A Brief History: Silicon Valley

Silicon Valley is the birthplace of much of the technology you can’t live without: think Apple, Facebook, eBay, Google and many more outstanding companies. Have you every stopped to ask yourself why?

Silicon Valley nestles just south of San Francisco. The word “valley” refers to the Santa Clara Valley, where the region has traditionally been centered, and the word “silicon” originally referred to the large number of silicon chip innovators and manufacturers in the region. The term was reportedly first used way back in 1971, gaining traction in the 80s, but the story of Silicon Valley dates back to 1947.

Immediately post world war two, in 1947 to be precise, three scientists created the world’s first successful transistor, winning them a Nobel Prize for Physics (awarded in 1956). One of the three scientists, William Shockley, was determined to capitalize on the transistor commercially and headed to the San Francisco Bay Area, bringing with him some of America’s brightest engineers and scientists. However, in 1957 Shockley’s young recruits rebelled against his abusive management style and, titling themselves the “traitorous eight”, they began their own company, Fairchild Semiconductor.

In 1957 the Soviet Union launched Sputnick. This seminal event spurred America to launch the race to send the first man to the moon. It also led to the US Government, through NASA, investing heavily in Fairchild Semiconductor. They were the only company in the world making transistors in silicon, which were able to sustain high temperatures making it suitable for use in missiles and aircrafts. While not commonly associated with the fast-paced, cashed-up, start-up world that is Silicon Valley, this investment ignited the risk-taking and innovative culture of Silicon Valley. Over the following decades, many other companies, not least AMD and Intel, were founded by Fairchild Semiconductor “alumni” and supported by the US Government.

In 1959 retired WWII veteran William Draper formed the first Silicon Valley venture capital firm. Named DG&A, the company aimed to invest in small technological companies. Although it made only moderate financial success it defined the modern constructs of the venture capital industry, giving way to Arthur Rock’s Venture Capital Firm Davis and Rock. Within seven years the fund held investments worth nearly $100 million. Arthur Rock was later a founding investor in Apple Computer and coined the phrase “Venture Capitalism”.

In 1971, a series of articles titled “Silicon Valley, USA” was published in Electronic News by Don Hoefler and this is believed to be the first time the term was used in print.

Today, Silicon Valley is unrivalled

globally, as a hub for high-quality engineers, venture capitalists and outstanding universities. Another distinctive characteristic of Silicon Valley is the mobility of capital and management. But most importantly, it has at its heart a ‘risk-taking’ culture that underpins its success. Those seeking to learn from the lessons of history — to build “Silicon Harbour” in Sydney — must focus on these elements and recognise that with time all things are possible.

Image Credit: http://exchange.telstra.com.au/2015/07/31/disruptors-musings-silicon-valley/

Originally published at h2blogspot.wordpress.com on March 9, 2016.