Great American Stories: Silicon Valley Pioneers
On this date in 1947, two friends who met as Stanford University undergrads filed articles of incorporation for a new company. Tweet
On this date in 1947, two friends who met as Stanford University undergrads filed articles of incorporation for a new company. The firm had been launched nearly a decade earlier as a partnership between pals with no venture capital fund behind them and no specific idea of the products they wanted to invent. The sum total of their assets consisted of $538 in start-up money from friends and family and a physical plant consisting of a rented car shed on Addison Street in the then-sleepy college town of Palo Alto, Calif.
The new enterprise was named after its founders, who proved to be inspiring bosses with novel ideas about business management. For one thing, they believed corporations have a responsibility for the welfare of their employees. The young men didn’t stand on ceremony, either. Having embraced the relaxed social customs of their adopted home state, they insisted that their colleagues call them “Dave” and “Bill.”
We know them as David Packard and William Hewlett, and their company as Hewlett-Packard.
When HP was incorporated, Packard was installed as president and Hewlett as vice president. So why wasn’t the company known as Packard-Hewlett? This bit of historical trivia is a nugget of Silicon Valley lore. The answer is that they flipped a coin. I wrote about HP’s founding five years ago in this space, but given the nation’s current uneasiness about Big Tech, I thought the origin story of Silicon Valley is worth reprising.
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Silicon Valley, as we know it, had many founders, and two rival historical strains. One of them traces its lineage to Stanford University; the other to the creation of Intel, the company started by Bob Noyce and Gordon Moore in 1968.
To summarize a complex legacy in a sentence or two: Intel’s claim to fame is that the company and its founders invented and then mass-produced semiconductors, the micro-device that gave Silicon Valley its very name, generating hundreds of thousands of new jobs and industries and launching the modern technology revolution. How ubiquitous are these computer chips? Well, we can’t communicate electronically — or even build cars anymore — without ’em.
The case for Stanford’s genesis in the formation of the Digital Age? First, several of its tech-savvy scions predated the invention of the integrated chip by three decades; and second, they laid the groundwork for the Western-based electronics industry that made Northern California such a fertile launching pad for new ideas and innovation.
Looking at the history of the tech industry this way, a Stanford professor named Fred Terman can be described as the George Washington, or perhaps the Thomas Jefferson, of Silicon Valley.
In the mid-1930s, Terman held out to promising engineering students the possibility of helping them start businesses after graduation so they would stick around the San Francisco Bay Area. But the Depression put a premium on securing gainful employment or a safe academic sinecure, so upon graduation two of Terman’s brightest protégés, Dave Packard and Bill Hewlett, did what young men in the West did in those days — they accepted positions back East. Packard was snapped up by General Electric, Hewlett went on to grad school at MIT.
Terman lured them back to Stanford with scholarship money and part-time jobs on campus, in hopes that they would start something big. Professor Terman also gave the lads an idea for the product that would prove to be their first big sale. It was called an audio oscillator, and in 1939 a fellow entrepreneur, this one from Hollywood, bought eight of them.
His name was Walt Disney, and he needed the state-of-the-art devices for a picture he was making. It was called “Fantasia.”
Carl M. Cannon is the Washington bureau chief for RealClearPolitics. Reach him on Twitter @CarlCannon.
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