Matt Weinberger Nov. 10, 2015, 8:46 AM Business Insider

Everyone knows that Silicon Valley is the center of the tech universe.

Apple, Facebook, Yahoo, eBay, and probably half the apps on the App Store all call Silicon Valley home.

So how did a collection of sleepy suburbs on a peninsula to the southeast of San Francisco become such an attractor to the tech elite?

It's a tale that goes back to before World War II, to an era when the Santa Clara Valley was better known for its prunes than its venture capitalists and on-demand startups.

Here's how Silicon Valley went from prune orchards to aerospace research labs to the capital of the connected world.

Originally, the Santa Clara Valley was known by a different name — the "Valley of Heart's Delight." It was famous for its orchards and flowers, with prunes as the major export.

The namesake of Silicon Valley is the Santa Clara Valley, which runs from the southeast of the San Francisco Bay down to San Jose, more or less. San Francisco itself isn't really a part of Silicon Valley.

But since the mid-1800's, the seeds had been planted for the valley's later rebirth as a hub of technology. As a hub for both military and commercial ships, the San Francisco Bay Area was a hotbed for the early telegraph and radio industries. In 1909, Charles "Doc" Herrold started the country's first radio station out of San Jose.

Also in 1909, Cyril Ewell led a Palo Alto-based team that developed the first American-built arc transmitter.

Speaking of military ships, the United States Navy played an important role in the early days of Silicon Valley. In 1933, the Navy purchased Moffett Field, a stretch of land in Sunnyvale, California, as a facility to dock and maintain the USS Macon, a military airship seen here flying over New York.

Moffett Field became a major hub for the young aerospace industry. Companies like Lockheed set up shop there to better serve the Navy. Scientists and researchers found solid, steady work in the area.

In 1939, the Ames Research Center was founded as a lab for the National Advisory Committee for Aeronautics. In 1949, Ames became home to the world's largest wind tunnel, critical for aerospace research. These days, it's also responsible for a lot of NASA's computer science work.

Hewlett Packard is often credited as the spiritual founder of Silicon Valley. But Stanford grads William Hewlett and Dave Packard didn't make computing equipment until much later. When they started the company in their famous garage, the duo was making oscilloscopes and, during World War 2, radar and artillery technology.

At this point, when people said "computer," they were referring to machines like the famous Eniac, the room-sized beast of a computer that helped the United States break enemy codes during World War II.

Silicon Valley's tech industry, as we know it today, would get its start with a man named William Shockley. A brilliant scientist, Shockley (middle) co-invented the transistor — one of the most basic components of what we now know as the computer processor — at Bell Labs.

After a series of clashes with management about not getting what he thought was proper credit for the invention of the transistor, Shockley founded Shockley Semiconductor Labs, the first-ever company to make transistors out of silicon rather than germanium. Shockley opted to start the new company in Mountain View, California, so as to be closer to his sick mother.

Unfortunately, Shockley's first building became a produce market and then got torn down, meaning this important bit of computer history has been lost except for this sign.

Shockley tried to get some of his former Bell Labs colleagues to join him in California, but nobody would make the cross-country move. Luckily, local colleges like Stanford University were turning out young graduates with top-tier educations. It helped that Stanford, in particular, encouraged students (like Hewlett and Packard earlier) to stay local and help develop the still-relatively-young California under a concept often called "regional solidarity."

And so, Shockley staffed his company with young, hungry scientists. But Shockley was a lousy manager, constantly changing focus on products and eventually cutting off development of silicon transistors. After being unable to take it anymore, eight of those young scientists quit the company. A furious Shockley dubbed them the "Traitorous Eight" and publicly declared that they would never be successful.

The "Traitorous Eight" teamed up with businessman Sherman Fairchild to create Fairchild Semiconductor, which picked up with silicon transistors where Shockley left off. It was originally founded in this tiny office in Palo Alto. Fairchild gets a lot of credit for helping make computers smaller, faster, and cheaper with its transistor and circuit research and inventions.

When the USSR put Sputnik I into orbit in 1957, it was Fairchild that the newly-formed NASA tapped to make the computer components for the first manned mission to the moon. It was a successful project that seriously put Fairchild and the region on the map.

All of the "Traitorous Eight" would go on to cofound or finance some of Silicon Valley's biggest companies. In 1968, Gordon Moore and Robert Noyce would cofound a microprocessor company called Intel, headquartered in Santa Clara. Other so-called "Fairchildren" companies include AMD and NVIDIA.

The public sector was also rapidly contributing to the growing computer scene in Silicon Valley. In 1969, the Stanford Research Institute became home to one of the first four nodes of ARPANET, the first attempt by the United States Department of Defense Advanced Research Project Agency (ARPA) to create a global computer network. It was the first version of today's world wide web.

In 1970, Xerox opened the Xerox PARC lab in Palo Alto. It was PARC that invented many aspects of modern computing, including ethernet networking, the concept of the graphical user interface, laser printers, or computer graphics. PARC would go on to develop the Xerox Alto, a precursor to the modern PC.

Thanks to all these advances, the Valley of Heart's Delight had become a boomtown for the young computer industry. The name really caught on when journalist Don Hoefler titled a three-part report on the semiconductor industry "SILICON VALLEY USA." Even after silicon-based components stopped being the chief export of the area, the name stuck.

In 1972, two financial types with tech industry experience named Eugene Kleiner and Tom Perkins (pictured) raised their first venture capital fund for young companies in the newly-dubbed Silicon Valley trying to get into the space.

Things started moving fast. In 1971, Intel released the Intel 4004 processor, the first that was cheap and reliable enough for home use. When it was followed up in 1973 with the even more useful Intel 8080, a hobbyist scene of amateur computer enthusiasts popped up.

Silicon Valley's local fan group, the Homebrew Computer Club, would turn out to be pivotal to the future of tech when two young enthusiasts named Steve Wozniak and Steve Jobs showed up to its first meeting in 1975.

At the first meeting of the Homebrew Computer Club, Jobs and Wozniak got to try out the Altair 8800, an early microcomputer based on one of those Intel chips.

That meeting inspired the duo to create the Apple I, a do-it-yourself computer kit where they'd just sell you the Wozniak-designed motherboard that they built in a garage. Their follow-up, the Apple II, was one of the first-ever real personal computers, and turned Apple Computer into a real company.

This period also saw the birth of other tech titans, as the demand for software for these new computers grew. Database company Oracle was co-founded by Larry Ellison, Bob Miner, and Ed Oates in 1977.

When Apple Computer had its IPO in December of 1980, it jump-started the Silicon Valley scene. Venture capitalists came in droves to try to get in on the boom.

Sand Hill Road, the street in Menlo Park, California where Kleiner Perkins set up, became the hub of the venture capital world, a status it still enjoys today.

In the eighties, as computers started to slowly but surely work their way into the mainstream, Silicon Valley just kept growing. In 1984, ex-Stanford faculty Leonard Bosack and wife Sandy Lerner would found Cisco Systems, building and selling exact clones of Stanford's networking software.

By the mid-eighties, Silicon Valley was established as the center of the computer industry, which was only on the rise. Sun Microsystems, which made computers and early operating system software was founded by a bunch of Stanford alumni in 1982.

The eighties would give way to the nineties, bringing a new kind of company to Silicon Valley: Thanks to the PC starting to hit the mainstream, and the rise of the internet, 1995-2000 would see companies like Google, Yahoo, eBay, and lots of others hit the scene during the height of the dot-com bubble. Just like HP and Apple before it, Google was founded in a Silicon Valley garage.

Meanwhile, even the old guard of Silicon Valley kept growing, with companies like Intel, Sun, and Silicon Graphics Inc. (SGI) taking over huge campuses all over Silicon Valley. Sun's campus, which it moved into circa 1998, was actually a historic ex-psychiatric hospital.

During the Dot Com Bubble, companies like Sun thought the good times would never end, and so spent a lot of cash that it didn't have to grow beyond a sustainable level. When the bubble finally finished bursting in 2001, it sapped all of Sun's momentum, leaving it vulnerable to a $5.6 billion takeover from Oracle in 2009. In 2011, Oracle sold the Sun campus to Facebook.

Mark Zuckerberg purposely left the Sun sign on the back of the Facebook sign as a warning to employees that they can never stop improving, or else meet a similar fate.

Similarly, Google started to rent the Googleplex campus from Silicon Graphics Inc. in 2003, before buying it outright from them in 2006.

Still, even as things change, Silicon Valley remains the center of the tech universe, with Apple, Google, Facebook, Yahoo, and many more calling it home for the foreseeable future. Apple is even building its new, massive "spaceship" campus in Cupertino, California, right near the old one.

By Will Oremus

http://www.slate.com/articles/technology/technology/2014/10/hewlett_packard_hp_split_the_rise_and_fall_of_silicon_valley_s_original.html

Photo=Hewlett-Packard co-founder Bill Hewlett on June 6, 1977

It started with two engineers tinkering in a Silicon Valley garage. Behind brilliant ideas and a distinctive corporate culture, it grew into one of the most successful technology companies of all time.

That’s true of both Apple and Google. It’s also true of Hewlett-Packard—a company that predated them by some 40 and 60 years, respectively.*

HP today is a broken shell of its former self. The seeds of its downfall were sown decades ago, when its focus shifted from high-end innovation to mass production of low-cost devices. On Monday, CEO Meg Whitman announced that it’s splitting into two companies: HP Inc. will hawk computers and printers while Hewlett-Packard Enterprise will focus on high-end business hardware and software, like IBM. It’s the second time in 15 years the company has spun off a core business—it turned its test and measurement division into Agilent in 1999, and it has been reeling ever since.

In its time, however, Hewlett-Packard was like nothing the business world had seen. It was, in many respects, the prototype from which the idea of the Silicon Valley startup sprang. Its former glory and longevity are worth recalling in an age when the potential for tech companies to strike it rich is taken for granted—and so is their evanescence.

The outlines of HP’s history have been well-traced, including by Michael S. Malone in Bill & Dave: How Hewlett and Packard Built the World’s Greatest Company, and by co-founder David Packard himself in The HP Way: How Bill Hewlett and I Built Our Business. The two met as undergrads at Stanford University under the tutelage of the legendary electrical engineering professor Frederick Terman; in 1939, at Terman’s urging, they formed their own company in a one-car garage on Addison Avenue in Palo Alto, California, then a sleepy suburb known more for fruit orchards than industry.

Photo=he newly renovated HP garage on Addison Avenue is seen Dec. 8, 2005, in Palo Alto, California

Like a lot of tech startups today, Hewlett and Packard decided to start a company before they knew what it was they wanted to build. They considered everything from medical equipment to air-conditioning control systems before settling on an audio oscillator that they managed to sell to Walt Disney, who used the devices in producing the soundtrack for Fantasia.

The founders were driven not by a particular business model or million-dollar idea, but by the conviction that, in Packard’s words, “we were able to design and make instruments which were not yet available.” The company’s subsequent products established it as a leader in instruments for measuring and testing electronic signals and devices.

By World War II, the company was scaling up rapidly to win and fulfill government contracts for its oscillators and vacuum-tube voltmeters. Out of necessity was born a corporate culture that would come to define Silicon Valley startups in the ensuing decades. As Walter Isaacson recounts in his new book The Innovators, citing Malone:

While Bill Hewlett was in the military, Dave Packard slept on a cot at the office many nights and managed three shifts of workers, many of them women. He realized, partly out of necessity, that it helped to give his workers flexible hours and plenty of leeway in determining how to accomplish their objectives. The management hierarchy was flattened. During the 1950s this approach merged with the casual lifestyle of California to create a culture that included Friday beer bashes, flexible hours, and stock options.

Over the years this approach coalesced in a management philosophy known as “the HP Way.” It emphasized problem-solving over profit-chasing and trust in employees over top-down management. It became a blueprint for the semiconductor industry, and then Intel, and ultimately the technology industry as a whole. The company made money—piles and piles of it—but it did it by continually inventing and honing useful products, not by maximizing volume and slashing costs.

“HP’s cultural legacy runs very, very deep,” Leslie Berlin, historian for the Silicon Valley Archives at Stanford, told me in a phone interview Monday. “The notion that literally a couple of tech guys in a garage could not only make it, but hit the ball out of the park—and that they did it without alienating their labor—it really helped to kick-start the Valley.” Berlin hears echoes of “the HP Way” in Google’s corporate motto, “Don’t be evil,” as well as in the company’s seemingly utopian corporate culture.

Malone, author of books about both Hewlett-Packard and Intel, agreed in a phone interview that HP was in many ways “the founding company of Silicon Valley.” But in other respects, he told me, it has always stood apart, whether due to the nature of its business or the magnitude of its success. While semiconductor and microchip companies—and, later, Internet startups—duked it out in cutthroat competition on the Valley floor, HP shone as a gold-paved citadel in the foothills where happy, healthy, lifelong employees settled in and raised families.

Hewlett and Packard may have treated their workers humanely, but they were unsentimental when it came to the company’s products and business models. “As early as the mid-1950s, an internal HP study showed that sales of most of the company’s products declined in the fourth or fifth year as their technological advantage slipped,” reported David Jacobson in a 1998 Stanford Magazine cover story. “So, in order to grow, the company had to generate an increasing amount of its revenues from newer ideas.” In a 2000 Forbes article, Malone elaborated:

"The key to the greatness of Bill Hewlett and David Packard was that they held no attachment to things, only people. The garage was left behind, as would be, in time, the redwood building. So too was the audio oscillator and thousands of other products—all abandoned in the endless pursuit of something better. Only the people remained, and they were cherished and respected. "

It’s hard to say just when the company began to lose the edge that its founders and their successors had been so careful to keep sharp. Some analysts pin the turning point on the tumultuous tenure of former CEO Carly Fiorina, who came to the company with a background in sales rather than engineering and orchestrated its acquisition of Compaq in 2002. Critics say she doubled down on the company’s maturing PC-sales business at the expense of more forward-looking products. Others fault her hard-charging successor, Mark Hurd, who pushed the company to tremendous profits through aggressive management and ruthless cost-cutting. The strategic flailing and soap-opera board intrigue that characterized Léo Apotheker’s 11-month reign certainly didn’t help.

Most agree, however, that the company had grown sclerotic and unwieldy even before Fiorina arrived. In a 2005 foreword to Packard’s book, Jim Collins wrote that HP in the 1990s “confused operating practices with core values” and “veered off course” with acquisitions whose success depended on cost-cutting and market share rather than technical innovation.

While the latest split-up may sound like a death knell, Malone believes it gives Whitman a chance to reshape Hewlett-Packard Enterprise in the mold of IBM, which sold its PC business to Lenovo in 2005. But even if that’s the case, it’s clear by now that the HP of old is not coming back.

For a time, though, all of the virtues of Silicon Valley at its best came together in a company that was at once wildly profitable and universally beloved. “Between 1955 and about 1965, HP was probably the greatest company ever,” Malone said. “It produced the kind of innovation you saw from Apple in the 2000s, but it was simultaneously the most enlightened employer in the country. They had the highest employee morale levels ever measured.”

In 1955, Hewlett-Packard was 16 years old. It has been 17 years since Steve Jobs retook the reins at Apple and remade the company in his image. And Google turned 16 years old this year.

Peter Burrows on April 01, 2009

http://www.businessweek.com/the_thread/techbeat/archives/2009/04/the_sad_saga_of.html

There was a time when Silicon Graphics Corp. was the Apple Inc. of corporate computing. It received coverage out of all proportion to its size, certainly by BW. And for good reason: It involved larger-than-life characters such as Jim Clark, who went on to co-found Netscape. SGI was forever on the cutting edge of technology innovation, and pioneered use of powerful computing technology in the making of movies, game consoles and for early Web companies in the mid-1990s. And it was a lightning rod in the best sense, always a central player in the big debates roiling the computer industry (workstation vs minicomputer, Risc vs Cisc and UNIX vs Windows, come to mind).

Today, the company was sold for a piddly $25 million to server-maker Rackable Systems. Given evaporating sales of its proprietary machines in recent years, it was weighed down with more than $500 million in debt. This despite the fact that just two years ago it emerged from a pre-packaged bankruptcy similar to the ones being considered for GM and Chrysler right now. (Managed bankruptcy is designed to help companies quickly put their finances in order so they can continue to operate in shareholders’ best interests.)

If there’s a farther fall in tech history, I can’t think of it. Despite breathless headlines, the fact is that few really successful tech companies come to this. IBM survived its dark days in the early 1990s, to emerge as a services powerhouse. Apple had just a few weeks of cash left when Steve Jobs returned in 1997, but he did return. Other once-proud players — Lotus, DEC, Netscape — at least sold for a number that started with a “b” rather than just millions. Even Sun (which put out acquisition feelers for SGI many times in the past) looks likely to get close to a 100% premium if it is acquired by IBM as expected.

I haven’t bothered to spend much time with SGI in recent years. That’s something I’ve felt somewhat guilty about. Silicon Valley is supposed to champion real innovators, and SGI never stopped innovating. (Full disclosure: part of the reason I stopped visiting is that on a few occasions I almost lost my lunch watching demos of flight simulations and such on the huge, immersive, theater-like visualization centers that were themselves a breakthrough in “visual computing.”)

In the end, SGI’s mistakes of the 1990s were too much to overcome. There was the basic mismanagement, which my bureau chief Rob Hof chronicled so well in this 1997 cover story (it’s worth reading again; probably the only time a BW story has mentioned a CEO “moon[ing] SGI employees at one of the company’s annual lip-synch contests.”). And there was a chronic indecisiveness about what to do when the server market really began to commoditize around Wintel. Former HP executive Rick Belluzzo, a Wintel fan, tried his best for a couple of frustrating years. After he left, the company turned back to its proprietary ways—continuing to fight technology wars, but without the scale of a Sun to be able to support a viable business.

But this end is even more evidence that SGI is a company snakebit by bad timing. After all, SGI ran out of future just as the enterprise computing business is getting focused on breakthrough innovation again. For years, it was all about which Wintel provider could deliver the cheapest blade. Now, there’s a battle royal going on to rethink the data center, in ways that will surely require major changes to the underlying gear. Rather than the same old servers, routers and storage systems, all of these elements are being glommed together in new ways; that’s certainly the point of Cisco’s “Project California” initiative, which has shaken up the sector more than anything in years. As one of my editors put it today, “servers are sexy again.”

November 22, 2015, 12:01 PM PST By Noah Kulwin

Five years ago, a number of high school students in Palo Alto killed themselves, a phenomenon that is referred to as a “suicide cluster.” Last year, another tragic wave of suicides struck the Northern California city, terrifying the affluent, otherwise picturesque community; two clusters so close together was unheard of.

In her cover story for the December issue of The Atlantic, journalist Hanna Rosin traveled to Palo Alto, home of Stanford University and the de facto capital of tech, to report on the shocking problem of teenage suicide in Silicon Valley. She discusses the psychological research behind suicide, and the role of destructive social norms that push American teenagers hard to be superhuman in all that they do.

For most people in Silicon Valley, success isn’t really a plateau that you reach, but rather something that is constantly a few rungs above you, perpetually out of reach. This is true across America, but especially so in the Valley.

In an interview with Re/code, Rosin talked about the story and the ways in which tech industry norms are interwoven into the Valley’s fabric of life.

With entrepreneurs, it’s an endless cycle of raising money, hiring, product tinkering, raising more money, hoping, praying, raising even more money, rinse, repeat. For employees of bigger companies like Facebook or Apple, it means stretching your workday to make sure that features and new products ship on time. Or at least with as few screw-ups as possible.

Predictably, this industry culture isn’t totally confined to the industry. In an interview with Re/code, Rosin talked about the story and the ways in which tech industry norms are interwoven into the Valley’s fabric of life. This interview has been edited and condensed for clarity.

Re/code: How did you come to this story?

Hanna Rosin: I came to it in kind of a backwards way. I was interested in the research by this woman, Suniya Luthar, who I quote in the story about the U-shaped curve between poor kids and really elite kids.

I just kept reading about the research; it’s this unusual body of data. I talked to her on the phone, and she was talking to me about Palo Alto. And she thought she was gonna head to Palo Alto, and then I looked up the Palo Alto story, and then I realized — they’re in the middle of another suicide cluster. So initially I thought that Palo Alto was just going to be one example of many, but then I realized they were smack in the middle of a second cluster, so all of these issues would be really alive to them at that moment.

People were in serious, deep agony at meeting after meeting in the the high schools and the community, and you could hear the anguish kind of unfolding. “The Overprotected Kid” was another story I wrote, and I kind of think of this as “The Overprotected Kid, Part Two,” with teenagers, later down the road.

How do you think of this suicide problem when compared to other public health issues at high schools? Like, say, injuries from football?

I think that deaths are just one of those things that call your attention to it — the deaths make you not be able to ignore the problem. But the actual deep problem, and I don’t know if this is analogous to sports injuries, is that we all — parents, administrators, parents — kind of have gone along and not really been paying attention to it. The deaths are really what just call your attention to the actual problem.

Have you seen “The Sopranos”?

Oh, yes.

One of the “Sopranos”-like themes that I picked up on in your story was how the high-school-age characters effectively relived the larger dramas of their parents. So many of the kids in Palo Alto have parents who work in Silicon Valley — did you see a connection there?

Absolutely. The bar is unreasonably high. The bar for dedication to professional life, the bar for how much money you need to make. It’s like everyone there has absorbed as a normal line of success what’s a completely unusual measure for success. I interviewed a lot of shrinks, who told me their patients come in with terrible anxiety because they haven’t made, say, $10 million by the time they’re 40.

And they absorb that like a normal path for success, and they transmit that onto their kids, like, “that’s what counts for success.” And that’s actually extremely difficult to achieve, I think there’s a line in the story from Suniya who says, “If you’ve never been to the moon, you wouldn’t know that that was an option.”

Whereas these guys, they do go to the moon, they go there all the time. They are the center of the universe, they make a huge amount of money — that’s the culture that’s considered normal. So that permeates the school, so what they think of as success is really unusual.

What you’re describing also sounds like a consequence of economic segregation; that by creating communities of the ultrawealthy in Palo Alto, you’re separating them from all these other people in the Bay Area who have totally different lived experiences, and so Palo Alto high schoolers have a very skewed idea of what’s “normal.”

Oh yeah, totally. That’s absolutely true. This is all about social norms, and social norms get created and absorbed by everybody, and nobody understands any alternative — or you forget that there is any alternative.

This is all about social norms, and social norms get created and absorbed by everybody, and nobody understands any alternative — or you forget that there is any alternative.

And I think that Palo Alto is a really excellent example of that. I was thinking, would it be different if Pally or Gunn [high schools in Palo Alto] were located in New York? And it would be different — New York is diffused and spread out, and you’d be passing lots and lots of kinds of people. You’d be bumping up against different social norms all the time. But Palo Alto is like an island, it’s isolated, it’s essentially a nice quiet suburb. You’re not in contact with many different kinds of people doing different kinds of things.

So the vast majority of people are doing this one thing, have accepted this one norm, and haven’t come into contact with many other norms.

Outside of the context of the Google engineer [whose daughter committed suicide] who joins the school board that was in your story, did you see any other instances where the tech industry got involved? Like say, a Facebook employee comes to a high school auditorium and says, “Listen, I didn’t go to college until I was 26, and dropped acid and walked around Nepal — you’re all going to be okay.”

Well that is what was so funny to me! People told me this is fairly typical, but the first generation of success stories in Silicon Valley are like affluent college-dropout types, and this is a question that I didn’t deal with, but how did that mutate into a kind of standardized, uniform, AP testing, “get-into-college” obsession?

The problem right now is that there is only one narrative, whereas I think in decades past there have been counter-narratives, like in the ’60s.

How do you mean?

It was like, “Screw the man! Drop out!” Even in the ’80s, there was a counter-narrative to ’80s materialism; in the ’90s there was one, too. I feel like there isn’t that counter-narrative, like we’ve lost it along the way.

Even the kids who are protesting in colleges these days, the kids are asking authorities to fix the problem, and that’s unusual. It used to be, “Screw the authorities!” The weirdest part of the story to me was the loss of agency, and how the kids have totally absorbed the norms.

That’s an eerily apt metaphor for how people perceive Silicon Valley. Take the public character arc of Mark Zuckerberg: Harvard bad boy who fucks with authority, creates his own app, becomes CEO of a fast-growing brash company, and then he drops the hoodie, wears a tie, hires a former Treasury official as his COO, and now his share price is way up. Are there people in the community who are making these kinds of connections between the industry and what’s happening?

Well, we’re in second-generation Silicon Valley now. A lot of people say that it was initially “rebels” or “outsiders” and “visionaries” and “kooks,” and now it’s much more, kind of, mainstream corporate. If any of these kids came home to their parents and said, “I have this vision for changing the world!” and want to drop out, their parents would be horrified. That’s not part of the idiom, that’s not hugely admired.

You really found that was the case? There’s an entire subset of the culture, especially around Stanford, that is telling people, “Hey drop out, work on that startup, move fast, break shit.”