the origins of silicon valley - e-grid€œthe origins of silicon valley ... – ipo in 1980:...

“The Origins of Silicon Valley”SSL Workshop, Istanbul, Turkey

August 20, 2013

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Paul WeslingIEEE Life Fellow

IEEE SF Bay Area Council Communications Director

Presented at SSL Workshop, Istanbul, 20 August, 2013

The Origins of Silicon Valley: Why and How

It Happened

Classic Silicon Valley: 1976

Homebrew Computer Club (hobbyists)– 6502 Processor Design-around Motorola 6800 Cheap (1/6th the price) Hobbyist-level device

– Steve Jobs and Steve Wozniak

– The Apple I (to sell to friends)


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Classic Silicon Valley: 1976

Wozniak-Jobs partnership – called it “Apple Computer Company”– Started in a garage in Los Altos– Sold 200 or so; attracted attention of

investors– IPO in 1980: 2nd-largest IPO since Ford

Motor Company 25 years before – Now largest stock market capitalization

How could this happen? Why in the SF Bay Area?

Before 1920

This was more typical …


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Let’s Go Back …Federal Telegraph– Formed in 1909 in

Palo Alto (by a Stanford grad)

– Lee de Forest invented the audion oscillator and amplifier in 1907

– Pioneered continuous-wave radio

– Sold equipment to US Navy in World War I

De Foresttube

Defining Events

Independent privatewealth, from gold rushTitanic Sinkingin 1912World War IImportance oftechnologyUS Navy “push”for ship-to-shoreand other communications modesDesire to replace expensive telegraph lines, undersea cables with the new “wireless” technologyBrought frenzy of activity, funds to S.F. Bay Area


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We Now Follow Three Pioneers

William EitelJack McCullough Charles Litton

Deep roots in the Bay Area Families with a strong history of entrepreneurship Born/raised here

William Eitel

Took shop class at Los Gatos High SchoolWorked in his father’s quarry – ass’t blacksmith, machine operatorVisited shops of Hall-Scott Motor Car Co.– Operation of Complex machinery

William Eitel, W6UF1908 - 1989


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Jack McCullough, Charles Litton

Attended California School of Mechanical ArtsNow Lick-Wilmerding High School, San Francisco (private)

Founded in S.F. by James Lick, $540,000Opened in 1895; free education for boys, girlsOne of the best West Coast technical hi schools– Rigorous training in the mechanical trades – Many became excellent machinists– Gained "a realistic 'feel' of materials and

processes” [Litton]

Jack McCullough, W6CHE1908 - 1989

Ghirardelli;land baron in SJ; patron

Jack McCullough, Charles Litton

McCullough continued at a local junior collegeLitton enrolled in Stanford's ME dept:– Curriculum with strong practical flavor– Courses in shop work & administration,

machine drawing & design, power plant engineering, chemistry courses

– BS-ME in 1924


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Eitel, Litton, and McCullough

Introduced to amateur “ham” radiothrough their families and friends in 1910’s, ’20’s – Became acquainted with the technology of

power tubes through activities in ham radio– Bay Area had 1,200 licensed amateurs 10 percent US total

Ham Radio in SF Bay AreaIsolated and peripheral region– A continent away from urban and industrial centers– But a large and vibrant ham radio community

Geographical and cultural factors: – Strong maritime orientation– SF was one of the largest seaports on the West

Coast of USA– Several military bases; US Navy presence – Commercial shipping firms relied on radio comm’n– Considerable visibility for technology in 1900s ’10’s– Navy, shipping companies employed radio

operators, many of whom were involved in amateur radio


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Ham Radio in SF Bay AreaActive center of radio mfg in the 1910s, ‘20sElectronics firms:– Remler - made radio sets

– Magnavox - leading manufacturer of loudspeakers

– Heintz and Kaufman Designed custom radio equipment

– Federal Telegraph One of the earliest radio companies in the US Produced radio transmitters in the 1910s.

These firms made radio parts available to local hobbyists, and hired radio amateurs

Ham Radio Subculture

Camaraderie and intense sociability– A way to make friends– Communicating "over the air," face to face in clubs

Egalitarianism and a democratic ideology– little heed to distinctions of class,

education– Santa Clara County radio club, which Eitel

chaired in the mid 1920s, had “farm boys, Stanford students, Federal Telegraph technicians, and retired executives”


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Ham Radio Subculture

Representatives of the citizenry– Opposed to large companies, patent

monopolies, undemocratic organizations

Interest in extending radio technology– Built reputations: innovating new circuitry,

devising clever transmitters, contacts with faraway lands

Mix of competitiveness and collaboration A lot like Home Brew Computer Club, and today’s Silicon Valley …

Following our Heroes …

Eitel, Litton, McCullough, ham friends– Learned about vacuum tubes– Built their own equipment, parts– Made notable contributions – 1924: Litton and Stanford radio club made

first contact with Australia and New Zealand

– 1928: Eitel pioneered 10-meter waves (30 MHz) for transcontinental communication

– Opened VHF bands to radio communication


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The Tube Business

General Electric, Westinghouse, AT&T– All East Coast companies– Developed hi-power transmitting tubes in

early 1920s – Difficulties in producing consistent, reliable – Required precise machining, glass blowing

(Pyrex)– Exotic materials, sophisticated sealing

techniques

Following our Heroes …

Litton got local job through ham friend– Research at Federal Telegraph– Built to 60 engineers and scientists – Became sole supplier of radios to IT&TEitel got local job through ham friend– Mechanic at Heintz and Kaufman Inc Heintz was a ham; focus on HF radio equipment

– Recruited McCullough a year later


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The Tube Business in the ’20sCould not buy transmitting tubes on open market– RCA, GE, Western Electric, and Westinghouse Exclusive cross-licensing of 2000 patents

– RCA set up by GE, US Navy to ensure US dominance

– Sole producers/distributors of power-grid tubes Refused sale to Federal Telegraph,

Heintz & Kaufman– Threats to RCA’s domination

So both companies developed triodes– Litton and Eitel headed their tube shops

Tube Shops’ Challenge

Design around ~250 RCA patents– Enormously difficult task (Samsung vs Apple case)

– RCA had shut down Sylvania’s tube businessHired locally (many hams); got resources from IT&T (French engineers)–Eitel, Litton collaborated with each other

(novel!)

–Based on friendships over the years–Didn’t compete with other’s marketWorked closely with patent attorneys


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Tube Shops’ ChallengesHeintz, Eitel, and McCullough engineered a rugged new power tube: – New materials, manufacturing methods– Tube’s plates of tantalum (avoid patents)– New shock-resistant seals – Create high vacuums (> reliability)More reliable, longer life than RCA’s tubesDidn’t infringe RCA’s patents

Tube Shops’ ChallengeLitton invented the glass lathe – For assembly, glass blowing, and sealing– Make complex tubes in large quantities– Allowed high repeatability, precision Built tube shop on parents' property


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The Ham Radio Market

Heintz and Kauffman 354 Power Triode Tube

The US Depression Formed Eitel-McCullough Inc (Eimac)– To build high-power, high-frequency tubesFinancing: – Harrison: real-estate agent in San Bruno– Preddey: ran movie theaters in San

Francisco– Eitel and McCullough

brought their know-how – Profits to be shared

Precursor to today’s Menlo Park Venture-Capital Firms


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The US DepressionLitton, Eitel, McCullough cooperated closely– Litton helped set up vacuum tube shop– Gave castings, engineering blueprints for lathe– Freely exchanged technical, commercial

information – Reduced risks, for the two small tube-

related businesses

Like Jobs & Wozniak, Homebrew Computer Club

The US Depression

1936: Frederick Terman asked Litton to join Stanford EE department as lecturer– Shared knowledge with staff, students– Litton $1000 grant: let Terman bring

Packard to campus for grad studies, work with Litton, Hewlett, others

Start of University/Industry cooperation


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Threats to Peace Growing threats from Japan and Germany– President Roosevelt rebuilt the Army, Navy– New electronic system: radio detection

and ranging (radar)Needed high-voltage transmitting tubes – Only Eimac’s best tubes worked at the

high voltages and frequencies

The Klystron

Russell and Sigurd Varian developed the klystron in 1937– Russell went to Stanford, then worked at

Farnsworth’s Television Laboratory in SF– Philo Farnsworth pioneered TV in 1920’sThey worried about Germany– Hoped to use microwaves to detect planes– 1937: Moved to Stanford’s labs to work

with HansenUsed Litton’s free adviceUsed Hansen’s theoretical assistance


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The Klystron – PA Times, Jan. 30, 1939

The Klystron

Not just a component –an integrated RF circuit Like an antenna, with resonant traps


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Pre-War Expansion

RCA, Western Electric selected for producing Eimac’s best tubes– NRL helped Eimac get sub-contracts– Bank of America financing, volume

productionManagerial techniques to thwart unions, keep employees happy, productive– Profit-sharing, cafeteria, medical clinic

Similar to Hewlett-Packard, Fairchild, Intel, Tandem …

Post-War Realignment RCA, others focused on TV, broadcastEimac developed new line of better tubes– Power tetrodes for high frequencies– FCC’s surprise shift of FM radio to VHF– RCA, others’ tubes wouldn’t work at VHF– RCA copied Eimac’s tubes, which did work


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Reversal of Fortunes

In 1947, Eimac sued RCA and GE– alleging patent infringement on tetrode– GE, RCA lost the lawsuit, halted

production – Eimac transformed them into its own

sales force and distribution network– Let them buy Eimac products and resell

them under their own names

The “Big Dog” was now Silicon Valley!

Charles Litton After the War

Focus on higher-power klystrons– For physics research, linear accelerators– Scaled from 30 kilowatts to 30 megawatts– Transformed Stanford into a major player

– Developed “Recipe" to build a firm: little initial capital; R&D contracts; engineering teams and a product line; move to production


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Varian Associates

1948: Russell and Sigurd Varian, Edward Ginzton, Myrl Stearns, Frederick Salisbury, Donald Snow (Russell, Edward, Myrl: Stanford)

– Families of modest means, progressive politics– Worker control and share in ownership– Small cooperative-like laboratory closely

linked to university research – Several small defense contracts (Litton

recommended)– From GE: specialty klystron for new UHF TV

(while GE worked on color television)

Egalitarian relations among engineers, companies

Varian Associates1948: Sold microwave measurement instrument plans to H-P for $20,000Enabled Hewlett-Packard to enlarge its product line, increase revenues in 1950s

David Packard and Bill Hewlett


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Frederick Terman, with schematic, encourages Hewlett and Packard to

start a company; client wasWalt Disney, for Fantasia

Philo Farnsworth with first all-electronic TV tube

Ralph Heintz, short wave radio pioneer

Frederick Kolster, pioneer in radio compasses for

marine navigation

Ernest O. Lawrence, UC-B Cyclotron

Charles Litton, inventor of the

glass tube lathe Artist’s wife Susan listening

to Herrhold broadcast

Lee DeForest, inventor of audion

Leonard Fuller, Cyril Elwell,

Federal Telegraph

Jack McCullough & Bill Eitel, cutting-edge

Eimac vacuum tubes

Charles “Doc” Herrold, radio broadcasting

Fast Forward to 1950’s

William Shockleyinvented transistorwhile at Bell Labs

Raised in Palo Alto; MIT

Point-contact Germanium deviceDeveloped to replace vacuum tubes

William Shockley (seated), John Bardeen, and Walter

Brattain, 1948.


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Fast Forward to 1950’s

William Shockley left the East Coast, returned to CalTech, then to Palo Alto– His mother, graduate of

Stanford, lived there– Funded by Beckman– 1955: Shockley

Semiconductor in Mt View – “Traitorous 8” left him in

1957 to form Fairchild,with first real venturecapital funding (Sherman)

The Planar Process

Developed by Dr. Jean Hoerni at Fairchild Semiconductor in 1959Required a special infrastructure– High-vacuum technology; precise

furnaces– Glass/quartz capability– Ultra-pure gasses/water; cleanliness– Process control; continuous improvement

Built on top of all of the capabilities developed here during the ’20’s, 30’s, ’40’s


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The Planar ProcessIt all happened here …

The Planar Process

Isaac Asimov said this was

"the most important moment since man emerged as a life

form"… perhaps with a bit of exaggeration.


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At the end … (1960’s)Situation had changed dramaticallyPeninsula had become major electronics center– A workforce of 58,000– Half to 2/3rds employed in electronics

The main center for development and production of power-grid tubes, microwave tubes, semiconductors, ICs – Half of the microwave tubes – In virtually every advanced weapons, space system – In a wide range of industrial goods (broadcast, uWave

ovens)Central to the US defense effort and to the US manufacturing economy

Why?

Silicon Valley Business Climate

East’s large, vertically integrated firms– Protect their current products; adjust

slowly to swift technological and market changes

– Protective, inward, monopolistic (ATT, RCA, IBM)

SV: highly fragmented, decentralized structure– Specialized firms, flexible, engineering-driven– Dense regional network of small & medium-size

firms that support each other; common work force– Autonomous and often competing teams– Adapt more rapidly to change– Thrived in the new environment

(Ref: Arjun Saxena 1994)


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Silicon Valley – ThemesPractices, skills, and competencies– Accumulating here for more than 40 years– Communities of hobbyists - Collaboration– Strong universities (SJSU, UC-B, Stanford …)– Analog and digital techniques (now biotech, sw, cloud)– Access to networks of engineers, financiers and

entrepreneurs– Unique expertise in process, manufacturing,

product engineering, sales, and marketing – Formula to develop and grow electronics companies– Work around/supersede monopolies, patents

The ’40’s and ’50’s


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The ’60’s

The ’70’s


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The ’80’s

The ’90’s and beyond


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Other Technology CentersSilicon Roundabout (London)Silicon Forest (Oregon)Silicon Allee (Berlin)Silicon Cape (S. Africa)Silicon Alley (New York City)Silicon Prairie (Omaha; DFW)Silicon Valley-India (Bangalore)Silicon Valley-Taiwan (Hsinchu)Silicon Oasis (Dubai)Silicon Wadi (Israel)Silicon Hills (Austin)

Where is Innovation Today in SV?

It’s still accessible (for those with an interest)“Hacker Spaces” – funded by US Dept of Defense (DARPA; $10 million program)– In local high schools and more– 200 of them: Hazard Factory, Hacker Dojo,

Noisebridge, Alpha One Labs, Space Gambit …– Resulted in Pinterest and other new companies– Avoids bureaucracy; incubators for

innovation– Collaboration, teamwork (rather than

isolation)


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Where is Innovation Today?

Hackathons and other get-togethers– Usually each with a purpose or goal

“Random Hacks of Kindness”– Sized for a weekend HackathonTechShop (several in SF Bay Area)Maker FaireOpen Source software projects– Egalitarian use of jointly-developed softwareBuilding your own Apps (android, iOS)

Like Ham Radio, Homebrew Computer Club

How Different are We?

“In Silicon Valley, great ‘collaborators’ are prized; in Washington, DC, they are hanged. When they say ‘collaborator’, they mean ‘traitor’; here [SV], they mean ‘colleague’.”

Thomas Friedman, NY Times, Jan 13, 2013

“The key thing is to get rid of the fear of failurebecause these’s nothing wrong with failure. It’s not going to kill you.”

Arnold Schwartzenegger, former California Governor, TIME Magazine, “10 Questions”, Jan 21, 2013

“Err on the side of the employee”Tandem Computer, cultural values


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Get the book!

Learn MUCH more about those early days …

Anotherfun book

Norm Pond was president of

Varian Associates (Sigurd and Russell’s

company), then formed Intevac

and is CEO

2008, ISBN 978-0-9816923-0-2www.russcochran.com


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To understand how H-P was a

product of Silicon Valley, and shaped its

culture through a number of

re-inventions(1930s, up

through 2009)

I also recommend

Leslie Berlin’s recent book on

Bob Noyce


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For another view of

Silicon Valley

On Netflix Streaming:2011 video, 85 minutes

(SXSW Best Documentary)

Covers funding and startup of Apple,

Intel, Genentech, Tandem, Cisco, with views from the key

funders (Rock, Perkins …) and entrepreneurs

(Moore, Treybig …)


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On PBS’s American

Adventure:“Silicon Valley:

Where the Future was Born”

video, 85 minutes, $20(Broadcast on Feb. 5, 2013)Can be streamed online

“The creativity of the founders of Fairchild Semiconductor, including physicist Robert Noyce, helps transform Santa Clara County into Silicon Valley …. the story of the pioneering scientists.”

Reviewing the Good Ol’ Days

… and understanding how Silicon Valley became the hub of technology development

… and STILL is … and what other technology hubs might do.

Download the slides (1.2 MB) at:www.e-grid.net/docs/1308-wesling.pdf

[email protected] www.e-grid.net

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