It's fair to say that without Intel founders Robert Noyce and Gordon Moore today's Silicon Valley startups wouldn't exist. The prosaic reason is because Intel churned out the first microprocessors, the building blocks of today's computing found in every smartphone, computer, and server (though not necessarily made by Intel). But the more poetic and far-reaching reason is that Moore and Noyce were among the first to walk away from a stable corporate job and pursue their own startup dreams.
The latest episode of PBS's American Experience series, Silicon Valley, tells the story of how the choices Noyce, Moore, and several other young physicists shaped modern-day Silicon Valley. The episode will interest anyone who's ever wondered where Silicon Valley got its name. But for every entrepreneur ever stuck in traffic on Highway 101 on the way to Santa Clara, it's especially worth watching to learn about the choices Noyce and Moore made that gave birth to Silicon Valley's entrepreneurial religion.
The story starts when William Shockley went out west to build his own semiconductor company, and recruited Noyce to manage it. After a few years of building a better transistor, Noyce and seven other engineers (known now as the "traitorous eight") defected from Shockley Semiconductor to found the first Silicon Valley startup, Fairchild Semiconductor. In the late 1960s, Noyce and physicist Gordon Moore then left Fairchild to found Intel.
While job hopping engineers aren't a minority today, before the mid-20th century, it was unheard of to leave a company and start out on your own – college grads were expected to stay at their first real-world job until they retired. When the traitorous eight left Shockley they blew up that notion, and ultimately proved that starting your own company could prove to be highly rewarding both professionally and for the bank account. The engineer as rich guy (or more rarely, woman) archetype was created.
"The history of Silicon Valley is people going to startups, leaving really nice jobs that pay well and taking this gigantic leap to see if they can make something important happen, be valuable, and in the long run, maybe even get rich," writer Michael Malone says in the episode. "Noyce was the prototype of that."
You can also thank Noyce for a number of office culture staples of Silicon Valley: open offices with a flatter management structure. At Intel, Noyce sat at a standard-issue cubicle with the rest of the management staff (not hidden away in a cushy office), and encouraged everyone to go directly to the person they wanted to speak with, without going through multiple managers. That corporate culture of openness has carried over into companies like Apple and Google, which have largely open, flexible offices spaces. Today, CEOs like Box's Aaron Levie emulate Noyce by sitting at an unsuspecting desk among his communications team.
Perhaps Noyce's biggest break from then accepted corporate rules, and a perk that Silicon Valley entrepreneurs and investors now say is crucial to any chance of success is the practice of handing out stock options to lure and reward employees.
After asking for ownership options at Fairchild and getting shot down, Noyce made it a point to give his Intel employees stock options. By making it a priority, and making early employees a good bit of money, he set the table for future technology companies to dole out options as well. Today, any startup hoping to get the best people has to pony up a portion of the company. Silicon Valley is filled with the lottery winning stories of early employees at Google, Oracle, Cisco, and other high-profile technology upstarts making fortunes when their companies went public.
Silicon Valley also flicks at the trend of venture capital in Silicon Valley. Prior to Intel's founding, most funding for technology companies came from the military or government organizations. By the 1970s, when Intel was growing rapidly, venture capitalists and entrepreneurs replaced the government and NASA as funding sources and eventually became institutions in the Valley. Eugene Kleiner, one of the traitorous eight and an Intel investor, went on to found Kleiner Perkins Caufield & Byers, the noted venture capital firm that funded Google, Amazon, and Netscape. His firm is now an institution in the Valley, as are many other high-profile VCs and angel investors who help hundreds of startups get off the ground each year.
Unlike Bravo's disastrous take on Silicon Valley's culture and the questionable entrepreneurs trying to make it, PBS's take is actually worth watching, especially if you want to learn the history of why so many people flock to The Valley with software code, hardware chops and dollars spinning in their heads. Silicon Valley airs Tuesday February 5 at 9:00pm EST.
