The Origins of Silicon Valley: Why and How It Happened

[Music] Stanford [Music] University what happened that caused this to be the epicenter of technology for the world it's a special culture of innovation that we've we've inbred here when you leave today you'll know why that happened and what the the secret sauce is for this not Better well I want to welcome all of you here on this beautiful afternoon I'm pleased you're spending it with me uh here to hear a little bit about what happened that caused this to be the epicenter of technology for the world it's a rather interesting story it goes way back

which I like to do I'm going to start with a tale that we're all fairly familiar with and that's the Homebrew Computer Club a classic silic Valley story from 1976 a bunch of hobbyists that were meeting in Melo Park and then moved to slack to meet there monthly uh Steve wnc and Steve Jobs got together wnc had this great idea he could take this 6502 microprocessor which was only 20 bucks which was a lot less than the $300 or $400 Motorola wanted for theirs but this one was neat because it worked with all the chips

that worked with the Motorola one so he could buy this inexpensive one which was not the same operating system But used the same chips and he could design his own machine so he sold his hp35 calculator and Steve Jobs sold his VW van and they put a cobble together enough money to put together what they call the Apple one and wnac mainly just wanted to make it available for his friends he thought uh this would be a great thing he might make 30 or 40 or 50 ended up making about 200 it was U Bill

Fernandez introduced them they lived about a block and a half apart the uh Critical mass of nerds here is pretty high uh so a block and a half apart so Bill Fernandez introduced the two of them and says you guys ought to be working together which they did what happened well the partnership they called it Apple computer company and it started in a garage which is how things are supposed to work around here um and they have now the largest market capitalization in the world it's the most valuable brand in the world so the Question

is why did this happen I mean a couple of kids turning into a multi hundred billion dollar company and why did it happen in the San Francisco Bay Area when you leave today you'll know why that happened and and what uh what the the secret sauce is for this well back some years ago before 1900 this was the valley of Hearts delight and it was washed with blossoms as it was about a month ago here in the valley and this was typically what our Product was it was boxes of fruit but the golden product here

was apricots and so as Leland Stanford said someday you will see paloalto blooming with nearly all the flowers of the earth and the fruit and shade trees of every Zone in the future we shall can this fruit and send it all over the globe in exchange for wealth which did happen but that got supplanted and so technology overtook agriculture as this wealth generator for the Silicon Valley I'm Going to go back ways to a company called Federal Telegraph was formed in 1909 in Palo Alto by a Stanford grab named serel lwell Le Forest then joined

them in 20 in 1912 through 1913 for a couple of years to further develop his uh audion tube this was his original audon tube this is the very first vacuum tube here's his patent on this first vacuum tube this was an improved version and I'm going to actually pass around an even more improved version so you can Take a look at what this audon looked like uh basically handle these very carefully but you can see what a vacuum tube in those days look like and the details are on the card that's attached to it so

pass these on around and we'll collect them in the back so this was a start of early technology for our local area so siral lwell wanted to improve on the spark transmitter which was being used the spark transmitter made so so much noise only one could run it at a Time and it was very difficult to have conversations with it and so they developed an arc transmitter was developed in Denmark so sirel Elwell went to license The pulson Arc transmitter he brought back uh the first one a little 15 watt transmitter uh which is in

the peram collection he raised fund funds from Angel Investors including the president of Stanford David star Jordan Jordan poned $500 which is about $118,000 today he also got money from Charles Marx the professor in civil engineering and uh John Casper braner who is the geology professor and cobbled together enough Venture Capital well it wasn't really called Venture Capital then called it Angel Investing to start his company and over the next year or so he was able to demonstrate communication reliable consistent communication from San Francisco to Honolulu which was quite a Jump and here's a cartoon

from the San Francisco Sun commemorating this feat of being able to jump the Pacific Ocean and communicate reliably with voice and Morse code back and forth to Honolulu so here we have the first venture capital in its early stages and Stanford's involvement the staff and faculty of Stanford getting involved with the local companies well they built a number of high-powered stations and then the 1920s they had three stations they were Operating as a business in Portland Oregon San Francisco and Los Angeles covering most of the Pacific Ocean so ships would pay 10 cents a word

to send information back to their home base and the shipping companies could then send word to the ships uh instructions and so on and this was quite a good business there's a California historical plaque in pal Alto uh at Channing and Emerson that commemorates this well the first radio broadcast the First regular commercial radio broadcast was from a a Stanford engineering student doc herhold he started a school out behind what's now the Fairmont Hotel in San Jose to teach radio Arts because it was a hobby of his and he wanted more people to be able

to participate in this they needed radio operators for ships and so on plus he would put together receivers for people so they could have it in their home and then they would broadcast for an hour a night his wife Syil uh on Wednesday nights would have a preview of some of the current records of 78s that were being brought into the r the uh record stores and she would play those over the air for the local audience for an hour she was basically our first DJ and that was station they call it station FN you

picked your own call signs in those days had became eventually KCBS when CBS brought that bought that station in the late 40s they renamed it KCBS well ois Morehead was one of those early technology entrepreneurs he was a Stanford engineering grad he was a radio amateur operator what we call ham radio operators also he liked building vacuum tubes they weren't that difficult to build although they weren't that good in those days and he established Morehead Laboratories in 1917 in San Francisco and he manufactured basically bootleg uh tubes he figured this is how you make a

good tube I'm going to make them just Like that well you can do that for a few hundred or a thousand but if you're making 5 or 10,000 somebody might notice and the East Coast companies noticed and they filed a patent infringement lawsuit and put him out of business in the early 20s this is a very interesting theme and we're going to follow this through the talk this idea of intellectual property and patent infringement very key but this is an early example of what happens in this tube Business well some of the defining events of

days there was that independent wealth from the California Gold Rush so there there was a lot of wealth in San Francisco and Oakland and around the Bay Area from the gold which was still being pulled out of the hills the Titanic sinking in 1912 was a major catastrophe and made it really brought home the issue that we need radio communication for ships to ship and ship to shore they had it but in those days The operator was employed by the radio company uh so the operator on the Carpathian had already gone to bed and couldn't

get this emergency signal from the Titanic well they then they quickly changed the rules to say no the steamship companies have to have their own uh radio operators World War I brought a very big awareness that technology is going to be key and so the US Navy had a push to put in more um transmitters receivers ship to Shore and Ship to ship and they knew this was a key technology after the war also the economics of radio was really desirable rather than having a 100 Telegraph lines going from Albuquerque to to uh Phoenix and

having to go out there and repair them all the time wouldn't it be great if you just had a radio link and you send stuff back and forth also undersea cables uh tended to be pretty reliable but very difficult to maintain being down two or three miles in the ocean and Wouldn't it be nice to go across the ocean with radio as Marone had demonstrated in the very early part of the uh the 20th century so this brought a frenzy of activity and a lot of funding to San Francisco to our Bay Area for our

radio companies well we're going to follow three Pioneers to give you a feeling for what happened and why it happened William itel Jack McCulla and Charlie Lon uh were kids in Bay Area families They had a strong history of Entrepreneurship in their families trying new things having hobbies and they were born and raised here this is Charlie Linton at 11 and on the door there which you can't quite read it says Wireless house so here's a kid at 11 he's got a little transmitter and he's a receiver and he's talking to the neighbors down the

street and maybe across the town using this Wireless technique Bill itel took shop classes at Losgatos high school I like to say that's because Homestead High School wasn't there yet uh which is where Steve wnc and Steve Jobs went at any rate he worked during the uh year at his father's Quarry in the Santa Cruz mountains uh as an assistant blacksmith and a machine operator and also during the summer at his uncle's Motor Company the hall Scott Motorcar Company that made the Victor the victory engines for airplanes in World War I and got to know

Quite a bit about operating Machinery making new jigs making new equipment maintaining things a real Hands-On uh capability there Jack McCulla and Charlie lton went to high school at the California school of mechanical Arts what we now know as lick Wilmerding High School in San Francisco it was opened by lick who funded the Lick Observatory up on Mount Hamilton in 19 in 1895 to give a free education for boys and girls that had a technological bent kind of a a School where you could get hands-on experience they had a rigorous training in mechanical trades being

able to build things wood shop metal shop the kind of things I remember when I was a kid Linton said he gained a realistic feel for materials and the processes there at lick wiing when he was a high school student well Mulla continued at a local junior college and Linton enrolled in Stanford in mechanical engineering in those days engineering almost all Engineers majored in mechanical engineering for the four years the fifth year to get their engineer degree was a specialty year and then they could go into electrical engineering if they wish to as a specialty

uh which could be uh locomotive propulsion it could be power transmission those kinds of things were uh fairly common in those days not Communications anyway he got his mechanical engineering degree in 1924 and then got his engineers's degree Specializing in electrical engineering taking that first Communications engineering class in 1925 and it was a very small electrical group about three people in the electrical side of the business well itel Linton and Mulla were introduced very early in their kids years uh to ham radio through their family and friends and we saw lton and his little Radio

Shack there ham radio in the Bay Area was quite a novel thing it was the Bay Area was pretty isolated It was oriented toward the sea ports here in San Francisco and Oakland the shipping out of mar Island those kinds of things so they needed radio operators and there was a lot of radio stuff going on so kids could get could find somebody down the street maybe who knew radio they could get Surplus Parts they could get circuits figure out how to do things they had little clubs they could get together and work on this

together well in the early 192 20s when they started Licensing radio operators 1,200 of those were from San Francisco Bay area which was 10% of the whole Nations population of ham radio operators so you can see there's a bubble forming here this is this is not very normal to have that huge number so already the Bay Area is starting to put down some statistics showing that it's going to be something big well as I said this was an active area for radio production we had a number of firms remler made radio sets Magn Vox a

guy named Jensen You' probably heard of Jensen speakers Magnavox speakers started in Napa and moved to Oakland hinston Kaufman I'll talk a little bit more about them it made custom radio equipment for shipping for companies that sort of thing and federal Telegraph which I mentioned and they had transmitters in the 1910s uh and in 1919 they were building 1 million watt transmitters they had one in the Canal Zone one in Alexandria Virginia they had them on the west coast and the government the Navy and others were using these across the world and so radio parts

were available for hobbyists and that was great for the radio amateurs also there were a lot of jobs so if you were 18 or 19 and a ham radio operator you could probably get a good job at one of the local radio companies how many of you are ham radio operators or have held all a license in the past so I see there's a fair number of you I'm km6 LH um well the nice thing about ham radio is it's a way to make friends us nerds us um you know technical kinds of people don't

like to really talk to other people but we're happy to talk about a circuit or something we've done recently like talking to somebody in in Kansas or some Far Away place so the hobby becomes a way for us to socialize it's a way to communicate over the air of course but also face to face it's very egalitarian there's very little Distinction by class or education for example itel said in the Santa Clara County radio club that he shared in the mid-20s he said they had Farm boys and Stanford students and federal Telegraph technicians and retired

Executives a whole panoply of people there all working toward the same goal helping each other in the hobby or trying to take a next step and make something better so it was a Grassroots kind of hobby much like that Homebrew Computer Club I talked about a little earlier and which was a big contrast for what we saw in the large companies which were typically tried to be monopolies we had the large oil comp companies Communications companies like AT&T that had a monopoly on stuff well these kids and these young people were interested in extending this

radio technology and I mentioned that Lee De Forest to develop this triode which is being passed around uh to help get us away from spark Transmitters and Arc transmitters into what we know today which is uh good Communications transmitters and receivers and the kids would build their personal reputations based upon maybe new circuitry or better transmitters or better antennas or being able to talk to a farway land being the first one coming in and say hey I just did this it was a combination of competition and collaboration so once they did it they wanted to

show you how to do it so you Could do it too and we could help each other in this hobby a lot like that Homebrew Computer Club I mentioned earlier and a lot like what goes on in Silicon Valley today we see a lot of these in meetups and uh uh Tech organizations keeping that technology going moving to the next next uh step so another Pioneer was young Fred Turman his dad Lewis Turman moved to San Bernardino where he was the principal of San Bernardino High School for a year Which is where I went to

high school in the early 60s and then his father was hired by Los Angeles normal school which we know today is UCLA and he spent three years there until cubberly who this Auditorium is named for in the school of education hired Lewis Turman to come and be a professor at Stanford in 1910 and so little Fred Turman was 10 years old there he was born in 1900 they rented for a couple of years the termans did while his dad got established here his Dad you may remember uh was one of the generators of the Stanford

Benet intelligence quotient test that we all took in the 6060s and70s he was uh uh involved in research on learning styles mainly at the high school level well they then built a house on Dolores Street and right across the street in about 1950 uh Herbert Hoover moved in he came back to the campus and moved right across the street and rented a place for a couple of years until they built their Own house about a block and a half away so Herbert Hoover Jr was a kid across the street from Fred Turman and down the

street was Roland Marx who was the son of Charles marks the professor in civil engineering and George braner uh whose dad was the famous geologist and Jack Franklin the son of the head of the chemistry Department who built the big chemistry building and so Herbert Hoover Jr said all three of us were neighbors and upon Pushing the key of one of our imposing Contraptions would holler out the window to see if it had been received on the other side of the street these are like 8 12 15y old kids working in this Hobby and helping

each other along this is the faculty kids uh around the campus and others well Fred Turman says if you saw a 90ft pole sticking up somewhere you'd go and knock on the door and get acquainted with him because this is obviously Somebody involved in radio Federal Telegraph had moved over to El Camino and it was about a mile or mile and a half down from the campus so Fred would hang out at Federal Telegraph him and his friends and get pieces or talk to the people there and then he worked there one summer when he

was working on his uh bachelor's degree in engineering and this is Fred Turman when he was 17 sitting there at his radio station so following our entrepreneurs itel Lon and Mulla U experimented with vacuum tubes which is the new technology they built their own Parts and Equipment their own receivers transmitters uh circuits things like that and made notable contributions for example Linton in 1924 when he was at Stanford radio club made the first radio contract with across the ocean with Australia and New Zealand and itel pioneered in 1928 what we call the 10 meter band

the 30 mahz Band which was way up there in the unusable part of the Spectrum in those days well I mentioned the two business uh in connection with Otis morous and it was uh an interesting business uh General Electric Westinghouse and AT&T their Western Electric Division made tubes mostly all on the East Coast they developed high power transmitting tubes in the early 1920s but they had difficulty producing consistent reliable ones they were flaky to make they might Die after 30 days or 60 days instead of having a long life of several years they required precise

Machining they had to blow the Pyrex glass which came from Corning in New York then be able to seal that as a vacuum so the tube would work correctly a lot of exotic materials and difficult sealing techniques well Lon got a local job through a ham friend at Federal Telegraph which was just down from the campus Leonard Fuller was their first Engineering PhD here at Stanford the first electrical engineering PhD in 1919 and he served as chief engineer from around 1912 to 1921 of federal Telegraph and that became the sole supplier of tubes and radios

to International Telephone and Telegraph they set up well obviously a lot of Maritime Communications but also for a lot of other companies in China the Philippines France Italy places like that uh AT&T and the these Eastern companies had the Monopoly on the United States itel meanwhile got a job through a ham friend at hin and Kaufman one of the other companies I mentioned that made Radio Systems and hin was himself a ham so he liked to hire guys who had that kind of experience and they focused on the what we call HF radio the stuff

from 5 to 20 to maybe 30 megahertz and they recruited Mulla to work for them about a year later this was the peram house over in paloalto where Federal Telegraph located This was their laboratory and this little house here is where Lea Forest uh was the uh research director ctor that worked on the improvements of the tube that I'm passing around well the tube business was interesting after World War I you couldn't buy transmitting tubes on the open market they were constricted restricted technology the Navy and General Electric set up a new company called radio

Corporation of America RCA to hold all these patents and to assure Us domination and in fact they took over any European companies like telun and Marone the US arms be had to become American companies in order to use this technology and they had an exclusive cross licensing with RCA GE Western Electric Westinghouse and the other companies only those companies could use these high power transmitting tubes and therefore they refused to sell them to our Bay Area companies hinsen Kaufman and federal Telegraph because they were Selling internationally they wanted to keep the secrets here and was

also a threat to RCA's Monopoly so both companies needed to develop high power triodes so Linton and itel headed up the tube shops at these two different companies the challenge there at the tube shops was to design around these key patents held by RCA which couldn't be licensed to our companies which was very difficult so they hired a lot of local hams itel and Linton that the two Companies collaborated with each other this would be unheard of on the East Coast I mean IBM talking to RCA or rathon or other companies you kept things close

to the vest out here because there are little companies and trying to hang on had to work together much like today's Silicon Valley companies it's a different method they would collaborate with each other because they knew each other as friends and trying to solve the same problems They also worked closely with our patent attorneys and they engineered rugged new power tubes one of them itel and Mulla put together using new materials and Manufacturing methods that weren't covered by patents for example the patent said that the plate surrounds the uh grid okay they says well what

if we just made it 3/4 of the way around or two halfes or whatever a new patent okay so they found ways around the RCA patents they had new shock resistant Seals lton was a master of process development he developed the oil vacuum pump to get higher vacuums to get better reliability better ceiling and so on and they had longer life and were more reliable than the RCA tubes of the same type and they didn't infringe RCA patents that's the key thing they could make them in quantity without infringing the patterns here's an example of

one of those early tubes the hinen Kaufman 354 well lton as I said he was a Processed guy invented what he called the glass lathe and you can see it here it's basically like the lathe you would use for turning wood and he would you would put the glass The Blob of Pyrex glass that you blew on one end and you had a an axis of symmetry you could build your tube in there and then seal it right on that same axis and you got High rigidity great repeatability and high precision and he built this

not in a garage but in a Shack on the back of His parents' property so that sort of counts as a Silicon Valley startup this is this is Charlie lton then came the US depression in the 1930s and itel and Mulla who had been at Hinson Kaufman Hinson Kaufman was shutting down they left and formed their own company which all hams know as iMac uh they built high power high frequency tombs m mainly for the ham radio operators because the commercial people weren't working at that high frequency High power area but the hams really wanted

better tubes and these guys were good at designing them so they got some financing uh predy ran at some mus some movie theaters in San Francisco and Harrison had a real estate uh business in San Bruno and they had some money and they invested the money to start up the company I tell them mull I brought the intellectual property and they split it 50/50 here's our first Venture Capital basically they uh shared ownership and The profits of this company it became very profitable and so this is precursor today's Meno Park Venture Capital firms Kleiner Perkins

and all those companies but this is back in the very early 30s another key point I made earlier was that they cooperated closely so Linton helped itel Mulla set up their vacuum tube shop gave them some castings for his lathe and gave him the blueprint so they could make more of them he wasn't in the business of making laths he Wanted to improve the technology so once he had what he wanted he could give them give his friends this and they freely exchanged information and Technical developments back and forth as I said this reduced the

risk for these little companies little startups competing with monoliths from the East Coast it gave them a better foothold as small tube companies and radio companies to be able to develop this new stuff kind of like jobs in wasc and the home brew Computer Club getting together with your friends helping each other figuring out how to make it better and collaborating well during the Depression Federal Telegraph in the late 20s uh had was building a 2 million watt transmitter to install in Spain and in Shanghai but that got cancelled because the war had wound down

there was no longer any funding for that so the uh this large machine which you see in the background here huge thing had great big Magnets and stuff in it was sitting out in the rain in Palo Alto um so when Federal telegraph was sold and moved to the east coast these leftover magnets for this 2 megawatt transmitter were donated by Leonard Fuller to UC Berkeley to use in Ernest Lawrence's 42-in cyclotron that he used to uh do high energy particle physics resulted in a half a dozen Nobel prizes by 1960 uh that cyclotron turned

out to be a very great development and it was Leonard Fuller who uh passed that along now Leonard Fuller uh was quite quite an illustrious guy in fact two of his grandsons are here today we got Greg and Clark here in the row and his great-grandson Chris the uh aons I'm passing around were part of Leonard Fuller's collection that he gave to his son Clark he went on to become the head of engineering at UC Berkeley uh in the 30s and that's one of the reasons of course That he acquired this for Ernest Lawrence and

they installed this in the Berkeley High Energy lab Lawrence uh radiation lab well Fred Turman in 1936 asked Charlie lton to join Stanford's faculty at least the department as a lecturer to share his knowledge with students and uh the staff and to help with the labs and show them how to do things and part of the KRON development which which I'll talk about later when sper purchased the rights to the KRON uh Technology there was $1,000 for a piece of intellectual property that belonged to Charlie lton and Linton said well why don't you just give

that to Fred Turman all of a sudden Fred's got $1,000 so he writes back to one of his students who graduated in 34 who's got a job remember jobs are hard to get but he's working at General Electric in New York and he writes back to David Packard and says you and Lucille why don't you come out to California you can work on your graduate degree I've got $500 you can live on and $500 for lab equipment and Dave Packard thought long and hard and got in his car and came out to California and he

worked with bill huet on a circuit that Bill huet had developed for an audio oscillator that was stable as opposed to having to be tweaked every time you changed the the frequency that was their first product and it was developed in a garage so that Counts um and so that form hulet Packard uh again Fred termin getting these two guys together using some of Charlie linton's uh money from a an intellectual property item so this demonstrates more University industry cooperation as we saw with Federal Telegraph and with other companies earlier well in the late 30s

there was a growing threat to peace uh Japan and Germany were rearming and President Roosevelt was rebuilding the Army and Navy in England they had Developed something called radio detection and ranging called radar where you could send out a pulse of of of radio and then you waited and you heard and if it came back after a little while you said well that's 14 miles or that's 32 miles you could range where it was and get a fairly idea of where it was coming from but to make it better so that it was more than

just hey there's a blob out there I don't know what it is you want to increase the power and you Want to go to a higher frequency so you can see smaller and smaller things like warships or airplanes and they needed high voltage high frequency transmitting tubes and in those days only the iMac tubes uh would have would be able to do that so they worked best at those high voltages and high frequencies so they were in in demand by the US Navy as they develop this radar capability well about that time well earlier Russ

and Varian two kids in Paloalto this is pictures of them as kids were were worried about Germany he they had ideas that maybe they could use microwaves to detect things as small as airplanes and so 1937 Russell Varian moved to Stanford's lab Electronics lab to work with Bill Hansen the physics Professor uh to develop a Clon Russ Varian would come up with ideas let's try this let's try that let's do this and and uh hson would then study him say Well this won't work but this has a Possibility so he' go back and he' try

something else they finally came up with what they thought would work and they developed this cayron in 1937 this is a picture of about a a 5 kilowatt Clon and these are the brothers here and so they used lon's free advice and Hansen's theoretical assistance to develop this clayon and probably only in Palo Alto you're going to see a front page like this this is 1939 and you see our president over here saying it's starting To look pretty bad for uh for peace in the world and this guy over here saying I just want one

more country give me um Czechoslovakia and then I'll stop but the big headline was this one here the new Stanford radio invention herold's revolutionary changes and they had Russ and sigard Varan here talking about this KRON which was just released to the press in 1939 probably that and maybe the Mercury News in the ' 80s and 90s was where you read about the Technology well well Sperry purchased the rights to the KRON got exclusive rights they bought lathes and welders and pumps from lton who was making lots of these and Linton continued then to make

krons for it& this International Telephone and Telegraph because very early France was trying to buy this radar and Communications technology uh until Germany took over France and then that became a dead end there well Linton became itt's very high frequency and Microwave design arm during the war and he developed continuous wave krons and VHF and radar triodes that could be used for this new technology uh in defense so at this point San Francisco Bay area and especially around Stanford was a microwave hot bed this is where all the development was happening about half of the

tubes were being made here so worktime expansion we had a very Progressive approach to business here in the Bay Area which we didn't see on the East coast and in Detroit and places like that it was much more egalitarian between the engineers and the uh marketing the uh cost accounting all the the production people in these companies it was a very open style it was typically developed here the managerial techniques were great at thwarting Union organizers but they also kept employees happy and productive for example they started Pro profit sharing at some companies uh free

tuition for their Their professionals the local uh colleges had cafeterias k had their steel mills and developed lots and lots of ships the Kaiser shipyards and they developed their own clinics which developed into Kaiser Permanente hospital system that we know of today but that came out of World War II and these clinics started by these Progressive companies we had the HP way philosophy which spread across ulip Packard Fairchild Intel I worked at Tandem for quite a few years we had a number of very interesting rules one of them that I remember was if a new

idea comes up in a meeting you can't say anything bad about it for 5 minutes you have to say well it could work you can't say that never work nobody would you got to say well if you did this and if how about if we tried this you've got to try to build it up first before you shoot it down and this allows more openness and more Entrepreneurship in our companies than you see in many other companies well in the post-war realignment RCA and the Eastern companies focused on TV and broadcast because Philo Farnsworth had

developed electronic TV on the peninsula so we had television and we had broadcast and iMac went on to develop a better line of highfrequency tetrode power tubes that worked at even higher frequencies than than they were using in those days the FCC the Federal Communications Commission did a surprise they were going to open up what we know as the FM band at around 50 megahertz but as you all know it's really up at about 100 megahertz 888 to 108 that's where you find KQED and so on well it turns out that RCA's tubes wouldn't work

at those VHF frequencies so they did the next best thing uh IMX tubes did work so they copied them kind of like Morehead had done earlier but there was a reversal of Fortunes in 1947 iMac sued RCA and General Electric and won this patent infringement lawsuit and shut them down so iMac transformed the Eastern companies then into their own sales force and distribution Network so they would either make the tubes here or license them to be be built there they were iMac tubes stamped RCA on the side so the big dog now was Silicon Valley

we had pretty much taken over that business through intellectual property through Entrepreneurship California before the war had about 7 million people way down here about half of what was in New York uh States like that but a few years ago California now has twice as many as New York and twice as many as Florida so this huge growth this blue line you see here shows that California was really growing a lot there were a lot of reasons for that but a key one was technology you see we were a microcosm of this new technology permeating

the ' 50s 60s 7s and so on and uh it involved Electronics defense Electronics Aerospace locked had their missiles and satellites Ford and and Sylvania and Venture Capital was here and that helped to fuel the growth both here and in Southern California and California became a leader then in U technology but also in population growth and wealth growth after the war Charlie Litton focused more on these high- power krons he thought that was a really neat Technology uh and he was using it for physics research they had developed the Mark 1 2 and three linear

accelerators and they developed krons going from 30 Kow up to 30 megawatt and that transformed Stanford into a major player Fred Turman and uh Wally Sterling wanted Stanford to have these Pinnacles of Excellence you could have lots of studies but you want to focus on these Pinnacles where you're really great and focus on those as graduate schools and So on and electronics and especially microwaves was one of those microwave physics so then they got a contract from the US government to fund the two- mile linear accelerator slack to do physics research and we see these

Len krons today in uh radiation treatment for cancer the uh the radiation treatment you get uh it source is a KRON so Charlie Linton developed a recipe for how to build a firm he says get some initial Capital not too much you don't Want these guys to go crazy with you know the uh unicorns or whatever but get some initial Capital together get an R&D contract or some new idea pull together your engineering team and develop it develop a product line go into production and then build on that build on this Market that was Charlie

lon's way of approaching the startup of little companies well one of the companies after the war was Varan Associates started by the Varans and some other Stanford people and you notice it wasn't called veryan Corporation they thought of as kind of an egalitarian Progressive company where we were all sort of equals working on stuff and so it was called Varian Associates well they were developing microwave equipment and they had to develop microwave measuring instrumentation to develop that so they could test their equipment and put it in the field Feld And get it working and they

developed a very nice piece of measurement gear and they approached hulet Packard and said we'll sell you the rights to this and show you how to make it for 20,000 bucks and HP says that sounds like a good idea cuz we're making instrumentation so that was a good match so HP enlarged its product line by picking up the uh the new equipment and increased their revenues and developed the Santa Rosa and Santa clar divisions Which became agilant and then became now key site so this became a whole new line of business HP kept divisionalized and

breaking off pieces as they got too big to develop these different businesses in medical Diagnostics things like that well this is a mural up in Palo Alto basically at the corner of El Camino and Page Mill it's on in Courthouse Square and some of you how many of you have seen this have visited Courthouse Square and seen this I know my wife has very Few okay well you can go and take a look at it I'll show you where it's located but it shows a number of these people this was this was uh painted in

2002 but here you'll see um Leonard Fuller shaking hands with Ernest Lawrence giving him this big uh magnet to build his cyclotron and sirial lwell here's doc herhold broadcasting to his audience in San Jose you see Lee Deforest with one of his original audion here's Charlie lton at his little glass Lathe uh making vacuum tubes here you see Fred Turman talking to uh uh Bill hulet and Dave Packard this is their audio oscillator they built they sold the first half a dozen first seven to Walt Disney for producing the Fantasia movie it was the first

client and you see Philo Farnsworth who developed the first electronic television Jack McCulla and Bill itel here working on their circuits so this is kind of it pulls together this thread of the Bay Area and Stanford and this technology these early technology developers and it's up in Palo Alto at Courthouse Square it's in an office the office is now a called easy home so if you want to go online you can go to easy home and they will arrange for your bush trimming and lawn maintenance that's that's the company that's occupying this but you can

go up and take a look at it it's at Birch and Sheridan and this is Nicola Tesla one of the heroes of electronics engineering There's a statue there of Nicola Tesla well let's fast forward to the 1950s a little kid named Bill Shockley here he's shown 8 years old with his dog at his home in Palo um graduated from Caltech went to MIT and got his PhD and went to Bell Labs where he and his cohorts invented the transistor which would come to replace the tube much less power much more reliable much smaller well he

wasn't too well-liked at B Labs you you May already know that story uh so he left Bill Labs he didn't feel he was getting enough recognition and so on he went to calac to teach and he was approached by Arnold Beckman who said uh well why don't you start up a silicon transistor company and you can locate it here in Culver City and I'll provide the money and and shakley says Culver City he says I don't think so uh so he thought he would come up his mom was still living in paloalto he came up

to Paloalto and started his company in Mountain View there's a plaque there although right now there's a big construction zone where the old Sears building was and about 2 years later some of the guys couldn't stand his management style kept changing priorities and changing things it was very difficult working for Bill Shockley so he left these these eight the trader of State left Shockley semiconductor to form Fairchild with the first real Venture Capital lined up by Arthur Rock one of the New York financiers who moved to the West Coast a lot of you who were

in engineering might have used shockley's book in the 50s and 60s and your electronics in class he was one of the the Pioneers in the field of solid state physics and semiconductors one of the things that was developed there was the planer process it was difficult to make transistors uh impurities would get in Contamination and it would ruin them after a few days or a few weeks it was very difficult to make good ones so Jean Hern at Fairchild in 1959 developed What's called the planer process and it required special infrastructure needed have high vacuum

with well we've got that here you have to have precise furnaces we know how to do that glass and quartz capability we have machinists who can machine quartz we've got the glass lathe we've been doing this for Decades Ultra Pure gases and water we're a top notch at process development and process control uh and so all of this said this is the place to build transistors and semiconductors and so the when this all was developed here it turned out we already had the infrastructures we developed during this tube era to go on to semiconductors it

made sense for Fairchild signetics all these companies to be be located here where the technology was where the People were where the practitioners were and so there's a plaque up in paloalto at the original Fairchild plant up Charleston which is a California historical plaque for the first commercially practical integrated circuit and we here's an i Milestone plaque and we had a dedication there four or five years ago uh Gordon Moore spoke and different people this is the epicenter of where the planer process was developed and Isaac azimoff the famous science fiction writer said the planer

process was the most important moment since man emerged as a life form and he may have been exaggerating a little bit but perhaps not much because cell phones uh Communications technology highdefinition TV all of this technology came out of what developed this of the semiconductors developed using using this planer process it's used by all semiconductors today licensed very Broadly okay well the fair children were formed uh after Fairchild Fairchild was funded by Venture real Venture Capital Arthur Rock uh pulled together the funding for this he had a two-page handtyped prospectus that he sold companies on

and they developed memory chips and then in 1971 they developed the microprocessor you see the 404 here developed initially to be part of the heart of a calculator But it was a true microprocessor uh put together by Ted Hoff employee number 12 and I've got a video in inter interviewing him which you can find at Silicon Valley history.org and at the end in the 1960s the situation had changed dramatically instead of the East Coast big companies controlling technology for communications and U radio and so on the peninsula and the Santa Clara Valley were the major

electronic centers in the nation they Veled the new technologies they had the production of tubes about half of the microwave tubes in the country were being built here typically up in San Carlos all the weapon systems the Space Systems traveling wave tubes for satellites were developed here there was a r wide range of industrial goods too for example broadcast TV microwave ovens which they originally called radar ranges which probably was the wrong thing to call them um but the microwave Oven uses magnetrons that were developed uh here and elsewhere but we're certainly a key part

of that Stanford microwave hegemony and so Silicon Valley became the central focus of the US defense effort in those days and also the US manufacturing economy and the business climate was quite different the East Coast focused on the vertically integrated firms you picked your IBM and they also tended to be rather slow adjusting to new Technology changes and marketing changes and the needs or the abilities of the technology to deliver for the uh defense department or for the U the consumer economy contrasting that Silicon Valley was highly fragmented and decentralized I mentioned this earlier lots

of little companies and therefore they had to kind of be nimble and they had to help each other they were very engineering driven looking at the next best way to do something processes being able to Improve existing processes so we had a a dense Regional network of small and medium-sized companies that had to support each other and when you had to do something instead of doing it yourself you'd find somebody else who was better at that and they would provide it to you it's very nice another key thing is different in California in the 1870s

back right after the Gold Rush California passed a law that said you can't enforce uh non-compete clauses and Employment contracts very few States had it in those days and today Most states still don't have that so if you're in Boston for example and you want to leave your company to start your own new company they you may have signed an agreement that says you can't can't compete for two years so you got to go pump gas or design websites or do something like that until that two years Runs Out not in California you may have

it in your employment contract but it's Unenforceable so you see people leaving HP leaving Google leaving companies and starting their own companies and they can't take the intellectual property or the customer lists but they can take their intellectual ability and their knowledge and then they can start building beyond that and so this is a rather unique thing in California that also helped this very different we could adapt much more rapidly to change and we thrived in this very competitive and Dynamic environment well it was pretty unique we had practices skills and competencies that we developed

over that 100 plus years we had a lot of hobbyists and collaborators that worked together a lot of this came out of hobbies like ham radio or the home brew computer club or meetups I'm going to a Meetup tomorrow for example and we started with analog which is the area that I covered but then we moved on to digital the Integrated circuits then to software to biotech in the 80s to mobile Computing now it's big data deep learning virtual reality and augmented reality and autonomous vehicles this is all technology coming out of the valley supplemented

obviously but a lot of it comes out here so a lot of cutting edge entrepreneurs we have people willing to risk things and try it out for a couple of years we have the engineers to support them and the Venture Capital we Have local universities that conduct research and development in these areas and then we have the supporting role um Role Models um the expectations for our high school and college kids you're supposed to go out and be able to invent something new or start go to a startup company and you know make a few

million dollars on your stock option it's a special culture of innovation that we've we've inbred here well in the 40s and 50s we had shly semiconductor then Fairchild sris Stanford Research Institute developed a lot of stuff with Doug Egle Bart and other uh the graphical user interface in the mouse aex for video audio and video recording ulip Packard I mentioned universities are Stanford and UC Berkeley then in the 60s we come up with the other semiconductor companies AMD we have National semiconductor and Intel and intersil we start getting infrastructure companies like Applied Materials Developing all

the equipment that you need to make the semiconductor that's a big business right there in the 70s now we have the computer companies I worked at tandem we have apple for phase amdall develops their big Mainframe I worked there for uh seven or eight years video games we have Atari now with a video game you can actually play in your home on your television uh we have the start of communications technology uh Western Digital is developing dis drives we have Genentech in the 80s software W we're all of a sudden discovering there's a market there

are so many computers now that there's a market for software so Adobe is making Photoshop for the mac and for the PC we have the workstation companies with silicon graphics and sun and mips um we have Cisco now we've starting to interconnect these computers and what becomes the E the internet this is the ethernet technology that was developed at Cisco and my favorite Fries Electronics where you can go to buy all these little bits and pieces of things and try out the new technology you have to leave your credit card at home when you go

to fries uh IBM has her almadin Research Center there's a lot going on here in the valley in the 80s in the 90s and Beyond we have Tesla starting their electric car business uh browsers and Google we have uh another networking company we start seeing Facebook coming up uh eBay where you can buy and sell Stuff paler analyzing large data sets for uh looking for secret of information PayPal where we can actually have online transactions and then software is a service with Salesforce and then Netflix and Pandora rolling out the content that we love so

much and companies are moving here the major auto companies are all here Ford is wants to hire another one or 200 people right next door to Stanford GM is going to be hiring over a thousand at Their Cruise Automation in San Francisco Nissan BMW Volkswagen we've got a branch of the US patent office now now in San Jose Toyota is investing a billion dollars much of it right next to Stanford and the rest around MIT uh Samsung big Korean company they would like to be really great in their operating systems for smartphones and Robotics and

other things like that but when they buy a little company in the Bay Area they can't convince the people To move to South Korea so instead they built a large 10 story building over in Santa Clara and they buy a company and they say okay you're on the second floor in the west wing and you're on the fourth floor in the South wing and they're bringing them all in there to form this bubbling pot of of desperate ideas to create these new technologies that Samsung's going to need and there's this little Arkansas company that for

about the last 15 years has had their Development Labs here on the peninsula doing uh things and always the lowest price always and biotech I mentioned jentech they sprung off a lot of companies they were formed in 197 6 Kleiner Perkins Venture Capital to do Jean splicing turned out it was possible they didn't think it was but it turned out to be uh Calico uh is the Google uh research thing that's supposed to increase our lifespan to about 150 years and some people say well it's named for The Calico cat which is a rather unique

cat if you know about calicos but I think it stands for California life company and that's that's what's going on there uh babe Cambrian uh genomics transcriptic Gene weave all of these companies here in the Bay Area and lots more in Southern California and around the world off of that pioneering development at Genentech so where exactly is Silicon Valley well I looked at a map and it Turns out it says Silicon Valley is sort of right down where we are paloalto to Sunnyvale to San Jose but really it's all the way from San Francisco to

Monteray and Santa Cruz maybe over to Livermore it's it's it's really a metaphysical space San Francisco is now considered part of Silicon Valley and who would have guessed but it is and Silicon Valley now really refers to the whole area there just wasn't enough land here to house what became Silicon Valley I mentioned Venture Capital funding where is it well in the spring of 2014 I found I found this map showing the Bay Area has about 55% of the USA Venture Capital invested here compare that to New England with 10% New York about 9% and

bits and pieces around the rest of the nation and you can see why it's so darned hard to start major companies in other parts of the nation it can be done there is need obviously to spread out what we're doing here Because we we the housing prices are so high you can't afford to move here anymore but the point is the venture capital of startup is very often here so how different is Silicon Valley I follow Thomas fredman in the New York Times and in January of 2013 he said in Silicon Valley great collaborators are

prized in Washington DC they are hanged when they say collaborator they mean traitor but here in Silicon Valley they mean colleague so we don't even Speak the same language we we have a different way of operating it's really our attitude for example we think of failure is a feature not a bug if you're a if you have a project that fails and you're working at uh company on the East Coast chances are you'll you'll be in maintenance engineering or maybe you'll be the janitor for your next project out here if you have a project that

fails out from under you we want to hire you for our startup because you've got Experience and we want to tap that and learn better how to do stuff so out here if you've had a massive failure of a startup people are looking for you in a good way and I like Facebook's one of their mottos is move fast and break things don't wait try it out iterate along the way make it better you saw at the f8 conference this week they're coming out with new things are going to be trying and probably cycling old

things out of The way so that's kind of a a trademark of what happens here in Silicon Valley and around here the failure rate instead of being nine out of 10 is more like eight out of 10 you either grow big you get acquired by Samsung or somebody or Microsoft or you you maybe make some uh some profit and become a a reasonable company we don't fail anymore we call it a pivot we have a different term for that so uh if you've started up something and it's not working out all Of a sudden you're

working on something else as William Gibson said the future is already here it's just not evenly distributed so we already know what the future is other people are starting to get a picture of it and will get involved in it over the next decades this is kind of where it happens so I suggest you if you're interested in this there's a great book put out by uh Kristoff laco called making Silicon Valley he says from 1930 to 1979 but he Really goes back to 1910 that's a very good quick book to read Fred terman at

Stanford is a great book to read it's a thick one but it has lots and lots of content talks about the technologists the technology and what happened in the uh the 10 20s 30s 40s 50s and 60s another fun book is called the tube guys written by Norm Pond he talks about the early tube days and also this is one of the big krons that you see here uh so if you happen to like the the radios That glow in the dark this book is a fun one to read and I have an interview on

the uh on the internet of Norm Pond and some others about this the HP phenomenon talks a lot about what it's like being in a St in a startup company in the Bay Area starting from the 50s through the well through through Mark herd in the 2009 um and it's a big thick book but a fun read about how HP grew divisionalized and their their philosophy I recommend lley Berlin's Book on Bob no behind the microchip here's a kid from the Midwest who uh made good he was working at filco in Philadelphia and he gets

this phone call other the line says this is William shley and he says it was like getting a phone call from God because everybody knew shle in his developments and the solid State physics he had developed and here's Big William shley calling little Bob noise working back at a company of course Bob came out to join uh shakle Semiconductor another view we've got Steve Jobs this is a more closed type of company but a very successful one uh Walter isaacson's book another view of a very Innovative and open environment is Google uh a book called

I'm feeling lucky if you've ever clicked on the I'm feeling lucky it just brings you to one thing which is probably what you wereing for uh or in the Plex which is the other book by Steven Levy very good books about this open environment where you're Encouraged to spend maybe 10% of your time working on your own hobby stuff which may develop into Google stuff or may not when I was at amdall Corporation amdall set aside 10% of my time on their payroll to spend time with the i e The Institute of electrical electronics Engineers

as an officer and involved in conference development and so on because this was a way of not only sharing what we had but picking up what other people were learning this this uh partnership Got me into a lot of different companies I mentioned I went to IBM and in in Fishkill and went through their plants wouldn't have been likely to get in as an amdall employee you had to know somebody how many of you have Netflix streaming how many of you have seen this video yes some of you have this is great it's called something

ventured back and it was the South by Southwest in 2011 one of their best documentaries and it covers the startup Of a lot of these companies that we're more familiar with apple Intel Cisco Tandem and jentech talks to the original Founders Gordon Moore uh Sandy learner Jimmy Tri big those kinds of people interviews them and talks to them and also talks to Tom Perkins and Arthur Rock and some of the Venture capitalists about how this happened what the importance is of venture capital and of Entrepreneurship and what this this uh cauldron of activity is like

here I Recommend watching that I think it's a little less than an hour so thank you for walking with me through these origins of Silicon Valley and Stanford's participation in it and why I see it as the Hub of Technology development which I think will continue for the next number of decades you can download the slides there are also a number of Technology history presentations and interviews on Silicon Valley history.com which you may find fun to go through so Thank you for your attention and we'll wrap it up than [Music] he [Music]