WEBVTT - How a Bad Boss Kickstarted Silicon Valley 0:00:17.560 --> 0:00:21.479 Pushkin too quick. No, it's perfect push kid stuff. You 0:00:21.600 --> 0:00:35.159 got it. 0:00:37.360 --> 0:00:41.440 Imagine you're just starting out in your field and one day, 0:00:41.440 --> 0:00:43.800 out of the blue, you get a call from this 0:00:43.840 --> 0:00:46.440 guy who basically invented the field, this guy who is 0:00:46.479 --> 0:00:49.400 a giant in the field, and he says, I want 0:00:49.440 --> 0:00:51.839 you to come work for me. Dream come true. So 0:00:51.880 --> 0:00:54.960 of course you go, you work for him. But he 0:00:55.040 --> 0:01:00.000 turns out to be an absolute nightmare. This is what 0:01:00.120 --> 0:01:03.880 happened to young Robert Noise in nineteen fifty six. And 0:01:03.920 --> 0:01:06.160 I'm going to argue on the show today that this 0:01:06.360 --> 0:01:09.600 chain of events is actually what led to the creation 0:01:09.880 --> 0:01:11.000 of Silicon Valley. 0:01:11.200 --> 0:01:15.399 One Bad Boss, Silicon Valley, one Bad Boss, a couple geniuses, 0:01:15.840 --> 0:01:20.839 the right mix of technology and historical facts, Silicon Valley. 0:01:21.240 --> 0:01:21.760 Let's do it. 0:01:22.000 --> 0:01:25.200 So Robert nois the guy who got the call. He 0:01:25.360 --> 0:01:28.240 was He was a golden boy. He was a real 0:01:28.760 --> 0:01:31.280 corn fed Iowa American golden boy. 0:01:32.240 --> 0:01:33.759 He grew up in Iowa. 0:01:33.400 --> 0:01:36.240 In the nineteen thirties and forties, went off to Grinnell 0:01:36.360 --> 0:01:37.880 College in his hometown. 0:01:38.840 --> 0:01:41.200 When he was there, he sang in the choir. He 0:01:41.319 --> 0:01:44.840 was a champion diver, and he played the leading man 0:01:44.959 --> 0:01:48.559 in a local radio soap opera, heart Throb, heart Throb. 0:01:48.920 --> 0:01:51.320 A few decades later, the great Tom Wolfe wrote a 0:01:51.360 --> 0:01:53.880 profile of Noise in Esquire. Yeah, why don't you give 0:01:53.960 --> 0:01:56.560 us a little hit? Let me read this While he 0:01:56.600 --> 0:01:59.600 looked to you. He never blinked and never swallowed. He 0:01:59.640 --> 0:02:03.320 absorbed everything you said and then answered very levely, in 0:02:03.360 --> 0:02:06.320 a soft baritone voice, and often with a smile that 0:02:06.440 --> 0:02:08.840 showed off his terrific set of teeth. He also had 0:02:08.840 --> 0:02:11.079 a good dentist. Look at that, yeah, wolf said, it 0:02:11.160 --> 0:02:13.840 was like he had a halo floating on his head, 0:02:14.440 --> 0:02:18.000 and kind of annoyingly. He was a genius. 0:02:18.680 --> 0:02:21.760 Got into transistors before anybody really knew what transistors were, 0:02:21.840 --> 0:02:25.880 went off to Mit, got a PhD. And then he 0:02:25.919 --> 0:02:29.800 got a job at this little electronics company in Philadelphia, 0:02:30.600 --> 0:02:33.600 and he got bored. Suddenly he's in his twenties, he's 0:02:33.600 --> 0:02:35.880 a golden boy. He's working at this kind of second 0:02:35.919 --> 0:02:39.560 tier place and it's just not going that well. And 0:02:39.600 --> 0:02:43.120 then one day Noise is at his office and the 0:02:43.160 --> 0:02:46.360 phone rings and he picks up the phone and here's 0:02:46.400 --> 0:02:49.399 this voice on the other end. The voice says, Shockley here. 0:02:50.680 --> 0:02:53.520 Noise later said this was like picking up the phone 0:02:53.880 --> 0:02:58.520 and talking to God. Three months later, Noise moved to 0:02:58.560 --> 0:03:00.920 Mountain View, California, to Wortlenoah. 0:03:01.760 --> 0:03:06.120 At the time. Yeah, turns out God, William Shockley is 0:03:06.240 --> 0:03:12.520 a horrible boss, a paranoid micromanager, cruel, really cruel, and 0:03:12.560 --> 0:03:16.040 the fact that he was such an asshole wound up 0:03:16.080 --> 0:03:20.600 having profound consequences for the world. I'm Jacob Goldstein and 0:03:20.639 --> 0:03:23.280 I'm Robert Smith. And this is Business History, a show 0:03:23.919 --> 0:03:26.040 about the history of business today. On the show, the 0:03:26.120 --> 0:03:29.440 invention of Silicon Valley, a place that is an actual place, 0:03:29.760 --> 0:03:32.920 but it's more a state of mind, a culture where 0:03:33.000 --> 0:03:37.320 restlessness is a virtue in quitting your job. It's heroic. 0:03:38.040 --> 0:03:42.240 Yeah, I mean Silicon Valley is this agglomeration, right, It 0:03:42.320 --> 0:03:45.760 is the most important agglomeration in the history of agglomeration. 0:03:46.040 --> 0:03:50.040 Perhaps it has created the most important technologies of the 0:03:50.040 --> 0:03:53.240 twenty first century and truly the most valuable companies in 0:03:53.280 --> 0:03:54.600 the history of the world. 0:03:54.720 --> 0:03:57.560 And it started with an asshole William Shockley and a 0:03:57.600 --> 0:03:58.840 golden boy, Robert Noise. 0:03:59.880 --> 0:04:02.840 So let's start with Shockley. He really comes first in 0:04:02.880 --> 0:04:06.840 the story. Shockley was roughly a generation older than Noise. 0:04:07.080 --> 0:04:09.640 He grew up in Palo Alto in California in the 0:04:09.720 --> 0:04:11.720 nineteen teens and twenties, when it was you know, a 0:04:11.760 --> 0:04:15.280 little college town surrounded by farms and orchards. 0:04:15.360 --> 0:04:17.920 Yeah. I think grapes of wrath east of Eden, right, 0:04:18.360 --> 0:04:21.800 these classic books about farm workers. That's what Silicon Valley 0:04:21.840 --> 0:04:23.520 was at the time. Yeah. Yeah, right over the hill 0:04:23.560 --> 0:04:28.000 from Salinas, right, not far. Shockley was a difficult child. 0:04:28.160 --> 0:04:31.720 He bit his mother a lot, He bit multiple babysitters. 0:04:32.160 --> 0:04:34.839 He didn't go to school. He was homeschooled until he 0:04:34.920 --> 0:04:38.800 was eight. His parents were high achievers. His dad had 0:04:38.839 --> 0:04:42.320 a PhD from MIT, his mom graduated from Stanford. It 0:04:42.400 --> 0:04:44.800 was one of the first people to solo climb Mount Whitney, 0:04:44.960 --> 0:04:48.040 I believe, the highest mountain in the continental United States. True. 0:04:48.080 --> 0:04:51.719 And you know, Shockley eventually went to school and turned 0:04:51.720 --> 0:04:55.520 out to be a brilliant student, got a PhD from MIT, 0:04:56.240 --> 0:04:59.200 and in nineteen thirty six he went off to work 0:04:59.279 --> 0:05:02.000 at Bell Labs in New Jersey. We haven't really talked 0:05:02.000 --> 0:05:04.919 about Bell Labs yet on the show, and we should 0:05:04.920 --> 0:05:06.360 do a whole episode about it because it was really 0:05:06.400 --> 0:05:08.680 critical for all the development of the technologies of the 0:05:08.680 --> 0:05:11.279 twentieth century. It was set up as AT and T's 0:05:11.360 --> 0:05:14.440 research lab in the early part of the century. And 0:05:14.560 --> 0:05:16.520 AT and T of course had a monopoly on the 0:05:16.520 --> 0:05:18.440 phone system, so you know, they had a ton of 0:05:18.480 --> 0:05:21.960 extra money. But more than that, bringing all these geniuses 0:05:22.000 --> 0:05:26.240 together to work on technology wasn't just about phones. It 0:05:26.279 --> 0:05:28.800 was about any hard problem that they could think of. 0:05:29.160 --> 0:05:32.479 They developed the first solar panels right, the first cell 0:05:32.560 --> 0:05:37.960 phone system, the Courtz clock. They found evidence of the 0:05:38.000 --> 0:05:42.479 Big Bang, the creation of the universe was discovered by 0:05:42.520 --> 0:05:46.560 the phone company, which is amazing. And the main part 0:05:46.560 --> 0:05:50.720 of this was this idea that if geniuses just interact, 0:05:51.040 --> 0:05:52.919 they will come up with solutions that they could not 0:05:53.080 --> 0:05:55.840 come up with alone. And if you want to picture it, 0:05:56.160 --> 0:05:57.840 one of the Bell Labs, there were several of them 0:05:57.880 --> 0:06:00.800 when in Lower Manhattan, couple in New Jersey. One of 0:06:00.880 --> 0:06:03.479 the Bell Labs is the building they use for the 0:06:03.520 --> 0:06:07.560 show Severance. Is that that giant hall, you know, the 0:06:07.640 --> 0:06:10.720 outside shots of it. That's what Bell Labs look like. Huh. 0:06:10.880 --> 0:06:14.400 I hadn't knowne that. So Shockley is hired, and you know, 0:06:14.560 --> 0:06:16.839 there is all of this incredible creative work going on, 0:06:16.920 --> 0:06:20.640 but Shockley is hired frankly to work on a more 0:06:20.680 --> 0:06:24.000 practical problem for AT and T, a more phone company 0:06:24.080 --> 0:06:30.599 centric problem, and that is this vacuum tubes. Vacuum tubes 0:06:30.600 --> 0:06:33.280 were these little glass tubes kind of like an elongated 0:06:33.360 --> 0:06:34.840 light bulb, all the size of your thumb, maybe a 0:06:34.880 --> 0:06:38.600 little taller, okay. And the fundamental thing they did was 0:06:38.960 --> 0:06:45.599 amplify electric signals, which is a huge problem in technology 0:06:45.640 --> 0:06:47.760 at the time. Right if you speak into a microphone 0:06:47.839 --> 0:06:51.679 or say a telephone headset, the electricity your voice generates 0:06:51.680 --> 0:06:54.560 as tiny, the signal is very small. How do you 0:06:54.600 --> 0:06:57.320 get that into wires that go across the United States? 0:06:57.440 --> 0:06:59.600 You have to amplify it along the way, and they 0:06:59.680 --> 0:07:02.600 use these little tubes to do it. Now, the problem 0:07:02.720 --> 0:07:05.800 is these tubes are fragile, like they are glass tubes, 0:07:06.080 --> 0:07:08.360 and they used a tremendous amount of energy. They would 0:07:08.400 --> 0:07:10.320 heat up. In fact, you had to like let them 0:07:10.360 --> 0:07:12.760 heat up before you could even turn on the tube 0:07:12.840 --> 0:07:15.200 radio at the time, or the tube amplifier. Really, speaking 0:07:15.240 --> 0:07:18.440 as a man who is familiar with vacuum tube technology 0:07:18.520 --> 0:07:21.320 or ever, I have spent some time with older radios 0:07:21.400 --> 0:07:23.200 where you have the vacuum tubes and of course the 0:07:23.240 --> 0:07:26.800 audio professionals who say those were the golden day. You 0:07:26.920 --> 0:07:30.080 are that audio profession I love a vacuum tube, but 0:07:30.240 --> 0:07:32.560 go on, so, okay, so it's the thirties. 0:07:33.000 --> 0:07:36.520 Long distance calling is growing fast. But the vacuum tubes, 0:07:36.520 --> 0:07:39.640 for the reasons you're describing, are a nightmare and also 0:07:39.680 --> 0:07:42.320 by the way they burn out, right, they are like 0:07:42.480 --> 0:07:46.160 incandescent light bulbs. It's very hard to scale a company 0:07:46.720 --> 0:07:49.520 on this technology. That's expensive and unreliable, and you have 0:07:49.560 --> 0:07:51.040 to keep sending people out to. 0:07:51.000 --> 0:07:52.119 Put in new vacuum tubes. 0:07:52.160 --> 0:07:55.560 Right, So Shakley is put in charge of this team 0:07:55.960 --> 0:07:59.200 that's trying to find a better replacement for the vacuum. 0:07:58.880 --> 0:08:02.440 Tube or something that a solid state that doesn't brick. Yeah, yeah, 0:08:02.480 --> 0:08:04.320 that doesn't break, that's cheaper, that scales. 0:08:04.960 --> 0:08:07.400 So you know, Shokley at a fundamental level is thinking 0:08:07.440 --> 0:08:11.320 about electricity and specifically how electrons move. 0:08:11.160 --> 0:08:13.440 Through materials, and of course there is this spectrum. 0:08:13.480 --> 0:08:15.960 We're on one end of the spectrum, you have insulators 0:08:16.120 --> 0:08:20.200 like glass and rubber, where electrons don't flow easily through them. 0:08:20.280 --> 0:08:22.240 On the other end of the spectrum, you have conductors 0:08:22.320 --> 0:08:24.960 like copper, where electrons flow right through them. 0:08:25.080 --> 0:08:27.080 If only there was something in between, you know, not 0:08:28.000 --> 0:08:31.120 an insulator, not a conductor, sort of quasi conductor. 0:08:31.160 --> 0:08:35.479 It's like a conductor, it's like a semi conductor. There 0:08:35.520 --> 0:08:40.040 were these materials that were semi conductors, things like silicon 0:08:40.319 --> 0:08:44.720 and germanium, and people were starting to understand that you 0:08:44.840 --> 0:08:48.560 could maybe control them so that their behavior would change 0:08:48.600 --> 0:08:50.880 under different settings, and that if you could do that, 0:08:50.960 --> 0:08:52.840 if you could get it to switch from basically an 0:08:52.880 --> 0:08:57.400 insulator to basically a conductor, you could use that as 0:08:57.400 --> 0:08:58.000 a way. 0:08:57.840 --> 0:09:01.360 To amplify an electric signal. You could put a tiny 0:09:01.480 --> 0:09:04.160 electrical signal in there and it would be boosted by 0:09:04.360 --> 0:09:05.880 like one hundred times. This is the way it works. 0:09:05.920 --> 0:09:07.800 Yes, And the dream is it would be, you know, 0:09:07.880 --> 0:09:11.360 a cheaper, more reliable version of the vacuum tube. So 0:09:11.400 --> 0:09:14.240 Chockles were on this in the late thirties and then 0:09:15.880 --> 0:09:19.440 Hitler invades poland damn it, World War two comes along 0:09:19.559 --> 0:09:23.120 and Shockley and every other high powered nerd in America 0:09:23.280 --> 0:09:26.720 gets reassigned to go work on the war effort. Side note, 0:09:26.920 --> 0:09:29.200 I feel like we should do a show or a 0:09:29.240 --> 0:09:32.720 series sometime of like How the Nerds Beat the Nazis. 0:09:32.720 --> 0:09:34.439 I feel like there's a lot there. Yeah, yeah, I 0:09:34.480 --> 0:09:36.880 mean one obvious one is the first sort of modern 0:09:36.880 --> 0:09:39.800 style computer was built as part of the war effort, 0:09:40.160 --> 0:09:43.280 using vacuum twas, using like eighteen thousand vacuum tubes in 0:09:43.320 --> 0:09:46.240 a room that was like fifteen hundred square feet, right 0:09:46.360 --> 0:09:49.160 like bigger than you know, your apartment, you know, a 0:09:49.240 --> 0:09:51.240 million times weaker than an iPhone or whatever. 0:09:51.280 --> 0:09:53.120 But yes, that was a computer. It was used to 0:09:53.120 --> 0:09:57.319 to calculate the trajectories of artillery, which I love. Shockley, 0:09:57.400 --> 0:10:03.320 for his part, was working on tactics for Navy convoys 0:10:03.320 --> 0:10:05.720 to fight subs, which is dear to my heart because 0:10:05.760 --> 0:10:08.600 my own grandfather was on a Navy convoy in the 0:10:08.600 --> 0:10:12.360 North Atlantic fighting Nazi subs. So okay, so the words 0:10:12.400 --> 0:10:15.280 beat the nazis good news, Thank you nerds. And then 0:10:15.360 --> 0:10:18.320 Shockley goes back to work trying to figure out a 0:10:18.360 --> 0:10:21.760 replacement for the vacuum tube. And it is hard to 0:10:21.760 --> 0:10:24.560 get it to work, right, classic leap from theory to 0:10:24.600 --> 0:10:27.200 practice is quite hard. They can't get it to work. 0:10:27.240 --> 0:10:30.400 They can't get it to work. But then finally, in 0:10:30.600 --> 0:10:36.160 November of nineteen forty seven, two researchers on Shockley's team 0:10:36.400 --> 0:10:38.680 they start to figure it out. They have what comes 0:10:38.679 --> 0:10:42.440 to be called the Miracle month, and the next month, 0:10:42.480 --> 0:10:46.200 in December, they get this slab of germanium with a 0:10:46.200 --> 0:10:49.160 little bit of like Jerry rigged foil on it to 0:10:49.880 --> 0:10:53.040 work to amplify an electrical signal by a factor of 0:10:53.040 --> 0:10:58.600 one hundred, and they call it the transistor. And Shockley, 0:10:58.600 --> 0:11:02.600 William Shockley is not throwing them a party, is not 0:11:02.800 --> 0:11:07.080 entirely psyched. Here. Let me read his quote. My elation 0:11:07.240 --> 0:11:10.160 with the group's success was tempered by not being one 0:11:10.160 --> 0:11:15.559 of the inventors. There is some frustration that my personal efforts, 0:11:15.600 --> 0:11:19.080 started more than eight years before, had not resulted in 0:11:19.120 --> 0:11:23.600 a significant inventive contribution of my own. Not sure. Not 0:11:23.679 --> 0:11:27.520 a lovable guy, Shockley not a team player, right. He 0:11:27.600 --> 0:11:31.200 in fact goes to the lawyers at Bell Labs and 0:11:31.240 --> 0:11:33.520 it's like, you guys should put my name on the patent. 0:11:33.559 --> 0:11:35.320 I know I actually do the work, but come on, 0:11:35.400 --> 0:11:38.000 it's my team. I've been working on it. The lawyers 0:11:38.000 --> 0:11:40.440 don't actually agree to do this. They don't do it, 0:11:40.840 --> 0:11:41.320 and so. 0:11:41.200 --> 0:11:46.080 Shockley goes off in secret and starts working on a 0:11:46.120 --> 0:11:48.760 better way to make a semiconductor. Basically, take this work 0:11:48.800 --> 0:11:51.959 and improve upon it. And remember he is a genius, right, 0:11:52.000 --> 0:11:55.480 he is a very talented engineer, and so he succeeds. 0:11:55.559 --> 0:11:57.520 Obviously, we're making fun of Shockli a little bit, but 0:11:57.600 --> 0:12:03.200 this like monomaniacal resentment that he had and had his 0:12:03.400 --> 0:12:07.120 entire life leads to all of these breakthroughs. Yes, well, 0:12:07.360 --> 0:12:09.160 not only does it lead to these breakthroughs. 0:12:09.200 --> 0:12:11.880 Right, So he's acting like a jerk at Bell Labs 0:12:12.160 --> 0:12:15.480 and completely a contrary to the ethos of the place, right, 0:12:15.480 --> 0:12:17.960 which is supposed to be everybody comes together. And so 0:12:18.040 --> 0:12:20.800 once he does this, nobody wants to work with him anymore. 0:12:21.080 --> 0:12:24.839 He gets passed over. And so he decides, and here 0:12:24.960 --> 0:12:27.880 here's the quote. He decides, the hell with that, I'll 0:12:27.880 --> 0:12:30.400 go set up my own business. I'll make a million 0:12:30.480 --> 0:12:31.320 dollars that way. 0:12:31.640 --> 0:12:36.080 So in nineteen fifty four, Shockolei leaves Bell Labs, leaves 0:12:36.080 --> 0:12:40.360 New Jersey, moves home to Palo Alto, California. Still remember 0:12:40.800 --> 0:12:42.160 kind of the middle of nowhere, kind of the middle 0:12:42.160 --> 0:12:42.480 of nowhere. 0:12:42.600 --> 0:12:46.440 Univers still still known for its annual Prune Festival, although 0:12:46.559 --> 0:12:48.959 although to be fair, I mean Hewlett Packard was there 0:12:49.000 --> 0:12:51.960 by this time. It's a legit company. Stanford was growing. 0:12:52.000 --> 0:12:54.080 They had just set up their industrial park. But yes, 0:12:54.920 --> 0:12:57.520 far from the center of the technological action. Right, Bell 0:12:57.600 --> 0:13:00.280 Labs was the center of the tech world. Mit was 0:13:00.320 --> 0:13:02.120 the center of the tech world. The East Coast was 0:13:02.160 --> 0:13:05.480 where all the action was, not California. Shockley's moving to 0:13:05.520 --> 0:13:08.800 Palo Alto because it's home. And two years after he 0:13:08.840 --> 0:13:11.840 moves home, he starts a company that he calls Shock 0:13:12.240 --> 0:13:17.720 Semiconductor with the idea of making transistors ubiquitous. And he 0:13:17.760 --> 0:13:20.320 writes in his journal something I actually find kind of poignant. 0:13:20.360 --> 0:13:23.120 He writes, idea of setting world on. 0:13:23.120 --> 0:13:28.320 Fire, Father Proud, We're already seeing the very beginnings of 0:13:28.360 --> 0:13:31.280 the Silicon Valley ethos, right, the postute doesn't really get 0:13:31.280 --> 0:13:34.760 along with others, the resentment, you know, the focus, right, 0:13:35.040 --> 0:13:38.400 but also this other thing that like I can change 0:13:38.400 --> 0:13:39.480 the world, the universe. 0:13:39.720 --> 0:13:43.200 Yes, yes, he is a very smart engineer with a 0:13:43.200 --> 0:13:47.120 lot of ambition and some tragic flaws, right, and all 0:13:47.160 --> 0:13:50.320 of those are important in the story and classic Silicon 0:13:50.440 --> 0:13:51.720 Valley traits. 0:13:52.640 --> 0:13:55.560 So Shockley gets there. He is, in fact a visionary. 0:13:55.600 --> 0:13:57.360 He sees the future and he is right right. 0:13:57.400 --> 0:14:00.880 He sees that semiconductors, the transistor is going to be 0:14:00.960 --> 0:14:03.000 useful in a lot of ways, not just for the 0:14:03.000 --> 0:14:07.000 phone company. Right, Like transistor radios are starting to be 0:14:07.040 --> 0:14:09.720 a thing around this time, hearing aids. It's clearly going 0:14:09.800 --> 0:14:12.560 to be really important for military applications. 0:14:12.160 --> 0:14:15.600 Because until this time anything electronic had to stay in 0:14:15.640 --> 0:14:19.440 one place. So he's seeing this world where you can 0:14:19.600 --> 0:14:22.960 move electronics, yes, and they won't break. Yeah. Miniaturization, right, 0:14:23.000 --> 0:14:25.640 things getting smaller. This is a huge theme that is 0:14:25.680 --> 0:14:27.440 going to be key to the whole twentieth century. And 0:14:27.480 --> 0:14:30.040 I remember the nineteen seventies getting a transistor radio. It 0:14:30.080 --> 0:14:32.920 was so important that they had it in the name, 0:14:33.080 --> 0:14:36.520 you got a transistor radio, because people were still like, 0:14:36.800 --> 0:14:40.000 I can't believe a radio can be held in my hand, Very. 0:14:39.920 --> 0:14:42.800 Smith, Am I right that you actually bought a transistor 0:14:42.920 --> 0:14:45.200 radio a year ago or something. 0:14:45.360 --> 0:14:47.680 I bought ten of them for my students just so 0:14:47.680 --> 0:14:49.240 they can see what it was like. They can move 0:14:49.320 --> 0:14:51.600 the dial, and yes, you can still buy them on Amazon. 0:14:51.720 --> 0:14:54.040 They have the like pull out antenna. It does have 0:14:54.120 --> 0:14:56.520 the pullout antenna. We had what's at home? We used 0:14:56.560 --> 0:14:58.320 to listen to the baseball game. We used to listen 0:14:58.360 --> 0:15:01.200 to the Padres games on a transistor radio. I still 0:15:01.200 --> 0:15:03.320 have one in my shower. I listened to it every morning. 0:15:03.600 --> 0:15:06.960 I love that. So Shockley has this vision. He is 0:15:07.040 --> 0:15:09.040 right about the future of the world. He is a 0:15:09.040 --> 0:15:13.440 genius who has been central to the the transistor. He 0:15:13.520 --> 0:15:16.000 started his company and now he needs a team. And 0:15:16.040 --> 0:15:18.960 so he calls his you know, engineers from Bell Labs, like, hey, 0:15:19.040 --> 0:15:21.880 let's do this. They're like, no, no, I know you. 0:15:22.200 --> 0:15:24.360 There's no way I'm leaving the center of the world 0:15:24.440 --> 0:15:26.800 to move out to the mill of nowhere to work 0:15:26.840 --> 0:15:29.240 for you. So he has to fight people who don't 0:15:29.280 --> 0:15:31.920 know him, who don't know him, but who know of him. Right, 0:15:31.960 --> 0:15:33.160 that's the sweet, that's the key. 0:15:33.280 --> 0:15:37.200 Yes, this is how he finds Robert Noise, this golden 0:15:37.200 --> 0:15:40.040 boy engineer we talked about at the beginning of the show. Right, 0:15:40.520 --> 0:15:43.120 Noise had actually gotten hold of of an early transistor 0:15:43.120 --> 0:15:46.160 when he was in college before anybody really you know, 0:15:46.320 --> 0:15:49.080 knew what they were. He was really excited about it. 0:15:49.120 --> 0:15:52.520 And by the time Noise gets this call, he's working 0:15:52.560 --> 0:15:56.640 at this second tier electronics company in Philadelphia and suddenly, 0:15:56.640 --> 0:15:59.520 out of the blue, William Shockley, the great genius, calls 0:15:59.560 --> 0:16:02.760 him on the phone, and as Noise said later, it 0:16:02.880 --> 0:16:05.240 was like he whistled and I came. 0:16:05.600 --> 0:16:07.840 Shockley is a good spotter of talent. 0:16:07.920 --> 0:16:11.960 He hires like a dozen by all accounts, extremely talented engineer, 0:16:12.200 --> 0:16:15.240 young guys in their twenties. Another key we're going to 0:16:15.320 --> 0:16:18.720 talk more about is Gordon Moore of Moore's Law's Law. 0:16:19.280 --> 0:16:22.400 And so they get out to California and at first 0:16:22.880 --> 0:16:27.760 it's great noise and more and these other young engineers 0:16:27.800 --> 0:16:31.320 are living the dream, right, working for this guy who 0:16:31.440 --> 0:16:34.880 founded their field, who helped discover the transistor. And he's 0:16:34.880 --> 0:16:40.880 got this former Apricot shed in Mountain View that's the headquarters, 0:16:41.200 --> 0:16:44.920 which is probably worth ten million dollars. Yeah, Chocolate really 0:16:45.480 --> 0:16:46.320 is talented, right. 0:16:46.360 --> 0:16:49.480 He has this breakthrough idea right at the beginning of 0:16:49.640 --> 0:16:53.160 the company, which is this. The transistors that he'd been 0:16:53.200 --> 0:16:56.440 working on at Bell Labs were made of germanium. But 0:16:56.520 --> 0:17:00.200 germanium is hard to work with. It's brittle, stops working 0:17:00.240 --> 0:17:04.640 at high temperatures, and so he decides to use silicon, of. 0:17:04.600 --> 0:17:07.159 Course, another semiconductor. It would have been weird if it 0:17:07.159 --> 0:17:10.639 were germanium Valley, right, I like germadium valley. They call 0:17:10.679 --> 0:17:14.280 themselves Germys or something. Yeah, Silicon's cheaper, it's easier to 0:17:14.320 --> 0:17:17.000 work with, but you know, it's hard to get things 0:17:17.040 --> 0:17:17.239 to work. 0:17:17.280 --> 0:17:19.719 It's hard to produce them economically at scale, it's hard 0:17:19.920 --> 0:17:20.640 to make hardware. 0:17:21.000 --> 0:17:23.040 But it's a problem they think they can solve. Which 0:17:23.080 --> 0:17:25.240 is the sweet spot, right, It's just if you're a young, 0:17:25.280 --> 0:17:26.960 ambitious engineer, it's where you want to be. 0:17:27.040 --> 0:17:28.560 They all know it's going to be big. It's this 0:17:28.800 --> 0:17:32.639 very ambitious thing they're trying. And you know, every morning 0:17:32.680 --> 0:17:35.960 at eight am, the team shows up at the headquarters 0:17:35.960 --> 0:17:41.960 in the former Apricot Shad and Shockley conducts what Tom Wolf, 0:17:42.000 --> 0:17:46.600 the journalist, calls the Rcane symphony of you know, getting 0:17:46.600 --> 0:17:50.440 all these engineers to work together. And Shockley apparently had 0:17:50.440 --> 0:17:55.399 this incredible intuition for engineering and for physics. One of 0:17:55.440 --> 0:17:58.679 the engineers who worked with him said his intuition for 0:17:58.800 --> 0:18:01.600 experiments was so good it was like he could see 0:18:01.960 --> 0:18:03.720 individual electrons. 0:18:03.960 --> 0:18:06.399 He just saw what was going to happen. Is that great? 0:18:06.480 --> 0:18:09.600 Isn't that beautiful? If only he could have seen individual 0:18:09.880 --> 0:18:14.520 human being, Hey o, he would have been much better off. Yes, yes, 0:18:14.760 --> 0:18:17.280 that classic kind of problem. And soon this sort of 0:18:17.440 --> 0:18:22.720 monstrous side of Shockley starts to show itself. He gets paranoid. 0:18:23.400 --> 0:18:26.480 There's this moment when a secretary cuts her hand on 0:18:26.560 --> 0:18:29.080 a doorway. There's like a little pin or something sticking 0:18:29.080 --> 0:18:32.720 out of the doorway, and Shockley becomes convinced that an 0:18:32.720 --> 0:18:36.480 employee is trying to sabotage the team demands that everybody 0:18:36.560 --> 0:18:40.160 take a lie detector test, which they refuse to do. 0:18:41.080 --> 0:18:44.720 He doesn't get over it, stays paranoid, winds up splitting 0:18:44.720 --> 0:18:47.960 the engineers into different teams and not telling one team 0:18:48.000 --> 0:18:50.560 what the other is doing, hiding information, which is like 0:18:51.359 --> 0:18:53.439 as far as you can get from the Dream, from 0:18:53.480 --> 0:18:55.240 the Arcane Symphony from Bell Labs. 0:18:55.320 --> 0:18:57.520 Right, And at this point it's starting to sound like 0:18:57.560 --> 0:19:01.960 mental illness. Yeah, really is, Yeah he is. Something is 0:19:01.960 --> 0:19:03.600 wrong with William Shockley. Right. 0:19:04.200 --> 0:19:07.000 And around this time, in nineteen fifty six, he actually 0:19:07.840 --> 0:19:11.920 wins the Nobel Prize, shares the prize for his work 0:19:12.040 --> 0:19:16.760 on semiconductors on transistors, and it only makes him worse. 0:19:17.240 --> 0:19:20.120 He has this paranoid idea that there were people who 0:19:20.119 --> 0:19:23.000 were trying to keep him from getting the prize. He 0:19:23.040 --> 0:19:25.760 writes to the Nobel committee saying, like, tell me the 0:19:25.840 --> 0:19:27.160 names of my enemies. 0:19:27.640 --> 0:19:28.879 After he's won of the prisons. 0:19:29.000 --> 0:19:33.480 He's won the prize, like take the win, William Shockley, unbelievable. 0:19:33.880 --> 0:19:35.200 And then he does one more thing. 0:19:35.359 --> 0:19:37.159 And you know, you can get away with a lot 0:19:37.240 --> 0:19:40.040 if you're managing a team of engineers, but there is 0:19:40.080 --> 0:19:43.200 one thing, if they're ambitious and talented, that you cannot 0:19:43.240 --> 0:19:47.800 get away with, and that is becoming less ambitious, scaling 0:19:47.880 --> 0:19:50.359 back the vision, and that is what he does. Around 0:19:50.400 --> 0:19:54.400 this time, he decides that rather than making a silicon 0:19:54.440 --> 0:19:57.640 transistor that can be used for anything, but that's quite 0:19:57.680 --> 0:19:59.400 hard to make that they haven't really figured out yet, 0:19:59.520 --> 0:20:01.800 instead of doing that, he decides that they're going to 0:20:01.880 --> 0:20:05.720 make something that has a clear, defined limited use case. 0:20:06.560 --> 0:20:10.040 That is a semiconductor that can do mechanical switching in 0:20:10.200 --> 0:20:11.600 telephone exchanges. 0:20:12.119 --> 0:20:15.399 Ough, he wants to revolutionize the phone company. Yeah, like 0:20:16.160 --> 0:20:18.439 come on, man, right, Like we came out here to 0:20:18.480 --> 0:20:21.720 the aprilcot Warehouse to change the world and you want 0:20:21.760 --> 0:20:24.359 to make calls clear. Okay, So this is. 0:20:24.440 --> 0:20:26.720 Like the last straw for a lot of the young 0:20:27.080 --> 0:20:30.720 talented engineers. But remember this is not an era where 0:20:30.760 --> 0:20:33.119 if you're like a young talented engineer on the forefront 0:20:33.119 --> 0:20:35.919 of technology, you can just quit and go do your 0:20:35.960 --> 0:20:38.639 own thing, right, Like that doesn't exist yet, you know. 0:20:38.840 --> 0:20:40.760 Sure Shockley started a company, but he was like this 0:20:40.920 --> 0:20:43.200 very senior guy. He invented the industry. He was to 0:20:43.240 --> 0:20:44.359 win the Nobel Prize. 0:20:44.720 --> 0:20:49.919 And crucially right, there's no money for them. Nobody's going 0:20:49.960 --> 0:20:52.159 to give them money. There's no venture capitol industry. That 0:20:52.280 --> 0:20:55.480 is not a thing. So one of these young engineers, 0:20:55.560 --> 0:20:59.160 guy named Eugene Kleinder, thinks, who can I call? He thinks, 0:20:59.200 --> 0:21:02.199 I'll call my dad, stockbroker back in New York. That 0:21:02.240 --> 0:21:02.960 guy knows money. 0:21:02.960 --> 0:21:06.000 That guy knows about money, and he calls him, and 0:21:06.280 --> 0:21:08.399 the broker puts him in touch with another guy at 0:21:08.440 --> 0:21:12.480 the firm, this thirty year old Harvard NBA named Arthur Rock. 0:21:13.080 --> 0:21:15.080 Knowing thirty year old NBAS, It's almost like they were 0:21:15.080 --> 0:21:18.440 pushing him off on the young guy, like you understand 0:21:18.440 --> 0:21:21.360 this stuff. Let the young guy hap, yeah, I mean Rock. 0:21:21.280 --> 0:21:23.359 Did, like, you know, kind of more interesting and more 0:21:23.440 --> 0:21:26.880 risky ventures. And so Rock and another banker they fly 0:21:27.040 --> 0:21:31.000 out to San Francisco and they meet with Kleiner and 0:21:31.160 --> 0:21:37.000