stories, but I realized that, no surprise, the popular press were writing books that had mass appeal.
> But no one was writing about where the entrepreneurial culture had come from. Where were the books explaining why were all these chip and computer companies started here? Why not elsewhere in the country or the world? With the exception of one great book, no one was writing about our regional advantage.
That "one great book" is Saxenian's "Regional Advantage: Culture and Competition in Silicon Valley and Route 128". Which, ummm..., answers my own question. :)
Re-reading that page by Blank reminds me of how much an eye-opener it was to hear Blank's talk the first time. His work really is the reason I am now wary when I read (yet again) the standard stories about SV.
> We were doing a lot of deals in California, and it occurred to me that all of the energetic scientists were forming around Stanford. The reason for that, in my opinion -- although some people will differ -- is because of Fred Terman. He was head of the engineering school at Stanford, and he encouraged his students, especially the doctoral and postdoctoral students, to form companies and continue to teach at Stanford. That was an unknown concept at any other school in those days -- it certainly wasn't happening at MIT, Harvard, or Princeton, or any of the good engineering schools. People got fired from MIT in those days if they started companies. All these people were entrepreneurial, and yet there wasn't any money in California. The money was in the East, and Eastern companies weren't exciting. So I decided to try to get some Eastern money and move to California to set up a company to invest in these entrepreneurs.
That's more specific than the "no non-compete" argument for the whole state.
(I wrote "emphasized" because the first essay says only "This focus on pushing colleagues and students to commercialize their ideas helped jumpstart engineering at Stanford." It doesn't point out that other schools actively resisted commercialization.)