108. Silicon Valley - Why Its a Miraculous Place on the Planet...!!

Updated: Jul 16

What is Silicon Valley?

What made Silicon Valley a Hub for Entrepreneurs?

Silicon Valley grew up in the area between San Jose, California, and San Francisco as a result of Frederick Terman, the legendary dean of Stanford Engineering School during the 1940s and 1950s. He created the tradition of Stanford faculty starting their own companies. A number of companies we still reference came out of Stanford during those years, especially Hewlett Packard and Varian Associates.

The transistor was invented and manufactured in Silicon Valley, which gave the area a leg up in the radio and telegraph industries. And the Navy had a base in Sunnyvale. By 1957, Russia’s success with Sputnik unleashed a big space competition, and the U.S. government founded NASA. At the time NASA opened at Moffett Field near San Jose, the only company able to build electronics for the space capsule was Fairchild Semiconductor.

The legend of Silicon Valley from the beginning of the transistor industry is well-known and has been written about and documented. Most of the Valley’s early success came from either components like Silicon chips (from which the Valley got its name) or the hardware into which the chips were placed.

Pic : Apple Park is the corporate Headquarters of Apple Inc., located at One Apple Park Way in Cupertino, California, United States.

It’s actually fun to learn about the Valley’s history, because the lesson is that the beginning of Silicon Valley was all about men and women, engineers, who had ideas out of science fiction about what technology could enable. Many of those ideas have now come true, like the personal computer and the iPhone, both envisioned by Steve Jobs. And we now wear what was once envisioned in a comic book as the “Dick Tracy wrist radio”–the Apple Watch.

Early engineers were not after money, they were about making things possible that had never been possible before, such as space travel. As a result, they received both government grants and venture capital. Before venture capital became a “thing,” it originated from the financial centers like New York. Arthur Rock, for example, was an early investor in Intel, Apple, and Scientific Data Systems. The first Bay Area venture capital firms, who located on Sand Hill Road adjacent to the Stanford campus, were Kleiner, Perkins Caulfield and Byers, and Sequoia Capital.

Silicon Valley is a region in the south San Francisco Bay Area, made notable by the number of technology companies that started and are headquartered there, including Apple, Alphabet Inc.'s Google, Facebook, and Netflix. The term rose to prominence in the 1970s in reference to the regional businesses' development of and technological reliance on the silicon transistor, which is used in all modern microprocessors.

A Global Center of Technological Innovation, Silicon Valley as a phrase refers to the industry and the companies that call it home, as well as to an innovative mindset, entrepreneurial spirit, and a lifestyle founded on technologically based wealth.

I. The HP Garage - Birth Place of Silicon Valley

HP is the First Startup of Silicon Valley

The garage sits in the garden at 367 Addison Avenue. It was built in 1905 and was originally occupied by Palo Alto’s first mayor Dr John Spence, his wife Ione and their two daughters in 1909. It was then divided into two separate apartments (numbers 367 and 369) in 1918.

Pic : The HP Garage - The Birth Place of Silicon Valley

During this time, William “Bill” Hewlett and David “Dave” Packard both attended nearby Stanford University and in 1937 had their first business meeting. The then Dean of Engineering Frederick Terman encouraged them to establish an electronics company in the local area rather than leaving California.

Therefore, in 1938 Dave Packard moved into the first-floor three room apartment a 337 Addison Avenue with his newly wed Lucille with Bill Hewlett sleeping in the shed. A now widowed, Mrs Spencer moved into the second floor apartment.

Dave and Bill formed a partnership and began using the one-car garage with jus $538 in start up capital and in 1939 flipped a coin to decide whose name would precede the other for the company.

Thus, Hewlett, Packard was born.

The company’s first product which you can still see a replica of today was an audio oscillator, known as the HP200. Interestingly, one of their first customers was the Walt Disney Company who purchased eight of these oscillators to test the sound systems in theaters running the iconic film Fantasia. This was the first major movie to be shown in stereophonic sound.

The garage and house have been replicated to show exactly how they looked at the time when Bill and Dave worked there and although closed to the public you can view it from the sidewalk. Tours are also available which will give insights into technology and history of that area.

Pic : HP Founders - Bill Hewlett (l.) and Dave Packard ( R )

II. Understanding Silicon Valley

Silicon Valley is located in a region of Northern California. Although its boundaries are somewhat nebulous, they generally include all of Santa Clara and San Mateo counties, the western edge of Alameda County, and Scotts Valley in Santa Cruz County.

Centered in the Santa Clara Valley, the region's population is over three million, and its largest city is San Jose. It's also home to Stanford University and several state university campuses. This academic presence has helped fuel a rich research and development (R&D) synergy throughout the Valley.

Some 39 Fortune 1000 companies are headquartered in Silicon Valley. Most of them are hardware or software companies—Cisco Systems, Intel, Oracle, Nvidia—but the list also includes giants in other fields, including Visa and Chevron—depending to some extent on how one defines Silicon Valley's boundaries. The number of high-profile ventures born in Silicon Valley has made the region an attractive target for venture capitalist firms and investors too.

Pic : Tech Majors in Silicon Valley

Half the world’s tech billionaires live in Silicon Valley and it is currently one of the wealthiest regions in the world. In May 2012, The New York Times reported that 14% of households in Santa Clara County and neighboring San Mateo County earn more than $200,000 per year. In 2015, the Brookings Institution ranked San Jose third in the world in per capita gross domestic product (GDP), behind Zurich, Switzerland, and Oslo, Norway.

By 2019, The Guardian reported the region was posting $128,308 per capita in annual GDP, with an annual output of $275 billion, according to the Bureau of Economic Analysis (BEA).

$139,755 -The average annual earnings of a Silicon Valley household in 2019, according to the Silicon Valley Institute for Regional Studies

III. A Brief Timeline of Key Silicon Valley Innovations and Developments

  • 1939: William Hewlett and David Packard patent an audio oscillator, forming the foundation for the Hewlett-Packard (HP) company.

  • 1940: William Shockley invents a silicon transistor at Bell Labs.

  • 1951: Fred Terman establishes Stanford Research Park as a partnership between Stanford University and the City of Palo Alto, providing a base of operations for both military and commercial technological innovations for companies such as Fairchild, Lockheed, and Xerox.

  • 1956: William Shockley opens his own firm, Shockley Semiconductor Labs, in Mountain View, Calif.

  • 1957: Several Shockley employees resign and start a competing firm, Fairchild Semiconductor. These men will later go on to start many other companies, including Intel and Nvidia.

  • 1958-1960: Independently, Robert Noyce and Jack Kilby discover that all parts of a circuit including the transistor can be created using silicon. Their discoveries led to the integrated circuit, created from silicon, which is used in all microprocessors today.

  • 1961: Former Fairchild backer Arthur Rock establishes Davis & Rock, which is considered the nation's first venture capital firm, giving rise to a new type of investment industry.

  • 1969: The Arpanet computer network is established with four nodes, including one at Stanford University. Arpanet is the foundation for the internet.

  • 1971-1972: Journalist Don Hoefler publishes a three-part report on the rise of technological development in the region in Electronic News, titled "Silicon Valley, U.S.A." He's credited with creating the region's name.

  • 1970s: Atari, Apple, Microsoft, and Oracle are founded.

Pic : Early Days of Apple, Steve Jobs and Steve Wozniak

1980s: Cisco, Sun Microsystems, and Adobe are founded.

Pic : Founders of Sun Microsystems

Company: Sun Microsystems, Inc. Based: Santa Clara, Ca. Founded: 1982 Founders: Vinod Khosla, Andy Bechtolsheim, Bill Joy & Scott McNealy Specialty: Sold computers, components, software, and information technology services including Computer servers and workstations designed after it's RISC-based SPARC process.

Pic : The SPARC team in 198, the year after the first SPARC- based products started building Sun Microsystems into a huge Silicon Valley Player , Photo: Robert B. Garner

  • 1990s: Netscape, Google, Yahoo, Amazon, and PayPal are founded.

Pic : Google Founders - Larry Page and Sergey Brin

IV . A Brief Story of Google - From Google Website

Founded - 1998

Founders - Larry Page and Sergey Brin

Incorporation - 4 September 1998

Initial public offering (NASDAQ) - 19 August 2004

From the Garage to the Googleplex

The Google story begins in 1995 at Stanford University. Larry Page was considering Stanford for grad school and Sergey Brin, a student there, was assigned to show him around.

By some accounts, they disagreed about nearly everything during that first meeting, but by the following year they struck a partnership. Working from their dorm rooms, they built a search engine that used links to determine the importance of individual pages on the World Wide Web. They called this search engine Backrub.

Soon after, Backrub was renamed Google (phew). The name was a play on the mathematical expression for the number 1 followed by 100 zeros and aptly reflected Larry and Sergey's mission 'to organise the world’s information and make it universally accessible and useful.'

Over the next few years, Google caught the attention of not only the academic community, but Silicon Valley investors as well. In August 1998, Sun co-founder Andy Bechtolsheim wrote Larry and Sergey a check for $100,000, and Google Inc. was officially born. With this investment, the newly incorporated team made the upgrade from the dorms to their first office: a garage in suburban Menlo Park, California, owned by Susan Wojcicki (employee no.16 and now CEO of YouTube).

Clunky desktop computers, a ping pong table and bright blue carpet set the scene for those early days and late nights. (The tradition of keeping things colourful continues to this day.)

Pic : Google HQ , Mountain View ,California

Even in the beginning, things were unconventional: from Google’s initial server (made of Lego) to the first 'Doodle' in 1998: a stick figure in the logo announcing to site visitors that the entire staff was playing hooky at the Burning Man Festival. 'Don't be evil' captured the spirit of our intentionally unconventional methods. In the years that followed, the company expanded rapidly – hiring engineers, building a sales team and introducing the first company dog, Yoshka. Google outgrew the garage and eventually moved to its current headquarters (aka'The Googleplex') in Mountain View, California. The spirit of doing things differently made the move. So did Yoshka.

The relentless search for better answers continues to be at the core of everything we do. Today, Google makes hundreds of products used by billions of people across the globe, from YouTube and Android to Gmail and, of course, Google Search. Although we’ve ditched the Lego servers and added just a few more company dogs, our passion for building technology for everyone has stayed with us – from the dorm room to the garage and to this very day.

2000-2010s: Facebook, Twitter, Netflix, and Uber are founded.

V. The Real History of Twitter, in Brief

How the micro-messaging wars were won

Imagine a scenario where you're gainfully employed but spending your nights and weekends working on a side project. It's just something you've been mashing together in your free time with a few friends at work.

Now, pretend to visit yourself five years into the future and see that your little side project turned into one of the biggest communications technologies of the last 100 years. This is the history of Twitter.

Pic : Twitter Founders

Early Twitter

Twitter began as an idea that Twitter co-founder Jack Dorsey (@Jack) had in 2006. Dorsey had originally imagined Twitter as an SMS-based communications platform. Groups of friends could keep tabs on what each other were doing based on their status updates. Like texting, but not.

During a brainstorming session at the podcasting company Odeo, Dorsey proposed this SMS-based platform to Odeo's co-founder Evan Williams (@Ev). Evan and his co-founder Biz Stone (@Biz) by extension gave Jack the go-ahead to spend more time on the project and develop it further.

In its early days, Twitter was referred to as twttr. At the time, a popular trend, sometimes to gain a domain-name advantage, was to drop vowels in the name of their companies and services. Software developer Noah Glass (@Noah) is credited with coming up with the original name twttr as well as its final incarnation as Twitter.

The First Tweet

Jack sent the first message on Twitter on March 21, 2006, 9:50 p.m. It read, "just setting up my twttr."

While the initial concept of Twitter was being tested at Odeo, the company was going through a rough patch. Faced with Apple's release of its own podcasting platform — which essentially killed Odeo's business model — the founders decided to buy their company back from the investors.

Jack Dorsey, Biz Stone, Evan Williams and other members of Odeo staff facilitated the buyback.

Pic : A sketch, c. 2006, by Jack Dorsey, envisioning an SMS-based social network.

By doing this, they acquired the rights to the Twitter platform. There is some controversy surrounding how this all took place. It's questionable whether Odeo investors knew the full scope of the Twitter platform.

Also, key members of the Twitter development team were not brought on to the new company, most notably, Noah Glass.

As a formality, Obvious Corporation (@obviouscorp) was created after the investor buyback of Odeo in order to house Twitter.

Twitter Achieves Explosive Growth

Twitter was now on the cusp of its biggest growth spurt. The 2007 South By Southwest (@sxsw) Interactive conference saw a huge explosion of Twitter usage. More than 60,000 tweets were sent per day at the event. The Twitter team had a huge presence at the event and took advantage of the viral nature of the conference and its attendees.

Twitter had its fair share of growing pains during its formative years. Twitter's user base grew at astounding rates and quite frequently the service would be over capacity.

Is It a 140-Character Limit or 280-Character Limit?

The reason Twitter imposes a character limit on tweets is that Twitter was originally designed as an SMS-based platform. In its early days, 140 characters were the limit that mobile carriers imposed with SMS protocol standard so Twitter was simply creatively constrained. As Twitter eventually grew into a web platform, the 140-character limit remained as a matter of branding.

In 2017, however, Twitter decided that the 140-character limit was no longer relevant in the smartphone age and it increased the tweet limit to 280 characters over minor protestations. Most tweets, the company explained, hover around 50 characters; when people needed more characters, they simply sent more tweets. The character increase was designed to help Twitter users spend less time condensing their thoughts and more time talking.

By 2012, more than 100 million users posted 340 million tweets a day, and the service handled an average of 1.6 billion search queries per day. In 2013, it was one of the ten most-visited websites and has been described as "the SMS of the Internet".As of Q1 2019, Twitter had more than 330 million monthly active users. Twitter is a some-to-many microblogging service, given that the vast majority of tweets are written by a small minority of users.

V. The Startup Journey of Facebook

In 2004, a group of friends at college created an innovative new social media platform with the aim of connecting Harvard students through an online community.

17 years later, Facebook is one the most influential social networks in the world, boasting approximately 2.85 billion monthly users by 2021.

So how did a social network created in the confines of a Harvard dorm room go from being a student trend to an unprecedented, worldwide phenomenon?

It all began in 2003, when Facebook founder and CEO Mark Zuckerberg created an online programme called “Facemash”, which allowed users to objectify fellow students by comparing photos of their faces and selecting who they deemed as “hotter”.

While Zuckerberg faced punishment from the Harvard administration and narrowly escaped expulsion from the college altogether for his actions, “Facemash” provided the framework for what was to become Facebook.

Online “face books” already existed at Harvard at the time. These were online directories that featured photos of students alongside some information about them.

There wasn’t a single “face book” for the whole student body of Harvard university, which is why Zuckerberg came up with the idea to create one. On February 4 2004, the first iteration of Facebook was born, then known as thefacebook.com and made available exclusively to Harvard students. However, the truth about how Facebook came about isn’t altogether clear, due to the involvement of three Harvard seniors.

Six days after “TheFacebook” was made live by Zuckerberg and co-founders Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes, they faced accusations by Cameron and Tyler Winklevoss and Divya Narendra that the idea for the site had been stolen from them.

According to the Winklevoss twins and Narendra, they had approached Zuckerberg asking for his assistance in creating a social network for Harvard students called "HarvardConnection".

This claim was explored in the 2010 Oscar-winning film The Social Network, which depicted Zuckerberg meeting with the Winklevoss brothers and Narendra to discuss their idea before creating his own without their knowledge.

Following a lawsuit filed against Zuckerberg, eventually all three received a settlement in 2008 that included 1.2 million shares in the company each. Facebook proved extremely popular with Harvard students when it was first launched, so much so that the site was soon also made available to students at Stanford, Yale and Columbia before expanding to numerous other colleges. By September 26, 2006, anyone in the world could make themselves a Facebook account, as long as they were at least 13 years old and had a valid email address.

One year prior, the social media platform had officially become “Facebook”, as opposed to “TheFacebook” as it’d formerly been known. As the number of people becoming members of Facebook grew, so did the number of people working for the company.

In 2004, Napster co-founder Sean Parker was named president of Facebook. He’d come across the site while browsing the computer of a student at Stanford and had become acquainted with Zuckerberg and Saverin soon thereafter.

At this point, Facebook had moved its headquarters to Palo Alto in California.

Zuckerberg’s issues with co-founder and former close friend Saverin were also explored in The Social Network.

Having been chief financial officer and business manager for Facebook since its conception, Saverin was reportedly cut from Facebook by Zuckerberg in 2005 and had his shares in the company diluted.

This led to Saverin filing a lawsuit against Facebook, which was settled outside of court. Lately, Facebook has become embroiled in