History of Silicon Valley

This article is written by Milambo Kabeleka, a Contributor Author at Startup Turkey.

Aamer Khan is a U.S Diplomat, Entrepreneur, and Technologist. He is an 18-year veteran of the Tech Industry, having worked in IBM, HP, Rational Software, and a variety of startups in Silicon Valley and Boston. Aamer has been involved with early-stage startups, major open source projects, and is an expert in software development process and tools.

San Francisco bay covered by orange trees in 1946 became the heart of the valley. With only Stanford University standing in the area, there were no tech companies in sight.

Dr Fredrick Terman, a Stanford graduate, is known today as the Father of Silicon Valley was Electrical engineer at MIT during WII, working on jamming Nazi radars as American aircraft flew into Germany. He noticed a huge amount of money was being spent by the US government on universities for basic research.  

From a sum of 450 million dollars, $117million went to MIT, $80 million went to Caltech, $30milllion to Harvard, $30 to Colombia and Stanford got $53 000. This did not sit well with Terman and he decided to change that and create a research facility in the engineering school to attract government funding. He started with solving a problem that the government was already trying to solve, which was to penetrate the Soviet radar systems, create jammers to disable them and reduce radar footprints.

He created the centre of gravity technology by creating companies, run by professors and tech made by graduate students.

Along with the 1950s came significant growth and breakthrough in the tech world when the first transistor is made by William Shockley. However, due to lack of good management by a group of engineers known as The Treacherous Eight left the company to join Fairchild Semi-Conductor which has been the source of hundreds of companies, because of the network that was formed around it that eventually brought in funding. Even though they were still government contractors, they played a big role in pushing the engines of technology which formed Silicon Valley.

Kack Kilby and Noyce from Fairchild Semi-Conductor worked together to create an integrated circuit made on Gramanium. They succeed due to miniaturization, componentization, and mass production and of course low costs which allowed them to increase their volumes. However, this product was still for the US government. The aerospace program was the main motivator.

Robert Noyce and Gordon Moore, both from the Treacherous Eight later created Integrated Electronics known today as Intel. They mass produced at consumer level two very important chips of a computer, the CPU and memory. Arthur Rock, provided 2.5million seed capital to get Intel going, he is believed to have founded the term venture capitalist.

By 1970 all the pieces of the computer were available, the chip, processor, memory and storage. However, there was no commercial microcomputer on the market in the world.

In 1977, Apple created the first successful microcomputer and unlike the many versions before them, their computer was a success because of the’ killer application’ called the VisiCalc which solved the big and common problem of payrolls for big companies. It was an easy tool which became the most sort after tool for companies in the world at that time. In 1981, IBM and Microsoft followed through with applications. The technology was evolving, with people building on top of what Apple had built.

All this rapid growth required money, and by this time there were places in Silicon Valley that were becoming more popular than others for money, such as San Hill Rd. Kleiner one of the Treacherous Eight left Fairchild and unlike the others, created a Venture capitalist company and became one of the famous most venture capitalists in Silicon Valley.

Silicon Valley is what it is because of the Venture capitalists, technologists, the creation of killer apps, and the unintentional push from the government. It is now the premier place to do business. Sustained by the availability, and fluidity of risk capital, a business-friendly regulatory environment, availability of skilled and innovative workers and the dream and belief of the entrepreneur.