A BIT LIKE LOVE A BIT LIKE LOVE
Tens of millions of people have watched the video of Steve Jobs’s 2005 commencement address at Stanford University. Executives and journalists quote from it. An exhibit at London’s Victoria and Albert Museum featured excerpts. Every year, a neighbor festoons a pair of trees along Palo Alto’s bicycle boulevard with photos of Jobs and quotes, many from the commencement address. The speech, given on a sunny June morning and lasting just over fourteen minutes, is indeed remarkable; in it, Jobs talks about his adoption, his cancer diagnosis, his work, his family, and his inspirations.
About six minutes into his address, Jobs tells the story of being fired from Apple when he was thirty years old. “The focus of my entire adult life was gone, and it was devastating,” he says. The next lines are easy to overlook but vital for anyone who wants to understand how Silicon Valley works: “I felt that I had let the previous generation of entrepreneurs down—that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly.”1
Throughout his career, Jobs spent time with older entrepreneurs such as Intel’s Robert Noyce and Andy Grove, as well as with Regis McKenna, a former employee of National Semiconductor who founded Silicon Valley’s leading public relations and marketing firm. In 2003, I asked Jobs why he spent so much time with the semiconductor pioneers. He said he “wanted to smell that second wonderful era of the valley, the semiconductor companies leading into the computer.” He added, “You can’t really understand what is going on now unless you understand what came before.”2
Jobs did not mention it in his Stanford speech, but after he returned to Apple, he passed the baton forward to a new generation of entrepreneurs. Google cofounders Sergey Brin and Larry Page went to Jobs for advice when they were starting their company. Facebook’s Mark Zuckerberg considered Jobs a mentor.3 I once saw Zuckerberg eating dinner in the same hidden corner of a low-key Palo Alto Mexican restaurant where, years before, I had seen Jobs. Zuckerberg was in the same seat, at the same table, sitting, as Jobs had, alone, his back to the window.
The period covered in this book marks the first time that the generational handoff happened on a grand scale, as pioneers of the semiconductor industry passed the baton to younger up-and-comers developing innovations that would one day occupy the center of our lives.II The result was staggering. Between 1969 and 1976, the narrow peninsula south of San Francisco was the site of the most significant and diverse burst of technological innovation of the past 150 years. In the space of thirty-five miles and seven years, innovators developed the microprocessor, the personal computer, and recombinant DNA. Entrepreneurs founded Apple, Atari, Genentech, and the pioneering venture capital firms Sequoia Capital and Kleiner Perkins Caufield & Byers. Five major industries were born: personal computing, video games, advanced semiconductor logic, modern venture capital, and biotechnology. In this same remarkable period, a laboratory at the Stanford Research Institute received the first transmission of data from the Arpanet, the precursor to the Internet. Stanford University pioneered a model of turning faculty research into commercial products that has since earned nearly $2 billion for the university.4 The independent software industry was born.I Xerox opened the Palo Alto Research Center (PARC), which would pioneer computing’s graphical user interface, icons, Ethernet, and laser printer. Upstart CEOs with an eye to the future lay the foundation for the now-tight political alliance between Silicon Valley and Washington, DC.
These years marked Silicon Valley’s coming of age, the critical period when the Valley was transformed from a relatively obscure regional economy with the microchip industry at its heart into an economic engine whose rate of job growth has been double that of the country as a whole for the past five years.5 In the process, Silicon Valley has spawned countless imitators and numerous industries that together have created the modern world. Troublemakers charts these changes through the lives of the people who made them happen. The book opens in 1969, when the transformation is just beginning in the shadow of the Vietnam War. The story ends in 1983, after the world has begun to experience the effects of these revolutionary innovations. By that date, a new generation of innovators and industries was on the rise.
In 1969, the name Silicon Valley did not exist; it would be two years before the region renowned for its plum and apricot orchards gained its current moniker. Starter homes in Palo Alto that now sell for nearly $2 million cost $60,000, but a computer with less processing power than today’s $250 programmable thermostat cost hundreds of thousands of dollars.6 The term “biotechnology” had not been coined, and the prospect of combining genes to create a hybrid life-form sounded like science fiction. Computers occupied rooms, not desktops—and certainly not pockets or wristbands. Silicon Valley companies built products for engineers, not consumers. To the extent that the average American thought at all about computers, it was only to curse them as the culprits blamed by banks when a checkbook did not balance properly.
Today we consider Silicon Valley the hub of the information economy. In 1969, however, the Valley was a manufacturing center; 60 percent of people working in the local electronics industry worked production jobs.7 Defense-based companies such as Lockheed and GTE Sylvania were pillars of the local high-tech economy, and the sophisticated global electronics supply chain was only beginning to take shape. Federal law barred pension funds from investing in high-risk/high-reward young companies. Entrepreneurs were suspect—weirdos who could not cut it climbing the ladder in a good corporate environment.8
Yet within a dozen years, products from Silicon Valley companies such as Apple, Atari, and their competitors were reshaping how people worked and played. Insulin had been synthesized using recombinant DNA, and the Supreme Court had declared that genetically engineered life-forms could be covered by patents.9 Software companies were going public. Pension funds had invested hundreds of millions of dollars with venture capitalists backing the riskiest early-stage investments. The US economy was beginning to reshape itself around information and services, rather than manufacturing. No longer did politicians claim that what was good for General Motors and other large companies was good for America. Entrepreneurs were the new American business heroes.
The 1960s set much of the tone for Silicon Valley, as engineers and scientists built the first microchips, and entrepreneurs launched startup companies that offered generous stock options and flat organizational structures. But the dozen years that followed—the years that unfold in these pages—laid the foundation for the world we know today.
Today, when five of the six most valuable companies on the planet are high-tech firms, three based in Silicon Valley;10 when the high-tech sector accounts for 9 percent of US employment, 17 percent of gross domestic product, and 60 percent of US exports;11 when 400 hours of video are uploaded to a single platform (YouTube) every minute,12 and more than 200 billion emails are sent every day;13 when the video game industry is larger than the movie business, and the biotech industry generates $325 billion in revenues in the United States alone;14 when US manufacturing jobs continue to disappear, many of them lost to automation;15 when the electronics manufacturing and equipment industry spends almost $60 million on lobbying in a single year;16 when a sitting US president guest-edits an issue of Wired magazine devoted to the future of innovation, and his successor rides to victory through savvy use of online social networks also blamed for disseminating misinformation; at a time when our relationship with technology is so intimate that 46 percent of Americans say they cannot live without their smartphones and one-third of adults would rather give up sex than their phones17—it makes sense to ask how we got here.
Understanding our modern world means understanding Silicon Valley’s breakthrough era, and a close examination of those years makes it clear that Silicon Valley was not built by a few isolated geniuses. Anyone who has worked in Silicon Valley (or anywhere else, for that matter) knows that although the spotlight often has room for only one person, those just outside its illuminated circle are at least as responsible for the success that has given the star a moment of glory. At a party I attended a number of years ago, someone who had served as chief operating officer of a major Silicon Valley company with a superstar CEO sang a little song about this phenomenon. The only lyrics were “I did all the work. He got all the credit.” Innovation is a team sport, suffused with similar passion and drama. “When a really difficult thing is being worked on and you get synergy from the small team in just the right way, you can’t describe it. It’s like love. It is love,” says Alan Kay, a visionary computer scientist who worked at Xerox PARC, Apple, and Atari. “You’re trying to nurture this thing that is not alive into being alive.”18
Silicon Valley’s success today and for decades has rested on personal connections and collaboration that transcend companies, industries, and generations. Men and women working in Silicon Valley during the breakthrough years brought technology from Pentagon offices and university laboratories to the rest of us. The history is far richer and more complex than the isolated tales of famous entrepreneurs—yet that history has never before been told. Looking at multiple contemporaneous developments reveals the overlapping experiences and individuals that made them possible.
This history is a tale of upstarts who defied the norms of their professions and peers, not just once but again and again. The entrepreneurs were not the only mavericks in Silicon Valley. Suit-wearing attorneys, venture capitalists, and angel investors risked their careers to back barefoot hippies. Public relations experts invented a new type of all-American media darling—the high-tech entrepreneur—in an effort to make complex technology more appealing to consumers. Executives banded together across industries to influence politicians. Scientists and financiers dared to play with DNA, the very stuff of life.
Troublemakers tells these stories, which feature some of the most famous names in Silicon Valley history, while also profiling seven other individuals in depth. Bob Taylor kick-started the precursor to the Internet, the Arpanet, and masterminded the personal computer. Mike Markkula served as Apple’s first chairman, with an ownership stake equal to that of Steve Wozniak and Steve Jobs. Sandra Kurtzig, an early software entrepreneur, was the first woman to take a technology company public. Bob Swanson cofounded Genentech. Al Alcorn designed the first wildly successful video game, Atari’s Pong. Fawn Alvarez rose from an assembler on a factory line to the executive suite. Niels Reimers changed how university innovations reach the public; in the process, he helped launch the biotech industry.
I chose these seven individuals not only for what they have done but also for who they are. Their work deserves more attention. Their fascinating stories speak directly to the forces that built Silicon Valley and continue to resonate in our lives today.
The troublemakers did not always have much in common, but they shared two traits: they were persistent, and they were audacious. None of the changes they pushed came easily. Inventing the future is a fraught business. At times, the previous generation—the one passing the baton—did not know what to do in the face of new technologies. When there were no blueprints to trace with a finger and no maps to follow, the troublemakers remained undaunted. They made it up as they went along.
I. In 1969, IBM, facing antitrust action, unbundled its hardware, software, and services businesses, after which the revenues of independent software vendors exploded from $20 million to $400 million.
II. Former employees of the Valley’s first wave of innovative tech companies founded in the 1930s and 1940s (companies such as Hewlett-Packard and Varian Associates) typically had little direct involvement with the rise of the semiconductor companies that followed.