George Grellas On Silicon Valley in 1956

Written by Sean Murphy. Posted in Silicon Valley

I am a huge fan of George Grellas writing and when his revised website removed this essay I had previously linked I asked if I could post it here for entrepreneurs to appreciate how much Silicon Valley has been transformed in 60 years. George said that while he was not in Silicon Valley in 1956–or even old enough to appreciate it at the time–he retains a great nostalgia for the Valley that is no more.

Silicon Valley Circa 1956 – A Valley That is No More

This article offers a snapshot of Silicon Valley in 1956 that will appeal to those who were there as nostalgia, to those who weren’t as a study in social contrasts with what is there today, and to tech startup founders and other technophiles as a glimpse of how the phenomenon we know as Silicon Valley initially took shape. Reflect and enjoy.

What was it like in Silicon Valley in 1956?

Back then, the Valley lay in the shadow of San Francisco. If you wanted culture, glamour, or riches, you headed to the City. If you wanted farm life, you headed to San Jose. I exaggerate, but not by much. Hard as it is to imagine today, the Valley then was still tied closely to the soil. People knew how to grow things. Things like fruit. Not just as a hobby but as way of life. Above all, they knew how to can and pack that fruit. Not as home preserves but on a large, industrial scale. Before WWII, San Jose had fewer than 100,000 people. Yet no fewer than 18 canneries and 13 packing houses could be found in the Valley. This was then the largest canning and dried fruit packing center in the world. By 1956, this farm-based culture was still largely intact. Today, it is almost entirely gone.

A Fragment of 1956 in 1970: The Del Monte Cannery

Those of us who have been here awhile may have caught fragments of the old life. I remember doing a summer stint as a student at the Del Monte Cannery off Auzerais Avenue, circa 1970, in which my fingers turned prune-like as I stood there for endless hours throughout each shift “guiding” grapes to the center of a conveyor belt at its drop-off point by repeatedly reaching my arms out as if doing a butterfly stroke and pulling the grapes inward as my arms would pull together. Shifting to the “dry” side later that summer, my brother and I would do the graveyard shift standing at the bottom of a massive slide and scrambling like mad to stack pallets manually with some really heavy boxes whenever the automatic pallet-stacker at the top malfunctioned and some faceless person would switch the boxes to come zinging downward non-stop and with a great force — we felt like Lucy and Ethel trying frantically to handle all the chocolates as the sheer number and frequency of the boxes would overwhelm our ability to stack them. I can assure you that whatever talent we displayed that summer went entirely unrecognized.

In 1956 Cupertino Celebrated Its First Birthday

But back to life in 1956. Cali Mill sat at the corner of De Anza and Stevens Creek Boulevard. Monte Bello Vineyards quietly grew its grapes in the Cupertino foothills, soon about to realize great harvests that would lead it to become Ridge Vineyards. Paul Masson was even then a Valley winery that would “sell no wine before its time,” as Orson Welles would later put it. Cupertino had just incorporated as a city in 1955, becoming the 13th city in the Valley (Sunnyvale had voted to incorporate in 1912). Cupertino High was about to form in 1958. De Anza College didn’t exist. Nor did El Camino Hospital. Both were about a decade or so off. Santa Clara’s law school was around, and it graduated exactly 13 students that year.

Many at the time could remember just a couple of decades earlier when it took the equivalent of a short trip through the country to get from downtown San Jose to Willow Glen. Much of Mountain View remained agricultural not only as of 1956 but even throughout most of the 1960s — during this era, there was still open space between Mountain View and Palo Alto, with row crops and orchards filling in the gap. Moffett Field with its huge hangars filled the Valley with the noise of monster-sized military planes droning continuously as they took off and landed throughout the day.

Transition Away From Agriculture Was Underway

Prosperity was afoot, however, wholly apart from the agricultural sector. Santa Clara Valley had a massive postwar population explosion and chaotic growth to accompany it. By the mid-1950s, San Jose was well on its way to having over 200,000 people, more than doubling its population within the decade. Electronics companies began to flourish, spurred on initially by WWII. Prominent among these was Hewlett Packard, which in 1956 did $20 million in revenues and employed 900 people while selling test and measurement equipment. By the following year, it would go public and double the number of its employees while doing something very unusual — it gave stock grants and options to all employees with at least six months of service, an almost unheard-of practice at the time.

Macy’s Valley Fair Hosted a Carnival on the Roof

Shopping malls sprang up as well, even as Woolworth’s and other five-and-ten-cent stores started to falter. In the summer of 1956, one of the first and most notable, Macy’s Valley Fair, opened as a 39-store retail center. Macy’s had wanted to open in downtown San Jose but got stiffed on price. It therefore bought several acres of land along San Jose’s unincorporated Stevens Creek Road and built the center there, amidst a wide open area consisting of orchards and an Emporium department store. When it opened, it had only one floor and a roof deck that was accessible to shoppers by elevator. Macy’s planned to add a second floor. So what did it do in the interim? It did what any good promoter of a new concept would do (and as many other centers of that day did) to attract shoppers — it set up a carnival! Yes, right on the roof deck of its shopping mall, it put not just one but seven carnival rides. It had a merry-go-round and a small train and even a 40-foot ferris wheel! It also had a cafe so that parents could relax and eat as their kids enjoyed the rides. It seems that fast-shuffle types were busy long before startups came along. If it sparkles, they will come!

Vallco Was Still Active Orchards

While Cupertino lagged in seeing its first significant shopping center open, 17 of its largest landowners shortly thereafter sold out to Varian Associates, another thriving electronics firm, which (along with the Leonard, Lester, Craft and Orlando families) developed the center that took as its name an acronym composed of the first initials of each participant: Vallco Park. Vallco, however, did not open until the early 1960s. In 1956, the large tracts of land were entirely undeveloped except for agricultural purposes.

Meanwhile, we had the Dow at about 500. People made just under $5,000 per year on average and paid about $12,000 if they wanted to buy a brand new home. No sticker shock in those days for those moving in from the Midwest.

Cold War in Full Swing

The Korean War had ended three years earlier and the McCarthy hearings a couple of years before. The shock of Sputnik was still a year away. The Cold War was in full sway, however, and was not helped by the crushing of the Hungarian uprising by Soviet tanks in 1956. Memorable among the oddities of the day were the atomic bomb drills by which school kids would attain assured safety from any nearby neutron blast by being taught to crawl under their desks (confirming that the leaders then were about like those we have today).

Eisenhower was President and Nixon Vice President, re-elected as a team for a second term. Congress adopted “In God We Trust” as the national motto, officially supplanting its unofficial predecessor, E Pluribus Unum. In one of the great ideological misfires of all time, Ike appointed William J. Brennan as an associate justice of the United States Supreme Court. The Supreme Court at the time included not only Justice Brennan but also Earl Warren, Felix Frankfurter, John Harlan, Hugo Black, and William O. Douglas.

Drugs, Smoking, and Alcohol

Drugs were clearly a problem in metropolitan areas but had not spread as yet to the larger society. In response, Congress held marathon hearings on the issue and passed the Narcotic Control Act of 1956. Prescription drugs and packaged food items, meanwhile, did not have safety caps or seals, and the Tylenol poisoner who brought that constant headache upon us had not yet begun to serve his just judgment of everlasting torture in the lowest of the lowest of the lowest regions of Hades specifically reserved for him, where (I hope) it is EXTRA, EXTRA HOT!

Smoking was cool, however, really cool; so too was drinking (remember the “highball”). Garbage was garbage and weather was weather, since Rachel Carson had not yet had her way. Wonder Bread made up for any nutritional deficit incurred through all that smoking and drinking, or at least that is the conclusion I would have come to as a 5-year old boy at the time had I thought about it (only weird people didn’t like Wonder Bread).

Fireworks, Payphones, and ’56 Chevys

Fireworks were everywhere on the Fourth of July, and there were no forbidden zones. Many an anthill served as a proving ground for mischievous boys in training for the demolition corps. What was done with cherry bombs will be passed over in silence.

Ma Bell introduced three-slot pay phones (for nickel, dime, and quarter) that year. She would lease you a home phone as well but not sell you one. You could, however, listen in for free on someone else’s party-line conversation, and you could make crank calls at will without fear that caller ID would expose you for being the lewd person that you were.

’56 Chevys, costing about $2,000, symbolized the oligopoly (composed of GM, U.S. Steel, and a few others) that John Kenneth Galbraith assured us would forever dominate a new industrial state and crush all future competition. “Made in Japan” meant junk, and Sony took this to heart by shipping its first transistor radio to Canada that year, perhaps sensing that it might ultimately have the last laugh.

Dairy Queens, Gas Stations, and Drive-ins

Dairy Queens proliferated, having just introduced dilly bars to complement the banana splits they had been serving up for five years, but no trace could yet be found of McDonalds (nor of the infamously-named and now near-defunct Sambo’s Restaurant which some of us may remember while eating those awful 3:00 a.m. fries in student mode during the 1960s and 1970s).

Gas stations were full service and gas was priced at about $.22 per gallon. The road culture ala Jack Kerouac held sway. Drive-in theaters flourished as part of a nationwide phenomenon which saw them quintuple in number from 1948 until they hit their peak by 1958 even as indoor theaters shrank by one-quarter during that same period. President Eisenhower signed the Federal Highway Act that gave impetus to the federal interstate system we know so well today. Commercial flying had gone mainstream, was highly regulated and expensive, and enabled you to get a hot meal with your flight.

Cameras with Film and Television without VCR or TiVo

Kodak dominated film. Polaroid was in its third decade of existence and had managed to sell its one millionth camera that year, though the Instamatic was still well off into the future. IBM had invented the world’s first hard disk (5 MB storage) for use on mainframes. Of course, the people of that day could scarcely dream of personal computers or hand-held digital devices or email or the Internet.

TVs were in about half of all households and had become the center of family activity, having supplanted radio and undercut the cinema. Almost all were black and white, as color sets did not catch on until the early ’60s. It took a U.S Supreme Court decision in 1955 to pave the way, but TV quiz shows were held not to constitute illegal gambling and so the $64,000 Question was eagerly watched to see if contestants could win individual prizes of as much as $100.

Also eagerly watched were Chet Huntley and David Brinkley, who premiered their hugely popular Huntley-Brinkley Report on NBC in October, 1956, bumping Douglas Edwards of CBS from the top spot in ratings for television news. TV poured forth a wealth of wholesome family entertainment, with Father Knows Best, the Danny Thomas Show, the Phil Silvers Show, the Loretta Young Show, Playhouse 90, Alfred Hitchcock Presents, and Caesar’s Hour coming to mind as standouts among the offerings. No VHS to record any of it with, however, and no TiVo either.

Schools Had Discipline and Prayer

Schools had discipline, and prayer. Knuckle-rapping with rulers was OK. Girls were of the marrying kind or of the “other” kind. Boys were the same drips then as they are today. Latin was still taught as a required language, though Greek had been routed by well-meaning but thoroughly befuddled language latitudinarians. Grade inflation had not yet taken hold, and the dread of flunking out remained very real for those who didn’t meet standards.

Perhaps the greatest news of 1956 came with the discovery of a vaccine for the prevention of polio — one of the great medical breakthroughs ever. The Valley, and the nation, gave a huge sigh of relief.

The Practice of Law

Law practice was characterized by mostly male lawyers who never touched a typewriter and who dictated profusely, wore suits and ties, and addressed one another as Mr. or Mrs. or Miss (no Ms. at the time and no casual first-name familiarity). Typewriters abounded. Plain paper photocopying was still several years off, but law firms could still use cruder mechanisms for making copies. Lawyers will be lawyers, after all.

Early fax machines existed but were few and far between and very expensive. An “express message” meant a telegram from the one company that then held a monopoly over that mode of communication. Literal cut-and-paste constituted the editing process. Manual redlining was laboriously done in larger firms but not much elsewhere. Even “large” firms were midgets compared to today’s giants (even as of the early 1960s, the then 80-year-old firm I began with in 1980, McCutchen, Doyle, Brown & Enersen, had just 20 or so lawyers!). Lawyers did not advertise, and collegial relationships tended to characterize what were then true partnerships where lawyers, once established, planned to spend their entire working careers.

“Silicon Valley” Did Not Exist, Yet…

“Silicon Valley” did not then exist, but all that was about to change. It began quietly enough and many did not notice. In the late 1930s, a pointy-headed Englishman named Alan Turing had taken his vast knowledge of high-level mathematics, had assumed infinite resources, and had set about to develop a logical model of incredible theoretical power that he called his “universal computing machine.” He saw that a vast number of complex functions could be mimicked and processed through logical representations contained in simple “on” and “off” states. Thus was born the digital model (or at least its modern and truly effective incarnation).

But a small problem remained: what to do about those “infinite resources” that higher mathematicians could take for granted in their theorems but that did not in fact exist. The analog world was one of heavy machinery, the bigger and more powerful the better. And yet, and yet . . . Maybe with the right materials, the power of electricity could be harnessed to give us real-world computers as so envisioned.

Enter William Shockley

Enter William Shockley. The date: February 13, 1956. The place: 391 South San Antonio Road, Mountain View. The goal: to make the world’s first semiconductors. Yes, right at the time the Valley struggled to retain some semblance of its agricultural roots, Shockley announced the formation of Shockley Labs. While really a division of a larger enterprise, this little outfit ultimately set the model for many startups that would follow. How? Well, in spite of all-pervasive genius, it never made a dime of profit. Only red ink. A true model for the Valley!

What is more, it became a prototype of a startup that is begun, controlled, and dominated by an engineering genius who proceeds to suffocate the life out of it. Today such engineers are kept caged in a back room, carefully guarded, and periodically fed big helpings of stock options to keep them tamed. Back then people didn’t know any better. And so William Shockley ultimately destroyed the company of which he was the brainchild. And brainchild he was — the Nobel-Prize-winning inventor of the world’s first transistor, a key foundational piece upon which the digital model could be built. A man with enough stature to assemble what was perhaps the world’s most famous founding team. But it all came to naught, and Shockley took his Nobel Prize and moved to Stanford to expound upon wild racial theories.

But what a founding team he had assembled! Gordon Moore. Robert Noyce. The founders of Fairchild Semiconductor and, ultimately, Intel, Advanced Micro Devices, and all the “fairchildren” that eventually came to the fore. From failure came spectacular success. Thus, the great companies of the Valley were poised to come into existence and realize the great digital vision of Alan Turing. The world of startups, venture capital, and explosive growth was about to begin. And Santa Clara Valley was never to be the same again. Silicon Valley was born.

Copyright © 2009 George Grellas. This essay is also available from: Web Archive and EzineArticles

Modifications From Original: Headings have been added to label the different sections and hyperlinks have been added to provide some additional context. Sections on popular culture and popular music that were not specific to Silicon Valley or related to technology have been omitted.

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Sunday Thoughts on Duty and Religion

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

Two long quotations, one from Henri Frederic Amiel in his Journal and the second from Benjamin Franklin’s “Letter To Ezra Stiles, 09 March 1790,” that explore duty and religion. A client recently lamented they had yet to find “the end of the rainbow, much less a pot of gold” and I was reminded of quote by Edwin Land, “the bottom line is in Heaven.” These two quotes reinforce that perspective.

Do Your Duty, Come What May

What is to become of us when everything leaves us—health, joy, affections, the freshness of sensation, memory, capacity for work—when the sun seems to us to have lost its warmth, and life is stripped of all its charm? What is to become of us without hope? Must we either harden or forget? There is but one answer—keep close to duty. Never mind the future, if only you have peace of conscience, if you feel yourself reconciled, and in harmony with the order of things. Be what you ought to be; the rest is God’s affair. It is for him to know what is best, to take care of his own glory, to ensure the happiness of what depends on him, whether by another life or by annihilation. And supposing that there were no good and holy God, nothing but universal being, the law of the all, an ideal without hypostasis or reality, duty would still be the key of the enigma, the pole-star of a wandering humanity.

Do your duty, come what may.

Henri Frederic Amiel in his Journal

A peaceful conscience and harmony with the order of things are easy to say and hard to achieve, but certainly worth striving for. I look at a successful business as generating value for customers, which requires you to have empathy for their needs and to identify those you can fulfill with distinction and at a profit that pays for innovation and future improvements to meet competitor’s actions.

Franklin’s Religion

“You desire to know something of my religion. It is the first time I have been questioned upon it. But I cannot take your curiosity amiss, and shall endeavor in a few words to gratify it. Here is my creed. I believe in one God, the creator of the universe. That he governs by his providence. That he ought to be worshipped. That the most acceptable service we render to him is doing good to his other children. That the soul of man is immortal, and will be treated with justice in another life respecting its conduct in this. These I take to be the fundamental points in all sound religion, and I regard them as you do in whatever sect I meet with them.

As to Jesus of Nazareth, my opinion of whom you particularly desire, I think his system of morals and his religion, as he left them to us, the best the world ever saw or is likely to see; but I apprehend it has received various corrupting changes, and I have, with most of the present dissenters in England, some doubts as to his divinity; though it is a question I do not dogmatize upon, having never studied it, and think it needless to busy myself with it now, when I expect soon an opportunity of knowing the truth with less trouble. I see no harm, however, in its being believed, if that belief has the good consequences, as probably it has, of making his doctrines more respected and more observed; especially as I do not perceive that the Supreme takes it amiss, by distinguishing the unbelievers in his government of the world with any peculiar marks of his displeasure.”

Benjamin Franklin (1706-1790)
Letter To Ezra Stiles, 09 March 1790
in The Works of Benjamin Franklin, 1904 (Chapter 12) John Bigelow editor

In the middle of a thunderstorm or an earthquake or lying sick in bed with a serious illness it can be hard to believe in a providential universe. Certainly at low points on the entrepreneurial roller coaster you can lose your sense of purpose and  of a place in the universe. I like this answer by Franklin where “doing good” to others is his focus over needless study of issues he expects “soon an opportunity of knowing the truth with less trouble.” He wrote it March 9, 1790 and was dead five weeks later in April of the same year.

Like many activities we engage in, business is an opportunity to do good for others. Not a hugely popular sentiment in Silicon Valley but true nonetheless.

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CNSV Recognized by IEEE as an Outstanding Chapter

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

The Consultants Network of Silicon Valley (CNSV) was recognized by IEEE Region 6 in 2015 for its outstanding achievements in promoting members’ skills and providing educational opportunities for Silicon Valley. The award reads:

IEEE Region 6 Outstanding Chapter  presented to

Consultants Network of Silicon Valley

For creating a network to promote the skills of its consultants, fostering collaboration among its members, creating alliances with other IEEE chapters, and providing educational opportunities for Silicon Valley.

Lee Kuan Yew 1923-2015

Written by Sean Murphy. Posted in Quotes, Silicon Valley, skmurphy

Lee Kuan Yew (16 September 1923 – 23 March 2015) governed Singapore as its first Prime Minister from 1959 to 1990. He shepherded the transformation of a small island economy into a first world technology leader.

Here are some excerpts from “The Wit and Wisdom of Lee Kuan Yew” published in 2013, a collection of quotes curated from public sources. I have added some commentary after each related to entrepreneurship.

Counting Your Blessings

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

The next few weeks and perhaps the next few years are going to be awful. Keep counting your blessings anyway, remain kind, and continue to make a difference.

Peggy Noonan wrote My Brothers and Sisters on March 8, 2002 in the Wall Street Journal. She subtitled it “A report from New York, six months on” indicating it was a reflection on 9/11. I have re-formatted an excerpt as a meditation on the need for counting your blessings.

Second Sight: A Meditation on Silicon Valley and 9-11

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

Michael S. Malone wrote “Second Sight” for the Dec-3-2001 issue of Forbes ASAP (a great quarterly magazine put out by Forbes and edited by Malone that no longer seems to be available on-line).  It’s also collected in his book “The Valley of Heart’s Delight: A Silicon Valley Notebook 1963-2001” as Chapter 3. It’s a meditation on Silicon Valley and 9-11. Writing in the aftermath 9-11 he reflects on the roots of Silicon Valley in the Cold War and World War 2.  What follows are excerpts with subtitles and hyperlinks added, intermixed with commentary

Thought Leadership: A Briefing For San Bruno Rotary

Written by Sean Murphy. Posted in Audio, Events, Silicon Valley, skmurphy, Thought Leadership

I gave a talk on “How to Give a Great Demo” in April at the Co-Founders Club and met Elijah Angote, founder of “The Best Notary” who arranged for me to speak at the Rotary Club of San Bruno today. So I have him to thank and the audience knew who to blame. I really enjoyed the talk and felt very at home with the group. Here is the audio for the core of the talk (I have cut intro and and about ten minutes of Q&A)


Or download from http://traffic.libsyn.com/skmurphy/ThoughtLeadership140806c.mp3

Here is a handout from the talk.


Thought Leadership

A Briefing for San Bruno Rotary, Aug-6-2014 by Sean Murphy, SKMurphy, Inc.

  1. What is thought leadership?
  2. Why will it bring you more business?
  3. How do you get started?

Thought Leadership: Discern the important events and trends at work in the present, predict their likely effects, and offer perspective and actionable advice in time to have an impact.

Thought Leadership In Action

  • Advise prospects and customers on how to overcome their most pressing problems
  • Customers bring you their hard problems, prospects ask you for insight on options

How Does It Bring You More Business?

  • A reputation for expertise means that you get called first
    • You can compete on more than price:  expertise acts as a differentiator
    • Encourages current customers to bring you new challenges
      • May lead to new opportunities and even new offerings for emerging needs

Key Practices for Thought Leadership

  • Careful observation, questions, networking
  • Writing and speaking to build influence

Build a Communication Strategy

  • Identify audience / Understand their needs  / Position your message / Promote
  • Measure success: website traffic, mailing list size, inquiries, customers

Execute: Your 90-day Plan Should Address:

  1. What other people say about you
  2. What you say
  3. What you write
  4. Getting found when people are looking

Topics You Can Always Talk About

  • Change: what’s waxing and waning
  • Significance of recent events
  • Checklists to identify or resolve problems

“The future is an abstraction, all change is happening now.”
Marcelo Rinesi

You can only take action in the present.

“I have gradually come to appreciate that the really important predictions are about the present. What is happening right now, and what is its significance?”
Robert Lucky

What Is The Current Situation / What Is Significant About it?

  • Before you can make predictions you have to understand what’s happened.
  • The easiest predictions are based on the “acorns” already planted in the present

Checklists:  Develop A Coachable Perspective

  • Teach customers and prospect to diagnose problems from symptoms
  • Teach prevention and self-service so that they call you for high value problems

Thought Leadership Brings Business

  • You get called first
  • Compete on more than price
  • New opportunities
  • New offerings

About SKMurphy, Inc.: We help you find leads and close deals

Bootstrappers Breakfast www.bootstrapperbreakfast.com

If you are looking or a speaker for your Silicon Valley business group please contact us. I enjoy giving highly interactive presentations to groups  of 12 to 40 people.  I am happy to talk to larger groups but I prefer where there are opportunities for real audience participation.  I also do a number of interactive webinars and workshops for groups who are not based in Silicon Valley so if that’s of interest please feel free to contact me as well.

Ten Mistakes Early Stage Bootstrappers Often Make

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, Rules of Thumb, Silicon Valley, skmurphy

In the last eight years  I have moderated several hundred Bootstrappers Breakfasts. After doing a hundred or so and working with many clients who were bootstrapping I came up with a checklist for common mistakes bootstrappers and bootstrapping teams make in their first year or so.

IEEE-CNSV Panel Explores Engineering in Japan vs Silicon Valley Mon-Mar-3

Written by Sean Murphy. Posted in 1 Idea Stage, Events, Silicon Valley, skmurphy

I am helping to moderate a panel 7pm Mon-Mar-3 at IEEE-CNSV on “Innovation: Work and Life of the Engineer in Japan and Silicon Valley” The event takes place at Agilent Technologies, Inc. in the Aristotle Room, Bldg. 5 located at 5301 Stevens Creek Blvd., Santa Clara, CA 95051. There is no charge to attend and the event is open to the public.

The event is organized by Takahide Inoue, the Global Outreach Director for the Center for Information Technology Research in the Interest of Society at UC Berkeley.

The panel members are:

  • Takashi Yoshimori, Toshiba Semiconductor
  • Laura Smoliar, Independent Consultant, Signal Lake Venture Capital
  • Tom Coughlin, IEEE Region Six Director-Elect, CNSV member and Independent Consultant
  • Kim Parnell, Past Chair, IEEE Santa Clara Valley Section, CNSV member and Independent Consultant
  • Brian Berg, Past Chair, IEEE Santa Clara Valley Section, CNSV member and Independent Consultant
  • Sean Murphy, moderator.

Here are some of the questions I hope the panel is able to address:

  • What are innovation lessons from Silicon Valley?
  • How does Silicon Valley do so many innovations?
  • What are innovation lessons from Japan?
  • How do Japanese engineers sustain their interest in a topic to achieve mastery instead of moving on to the “new hot thing” or next “bright shiny object?”
  • What makes an innovative culture? What can other areas do to create an innovative culture?
  • In Silicon Valley, we tend to celebrate the individual over the group. For Silicon Valley engineers how do you give back to your  community?
  • The Japanese say that “the nail that sticks up gets hammered down.” For Japanese engineers, how do you disagree constructively with your peers to foster innovation?
  • What advice do you have for engineers for finding an idea that can inspire them to work on for several years before it becomes a reality?
  • How do you see the work of the engineer changing in the next five to ten years?

I hope you can join us tomorrow night. Here are some background material on Silicon Valley’s innovation culture you may find relevant.

Here are five related blog posts about Silicon Valley it’s entrepreneurial culture

Finally Tom Wolfe wrote “The Tinkering’s of Robert Noyce” about the founding and early culture at Fairchild and Intel for Esquire in December of 1983 and updated it for Forbes ASAP fourteen years later as “Robert Noyce and his Congregation.” (Aug-25-1997).


The text of California Historical Marker 836:

PIONEER ELECTRONICS RESEARCH LABORATORY – This is the original site of the laboratory and factory of Federal Telegraph Company, founded in 1909 by Cyril F. Elwell. Here, Dr. Lee de Forest, inventor of the three-element radio vacuum tube, devised the first vacuum tube amplifier and oscillator in 1911-13. Worldwide developments based on this research led to modern radio communication, television, and the electronics age…California Registered Historical Landmark No. 836..Plaque placed by the State Department of Parks and Recreation in cooperation with the City of Palo Alto and the Palo Alto Historical Association, May 2, 1970

Discerning the Future

Written by Sean Murphy. Posted in Rules of Thumb, Silicon Valley, skmurphy

Robert Pirsig in his afterward to the tenth anniversary edition of Zen and the Art of Motorcycle Maintenance.

This book has a lot to say about Ancient Greek perspectives and their meaning but there is one perspective it misses. That is their view of time. They saw the future as something that came upon them from behind their backs with the past receding away before their eyes.

When you think about it, that’s a more accurate metaphor than our present one. Who really can face the future? All you can do is project from the past, even when the past shows that such projections are often wrong. And who really can forget the past? What else is there to know?

Ten years after the publication of Zen and the Art of Motorcycle Maintenance the Ancient Greek perspective is certainly appropriate. What sort of future is coming up from behind I don’t really know. But the past, spread out ahead, dominates everything in sight.

I feel a sense of “the future coming up from behind” more and more.  When I worked in semiconductors and later networking I used to be able to rely on Moore’s Law to see at least a decade into the future. For the last thirty years Moore’s Law has always had ten years of life left in it; we will probably be saying that on the other side of the Singularity. But now it’s hard to see what trends can be relied on to continue.  I spend more time now trying to discern the likely trajectories of various technologies and businesses but I have much less clarity.

“We build up whole cultural patterns based on past ‘facts’ which are extremely selective. When a new fact comes in that does not fit the pattern we don’t throw out the pattern. We throw out the fact.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance

It’s also hard to separate the harbingers from the outliers and to compensate for blind spots. That’s why they are called blind spots. Rejecting disconfirming evidence is another way that blind spots are preserved.  When I started this business I knew that I was going to focus on Silicon Valley startups and work primarily face to face with clients. In the first year that I started I handed my card to an entrepreneur and he said, “You need a Skype address on this card.” I didn’t agree.

Of course I was dead wrong.  Today more than 1/3 of our clients are “out of region.” And while we meet and work face to face with many clients, most of our interactions, even with Silicon Valley clients, are on-line in Skype, wikis, shared edit documents, and other virtual collaboration environments.

“A person filled with gumption doesn’t sit around dissipating and stewing about things. He’s at the front of the train of his own awareness, watching to see what’s up the track and meeting it when it comes. That’s gumption.

[..]

The gumption-filling process occurs when one is quiet long enough to see and hear and feel the real universe, not just one’s own stale opinions about it. But it’s nothing exotic. That’s why I like the word.

You see it often in people who return from long, quiet fishing trips. Often they’re a little defensive about having put so much time to “no account” because there’s no intellectual justification for what they’ve been doing. But the returned fisherman usually has a peculiar abundance of gumption, usually for the very same things he was sick to death of a few weeks before.

He hasn’t been wasting time. It’s only our limited cultural viewpoint that makes it seem so.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

So if I can’t see what’s coming how do I maintain my gumption? I focus more on conversation and real time collaboration, to reacting intelligently to events, and to spending more time making sense of recent events–facts–rather than trying to predict. I spend more time trying to cultivate peace of mind to prevent overreaction: I find meditation, fasting, reading all very helpful in maintaining perspective.

“Peace of mind isn’t at all superficial, really. It’s the whole thing. That which produces it is good maintenance; that which disturbs it is poor maintenance. What we call workability of the machine is just an objectification of this peace of mind. The ultimate test’s always your own serenity. If you don’t have this when you start and maintain it while you’re working you’re likely to build your personal problems right into the machine itself.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

Serenity as a ground state allows you to react more rapidly and more intelligently: first because you overlook less and second because you are less likely to overreact.

“The ultimate test is always your own serenity. If you don’t have this when you start and maintain it while you’re working you’re likely to build your personal problems right into the machine itself.”
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

I guess one thing I have gotten better at compared to a decade ago is admitting mistakes–to myself and to others–more quickly. Self-deception is an “own goal” that blocks debugging a situation. And prevents you from seeing the recurring problems you are causing yourself  and others.

“Sometime look at a novice workman or a bad workman and compare his expression with that of a craftsman whose work you know is excellent and you’ll see the difference. The craftsman isn’t ever following a single line of instruction. He’s making decisions as he goes along. For that reason he’ll be absorbed and attentive to what he’s doing even though he doesn’t deliberately contrive this. His motions and the machine are in a kind of harmony. “
Robert Pirsig in “Zen and the Art of Motorcycle Maintenance”

It may be as useful to determine what’s not likely to change, what will still be true in five or seven or ten years as what will be different.

Four years ago I speculated that the twenty teens were going to be less about new inventions and more about changing the design of jobs, business processes, and business models to take full advantage of what’s already been invented. I am not saying that we don’t need more innovation, just that we have not adjusted our business practices to take advantage of what’s already here.

Two Mastermind Open House Events in November and December

Written by Sean Murphy. Posted in Events, Silicon Valley, skmurphy

SKMurphy Mastermind Groups SKMurphy Mastermind groups have a unique high-technology focus and are limited to eight qualified members. We guide a small group of peers to brainstorm and critique your critical business issues. Our use of ‘workout buddies’ provides a level of feedback and joint accountability that will help you to become more effective. Entrepreneurs have the opportunity to present their businesses issues, share referrals, and advise one another in a confidential, supportive environment during two meetings a month.

SKMurphy Offers Two Upcoming Mastermind Open House in November and December of 2013

Both events are no charge and will allow you to meet other members and potential members of our Mastermind groups.  The regular meetings run two hours and are held twice a month; the cost is $100 per month.

As we approach the new year, we want to take stock and evaluate what will impact our bottom line. Join us for the upcoming Open House. Bring your 2014 plans and let’s get a jump-start on making it your best year ever!

More information http://www.skmurphy.com/services/startup-advisor/

 

Working For Equity CEO Panel Returns to Silicon Valley Code Camp 2013

Written by Sean Murphy. Posted in Events, Founder Story, Silicon Valley, skmurphy

We are reprising our “Working for Equity” CEO Panel for the fourth year at the 2013 Silicon Valley Code Camp. Here is the current write-up, we will be adding panelists’ bios in a few days.

Many of us in Silicon Valley seek either to found or to be an early employee at a technology startup. If you aspire to create a startup come take part in a conversation with four startup founders about what’s really involved in leaving your day job and striking out on your own or with partners. The startup founders range from serial entrepreneurs to first-time CEOs, they will share their vision, drive and passion as they discuss the nuts and bolts of following their dreams to building something that will change the world.

Please Register for Silicon Valley Code Camp and indicate your interest in the session, this determines the size of room we will be in. We have had some great discussions not only among the panelists but with the audience–more than half the time for the session is allocated to questions from the audience–so please let us know if you plan attend so we will have room for you. There is also a Mobile Session Viewer And Planner.

While I think our panel is one of the better reasons to attend Code Camp there are another 232 sessions offered by experts and practitioners that cover a broad range of topics of interest to software engineers. Code Camp takes place all day Saturday October 5 and Sunday October 6 on the Foothill College campus at 12345 El Monte Rd, Los Altos Hills, CA. The “Working for Equity” panel takes place on Saturday October Oct 5 at 1:45.

For more information on earlier “Working for Equity Sessions” see

Ebb and Flow

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

A long term viable business model embraces ebb and flow: it organizes the abandonment of failed and obsolete products to enable an investment strategy for new growth that emphasizes experimentation in anticipation of a high rate of early small failures.

Evelyn Rodriguez Envisions a Silicon Valley Renaissance of Art & Culture

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

Among my other pursuits, I envision a Silicon Valley renaissance that brings a love of art, culture, place, and the divine spark alive and innate within our humanness out into the open.

To that end, I’m working on some ideas that revive Parisien style salons. Imagine curated one-of-a-kind intimate living art experiences. Seasonal dishes. Cross-fertilization of folks from the agriculture/foodie arena, the arts, and the techie financiers of the region.

Inspiration and pushing our edges is not a solitary act.

The Italian Renaissance wasn’t about one artist, one patron. It was a movement. A concerto with many players in the orchestra. I concur with this statement from the Montalvo Arts Center in Saratoga, CA:

“While the voice of an idea may appear to be individual, in fact the emergence of new ideas is a collective effort.”

Evelyn Rodriguez “About Page

It’s a compelling vision. To the extent that we can create opportunities for collaboration and shared improvisation that infuse art with our strengths in science and technology I think it would be possible to spark a new Renaissance. In Finding Silicon Valley in Two Passages from E. B. White’s “Here Is New York” I observed

What the Silicon Valley settlers lack in comparison to those who aim for New York–probably less interest in the arts or finance–they compensate for in their commitment to innovation, science, and technology.

I wonder if we have neglected the arts to our detriment.

Evelyn Rodriguez elaborates on models for collective efforts in  “The Myth of the One-Woman Inspirational Whirlwind” and references a great quote by Michael Schrage:

“If we really want to understand innovation and collaboration, we have to explore shared space. Consider Watson & Crick: How many experiments did they do to confirm DNA’s double helix? Zero. Not one. They built models based on other people’s data. These models were their shared space. Their collaboration in that shared space powered their Nobel Prize-winning breakthrough. If you don’t have a shared space, you’re not collaborating.”
Michael  Schrage, MIT design researcher and author of “Serious Play

In “$650,000 grant drops in your lap, and you’d…” Rodriguez outlines an approach very similar to the Art Prize model developed by Rick De Vos that has helped to transform Grand Rapids, MI.

Ben Kaufman on “What Raising Money Means”

Written by Sean Murphy. Posted in Rules of Thumb, Silicon Valley

Don’t congratulate people for raising money. That was never the goal. The goal is building a successful and meaningful business. When people raise money, instead of congratulating them, wish them luck. Their work is just getting started.

Congratulating people for financing perpetuates a problem that has plagued the startup world. The problem is that that it’s easy to focus on the hype surrounding a company, and lose sight of the fundamentals.

This is why our industry is flooded with […] people whose only ambition in life is to raise money, and then sell their company. They have no real interest in building a meaningful and enduring business. If we let [the people] dominate, we all lose.

This is my favorite startup quote of all time (although I don’t know who said it): “Congratulating an entrepreneur for raising money is like congratulating a chef for buying the ingredients.”

Ben Kaufman in  “What Raising Money Means to Me

Four key points for bootstrappers (from 8 Tips for Evaluating Funding Alternatives)

  • Revenue, especially break even revenue, is never dilutive of your ownership.
  • Paying customers are real proof that there is demand for your product. Getting funded is proof that an investor thinks there will be demand for your product.
  • Your most important investors are your spouse, friends, and family who will provide you with emotional support on the entrepreneurial roller coaster.
  • Professional investors don’t want control of your business, they want a return on their investment.

Related Posts on Viable Business Models

Exits vs. Enduring Companies

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

VCs and angels may talk about changing the world, but their business model rests on a more prosaic calculation: Buy low, sell high. They invest in companies they think will become more valuable, so they can sell their stake for a sizable profit. From the time that VCs invest in a company, they have five years—10 at the most—to sell their entire position, hopefully for many times more than their original investment. After that, it doesn’t matter to them whether the company survives a year or a century.

To put it another way, the VC model is based on creating wealth for investors, not on building successful businesses. You buy into a company early on and sell out a few years later; if you pick well, you can make lots of money. But your profits don’t accrue to the company itself, which could implode after your exit for all you care. Silicon Valley is full of venture capitalists who have become dynastically wealthy off the backs of companies that no longer exist.

Felix Salmon “For High Tech Companies, Going Public Sucks

Marc Andreessen’s selection as “The Man Who Makes the Future” in a recent Wired cover and interview highlighted five key idea and related project or companies he started as a result:

  1. 1992: Everyone Will Have the Web  (Mosaic at NCSA)
  2. 1995: The Browser Will Be the Operating System (Netscape)
  3. 1999: Web Businesses Will Live in the Cloud (LoudCloud)
  4. 2004: Everything Will Be Social (Ning)
  5. 2009: Software Will Eat the World (Andreessen Horowitz)

It’s interesting that there is no mention of Jim Clark recruiting him to start Netscape, he does have an interesting aside as to how ephemeral even significant products can be:

Andreessen: One of the first times Zuckerberg and I got together, in 2005 or 2006, he stopped me in the middle of conversation and asked: “What did Netscape do?” And I said, “What do you mean, what did Netscape do?” And he was like, “Dude, I was in junior high. I wasn’t paying attention.”

Felix Salmon offered a less enthusiastic endorsement than Wired:

“In many ways, Andreessen’s entire fortune has been built on the greater-fool theory: if you build something trendy enough, there’s probably going to be a huge lumbering company out there somewhere willing to overpay for it. Hence the buzziness of the Wired interview — clouds! social! SAAS!”
Felix Salmon in “The Problem with Marc Andreessen

Salmon’s assessment echoes Chris O’Brien 2009 profile, “The Curious Case of Marc Andreessen” written just prior to the launch of Andreessen Horowitz, which triggered a Curious Case of Marc Andreessen Part 2. Some excerpts

And then there’s Marc Andreessen, the businessman, who seems to me to be — how can I put this charitably? — a bit of a dud.  […]

I don’t want to imply he’s a failure, because he’s not. But when I look at Andreessen’s business track record, I’m less interested in his checking account than the financial statements of his companies. As far as I can tell, Andreessen has never started or operated a profitable business, with one exception: Netscape turned an annual profit, back in 1996 when it posted a $19 million profit. Of course, that was when the company still charged you $49 to buy a copy of Netscape Navigator. Once Microsoft started giving its Explorer browser away for free, that was all she wrote. Andreessen and Netscape couldn’t figure out another business model, and vanished a couple of years later in a complex deal with Sun Microsystems and AOL that was announced November 1998.

[…]

Andreessen’s reputation has only risen as he has emerged as a leading angel investor for the Web 2.0 industry, advising or investing in companies like Facebook and Twitter. These companies reflect the philosophy of service and technology over revenues and profits.

[…]

Of course, at some point, these priorities have to change. A company has to actually make money. Innovation can’t be sustained by creating a venture-backed Ponzi scheme where one money-losing start-up is sold to another, which is then sold to another.

Losing money indefinitely isn’t just a financial failure. It represents a failure to truly understand how a service or product is creating value for a customer, how to communicate that value, and how to persuade the customer to pay above and beyond for that value.

That, all too often, is where the valley still falls short: Failing to innovate around the business to the same degree it innovates around the technology.

Three years after O’Brien’s article his assessment seems prescient.

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