The Big Score
The billion dollar story of Silicon Valley
The founders of a technological revolution are often such queer ducks or vicious bastards that they can't get along with anybody—and it is precisely those character flaws that made them strike off into the unknown and stake their fortunes and careers on the outcome.
At least since Edison, perhaps even since Franklin, the public has come to expect the name of a single individual ("the inventor") to be inextricably and singularly tied to a landmark product or design or theory ("the invention").
Studious, soft-spoken, and forever self-effacing, Terman was not a great scientist. Rather, he was a great synthesizer of knowledge, and it was this quality that made him first a brilliant teacher and later a profound visionary.
Dave Packard felt that business leaders, instead of complaining about the federal government's incompetence or ignorance, should become involved, donating their considerable expertise in management and decision-making.
To be a successful businessman requires the periodic administration of suffering to others.
In every company, if that company is to survive, someone has to hang tough at the top. The tragedy is when that type of person is the only one on executive row. Someone who cares for employees must always be above that hard-nosed executive.
America loves hustlers, but hates a success—and the Great American Success Story always includes a fall from grace.
Much has been written about the impenetrability of techno jargon, all of it true.
As long as the rate of innovation remain steady, and Moore's Law holds true, novelty will save the electronics industry in its strange battle with its own effectiveness.
Writing sophisticated software is difficult, as much an art as a science—which explains why English majors have often made the best software engineers. It takes very special individuals to write best selling games or word processing programs—and most seem to be as much born as made. This means that good software engineers operate in a sellers' market, able to write their own tickets.
Software can't be built like an integrated circuit or an oscilloscope. It has to be conceptualized, plotted, written, and edited. An analogy to writing a novel is not far off. You can't compose a symphony using dozens of people at numerous stations on an assembly line. Neither can you write an innovative new software program with a committee. It is a solitary act of creation, done as well on the kitchen table or on the porch of a mountain cabin as in a fancy office with a couch and credenza.
With hardware of necessity holding rather steady, the onus of innovation is on the software designer. After everything, the arcane technology, the complex manufacturing process, it all comes back to the brain matter of a handful of men and women. In the race for the world's technological leadership, it is increasingly coming down—as it should—to the solitary individual and his or her imagination.
The more unsophisticated the operator the more ingenious the software required.
Founding a successful new high technology firm is one of the most complex and demanding—and rewarding—jobs in all of American business. The entrepreneur must play all of the roles normally distributed among a dozen executives in an established company.
Those few researchers who have spent considerable time with high-tech entrepreneurs have come up with some basic shared traits. Brandt lists a big ego, an abrasive personality in social settings, a high level of energy, and a tendency to be very competitive even outside of work. Monetary success, he adds, seems to be secondary: "Many of them see that the fun is in the game, not in the end of the game—in flying the ship, not just the landing."
A good entrepreneur must have an average intelligence ("if you're smart enough to be able to think of all the things that can go wrong, why would you ever want to get into this business?"), a strong sense of urgency, a high pain threshold and energy level, and a slight sense of insecurity.
Some psychologists question whether entrepreneurs view risk and their own ability to control it differently than the average person. One would suspect however that the self assurance is rarely innate, but instead the result of experience and a growing sense of competence. Certainly the aggressive, confident style must be there from the start, but it also must be combined with the technical expertise needed to come up with a new product idea (or appreciate that of someone else) and the business maturity to know how to raise money from venture capital, rent buildings, hire employees, and set up production schedules.
Equity is more than just money; in fact, it is sometimes never money, just paper. Equity is power, the ability to direct your own life, to be your own boss, to never have to take shit off of anyone ever again.
Another important lesson is learned too late by some entrepreneurs: never give away controlling interest of your firm. It was an experience shared by many first-time entrepreneurs... this is the main reason why there are second-time entrepreneurs.
One of the great Silicon Valley truths is that success covers up mistakes that failure throws into sharp relief.
Silicon Valley must be competitive to survive, coming up with new innovative products and companies that can only be built by the aggressive, paranoid, maverick minds of entrepreneurs.
Tracking the growth of the small computer industry is like attempting to chart the path of every atomic particle in a nuclear chain reaction. At best, only general trends can be discerned, and even then most detail is lost in the heat and light.
George Morrow was best known for the stunts he loved to pull with suppliers, particularly if they were Japanese. He'd sit in negotiation with one of these businessmen and ask what he would charge for a particular order. When the price was given, Morrow would gasp, clutch his chest, flail about the room as though experiencing a massive cerebral hemorrhage, then collapse to the floor, his eyeballs only showing whites. It would take several minutes for employees and the stunned suppliers to "revive" him.
Getting rich is not the only reason entrepreneurs build companies. In fact, according psychologists, it is one of the least important reasons. Control is far more important—and control is measured in percentage ownership of the company's outstanding shares of stock. Thus, every sale of stock signals a commensurate erosion in control.
In the business world, particularly in new startups, there is a sizable difference between total personal value and disposable income.
Entrepreneurs weren't just engineers turned executives, but just as often the other way around. This odd cross-fertilization between two species rarely found together in the same environment produced an odd sort of hybrid that is Silicon Valley's most famous creature.
To have made it in Silicon Valley while one was young was just about the best of all possible worlds. The best part was that, contrary to most urban areas, one rarely saw people much less successful than oneself—which happily kept guilt from interfering with one's self-actualization.
There are almost no sidewalks in Silicon Valley: one is simply expected to drive, even to the next parking lot, yet it is de rigueur to run five miles in the street during the lunch hour.
Like a true entrepreneur, Bushnell was only convinced by failure that he was on the right track.
As the saying goes, no one ever lost money underestimating the intelligence of the American public.
As history repeatedly shows, those responsible for a new cultural force often have a little idea at first of the magnitude of their achievement—and sometimes end up not among the beneficiaries.
Each generation finds its game—crossword puzzles, Monopoly, Scrabble, touch football—and in the passive age of television, computers, Star Wars, and the brief, jolting hit of cocaine, could there be a better instrument of amusement than the video game? Could Silicon Valley have found a more apt metaphor for itself and the new society it was helping to create?
In the high-tech business, a good product usually will make up for any amount of incompetent management, incoherent marketing, and lousy cash management.
According to one Atari insider, the day Kassar arrived he called a meeting of top management. One executive showed up in a bunny suit. When Kassar asked what the costume was all about, he was informed that it was Halloween. When, incredulous, Kassar inquired what kind of fool would come as a bunny to an executive meeting, he was informed that it was the vice president of engineering.
Riding a business boom is like surfing: you have to see the next wave coming in on the horizon, get out, and be turned around to meet it, and then, as the swell "feels" the bottom and rises, you have to paddle like hell to get up to speed to be caught in the arching crest.
If the Silicon Valley story shows anything it is that in the world of high-technology businesses any bozo can build a $10 million company, and even a moderately capable businessmen with the right product or market can take a firm to $100 million annual sales. But to top $1 billion and manage the requisite 25,000 or so employees needed to do so, you have to be a world-class executive.
Any true fad needs its core of fanatics as well as a large population of curious participants. It is the fanatics, with their metronomelike steady clip of quarters, who pay the overhead, set the standards, and serve as examples for others to follow in the wonderful world of consumerism.
Reformers and revolutionaries, by eschewing long established and long verified rules of conduct, often slip into behavior far worse than that which they once derided.
As in every other high-tech boom, some people made an enormous amount of money, many more didn't, and everyone confidently predicted that the good times would last forever.
At night, as a sad voyeur, one can drive past the open windows of the Valley's large apartment complex and in hundreds of living rooms never see a bookshelf, only the blue glow of televisions and personal computer screens.
The secular faiths of Silicon Valley target human perfection and try to achieve it, as one would the design of a new integrated circuit, through logic and analysis.
The truth, the great contradiction, is that in this Valley of mavericks and vision, there is stultifying conformity and a narrow point of view.
With little at home waiting for them and a barren cultural life, many Valley workers turn to their employers to give meaning to their lives.
Since no one really planned to stay, Silicon Valley was erected with little thought to the future. Companies were built the same way. Entrepreneurs, whether they are home builders or chipmakers, rarely think too far into the future, certainly not to the ultimate ramifications of their activities.
Unions would mean the death of Silicon Valley, because for an entrepreneurial environment to work, it must be a meritocracy, an anathema to seniority-oriented unions.