so the book that I want to talk to you about today is not a book it is a long form article long form piece written for Esquire magazine all the way back in 1983 it is very well-known long form piece for those that study the history of the technology industry specifically the history of Silicon Valley it is called the tinkerings of Robert noise how the sun rose on the Silicon Valley and it was written by Tom Wolf and I was
reading it and rereading it in anticipation for another book another biography on Bob noise that I'm going to at the end of this encourage you to read along with me but as I was reading this to serve as supplemental research for the other book I realized like this piece is so good that it could stand on its own and it should be an episode on its own so I want to read to you and it gives you an idea of why this is so
important because even though the technology has changed like if you strip away what new technology is being invented in this article you could easily replace it with the technology that is being created today and yet humans reaction is almost identical but let me give you the intro to this article because I think it sets it up perfectly remember this is written in 1983 okay America is today in the midst
of a great technological Revolution with the Advent of the Silicon chip information processing and Communications the national economy has been strikingly altered the new technology is changing how we live how we work how we think people say the exact same thing today it's remarkable the revolu didn't just happen it was engineered by a small number of people collectively they engineered tomorrow formost among them is Robert noise and
so before I jump into the beginning of this piece I want to read this quote that comes from Steve Jobs because a little background on Bob noise in case it's the first time youve come across him he was the founder of fair fair child semiconductor the founder of Intel he's known as like The Godfather the grandfather of Silicon Valley he was also one of Steve Jobs mentors I've read in a bunch Steve Jobs biography
hilarious stories about like a young Steve Jobs who in his 20s Bob noise is probably in his 50s by then would come over and you know Bob is just kind of like smacking him on the back of the head telling him hey you need to learn how to act it's just kind of funny because you think of Steve Jobs as you know one of the greatest entrepreneurs ever do it this very formidable individual who seemed in complete control in any environment he was in
he's like yeah but he wasn't like that when he was in his 20s and he needed the guidance but this is what Steve Jobs said about Bob noise after uh after Bob died he said he was one of the Giants in this Valley Who provided the model and inspiration for everything we wanted to become he was the ultimate inventor the ultimate Rebel the ultimate entrepreneur so this story starts in 1948 in this Tiny Town of 7,000 people
called grenell Iowa and so Tom Wolf writes grenell Iowa was one of the last towns in America that people would have figured to become the starting point of a bolt into the future that would create the very substructure the electronic grid of life in the year 2000 and Beyond it was in the summer of 1948 that Grant gaale a 45-year-old physics professor at grenell College ran across an item in a newspaper concerning a former classmate
of his John Bine Bine was now working at Bell Laboratories and Bine and another engineer at Bell Walter Baine had invented a novel little device they called a transistor many years later the transistor is going to be called one of the most important inventions of the 20th century but at the time in 1948 in the newspaper it certainly didn't register as that this was only a small news item however the invention of the
transistor in 1948 did not create headlines the transistor performed the same function as the vacuum TB which is an essential component of telephone relay systems and radios at the time but the transistor was 50 times smaller than a vacuum tube and so I'm going to pause right in the middle of this before I tell you what Grant Gale does next which changes the trajectory of Bob no's life he just doesn't know it yet so there's a
great line that Paul Graham uh had when he wrote this phenomenal essay it's EP episode 314 it's called how to do great work I'm just going to read a paragraph for you because we're about to see a great illustration of this in the life of Grant Gail and Bob noise now so Paul Graham talks about the importance of making yourself a big Target for luck he says when you read biographies of people
who've done great work it's remarkable how much luck is involved they discover what to work on as a result of a chance meeting or by reading a book or a newspaper in this case and they happen to pick up so you need to make yourself a big Target for luck and the way to do that is to be curious try lots of things meet lots of people read lots of books and ask a lot of questions and so Grant Gail who is the mentor and the professor
of Bob noise reading the newspapers like oh this is interesting and he says he thought it would be terrific to get some transistors for his physics department at grenell so he wrote to Bine at B Bell Laboratories just to make sure his request didn't get lost in the shuffle he also wrote to the president of ball Laboratories this guy named Oliver Buckley Buckley was from Iowa as well and happened to be a grenell graduate
it's incredible how important grenell this tiny little College in a town of 7,000 people in Iowa in the 1940s winds up being in fact there's a there's a I'll just tell you now there's a a great story about this how important grenell is uh later on where they actually invest in the founding of Intel and I think it doubles their entire that one investment just doubled their entire endowment but back to this you have this
this Iowa the Small Town Iowa connection between all these really influential people so by the fall of 1948 Gail had obtained two of the first transistors ever made and he presented the first academic instruction in solid state Electronics available anywhere in the world for the benefit of the 18 students majoring in physics at grenell College you already know where this is going one of those 18 students is Bob noise and
Bob like most entrepreneurs is a misfit a rebel a juvenile delinquent in fact Grant Gale had done more of his share of agonizing over Bob noise Bob was a very bright student but he'd just been thrown out of school for a semester and it had taken every favor that Gail had to keep the boy from being expelled and charged with a felony just like Bob Noy played a very influential and impactful role in the lives of Steve Jobs we see that
Grant Gale played that same role for a young Bob no and the reason he knew that he was special that I'll get into son she steals a pig and we'll get to in a minute uh about you know saving this kid he's a good kid he's very smart you know he's a little rebellious doesn't really like follow the rules typical entrepreneurial Behavior but he knew from the time that he was that Bob noise was in high school he's like oh this
this guy's brilliant and in fact Bob had done so well in science at grenell high school that Grant Gail had invited him to take the freshman's Physics course at College during his high school senior year and Bob noise very quickly became one of Gail's star students said he had a fear work ethic and he had a passion for the scientific grind now Bob is going to be one of the greatest inventors and entrepreneurs but he's
also very well-rounded he was very trim muscular he was on the College swimming team he he won a bunch of uh Awards in diving he sang in the choir he was an actor in the college dramatic Society he was even the leading man in a soap oper that was broadcast in radio during college and we see this later on when even when he's running Fair child Semiconductor in Intel he has all these Hobbies he's you know hangliding and
scuba diving and skiing but he had a passion for tinkering remember the title of this of this essay is called the tinkerings of Robert no and we see that even when he was a young boy when he was 13 he had come across some plans for building a box kite which is a kite that a person could ride in and he found the plans in the magazine Popular Science and so Bob noise had this innate gift from a very young age of getting people
to collaborate he has an idea then he'll gather people together and say hey let's make this idea real almost winds up killing doing this cuz they try to launch the kite off of a off of a the the roof of a house then they convince a neighbor to to tie the kite to the back of their car which he agrees noises is like Master salesman very charismatic person as well and says Bob rode the kite and managed to get about 12 feet
off the ground and glide for 30 seconds and as you can imagine if you have kids you wouldn't be too happy with your you know 13-year-old boy being being pulled behind a car in a kite uh but he he had this rebellious streak and this is what got him in trouble and this is where Gail Grant safes is behind so the major Capital asset in grenell Iowa at the time is livestock and Bob's in college and they have this idea to do a luau and
you can't do a luau without a roasted suckling pig and so Bob convinces two other boys to go with them and they wind up going on to they sneak onto a farm and they wind up wrestling a 25b pig to the ground out of the livestock or out of the the pig pen rather and then bring them back to college so they could roast that pig over a fire here's the problem what they thought was like a silly little prank was actually a Larsen it
was a felony stealing Livestock in Iowa was a felony so the farmer didn't think it was funny at all he called the sheriff and he insisted on bringing criminal charges against Bob and his friends this is one of the benefits of a small town everybody knows each other so Grant Gail is obviously respecting the community and he goes to bat for winds up not only having the charges not uh dropped but also convinces the school
you don't want to expel this this kid is gifted don't expel him just give him a one uh one semester suspension and that was fine for Bob because he had such a fierce work ethic remember he was addicted to the scientific grind he loved it then in his first three years in college he had accumulated so many extra credits he just needed one more semester he didn't need the full year to graduate anyways he was so far ahead but
it did it talks about the fact that even though he went through this you know community's trying to ostracize him they're they're telling him how how bad he is and what he did was so wrong he's just got this innate confidence in Charisma that no matter what period of Bob's life whether a young boy or one of the the best entrepreneurs in Silicon Valley it they just bring it up over and over again it says this never broke his
confidence he had a profound and baffling self-confidence when he looked at you he never blinked he absorbed everything you said and then answered in a soft voice with a smile this is something his employees will talk about later the fact that they just could not believe how engaging he was that when he was with you when he was meeting with you when you were speaking he looked at you you thought he made you feel special
he made you feel you were the most important person in in his life at that moment that he was fully engaged with what you were saying this is more about his Charisma Bob noise projected what psychologists call the halo effect people with the halo effect seem to know exactly what they're doing and moreover they make you want to admire them for it they make you see the Halos over their head and so when Bob gets back to school
he becomes involved with this new experimental device that Grant Gale had procured for him and the other 17 physics students the transistor and that changes the trajectory of Bob noise's life forever and the author does a fantastic job describing the series of events that had to occur for this change into the trajectory of Bob no's life what if Grant Gail hadn't gone to school with John Bine and what if Oliver
Buckley hadn't been a grenell alumnist and what if Gail hadn't bothered to get in touch with the two of them after he read about the transistor in the newspaper and what if he hadn't gone to bat for Bob no after the night of the lual pig and the boy had been thrown out of college after all if Bob hadn't been able to finish a grenell he would have never been introduced to the transistor and he certainly wouldn't have attended
MIT in 1948 given what Bob noise did over the next 20 years one couldn't help but wonder about the fortuitous chain of events and so there's going to be another person that plays an important role in Bob no's life and that's going
to be William Shockley Grant Gale was the first important physicist in Bob no's career the second was William Shockley Shockley is going to win the Nobel Prize in physics he's going to share it with John bardine and Walter
Bain and it's for their research on semiconductors and discovery of the transistor effect he is also going to be the person that recruits Bob no to move from the east coast and come out to Silicon Valley we'll get there in one second so Bob no graduates MIT 1953 he says in 1953 the MIT faculty was just beginning to understand the implications of the transistor but Electronics firms were already eager to have graduate
electrical engineers who could do research and development in the new field so no is offered jobs by all these different people he chooses to work at filco which is interesting cuz he turned down jobs from belt Laboratories which you know probably had this the highest density a collection of like brilliant people which is surprising IBM which is a bigger company and the reason he does this says a lot about the kind of
environments that he wants to work in so he chooses filco which is in Philadelphia and because filco was starting from near zero in semiconductor research and chances for Rapid advancement seemed good for him this is also something he talks about later on because I've read multiple biographies of Bob nois the fact that he doesn't he he always said he didn't like building he didn't like working in large companies but he built two gigantic
companies but he was obsessed with like the early days of the start up like small teams he just was so successful in these two companies that these startups transformed ra rather rapidly to very successful companies but I need to hone on that point because again he's he's not ignorant he knew that noise says noise was well aware that the most important work was still being done at Bell Laboratories and that was thanks in
no small part to William Shockley but he still chose to to go to the smaller less Advanced company but he's not going to stay there for too long so by 1955 Shockley leaves Bell Labs goes to Pao Alto California where he had grown up and he's going there to start his own company which is shockly semiconductor laboratory he sets up his new company in a glorified shed in Mountain View California and practically every single
one of the early employees were electrical engineers with doctorates which shockly began referring to as his PhD production line and so a year later Bob noise is going to join him and we just see this this personality that Bob has he's he's all in he is risk on so in 1956 he decides to move from Pennsylvania to California to join shakley listen to how he does it the way he went about it was a classic example
of the noise brand of confidence by now he and his wife Betty had two children after a couple telephone conversations with Shockley noise put himself and Betty on a flight from Philadelphia to San Francisco they arrived in Pao Alto at 6:00 a.m. by noon noise had signed a contract to buy a house that afternoon he went to Mountain View to see shley and ask for a job and he got it so then they get into description of William
shley I have to share something with you I read I read sh Le's biography it's episode 165 of Founders the name of the biography for God's sake is broken genius the rise and fall of William shley to prepare also for this episode I reread my highlights from that book in Founders notes and I had remember this too Shockley is the worst person I have ever covered on Founders he I don't even know how to describe him he's the
smartest dumb person you ever meet he's the most intelligent yet idiotic person you ever come across unbelievably brilliant and Brilliant inventor brilliant physicist zero people skills at all in the way he treated people around him they called his personality reverse Charisma if you plot by noise's personality and William shockley's on a spectrum they're almost at opposite ends and this is the danger of being I think
for especi for entrepreneurs almost too introspective they they're too lost in their own mind so I'm just going to give you some highlights about like how he viewed other humans the way some of the stuff he did and it just his his his life is just tragic it's very sad and so he says just another warning that the deepest pess pessimism in general lack of admiration for the human race and myself are probably with me for Keeps
these are all quotes from his biography the thought that another person might be seen as smart as him seem to frighten him listen to how he describes his own children and his first wife in terms of my own capacities my children represent a very significant regression my first wife their mother had not as high an academic achievement standing as I had one of the worst traits that shle has is he was threatened by the achievements of
other people as Charlie merer said that Envy has no envy and self-pity have no utility like you have to cure yourself of self-pity and envy according to trer and this guy just couldn't get over it it's such a sad State of Affairs if the achievements of other people or the recognition of other people caused you to be depressed this happened in shak's life so much he tried to kill himself he's got a a a revolver which obviously
had can hold six Six Bullets he puts one bullet uh in there and he's just going to essentially leave almost like a playing Russia roulette right but he writes a letter to his wife and this is what he says before he does this dear Jean I am sorry that I feel I can no longer go on most of my life I felt that the world was not a pleasant place and that people were not very not a very admirable form of life I find that I am
particularly dissatisfied with myself and that most of my actions are the consequences of motives of which I am ashamed he then takes out a revolver puts a bullet in one of the six Chambers puts the gun to his head and presses the trigger nothing happened he put the gun away and then wrote another note dear Jean there was just one chance in six that the loaded chamber would would be under the firing pin there was some
chance of a misfire even then I am sorry that I'm not sufficiently ingenious or painstakingly and painstaking enough and find a more practical and suable means of solving our problems he's got no soul he's got no Humanity to him and at the very end of the book it talks about the fact I think this is a second his second wife that she didn't even have a memorial service for her husband when he died because she said it's not clear who
would have come and the note I left myself on that is this is what losing at life looks like and so the reason I bring that up is not to try to criticize you know somebody that's passed on it's because he very likely had some one of the largest collections of scientific and entrepreneurial talent in his company and because of his inability to learn people skills it was squandered and these people went on to literally
build Silicon Valley and so this essay talks about this Shockley had received a telephone call that morning informing him that he had won the Nobel Prize for physics for the invention of the transistor uh he was the co-winner along with John Bine and Walter Bain they go out and they have this great like celebration and it says that had been a great day at shley semiconductor laboratory there weren't many more great
days shley was gifted his Forte was breaking a problem down to First principles with a few words and a few lines on a piece of paper he aimed any experiment in the right direction when it came to comprehending the young Engineers on his PhD production line however he was not so terrific he was obsessed with getting all the credit for everything that everybody was doing inside the company it seemed it never seemed to occur to shle that these
Highly Educated people working for him just might happen to view themselves the same way he had always viewed himself which is to say as young Geniuses capable of the sort of inventions Nobel prizes was were given for he becomes very uh paranoid is the way to put this so he has this weird way to like run a company he was convinced that someone in in the company was sabotaging the project so he made them all take lie
detector tests at the very beginning of a company you should have like a high trust environment right I can't think of of any what's the opposite of a high trust environment uh I don't know making all of your employees take lie detest detector tests because you think somebody sabotaging them and then the end result was no sabur was ever found and so the response of his employees I think should be rather predictable like
they're obviously very high agency they're they're brilliant they're smart and they're like wait we could just do there's no way that we would do a worse job at shockly running a company there's nothing starting us there's nothing stopping us rather from starting our own company besides Capital let's go see if we can raise money and just leave and do our own thing and so originally there's seven defectors from shockley's company
Bob noise is not one of the first seven defectors there's going to be eight defectors they are going to be known throughout history as the traitorous 8 and these other seven are the ones that recruit Bob to join them because remember go back to what they said like he had this this halo effect about him you know people wanted to be around Bob they wanted to follow him they trusted him so say seven defectors went to the
Wall Street firm of Hayden Stone in search of startup money it was at this point that they realized that they had to had had to have someone serve as an administrator so they turned to noise noise was the one with the Halo and he was just 29 years old now I absolutely love how so many things fit together and they're kind of tied in this like unbroken chain you know over multiple decades usually inside the same industry
and what I mean by that is they get a financing by this young guy named Arthur Rock Arthur rock is going to be one of of the first one of the first Venture capitalists and he's at Hayden Stone eventually leaves what connects the reason I say is I find Arthur rock fasinating is so he's the one that that gives them money or finds the deal to give them money to start Fairchild semiconductor Arthur Rock will also be
an early investor in Intel Arthur Rock would also be an early investor in apple Arthur Rock would also be an investor and almost like a partner in somebody to bounce ideas off of for Henry Singleton at Tedy so the deal that Arthur Rock puts together for the Trader 8 he goes and contacts this company back in New York called Fairchild Cameron instrument Corporation and it's being run by Sherman Fairchild and so Sherman's like
yeah I'll give you the money and this is what he asked for he gave the defectors the money to start up the new company Fairchild semiconductor with the understanding that Fairchild camera and instrument would have the right to buy Fairchild semiconductor for $3 million at any time within the next 8 years and so Bob noise and the rest of the Traders eight make a very important decision they're like they're not going
to go back East they know exactly where they're going to start their new company and they're going to start it it's not even known as Silicon Valley yet and it's funny in this essay you know written in 1983 they they don't call it
Silicon Valley they call it the Silicon Valley but this is still you know 25 years before the essay is actually written so it says a few well-known Electronics firms were already here General Electric and IBM as well as a
company that started up locally h Packard Stanford University was encouraging engineering businesses to locate near paloalto and use the University's research facilities the man who ran that program was a friend of Shockley and this guy named Fred Turman what were they working on both IBM and hulet Packard remember this is 1957 okay both IBM and hero Packer were trying to develop a highly esoteric and colossally
expensive new device the electronic computer let's go back to this idea of luck being in the right place at the right time with the right set of skills that happened in noise's life over and over again Fair child startup could not have come at a better time in 1957 the Soviet Union launched Sputnik in the electronics Industry the ensuing Space Race had the effect of coupling two new inventions the transistor and the
computer and magnifying the importance of both the first American electronic computer was known as the aniac and it had been developed by the army during the second world war chiefly as a means of computing artillery and bomb trajectories the machine the ENC was a monster it was a 100 ft long 10 ft high and required 18,000 vacuum tubes the tubes generated so much heat that the temperature in the room reached
120° substituting this is why I'm reading this entire section to you this for the sentence right here substituting transistors for vacuum tubes was an obvious way to cut down on the size if you're going to put things in space they have to be small this is so important it's amazing how all this fits together after sputnick the Glamorous words in the semiconductor business were computers and miniaturization now this is what the
beginning of a new industry sounds like so says if you visited Fairchild you would you would not have had the faintest notion that you were looking in on the Leading Edge of the most advanced of all Industries Electronics the work base where the transistors were produced by phds mostly right looked like slightly sunnier versions of garit sweat shops you would see rows of people hunch over workt squinting through microsope
microscopes doing the most tedious and frustrating sort of manual labor cutting layers of silicon apart with diamond Cutters picking up the little rectangles on them with tweezers trying to attach wires to them dropping them rumaging around on the floor to find them again swearing muttering climbing back up to their chairs rubbing their eyes squinting back through the microscopes and driving themselves crazy some more
now this is the crazy thing this is the beginning one of the most important industries ever exist and what they are producing had a 50 to 90% failure rate that is bananas anywhere from 50 to 90% of the transistors produced would turn out to be defective and so noise is examining what they're doing is like there has to be a way better way noise had figured out a solution there was something primitive about cutting individual transitions
out of sheets of silicon and then wiring them back together in various series why not put them all on a single piece of silicon without wires noise realized that he had not he was not the only engineer thinking along these lines but he had never even heard of Jack Kilby so Kilby at the time was a 36-year-old engineer working for Texas Instruments in Dallas Texas okay in January 1959 noise made his first detailed notes
about a complete solid state circuit a month later Texas Instruments announced that Jack Kilby had invented one Kilby's integrated circuit as the invention was called 6 months later noise creates a similar integrated circuit no's silicon device actually turned out to be much more efficient and more practical to mass produce than kilb and so noise actually gets to set the standard for the industry and it was that way that
noise became known as the co-inventor of the integrated circuit now some people have heard this invent referred to as integrated circuit but way more people have heard of what the invention would come to be known which is the microchip and it says noise knew exactly what he possessed in this microchip noise knew that with it he had discovered The Road to El Dorado and this is another fantastic description of
what the beginning of an entire industry an entire industry looks like we just went through you know anybody coming to Fair child like the what they don't even know what they're looking at the idea that 50 to 90% of the things they were producing you know were defective were failures obviously they're going to improve that but listen to this the integrated circuit was based on the transistor but the integrated circuit
opened up Fields the transistor did not even suggest the integrated circuit made it possible to create miniature computers to put all the functions of the mighty aniac on a panel the size of a playing card remember they said the aniac let's go back to that a few pages ago it was 100t long 10 ft high and required 18 18,000 vacuum tubes and now they're able to produce the same level of technology and fit it on the size of
a playing card thereby the integrated circuit opened up every field of engineering imaginable from voyages to the Moon to robots and many fields that had never been imagined it opened up so many fields that no one could come up with a single name to include them all and what happens next is fascinating because remember how they got the financing for the company to begin with it is just a startup inside of a larger
company right the importance of the integrated circuit was certainly not lost on Fairchild camera back in New York in 1959 they exercised their option to buy Fairchild semiconductor for $3 million the next day Bob noise Gordon Moore and all the the the shockly Traders eight right woke up richer than they had ever dreamed of being now listen to this this is going to cause you to chuckle a little bit cuz they they were they were not in it for the
money now noise is going to go on and build fabulous levels of wealth but at this point he's like I'm I can't believe I'm so rich each of the Traders 8 received $250,000 worth of Fairchild stock so I went back and put it into the inflation calculator that would be each of them equivalent of about $2.6 million in stock today and to place that into even more context that was 20 times the amount of annual salary that he was
getting he was making about $122,000 a year at this point noise did not know what to make of his new wealth he was 31 years old the semiconductor business had not seemed like a business at all it just felt like an esoteric game in which young electrical engineers competed for the occasional Round of Applause so even though they sold the company no still stays there he's the general manager of the entire Division
and this return on investment for this three buying this company for $3 million I I should see if I can find the total amount of money they made because the growth of Fairchild semiconductor in the next few years is going to blow you away and I love this NASA chose no's integrated circuit for the first computers that astronauts would use on board their spacecraft I don't know if they ever did this but used by NASA had
to be great ad for fair child semiconductor after that orders poured in in 10 years Fairchild sales rose from a few thousand a year to $130 million a year for a company that you paid $3 million for I got tears in my eyes right now I don't know why laughing so much the number of employees Rose from the original 12 to 12,000 and so now noise has to learn how to run a giant company which he says multiple times in the future he didn't
actually like doing it during the startup phase of fair child semiconductor there had been no sense of bosses and employees there had only been a common sense of struggle out on a frontier everyone had internalized the goals of the Venture they didn't need exhortations from superiors as Fair child expanded expanded noise didn't even while they're trying to find experienced management Personnel because
in this in the semiconductor industry that didn't exist because they're also inventing the industry at the same time instead he recruited Engineers right out of the colleges and graduate schools and gave them major responsibilities right off the bat so this is really about noise's management style or almost lack thereof and in some degree the young Engineers who came to work for Fairchild and noise could scarcely believe how
much responsibility was suddenly thrust upon them some 20 4-year-old just out a graduate school would find himself in charge of a major project with no one looking over his shoulder a problem would come up and he would go to noise and he would ask him what to do and noise would say listen here are your guidelines you've got to consider a you've got to consider B and you've got to consider C but if you think I'm going
to make your decision for you you're mistaken hey it's your ass and I think to some people this might be counterintuitive but the the for the response for that young 24-year-old wasn't sadness or depression it it was joy and exhilaration said the spirit of the startup phase my God who could forget the exhilaration of the past few years to be young and free out here on the Silicon Frontier noise was determined to maintain that Spirit
during the expansion phase but as is the nature of these things what's going to happen you go from 12 people to 12,000 the talented young people are going to now be like hey I can do this too just like noise and the Traders are a unders shock they're like hey I can do this too so they call them defectors they're not this is not a perjorative but this is the term that the author uses so this is the one I'm going to stick with
defectors from Fairchild started more than 50 companies all making or supplying microchips the defectors had a name the defectors were called the fair children and this is why this is so important this is why I'm reading this entire essay to this is why I'm dedicating entire episode to it it was the Fair children who turned the Santa Clara Valley into Silicon Valley acre by acre the fruit trees were uprooted and
twostory silicon modern Office Buildings and factories went up everywhere the fair children went they took the noise approach with them the new breed of Silicon Valley were disciplined they became absorbed in their companies the way men once had in the palmy days of the automobile industry so they were drawing the parallels between that's say 1950s 1960s Silicon Valley with say 1900 to 1910 Detroit Michigan it's the same person I
did like a 12 or 13p part series on the early automo the early founders of the early pioneers of the American automobile industry it's the same person same personality type they were just taking advantage of the the New Frontier of their day which you know if you were alive and you were this personality type and you were alive and you're in America in 1900 you got your ass of Detroit and you were working in the automobile
industry the same personality if they were born 50 years later they're in Silicon Valley with Bob noise and the fair children and there's a line that Tom Wolf uses in this piece that could describe Detroit Michigan it could describe Silicon Valley it could describe a lot of the early industries that you and I talk about says the young Engineers were giving themselves over to a new technology as if it were a
religious Mission and then the rapid Improvement of technology is incredible listen to what happens over the next 17 years in 1959 noise's invention had made it possible to put an entire electrical circuit on a chip of silicon the size of a fingernail by 19 64 so that'd be 6 years later okay you had to know how to put 10 circuits on a chip the that size to enter the game and the stakes kept Rising another 6 years after that the
figure was 1,000 circuits on a single chip so Bob starts out with one circuit 6 years later it's 10 circuits 6 years after that it's a thousand circuits 6 years after that it would be 32,000 circuits by 1968 Bob noise had a dozen new integrated circuit and transistor patents and the future potential of no's invention far exceeded anything he could have possibly predicted it says because as a direct result of no's invention The Invention
made the flight of the Apollo 8 possible the Apollo 8 was the first crude spacecraft to leave Earth's gravitational spere and the first human space flight to reach the moon that crew orbited the moon 10 times without landing and then came back to Earth and there would have been no miniature computer without the integrated circuits invented by no and Kilby and refined by noise and the young semiconductor
zealots of Silicon Valley if you wanted to talk about the creators of the future will hear they were in Silicon Valley just before Apollo 8 Circle the moon Bob noise turned 41 and he was one of the oldest CEOs in the semiconductor business he was the father of Silicon Valley and so now we got to get to no's decision along with his co-founder and partner Gordon Moore to Le Fairchild semiconductor and found Intel and so
when they start their own company they go back to Arthur Rock for financing he's like well you got you helped us out when we started Fair trial semiconductor we want to we have an obviously proven track record we want to start Intel and Arthur Rock was like this is the biggest no-brainer ever and now Rock had his own Venture Capital company they merely told Rock what they wanted to do and then they said they're going to put up
500,000 of their own money so 250,000 each rocks like cool he winds up putting up 2.51 million of additional startup money and another 300,000 came from grenell college now before I go into what they wanted to build at Intel this was a hilarious part of like Silicon Valley history lore they say he was the magnet that held Fairchild semiconductor so when he leaves it was obvious to the other remember all these other dozens
maybe hundreds of other companies sprouting up in the valley at this point so they're like oh the now the noise is gone the entire world work force is going to be up for grabs and so there's hilarious this made me laugh one person put what happened after noise left to the workforce a Fairchild semiconductor says people were practically driving trucks over to Fairchild semiconductor and loading up the trucks with new
employees and so Fairchild responds by pulling off one of the best corporate raids one of the best raids in corporate history and so the remaining employees at Fairchild one day they see this platoon of young men that are moving into the executive office cubicles now this is hilarious so the young men were led by C Lester Hogan so Hogan was the chief executive officer of the motor of the semiconductor division for Motorola
and so Hogan shows up at fairchild's semiconductor with all of his top engineers and administrators and so what Fairchild had done was you know kind of simple Brilliance I guess Fairchild had hired the whole bunch of away from Motorola and installed them to take place of noise so he didn't just say hey I want you Hogan he's like no I want you and your entire staff and Fairchild had lured them away in the most direct way
imaginable he had offered Hogan and his team an absolute fortune in money and stock now this is the funny part of Silicon Valley lore Hogan received so much money that henceforth wealth in the valley would be measured in units called Hogans so that's one way to solve the problem when you know noise sleeves and everybody else is poaching your employees is just going to poach an entire division from a larger company so
noise and more then go set up Intel and they do so in the exact same way they set up Fairchild they just started with a dozen Bright Young electrical engineers and they're going to bet everything on research and product development at the beginning of Intel noise and more are actually putting on white coats and they're working at lab tables this is the part that noise love the most but their strategy in the product they're developing is a little
different they would not be competing with Fairchild or anyone else in the already established semiconductor Market they had decided to move into what was called the most backward area of computer technology at the time which was data storage and memory within 2 years noise and Moore had developed the 1103 memory chip each chip contained 4,000 transistors and did the work of a th000 ceramic ringlets and did it faster
so before this invention a computer's memory was stored in ceramic ringlets known as Co and so Intel invents the memory chip that does the work of a thousand ceramic ringlets and does it faster and so as the technology progresses so does the environment in which that technology has to be produced it says the work base remember they said they used to look like A Step Above like sweat shops and now it says the work
base now look like something out of an Intergalactic Adventure movie so they're in these giant suit look like astronauts because it has to be a completely clean environment because a single Speck of dust could ruin one of the miniature circuits and we see what is this reoccurring theme in this life of Bob noise he has another hit on his hands says at the end of Intel's first year in business which had been devoted almost
exclusively to research sales totaled less than $3,000 and the workforce had 42 people in 1972 so 4 years after founding sales were 23 million and there was a th000 people working there and the next year sales went to 66 million and they had 2500 employees so four years after founding remember first year they're doing $3,000 and they have 42 people year four 23 million people or EXC $23 million in sales a th000 people year five
66 5 years after founding $66 million in sales and 2500 employees so then it goes into detail of about some important ideas that noise had at the very beginning of Intel from the beginning no gave all the engineers and most of the office workers stock options he had learned at Fairchild that in a business so dependent upon research stock options were a more powerful incentive than profit sharing talks about the incentives to go into this
incentives R everything around us people sharing profits naturally wanted to concentrate on products that were already profitable rather than plunge into Avant guard research which is what noise really was interested in rather than plunge into Avant guard research that would not necessarily pay off in the short run he also wanted the fewest layers of management as possible he wanted ideas to win out over hierarchy
noise's idea that was that every employee should feel that he could go as far and as fast in this industry as his talent would take him he didn't want any employee to look at the structure of Intel and see a complex set of hurdles at Intel Executives would not be walled off in offices everybody would be in one big room noise worked in an old scratched second hand metal desk as the company expanded noise kept the same
desk and new employees were given desks that were not only newer but bigger and better than his everybody noticed the old beat up desk then it goes into more detail how he structured Intel noise decided to eliminate the notion of levels of management altogether he and Moore ran the show but below them there were only strategic business segments as they called them so a segment would be comparable to like a major department in
an orthodox Corporation but they had far more autonomy at Intel here's an example of that at intel if the marketing division had to make a major decision that would affect the engineering division the problem was not routed up a hierarchy to a layer of Executives who oversaw both departments instead councils made up of people already working on the line in those divisions that were affected would meet and work out the problem themselves noise was
also a great believer in meetings the people in each department or work Unit were encouraged to convene meetings whenever the spirit moved them if noise called a meeting then he would set the agenda but after that everybody was equal if you were a young engineer and you had an idea you wanted to get across you were supposed to speak up and challenge noise or anybody else in the meeting you were face to face with the
inventor or the co-inventor and he was only 41 years old and he was listening to you so I mentioned this earlier talks about like the thrilling for like a young talented person imagine you're 24 years old just had of graduate school and you're in meeting and Bob noise is paying attention and making you feel important this was much more like a cult or like a religion than it was a company this wasn't a corporation it was a
congregation there were sermons at Intel everyone noise included was expected to attend sessions on the Intel culture at these sessions the principles by which the company were run were spelled out and discussed and this was fun to me who's teaching these sessions Andy GR the principles of Intel were explained via the Socratic method at management seminars by Intel's number three man Andy Grove and so there's an example in
the essay or the article of the way Grove taught and then his personality I I'm just going to read the whole thing to you I just it just made me laugh so Grove would say how would you sum up the Intel approach many hands would go up and Grove would choose one and the employee would say at Intel you don't wait for someone else to do it you take the ball yourself and you run with it and Grove would say wrong at Intel you
take the ball yourself and you let the air out of it the ball and you fold up the ball and you put it in your pocket then you take another ball and you run with it and when you've crossed the goal you take the second ball out of your pocket and reinflated it and score 12 points instead of six Grove was the most colorful person at Intel he was in his mid-30s at the time he was the epitome of the religious
principle the Intel religious principle that the greater the freedom the greater the obligation to exercise discipline and then it goes into some of his managerial uh contributions to Intel Grove was the inspiration for performance ratings we kind of like a report card and so the all the employees are graded there's uh let's see five different ways you can be graded sounds a lot like a b c d and f so it's Superior exceeds requirements meets
requirements marginally meets requirements and does not meet requirements and noise loved this system and the reason he loved it this is very fascinating he says if you're ambitious and hardworking noise said you want to be told how you're doing in no's view this is the very surprising part to me in no's view most of the young HotShots who were coming to work at Intel had never had the benefit of honest grades
in their lives in the late 1960s and early 1970s College faculties had been under pressure to give all the students passing marks so they would not have to off to Vietnam and they had caved in until the entire grading system was meaningless at Intel they would learn what Measuring Up meant the person that put that idea in my mind the best and made it the most memorable for me this idea that hey if
you're ambitious and hardworking you want to be told how you're doing Nick Sabin said this one time and I've never forgot I have it in like my notebook I I read read it all the time he says average players want to be left alone good players really want to be coached and great players want to be told the truth what did noise say nois said if you're ambitious and working if you have the desire to be great you want to be told how you're
doing and so then we revisit this reoccurring theme that noise it's constantly innovating constantly improving upon what he's already doing so so Intel has a phenomenal second act that is bigger than their first act so by the 1970s the 1103 memory chip had given Intel an entire corner of the semiconductor market right but that was only a start an Intel engineer named Ted Hoff came up with an invention as important as no's integrated circuit had
been a decade earlier he invented the microprocessor which was known as a computer on a chip this invention leads to the possibilities for creating and using small computers computers so small they surpassed what they most people thought imaginable even people already working in the industry and it's important to highlight that this was an illustration of no one of noise's strongest held belief that Innovation
and is a Young Person's game so say in Ted Hoff and always trying to nurture like young talent and giving them as this entire you know essay has talked about he gave them a lot of latitude and freedom and a lot of responsibility and put them in like a place with resources and structure an environment that hopefully you know yields like turns their genius into a tangible product that makes the world better in Ted Hoff
noise was looking at proof off of his hypothesis that out here on the electrical Frontier the great flashes came to the young Hoff was about the same age as noise had been when he invented his integrated circuit and so this new invention caused an explosion in Revenue obviously the company's going to keep adding people and growing and so noise does what the same thing he did once the company gets too big he wants
to step away so in 1974 noise turned over the actual running of Intel to Gordon Moore and Andy Grove and kicked himself upstairs to become chairman of the board his major role was now to become the spokesman of Silicon Valley he was awarded the national medal of science from the White House in 1980 and he was inducted into the national inventures Hall of Fame in 1983 by then Intel sales had grown from 64 million in 1973 to
almost a billion a year in 1983 noise's own fortune was incalculable grenell College's 300,000 investment in Intel had multiplied in value more than 30 times and doubled the college is Endowment for those who follow the semiconductor industry noise was a legend a national treasure the man that led the world into the 21st century across the electronic grid and into space and so when this piece ends Bob noise is 56 years old he does not know
but he only has 6 years left to live he dies at the relatively young age of 62 from a heart attack I will leave a link Down Below in the show notes available on your podcast player and at founders podcast.com for you to read the entire essay I think it's worth your time but I also wanted to tell you what I was thinking about and what I was doing and how this came to be so a long time ago I read this
book called the Intel Trinity how Robert noise Gordon Moore and Andy Grove built the world's most important company is written by this guy named Michael Malone I'm going to read it in the next few weeks I'm encouraging you to buy a copy and to read it with me and so even though I read that book over seven years ago there's still an idea in that book that I've never forgotten I think it's really important it's the idea that you
have for a new product you have to educate the market and that's what Bob noise Andy Grove and Gordon Moore realized with the invention of the microprocessor it says when you were trying to convince an audience to accept a radical Innovation almost by definition the idea so far from the status quo that many people simply cannot get their minds around it they quickly discovered that the marketplace wasn't just confused by the concept of
the microprocessor but was actually frightened by its implic ation many of my engineering friends scoffed at it as if it was a gimmick their solution the market had to be educated and this is what's so fascinating the best Founders know that they are the ones that have to take the lead on this at one point intel was conducting more seminars and workshops on how to use the microprocessor than the local Junior
College's total catalog of courses Bob noise Gordon Moore and Andy Grove became part of a traveling educational Road Show they became Educators and it worked another founder who understood this at a fundamental levo was the founder of Sony AO Marita this is what he said in his autobiography one must prepare the groundwork among the customers before you can expect success in the marketplace it is a Time honor
Japanese gardening technique to prepare a tree for transplanting by slowly and carefully binding The Roots over a period of time bit by bit to prepare the tree for the shock of the change it is about to experience this process is called nemawashi and it takes time and patience but it rewards you if it is done properly with a healthy transplanted tree advertising and promotion for a brand new Innovative product is just as important the way AIO
would educate customers about a new product was inspired by the Japanese tradition of Nima was the thing they both have in common is that they both require time so that idea that we see at Sony that we see at Intel that idea that it's very important that when you're bringing a new product to Market that you realize you have to educate the customers about why the product exists and what it can do for
them is really really important and so that was led me on this tangent to read this excellent piece by Tom Wolf the tinkerings of Robert noise and how the sun rose on Silicon Valley I will leave a link down below for both this piece and the Intel Trinity book if you want to read it with me links for both of those will be down below and available at Founders podcast.com but that is 356 books down 1,000 a go and I'll talk to you again soon