Valley of Genius: The Uncensored History of Silicon Valley (As Told by the Hackers, Founders, and Freaks Who Made It Boom)

by Adam Fisher

  Brad Handler: The reason goes back to the Spanish control of California—through Mexico. The law in Spain, through Mexico, to the California territory did not allow what we now call “covenants not to compete.” Most other states will enforce a covenant not to compete. But in California covenants not to compete are nonenforceable, period.

  Scott Hassan: That’s a big deal. A lot less innovation happens on the East Coast because they believe in these noncompetes.

  Jamis MacNiven: We had railroads, real estate, aviation. We had oil. Hollywood was a giant rush. Oranges. So we’re used to that gold rush mentality, and we’ve had a lot of rushes.

  Rabble: It’s easy to see the web companies or this generation of companies and think that the stuff going on in Silicon Valley is new, but it’s not. The reason there is stuff going on here with technology is because this is where radios were designed during World War One.

  Dan Kottke: Lee de Forest! He invented the vacuum tube. It was called the Audion and it was the first amplification device. It was a huge step forward. His company was called the Federal Telegraph Company, and there is a bronze plaque in downtown Palo Alto where his lab was. Lee de Forest, he’s right up there with Edison in my mind.

  Jamis MacNiven: The vacuum tube allowed for amplification of sound, which led to the music industry and also to Adolf Hitler—Adolf Hitler was big on the radio. But they also discovered that the vacuum tube could be used as a switch: On. Off. On. Off.

  Steve Jobs: Before World War Two, two Stanford graduates named Bill Hewlett and Dave Packard created a very innovative electronics company—Hewlett-Packard.

  Jim Clark: You can name probably thirty, forty companies that started out at Stanford now—big ones.

  Ron Johnson: Stanford really is the epicenter of the Valley, and most of the companies, the people of these companies, had a connection to Stanford.

  Jamis MacNiven: Stanford was the first major university that reached out, in a big way, into the business community and said, “Hey, we have this open-door policy. Come on in, do business: Go out and do business!”

  Jim Clark: Contrast that with the Ivy League. They had their nose in the cloud: “We are beyond business. Business is dirty. We are not talking about applications. We are talking about advancing knowledge and research.”

  Steve Jobs: Then the transistor was invented in 1948 by Bell Telephone Laboratories.

  Jamis MacNiven: And that allowed us to turn switches on and off even faster, faster-faster-faster. In the binary world, on/off is very important.

  Steve Wozniak: William Shockley invented the transistor and that was going to be the growing industry.

  Andy Hertzfeld: In some ways Silicon Valley itself was an accident of William Shockley being born here.

  Steve Jobs: Shockley decided to return to his hometown of Palo Alto to start a little company called Shockley Labs or something. He brought with him about a dozen of the brightest physicists and chemists of his day.

  Po Bronson: At Shockley Semiconductor some people who felt mistreated, who felt mismanaged, left. They went over to a new funder, Fairchild, who said, “Yes, we’ll take you guys over here.”

  Steve Jobs: Fairchild was the second seminal company in the Valley, after Hewlett-Packard, and really was the launching pad for every semiconductor company in the whole semiconductor industry which built the Valley.

  Po Bronson: Then Bob Noyce and Gordon Moore left Fairchild to start Intel, and that just didn’t happen anywhere else in the country. Labor laws were different in other states.

  Brad Handler: It’s just a public policy difference from hundreds of years ago.

  Jamis MacNiven: Then Moore created this law he’s famous for: computer power doubling every eighteen months.

  Alvy Ray Smith: Moore’s law went into play in 1965, and from then on the more powerful computer you have, the smaller they got.

  Gordon Moore: By making things smaller, everything gets better at the same time. The transistors get faster, the reliability goes up, the cost goes down. It’s a unique violation of Murphy’s Law.

  Jamis MacNiven: And Moore keeps saying, “Well, that’s about to end,” and then it doesn’t end.

  Steve Wozniak: Transistors were subject to Moore’s law, and boomed into chips, and bigger chips, that could do more and more over time. Silicon Valley is called “Silicon Valley” because of the material silicon that makes hardware chips. The area was growing economically.

  Alvy Ray Smith: And then the venture capital idea came along. And as far as I can tell that idea had never been tried before. There were bankers who could loan you money, but they wanted guarantees that could get it back. Venture capitalists expect failure. They discovered that they could gamble big with maybe ten firms…

  Marc Porat: Just throw a lot of things into the funnel, attract a lot of smart people, and make them interact in unmanaged ways. Go chaotic on the whole system of innovation. Just let it happen. Cull the good stuff from the bad stuff. Find a relatively efficient—not perfect, but relatively efficient—solution. The thing blows up? Nobody cares. If it goes big, then they want to stuff as much money into it as possible.

  Alvy Ray Smith: And if one of them hit, it would pay for all of the failures. That was a new idea.

  Steve Jobs: People started breaking off and forming competitive companies, like those flowers or weeds that scatter seeds in hundreds of directions when you blow on them.

  Po Bronson: That is pretty legitimately the true origin of the culture here. The I-need-to-leave-my-big-thing-to-start-something-small story.

  Ezra Callahan: It’s a place where people with an idea and some talent can make something huge out of something small. It’s the success stories of young entrepreneurs with no particular business experience who, within a matter of months, become industry-creating technological celebrities.

  Po Bronson: That became an imprint that got repeated and repeated and repeated.

  Steve Jobs: And that’s why the Valley is here today.

  Carol Bartz: The future doesn’t just happen.

  Ev Williams: Sparks happen and then it just erupts. I think a lot of it has to do with networks. Networks—they get bigger.

  Ray Sidney: There’s this network effect: Sharp people come to be with other sharp people. People come to Silicon Valley just to be with these movers and shakers and brilliant engineers and product designers and marketers and sales folks and whoever.

  Lee Felsenstein: The story of Silicon Valley is the story of networks. There was never any centralized place. They were all what they call local maxima, little mounds of people here and there, and people move between them, that’s the important thing. So it’s a decentralized set of networks with mobility among them.

  Marissa Mayer: I’ve heard both the founding stories of Google and Yahoo, and for both those companies, the founders didn’t even have to get into a car. They could literally go to the law office, the venture capitalists, the bank… on a bike. It’s all that close together.

  Orkut Büyükkökten: The network in Silicon Valley helps you to connect with people who can create that magic, right? So if you have a great idea, you can meet up with a good designer or engineer and then maybe with an angel who would support it and then you can make it happen.

  Jerry Kaplan: And for every one of them there are a thousand people who came here with a good idea and burned through their savings without being successful.

  Marc Porat: People fail in one, but they learn enough so that they succeed in another. And success breeds success.

  Orkut Büyükkökten: I think all over the world people have great ideas, but they don’t necessarily have the means to implement them. In Silicon Valley it’s a lot easier to make an abstract idea and turn it into reality.

  Carol Bartz: There are more people attracted to the concepts and there are more tools. Computing has gotten stronger, faster. Data collection? Stronger, faster. Video? Stronger, faster. And so we have the basics now to make increasingly fast changes.

  Andy He
rtzfeld: Once you have a pipeline going, the pipeline wants to be filled.

  Biz Stone: The infrastructure is here: the real estate people, the legal people, the you-name-it people. They get start-ups, so it’s easier: “Oh, okay, you’re a start-up. So, here you go.” It’s just easier to do start-up stuff, because everyone in the whole ecosystem knows about start-ups.

  Guy Bar-Nahum: Silicon Valley is not one thing. You have layers. You have the engineers and you have the bankers. But the people who are active ingredients, the troublemakers, the Tony Fadells, the Steve Jobses—they’re really lusting for fame. They want to be relevant, they want to be recognized, they want to be famous, and when they get that it all ties to money, of course. Big money.

  Jeff Skoll: We’re living in an age of ever-growing celebrity status for entrepreneurs.

  Jerry Kaplan: That’s what makes it tick. Without that nobody comes, nobody invests, and it doesn’t work.

  Rabble: One of the things that I find fascinating is that people from the outside perceive it as supercompetitive. They see it as a kind of über-capitalism. But when you look at people who work in it, the identity and the communication, the vibration, is more with communities, networks of people, than the companies. You really often see teams of people who will go from one company to the next company.

  Aaron Sittig: The best way to think about Silicon Valley is as one large company, and what we think of as companies are actually just divisions. Sometimes divisions get shut down, but everyone who is capable gets put elsewhere in the company: Maybe at a new start-up, maybe at an existing division that’s successful like Google, but everyone always just circulates. So you don’t worry so much about failure. No one takes it personally, you just move on to something else. So that’s the best way to think about the Valley. It’s really engineered to absorb failure really naturally, make sure everyone is taken care of, and go on to something productive next. And there’s no stigma around it.

  Scott Hassan: It’s like a huge, huge, huge company, where there’s no one running it. And you can do whatever the fuck you want! And the only thing that matters is whether the market cares about what you produce or not. That’s the only thing that matters. And you will go away if you’re not producing something of value, period, and nobody decides it for you other than this nameless market. Fortunately as the internet grows, the market gets even bigger and bigger and bigger.

  Aleks Totić: We have had a lot of help from Moore’s law.

  Chuck Thacker: Moore’s law is like compound interest. It gave us exponential growth.

  Aleks Totić: But that doesn’t explain it. The rest of the world gets the same help from Moore’s law.

  John Battelle: At its core, Silicon Valley is a culture.

  Dan Kottke: Silicon Valley was a nerd-driven culture, and the engineers were the priesthood.

  John Battelle: It was a culture of hardware hackers and software writers, who were generally older, midthirties to fifty, generally bearded, generally grimy, super fucking smart—what we would call on the spectrum now, but back then there wasn’t a term for it—generally that was the heart of the Valley culture.

  Jim Warren: For the most part folks were doing it as a labor of love, and it was about the excitement of pushing the frontier.

  Tiffany Shlain: There was something incredibly exciting about being at the frontier of this new medium and this new culture that we were creating.

  Steve Jobs: In the seventies and the eighties the best people in computers would have normally been poets and writers and musicians. Almost all of them were musicians. A lot of them were poets on the side. And they went into computers, because it was so compelling, because it was fresh and new. It was a new medium of expression.

  Po Bronson: You have a culture, riding on top of a technology that’s accelerating superfast. And so that culture gets replicated, just as much as the technology does. And you put those two together and you get something distinctly unique.

  Steve Jobs: This is the only place in America where rock and roll really happened, right? Most of the bands in this country outside Bob Dylan in the sixties came out of here: from Joan Baez to Jefferson Airplane to the Grateful Dead. Everything came out of here: Janis Joplin, Jimi Hendrix, everybody. Why is that? That’s a little strange when you think about it. You also had Stanford and Berkeley, two awesome universities drawing smart people from all over the world and depositing them in this clean, sunny, nice place where there’s a whole bunch of other smart people and pretty good food. And at times a lot of drugs and a lot of fun things to do, so they stayed.

  Fred Davis: As Detroit was to the car, the Bay Area was to LSD. This is where it was all coming from. It was definitely part of the culture. Acid was a university lab product since the fifties.

  R. U. Sirius: Then the Youth International Party—or Yippies—a group combining psychedelic culture with the revolutionary New Left, sprang up and became very powerful in 1968. And the phone phreaks were into the Yippies. And the Yippies were into the phone phreaks. And Captain Crunch somehow figured out that he could make a free long-distance phone call anywhere.

  Captain Crunch: You blow a whistle and if it’s just exactly 2600 hertz that’s the tone that operators use. With that you have the same power that an operator has.

  Steve Jobs: It was miraculous. Blue boxing, it was called.

  R. U. Sirius: It was an idea that Steve Jobs and Steve Wozniak and Lee Felsenstein at the Homebrew Computer Club loved. That’s the connection between the hacker culture and the counterculture going all the way back to the seventies. That’s not really widely known.

  Brad Templeton: As a personal computing nerd, I think of Nolan Bushnell as the first round. Yes, there was much stuff before: There was Fairchild.

  Steve Wozniak: Engelbart! When you get to computers, Engelbart is great.

  Brad Templeton: But I count Atari actually as the beginning.

  Don Valentine: Steve Jobs was the son of Nolan Bushnell. Not literally, but he evolved the same way, and Apple was in many ways an evolution of Atari. A lot of Steve’s original thinking came from Nolan.

  Steve Wozniak: Atari, yes, they started an industry of arcade games, but what was the first arcade game ever that was software and what was the first time it was color? The Apple II. That was a huge, huge step.

  Larry Brilliant: Steve used to write me when he started Apple. I would get these letters, and then one day he just called me. He said, “Do you remember when we would say ‘power to the people’? That’s what I’m doing, I’m giving power to the people. I’m building a computer that every person can put on their desktop, and I’m going to get rid of the high price of the mainframes.”

  Bruce Horn: There was so much discussion and so much talk and so many brilliant ideas and everyone just came together.

  Kristina Woolsey: But we’ve also got our hippies, our beatniks, our gays… I’m an old-timer around here, and that’s just in my lifetime.

  Ray McClure: The sharing of ideas and merging of alternative cultures, alternative lifestyles, people’s ability to express themselves, whoever they are: I think that that’s the real heart of the creativity. That’s what has made it a fertile place for new ideas.

  John Battelle: It was the people who kind of first gathered around the Atari and the Apple II, and later around the Mac, and then later around the CD-ROM revolution and the multimedia revolution of the late eighties and early nineties. And they were the same people.

  Jamis MacNiven: We had the Whole Earth Catalog as bible, then it went electronic, The Well, and it became one of the backbone models for the internet. These guys around here invented the new world.

  John Battelle: They also gathered around science fiction, right?

  Steve Wozniak: Science fiction leads to real products, but first you’ve got to deal with the laws of physics, and ask, “What’s it going to cost?”

  John Giannandrea: I’m fond of this book by Arthur C. Clarke, Profiles of the Future. He splits the book into two sections. One sec
tion is things that will happen, like self-driving cars. The other is things that will be surprising if it happens, like time travel. And the thing is the kind of people who worked at General Magic or Netscape would be like, “Show me the technical detail that makes this possible—and sign me up!”

  John Battelle: They were these really smart engineering types who had nonstandard political views. They leaned more libertarian, sometimes anarchist. They were far more left than right, but at its core, it was a culture of people who believed that something really fucking big was going on: that it was bigger than them, that it was bigger than the products that they were working on, that there were the seeds of a true movement happening.

  Kristina Woolsey: It wasn’t about being able to talk on a less-expensive phone line or being able to do video-chats or having a cell phone with the power of a computer. The bigger question was always “How is the digital revolution going to change society? And people?”

  Jamie Zawinski: We weren’t building a toy. We were building a communications medium. We were letting people connect to each other in a way that they hadn’t been able to before. It was the opposite of television; it was giving people a voice.

  John Battelle: But it was not until the Web 1.0 boom that there was a sense that this was only a Silicon Valley thing. It was just that this is where most of the companies were.

  Jordan Ritter: The defining moment was the rise of Google. If there was ever a paragon of the engineer thumbing their nose at conventional management, conventional software development, conventional everything—it was them. That’s the point where it shifted: when the engineers were treated as valuable as they really are.

  Ev Williams: One of the interesting shifts that has happened is the move to San Francisco. Silicon Valley until the dot-com boom wasn’t in San Francisco. It was in Palo Alto and Mountain View, because tech companies weren’t built in the City.

  Steve Wozniak: The hardware industry has sort of settled down and all the new things that catch our attention—the apps and Ubers—they’ve kind of chosen to move up to San Francisco. Silicon Valley includes San Francisco now.