In 1971, a hard-drinking reporter named Don Hoefler published a three-part history of the “men, money, and litigation” behind the semiconductor business. He titled the series, which appeared in an industry newsletter called Electronic News, “Silicon Valley USA.” It was the first formal use of a name that for years had been bandied about inside the valley.¹

No one beyond the readers of Electronic News took notice that a new technology region had been born on the San Francisco Peninsula. Individual companies had begun to attract outside interest—Intel would have a successful IPO in 1971, for example—but three years would pass before any major national publication wrote about the Peninsula as a distinct, technology-based regional economy.² Years would pass before the name “Silicon Valley” gained widespread use.^III

In the early 1970s, Silicon Valley startup companies were largely deemed irrelevant to the real business of the United States, which was concentrated in East Coast financial centers and cities such as Detroit, Pittsburgh, and Chicago that had manufacturing at their core. The nation’s new minicomputer companies, Digital Equipment Corporation (DEC) most prominent among them, were clustered near MIT and Harvard, along Boston’s Route 128. A Forbes editor with responsibility for the West Coast stated unequivocally that the magazine was interested only in publicly held companies with sales of $50 million or more.³

Stanford’s reputation was on the rise—it was often called “the Harvard of the West”—but the university attracted mostly students from California. San Francisco was best known for its hippies. Palo Alto was fighting its reputation as “the Peninsula’s largest sex-shop center,” thanks to an eight-block stretch of El Camino Real near the city’s southern border that was home to multiple adult bookstores, an X-rated movie theater, and massage parlors with names such as “The Streaker” and “The Foxy Lady.”⁴ None of this pointed to a promising future as an economic powerhouse.^II

The rest of the business world might not have noticed, but inside the Valley, things were brewing in 1972. The previous year, Intel had invented the microprocessor, the chip that would soon nestle at the heart of consumer electronics such as the personal computer and video games. Meanwhile, Hewlett-Packard became the first Silicon Valley company to discover that an advanced electronic device could have broad consumer appeal. In 1972, the company introduced the HP-35, the world’s first handheld calculator that could do more than add, subtract, multiply, and divide.^I HP sold more than 100,000 in the first year, despite the $395 price. A cheeky chapter called “Shirt Pocket Power” in the owner’s manual noted, “We thought you’d like to have something only fictional heroes like James Bond, Walter Mitty or Dick Tracy are supposed to own.”⁵

For the most part, those developments within Silicon Valley happened independently of one another. But like different streams that feed a swift-moving river, the work would soon begin to blend and swirl together. The resulting network of personal and institutional connections would form the foundation of today’s Silicon Valley and the high-technology revolution.

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I. The HP-35 was the first scientific pocket calculator. It had thirty-five buttons and could perform trigonometric, logarithmic, and exponential functions.

II. In 1976, the city finally shut down its red-light district, closing seventeen massage parlors and banning halter tops as well as massages after 11p.m.

III. “Silicon Valley” was just one of many terms coined to describe the cluster of electronics firms on the San Francisco Peninsula. “Silicon Gulch,” “Semiconductor Country,” “California’s Route 128,” and “California’s great breeding ground for industry” were some of the others.