Rude VC: The Valley of Heart's Delight

Feb 19, 2013
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traitorous8Spot quiz: What region is formerly known as the Valley of Heart’s Delight ?

Here’s a hint: it’s not Blackstone Valley in Massachusetts, nor is it Berlin, East London, and especially not Saclay, France.

A swathe of apple orchards and orange groves spanning Santa Clara County in Northern California is what gave Silicon Valley this original nickname. In 1953, transistor inventor William Shockley left Bell Labs, moved to Mountain View, California and founded Shockley Semiconductor Laboratory with the belief that silicon would be a better material than the conventional germanium for making transistors. Shockley was a brilliant engineer but proved a terrible manager, so in 1957 eight of his best engineers (including a character by the name of Gordon Moore) quit and went on to found Fairchild Semiconductor.

This is of course only one little excerpt of a fascinating story, but it seems timely to review the history of the creation of Silicon Valley as the French government embarks on (yet another) attempt to replicate Silicon Valley in France with its Paris Capitale Numérique initiative.

I’m a Silicon Valley native. My first residence when I entered the world almost four decades ago was in Tiburon, an island just north of the Golden Gate Bridge. Besides a brief stint in Tokyo, I spent much of my childhood growing up in Los Altos, a sleepy residential town smack in the middle of Silicon Valley. I attended the same high school as Steve Jobs and Steve Wozniak in Cupertino, albeit almost two decades later.

We knew our region as Silicon Valley (not “The Valley”, as people that never lived there sometimes call it). However, as kids, we didn’t necessarily realize that we were a part of something so unique. The high-tech boom of the 80’s was in full swing, though it was about designing microprocessors rather than designing mobile apps.

HP, VisiCorp, and Varian were like the Google, Facebook, and Zynga of the era. Entrepreneurship was a natural reflex, not something to be forcibly learned. I recall my first entrepreneurial experience at the age of 15 which began with a paper route and, encouraged by a more industrious neighborhood kid, evolved into locking up town-wide distribution for the local newspapers and subsequently hiring junior high kids for pennies to perform the actual delivery. The San Jose Mercury News was the big brand, but the lower-quality Peninsula Times Tribune proved a nice complement with its fatter margins.

Maybe it was due to the omnipresent earthquake risk (I recall the menacing San Andreas fault line ran right down our street), but the prevalent vibe was the cycle of creating, enterprising, destroying, and rebuilding. Of course there were the folkloric stories of tinkerers in garages launching tech companies. Less often reported were the far more numerous incidents of lifestyle entrepreneurs creating small businesses: dry cleaners, pizzerias, and ice cream parlours. And just as Fairchild Seminconductor later gave way to Intel, the ice cream parlours were disrupted by frozen yogurt shops. It’s no coincidence that of the three aforementioned Silicon Valley corporate titans of the 80’s, only one name is recognizable today – HP – and it’s not exactly a poster-child for the visionary companies list nowadays.

So as the French government launches its initiative in order to “stimulate France’s digital sector and increase its international visibility,” I submit that it’s worthwhile to study how Silicon Valley came to be what it is today. Some lessons may be relevant for France, others less so. In the spirit of constructive brainstorming, which Fleur Pellerin has graciously welcomed, I’ll use this column in a future post to expound on the confluence of factors which transformed the Valley of Heart’s Delight.