WAVE AFTER WAVE WAVE AFTER WAVE
The heart of Facebook’s Silicon Valley headquarters, nine buildings containing more than 1 million square feet of office space, resembles a small town—except that, for employees, nearly everything is free. There are restaurants, a dry cleaner’s, a bike shop, an arcade, and a barber. Most weekends, the company hosts a farmer’s market, where employees and people from surrounding communities can buy fresh produce, play games on the grounds (“Human Foosball” is popular), watch cooking demonstrations, and listen to local musicians just steps away from San Francisco Bay.1
The company’s unmistakable thumbs-up icon dominates the sign at the main entrance off Hacker Way. But the bright Facebook logo is a facade, a cheerfully printed swath of heavy-duty vinyl stretched taut over the front of a metal sign. On the reverse side of the sign, like a record track played backward, are the name and logo of another company: Sun Microsystems.
The Facebook campus once belonged to Sun Microsystems, a computer hardware and software company founded in 1982 that grew to be one of Silicon Valley’s most successful and best-known firms.II Sun reached $1 billion in sales in six years—as rapidly as Apple, a company Sun once considered buying. Between 1985 and 1989, Sun was the fastest-growing company in the United States.2 Cofounders Andy Bechtolsheim and Vinod Khosla were celebrated in their home countries of Germany and India. (There were two American-born founders as well, Bill Joy and Scott McNealy.) The company was so successful and iconic that a US senator visiting Silicon Valley in the mid-1980s wonderingly asked CEO McNealy, “Who told you that you could do this?”3
The innovations and human networks developed in the previous decade underpinned Sun’s success. The computer workstation’s technical design was based on technology from Xerox PARC, where Bechtolsheim had worked while in graduate school.4 Kleiner Perkins Caufield & Byers, the venture capital firm that had launched Genentech and whose cofounders had worked at Fairchild and Hewlett-Packard, was an early and significant investor in Sun. Bechtolsheim had designed the workstation while a student at Stanford, so Niels Reimers’s Office of Technology Licensing received an invention disclosure.5 For years, Sun used MANMAN software, running on ASKNET, to track its materials resource planning.6
Sun, which at the turn of the millennium marketed itself as “the dot in dot-com,” crashed after failing dot-com companies canceled their orders for computers and servers. Sun, also facing competition from less expensive servers running Linux and Berkeley Unix operating systems, never recovered. In 2010, Oracle Corporation acquired Sun for $7.4 billion. Oracle’s cofounder and CEO was Larry Ellison, a former Ampex employee who had worked on the same Videofile system as Atari’s Al Alcorn, Nolan Bushnell, and Ted Dabney.
When Facebook CEO Mark Zuckerberg left the Sun sign angled so that employees pulling out of the main campus parking lot could see it, he was sending them a message: take none of Facebook’s success—the wealth, the accolades, the free lunches, the pride you feel in your company’s name—for granted. Even a once iconic company can disappear in the wake of relaxed vigilance, a few bad quarters, a series of poor decisions, or the rise of a new competitor.
If Sun drew power from the waves of innovation that preceded it, the company also created momentum for those that came after. Sun’s legacy is more than a fading logo on the back of a sign. Sun’s Java programming language runs beneath millions of websites and applications, in web-based applications such as Google Docs, in financial trading systems, and in video games such as Minecraft. Among the more than 250,000 people who worked at Sun are the former CEOs of Google, Yahoo!, and Motorola.7
Sun’s cofounders went on to fund new generations of technology companies. Vinod Khosla has backed dozens of startups as a venture capitalist, first at Kleiner Perkins Caufield & Byers and later at Khosla Ventures. In 1998, Andy Bechtolsheim met two young Stanford computer science graduate students who were thinking of starting a company. They had not incorporated and so did not have a name for the company, they told him, but Bechtolsheim was so excited that he wrote a $100,000 check to the name they thought they were most likely to choose.8 “Pay to the order of,” Bechtolsheim wrote, “Google, Inc.”I
This chain of cross-generational support—in which technology, alumni, and resources from one innovative generation support the next—is one of Silicon Valley’s great contributions to the world economy. It is the “baton pass” Steve Jobs referenced in his 2005 commencement address at Stanford.
It is easy to play the “begat” game in the Valley. Stanford and Xerox PARC begat Sun, which begat countless other companies and technologies. Fairchild begat Intel and National Semiconductor, which, through Markkula, Scott, and Carter, begat Apple, which through Trip Hawkins, who worked for Markkula, begat Electronic Arts. Stanford begat Cisco, Google, Hewlett-Packard, IDEO, Instagram, MIPS Computer Systems, Netscape, NVIDIA, Silicon Graphics, Snapchat, Sun Microsystems, Varian Associates, VMware, and Yahoo!—and those companies, many funded by Don Valentine’s Sequoia Capital or Kleiner Perkins Caufield & Byers, have begotten others. (Stanford has been a limited partner in both venture firms’ funds, as well.) Ampex begat Memorex and Oracle, as well as Atari, which begat many other video game companies including Activision, the company behind Call of Duty. Research staff from the Computer Science Laboratory at Xerox PARC begat Microsoft Word, as well as AltaVista, Ethernet, the pioneering networking company 3Com, and Adobe. As recently as 2016, several of the most senior members of the research staff at Google were former PARC employees. Even companies that cannot trace their lineage to a Valley predecessor—Facebook, for example—have moved to the region to take advantage of its unique network and resources.
It takes a certain kind of audacity to think that you can launch a company, much less invent an industry—and audacity often veers into arrogance. The waves of innovation that have sustained Silicon Valley for the past sixty years have not been an unmitigated good. Waves crash. Undertows are strong. Silicon Valley is more crowded and more expensive than ever, and people who have lived in the Valley for decades can no longer afford to stay. The manufacturing and assembly jobs that supported Vineta and Fawn Alvarez as well as tens of thousands of others have largely disappeared from Silicon Valley, shipped overseas to cheaper markets or replaced by automation. The digital world has exposed, and some would say contributed to, the widening gaps between rich and poor. In Silicon Valley itself, men as a group earn more than women at the same level of educational attainment, and the lowest-earning racial/ethnic group earns 70 percent less than the highest-earning group.9 Waste from electronics is a major cause of pollution around the world. High-tech companies spend tens of millions of dollars lobbying federal, state, and local governments, and the tech industry has what some see as disproportionate political clout as a result.10
Silicon Valley’s record is not unblemished, but the impact of the innovations from the region is unmatched. The years covered in this book saw the launch of five major industries: video games, personal computing, biotechnology, modern venture capital, and advanced semiconductor logic. In the decades since, Silicon Valley has reinvented itself again and again. The consumer electronics wave of video games and personal computers became the wave of powerful software and networking companies, which was followed by web and search businesses, and now, cloud, mobile, and social networking industries.
The most recent waves of innovation have been sustained by the constant refresh of immigrants to the valley. This mixing of new ideas and new perspectives has been essential to Silicon Valley’s continuing vitality throughout its history. In 1969, the immigrants came mostly from other parts of the United Sates. By 1980, the percent of the Silicon Valley population born outside the country was roughly double that of the American population as a whole. Today, one person born outside the country moves into Silicon Valley every half hour. Thirty-seven percent of the population is foreign born, nearly three times the US population overall.11 More than half of the people in Silicon Valley over the age of five speak another language than exclusively English at home. Two-thirds of the people with bachelor’s degrees working in science and engineering in the Valley were born in another country.12 Immigrants are key members of management or product development teams in more than 70 percent of American startup companies valued at $1 billion or more—and founders at more than half of those companies.13 The next great “Silicon Valley idea” can pull its energy from, or export its energy to, anywhere in the world.
I. In 2012, Bechtolsheim’s stake in Google had an estimated value of more than $1.5 billion.
II. Sun built powerful, sophisticated, networked computers called workstations that were about three times the cost of personal computers. Workstation users were not the personal computer users that Markkula called “Joe Averages” but scientists and engineers in computation-heavy fields such as computer-aided design, where the work demanded speed and significant storage capacity.