silicon-valleyI’ve heard a number of explanations, most having to do with World War II, though not 100% sure these are historically true. Why did Silicon Valley become Silicon Valley?
Endeavor Insight released an interesting report on this earlier this year.
I'll attempt to distill the ~20 page document into some key details:
The man commonly known for coining the term "Silicon Valley" in 1971 is a journalist named Don Hoefler (not the first to use it, but the first to use it widely in print). And when it is all boiled back, the region was chosen by one of the nobel prize winning inventors of the transistor.
William Shockley was looking to start a company producing transistors. And after looking at the cities known for producing electronics, he instead decided to move to the area he'd grown up and started his business in Mountain View, California.
His initial hurdle was fining talent to work for him. There wasn't any in the area because all the people trained in working with semiconductors had jobs somewhere else or were going to school somewhere else. So he started calling up people working in the industry across the country and eventually gathered 8 hand-picked people to work for him.
Turns out Shockley sucked as a boss so they all quit (I think it was even the same day?). His company eventually failed and these 8 specialists were now out looking for a job hoping to market themselves as a group that would be valuable to hire together due to their experience.
A banker told them they needed to think bigger - get funding and start their own gig. After all, they were hand selected by one of the inventors of the semiconductor - with his poor management skills out of the way, they may have a shot at doing something great!
They got connected with a serial entrepreneur named Fairchild and with this new source of funding (and industry connections) they started Fairchild Semiconductor.
The business exploded as they took on new contracts including one for the Minuteman missile program in 1959.
Eventually as they grew they began creating spin-off companies. Employees left to start microchip companies or companies to manufacture glass components needed for semiconductors. And rather than trying to hang on to these employees, they were encouraged and supported in these other ventures.
By the time Hoefler wrote about the region over 30 companies had been started as a result of Fairchild Semiconductor. And apparently all but 2 local chip firms could be tied back to those 8 co-founders in some way.
So why did Silicon Valley become what it is today? Because while William Shockley sucked at managing a team, he was apparently exceptional at choosing one.
Steve Blank did a fair amount of research and has a good presentation on this topic.
http://steveblank.com/secret-history/
A summary of key events:
Part 1: The Vietnam War
Part 2: B-52’s and the Soviet Air Defense System
Part 3: Bill Perry/ESL and the Cold War
Part 4: Undisclosed Locations
Part 5: Silicon Valley, the 2nd 100 years
Part 6: Stanford, Terman and WWII
Part 7: Stanford, Terman and the Cold War
Part 8: Stanford and the rise of Cold War Entrepreneurship
Part 9: Stanford and Electronic Intelligence
Part 10: Stanford and Weapons Systems
Part 11: The Rise of Venture Capital
Part 12: The First Valley IPO’s
Part 13: Startups with Nuclear Missiles
Part 14: Spy Satellites in Silicon Valley
Part 15: Lockheed – Silicon Valley largest employer
Part 16: Balloon Wars
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