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The Roots of Silicon Valley, Part 1: Founders, Legend, Legacy

Stanford — approached David Webster, head
of Stanford’s Physics Department, for help in
developing the Varian brothers’ idea of using
radio-based microwaves for aircraft detec-
tion in poor weather conditions and at night.
Webster agreed to hire them to work at the
university in exchange for lab space, supplies,
and half the royalties from any patents they
obtained. The group’s work eventually led to
the August 1937 development of the klystron,
subsequently adopted by Sperry, and the
formation of Varian Associates in 1948.
In 1938, shortly after the klystron’s devel-
opment, Bill Hewlett and David Packard, who
had graduated three years earlier with degrees Dollar bills signed by each founding member were part of the contracts among the
in electrical engineering from Stanford California Group, which formed the basis of Fairchild Semiconductor.
University, formed Hewlett-Packard in a (Source: Computer History Museum)
garage at 367 Addison Ave. in Palo Alto under
the mentorship of Fred Terman. The garage is
often referred to as the “Birthplace of Silicon other — not exactly feasible, given that they ARTHUR ROCK INVESTS
Valley,” understating the contributions of all worked in a small building. At some point, In March 1957, Kleiner, who was also beyond
Terman and Stanford in creating the catalytic Shockley sent the entire lab for a lie- Shockley’s suspicions, asked permission to
environment for Californian high-tech detector test, although all refused. Shockley attend an exhibition in Los Angeles. Instead,
ventures, as well as the explosive role that also lacked business experience and industrial he flew to New York to seek investors for a
Shockley Semiconductors would subsequently management, unilaterally deciding that the new company that he and the six others were
play. From a semiconductor perspective, lab would pursue an invention of his own — by now contemplating. Kleiner’s father, an
381 San Antonio Rd. in Mountain View, the four-layer diode — rather than develop investment banker, introduced Eugene to
Shockley’s address, is more appropriately the the diffused silicon transistor that he and his broker, who in turn introduced Kleiner
real birthplace of Silicon Valley, as recognized Beckman had agreed upon. to Arthur Rock at Hayden Stone & Co. The
by IEEE. team’s original idea was to join an existing
company. Rock, already investing in new com-
SHOCKLEY SEMICONDUCTORS With the help of a new team, panies — what today would be called startups
Given his own prodigious IQ, Shockley Shockley brought his own — together with Alfred Coyle, backed Kleiner’s
embarked on an ambitious hiring campaign, proposition of a seven-strong, pre-packaged
seeking to employ the brightest scientists diode to mass production in team, believing that trainees of a Nobel
available — not just Ph.D.s, but Ph.D.s from laureate were destined to succeed. Finding
the finest universities who were at the very 1958, but by then, time had prospective investors, however, proved to be
top of their class — bringing together a ver- been lost and competitors difficult, given the U.S. electronics industry
itable brain trust of brilliant engineers. The was at that time concentrated on the East
hiring process was not that straightforward, were already close to Coast. The California Group — as the seven
however; because most electronics-related became known — wanted to stay near Palo
companies and professionals at that time developing ICs. Alto. Rock presented the group to 35 prospec-
were based on the East Coast, Shockley’s tive employers; all declined.
startup had to post ads in The New York Lacking financial backing, the group led
Times and the New York Herald Tribune. Barely six months passed when discontent by Moore, as a last resort, presented Arnold
Shockley initially tried to recruit from his Bell boiled over, prompting seven employees to Beckman with an ultimatum in May 1957:
Lab peers, but knowing his reputation as a voice their concerns to Arnold Beckman — not Solve the “Shockley problem” or they would
difficult manager, none would join him. to get rid of Shockley but to put a more ratio- leave. Moore proposed finding an academic
Early respondents included Sheldon nal boss between him and them. Their request position for Shockley, replacing him in the lab
Roberts of Dow Chemical, Robert Noyce of might well have been granted had Shockley’s with a professional manager. Beckman again
Philco, and Jay Last, a former intern of Nobel Prize not been announced in refused, believing that Shockley could still
Beckman Instruments. Each was required November 1956, extending Shockley’s fame succeed — and shortly regretted that decision.
to pass a psychological test, followed by an and inflated ego. Rather than rock the boat, A month later, Beckman finally inserted
interview. Julius Blank, Gordon Moore, Last, Beckman chose not to interfere, instead a manager between Shockley and the team,
Noyce, and Roberts started working in the telling the seven to keep their heads down. but by then, it was too late, as the seven were
April–May timeframe, and Eugene Kleiner, Future Intel founders Noyce and Moore now committed to leaving and embarking on
Victor Grinich, and Jean Hoerni during the stood on different sides of the argument, Plan B — namely, creating their own startup.
summer. By September 1956, the lab had with Moore leading the dissidents and Noyce Recognizing they were followers, not leaders,
32 employees, including Shockley. standing behind Shockley, struggling to the group persuaded the charismatic Noyce
Although never medically diagnosed by resolve conflicts. Shockley considered Noyce to join them. The now-expanded California
psychiatrists, Shockley’s state of mind has his sole supporter, but the team started to dis- Group met up with Rock and Coyle at the
been characterized as paranoid or autistic. integrate, starting with Jones, a technologist, Hill Hotel in California. These 10 engineers
All phone calls were recorded, and staff were who left in January 1957 because of a conflict became the core of a new company. Coyle,
not allowed to share their results with each between Grinich and Hoerni. fond of ceremony, produced 10 US$1 bills and

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