Silicon Valley Story
Michael S. Malone '75, MBA '77
The hidden history behind the heart of ingenuity
In the standard history of Silicon Valley, Mission Santa Clara and Santa Clara University barely rate more than a footnote as yet another institution of higher education that served the Valley’s insatiable need for ever-more numbers of trained engineers and managers. In that oft-recounted story, Silicon Valley begins in the early 1930s in Frederick Terman’s laboratory at Stanford—where, in the first electrical engineering program west of the Mississippi, Terman instilled the love of innovation in the young Bill Hewlett, Dave Packard, and Russ Varian. And they in turn, upon graduation, started companies in and around Palo Alto and kicked off the electronics age.
As the story continues, the development of the technology and the region got a further boost in 1956, when William Shockley, co-inventor of the transistor, came home to Palo Alto, gathered the best and brightest young engineers and physicists in the USA, and founded Shockley Labs. Then, because Shockley was a terrible boss, this now-disaffected
group of employees—the “Traitorous Eight”—walked out and founded the mother company of modern Silicon Valley, Fairchild Semiconductor. A decade later, Fairchild itself blew up and scattered dozens of chip companies all over the area—the birth of modern Silicon Valley.
That’s the story told and retold in books, museum exhibits, documentaries, and feature films. We like it because it is so simple: from Terman to the Packard garage to Fairchild; from Intel to Apple to Netscape; then from Google to Facebook and beyond. Part of this story’s appeal is that it is so neat—not to mention that it reinforces our desire for the trajectory of this tale to be ever upward, from success to even bigger success.
But the truth is that this accepted version is full of holes. For one thing, it ignores the reality that thousands of companies in the Valley were born, made important contributions, then died—often leaving little trace. Industry veterans know that the real story of Silicon Valley is even more about failure than success. That is the cost of entrepreneurship and living at the bleeding edge of innovation.
But even more important, for our purposes: This story also has no prelude. No story before the story; no roots. It is as if Terman’s Lab and Packard’s garage spontaneously spring up amid a sea of fruit trees in the Valley of Heart’s Delight ... and were not, in fact, the end product of what was already 150 years of regional development—a century and a half in which Santa Clara’s mission, college, then university played an absolutely central role. And it was during this long interval, stretching across three different centuries, that there first appeared many of the practices, attitudes, and institutions that we think of as being relatively new and unique to Silicon Valley.
Rings a bell
Consider the question of when Silicon Valley actually began: When Don Hoefler named it in his series on the area in the trade paper Electronic News in 1971? But there were hundreds of Silicon Valley companies by then. The Packard garage in 1939? But HP depended upon a technology infrastructure—almost unique in the world—that already existed in the region. Philo Farnsworth had been working on television in San Francisco, and Cy Elwell and Federal Telegraph were working with vacuum tubes and early radio. Even those largely forgotten pioneers depended, in turn, upon the invention of the triode vacuum tube by Lee de Forest at the beginning of the century. De Forest, who constructed his invention in Palo Alto while on the run from the law, then moved to Hollywood. He claimed credit for the entire movie, radio, and television revolution—thus becoming the prototype for many of the more outrageous Silicon Valley tycoons to follow.
Indeed, the more you study the history of the Valley, the more it appears a continuum of one invention or technology or industry after another; and the more difficult it becomes to point at a single date on the timeline and say, “This is where Silicon Valley begins.” In fact, there is only one true moment—further back than you’d ever imagine—where there is a historical discontinuity, a break in the narrative so complete that everything before and after it is utterly distinct and different. Incredibly, we can even name the date and hour of this moment: The long march to modern Silicon Valley begins at 7:25 in the morning on January 12, 1777.
Why then? Because that was the official day of the founding of Mission Santa Clara de Thamien (later de Asís) on a now-lost site on the Guadalupe River. Father Junipero Serra with his missionary party had founded Mission Dolores at the site of modern San Francisco the previous summer. Established there, the party had traveled south to bring the Word of God to the Ohlone natives—also known as Costanoans—of the South Bay. On that January morning, the first Mass at this new mission was held—likely in the open air. To establish the traditional schedule of Catholic missions and monasteries everywhere, a bell was rung at dawn to awaken the participants to begin their historic day. That first bell was likely small and portable. It was soon replaced by official bells donated by Spain’s King Charles III to be rung in his memory each evening—as they do to this day. But that morning, with its first toll, that bell changed everything.
Until that first peal, Santa Clara Valley had never experienced time as we know it today. For the Ohlone, time had been cyclical for thousands of years: births and deaths, the seasons, periods of conflict and peace. Food, with acorns as a staple, was so plentiful that historians estimate that the native people worked no more than 20 hours per week. But tranquility was punctuated by violence as neighboring family groups regularly raided one another for possessions and potential wives. Because of this, while life was largely easy, it was also severely circumscribed: A family group that lived at the site of, say, today’s Santana Row, would likely have never visited the Bay or the Pacific Ocean or Stevens Creek—or perhaps even the Guadalupe River.
And so it would have remained, perhaps for another century or more, had that bell not rung that winter morning in 1777. But it did ring. And from that moment on, the Valley was on a clock ... a clock that went faster by the year, as time was divided into ever shorter and more precise intervals by stagecoach and steamboat and train schedules.
That bell did something else as well, something even more magical: It erased geographic barriers. That process began with the local natives. The presence of the Mission—with its order, discipline, and wealth—accomplished what millennia had failed to do: make the local Indian family groups forget their differences and act like a single people.
But that was just the beginning, because the Mission for which the bell tolled was itself a symbol of 18th-century globalism: altars of Philippine mahogany, vestments of Chinese silk, Communion vessels of South American gold, Bibles published in Spain ... the California Missions were easily the most international institutions of western North America. One irony is that, in some ways, the Santa Clara Valley of the Mission era looked more like the modern Silicon Valley—multiethnic, entrepreneurial, relatively lawless, filled with small startup enterprises, regularly transformed by technological revolutions, and paced by the clock—than it would during the century that followed.
Mission Santa Clara made that all possible. For the first time, the Valley had a center of attention, a nexus of human activity, that gathered together the critical mass of people and talent to spark the creation of a true community. San Jose emerged as the commercial antipode to the Mission, the profane to the Church’s sacred—linked together by the great artery of The Alameda. This was Mexican Valley: of great herds of cattle grazing under giant oaks on the grasslands of even greater ranchos, of Spanish Catholics giving allegiance to the Roman Church.
Farming, flying, finance, filings
This is the world that the Americans from points east came to in the 1840s, first for land and then for gold. One of the initial groups of immigrants to arrive—just in time to fight in the Mexican War and to rescue the Donner Party that followed them—was the Murphy-Stephens-Townsend party. The leader, Martin Murphy Jr., was Catholic, of the Irish variety. Within a couple decades his ambition led him to own the Pastoria de las Borregas rancho, which covered today’s Sunnyvale and Mountain View, much of downtown San Jose, miles of the Diablo Range south of Mt. Hamilton, as well as vast regions of Argentina.
Murphy was yet another prototype of the Valley to come—in his case, the fearless empire builder and visionary tycoon. When his sons came of age, he didn’t hesitate to turn to his church, Mission Santa Clara, and help establish a college for their education. (He did the same for his daughters with the College of Notre Dame up the road.) And when, thanks to that education, those newly sophisticated sons and daughters wanted to move uptown from life on the farm, he built them the great Victorian homes that helped turn San Jose into a burgeoning city.
It was to this community, and to the blossoming wealth of the great ranchers like the Murphys, and to a growing professional class emerging out of Santa Clara College that another Catholic entrepreneur—this one Italian—was drawn: A.P. Giannini. When most histories discuss the Bank of Italy (in time, the Bank of America), first in San Jose and then San Francisco, they speak in terms of a bank for working-class people who deposited their nickels and dimes, and who obtained small loans to start their stores and businesses. But with a longer perspective—and from the vantage of the Silicon Valley to come—the early B of A becomes the template for the angel investors and venture capitalists who emerge in the second half of the 20th century.
Another piece fell into place at the end of the 19th century, when the first artesian wells were dug to the region’s underlying aquifer—and the Valley of Ranches saw the planting of 10 million fruit trees, which transformed the place into the Valley of Heart’s Delight. When we look back on this second Valley—with its orchards and canneries, and with boat rides on the Guadalupe River past the Victorian edifices of downtown San Jose—it seems like another world: on the one hand graceful and pleasantly paced but on the other parochial, limited in opportunity, and largely isolated from the events of the larger world. But the truth is that the Valley of Heart’s Delight, now all but buried under asphalt and cement, was not so different from the world we live in today.
If the clock was still ticking much more slowly than it would in the decades to come, the pace still felt blindingly fast to those who lived it—compared with the decades before. The toll of the Mission’s bell was lost in the whistles of the nearby canneries, the honking of automobile horns on El Camino, and the roar of planes flying out of San Jose Airport. Streetcars clanged and crawled up Stevens Creek Road from San Jose to the hills above Cupertino. Heavy farm machinery rumbled and spit out diesel smoke from one end of the Valley to the other.
The work of the Valley in the first half of the 20th century may have been fruit and produce, mills and small machines—but that work was already being driven by technological advances, managed by a growing professional class, funded by risk-taking local investors, and selling to a global marketplace. At the center of this transition remained Santa Clara Mission and University. It was the SCU-educated agricultural specialists, agronomists, and trained farm business managers who fanned out across the South Bay after graduation and ran these huge enterprises—directing everything from soil treatment to choice of crops, from the canneries to the market and distribution of millions of cases of fresh and dried fruit around the world.
And it wasn’t just farming. The Valley during this period was already becoming obsessed with the latest scientific advancements. John J. Montgomery’s pioneering experiments in flight at SCU inflamed the imaginations of the region’s young men, such as the Lockheed brothers in Los Gatos, who soon were doing their own tests, with seaplanes, on San Francisco Bay. The arrival of Moffett Naval Air Station—its huge hangar housing the giant dirigible USS Macon—and the adjoining NACA Ames Research Center (in time, NASA) showed that the U.S. military had already identified the region as both technologically sophisticated and capable of providing the technical talent needed to run one of the nation’s most advanced research installations.
Radio, too, was the subject of fascination in Santa Clara Valley. And while much of this interest centered around Stanford and young Fred Terman, the son of that university’s president, one of the biggest revolutions in that industry began in downtown San Jose, where Doc Herrold set up the nation’s second radio station and was the first to deliver a commercial broadcast. By the end of the 1920s, what has been called “the first Silicon Valley” company, radio manufacturer Echophone, had set up shop in Sunnyvale.
But Santa Clara University wasn’t just supplying the region with managerial and engineering talent. It was also providing the Valley with a legal community of national reputation that was far outsized to the small population it served. Courses in law were taught at the beginning of the century, and as the law school graduated its first class in 1914, those men began to fill not only the South Bay but much of Northern California with trained lawyers and, in time, judges at every level. Local business executives may have joked about the “Bronco Mafia”—SCU law grads who managed, over the course of their careers, to move from the campus down The Alameda to hang their shingles, and then on to downtown San Jose to serve on the bench—but those businessmen also recognized that this local legal community was, already by the 1930s, capable of handling any commercial legal task, from the mundane to the labyrinthine.
An entire history could be composed about the ways in which SCU Law’s contributions to contract, patent, intellectual property, and employment law shaped the success of the electronics revolution. Of course, that story is still being written.
Although the “official” birth of Silicon Valley begins in the Packard garage in 1939, in fact, other than HP, Varian, and a few other startups, the modern Valley really only began—with a vengeance—after World War II. That is the story, the one that began this essay, we have all been taught: Shockley, Fairchild, the chip industry, and so on—until today’s world of social networks, Tesla, Uber, and iPhone apps. Meanwhile, the clock that began ticking with the ringing of the Mission bell—and established a tempo that came to beat at millions, now billions, of beats per second—sets a staggering pace for local life that only grows more frenetic by the year. Certainly SCU and its graduates have played a key role at every step in this modern history—in the aforementioned IP and high-tech law, engineering, marketing, entrepreneurship, investing, and, perhaps above all, as the leading provider of middle and senior management to the Valley’s established companies.
But for all of these impressive achievements, the greatest contribution of Santa Clara Mission and University to Silicon Valley has been lost in the region’s prehistory. By the time the Traitorous Eight walked out to found Fairchild Semiconductor, the Mission was 175 years old, the University more than a century old. They had become venerable institutions, hidden in the pattern of the backdrop of current events. Santa Clara set the table in the Valley for the business miracle to come—though plenty of others have dined there. The Mission and University’s real contribution was all but ignored by those who would tell the Valley’s story.
And what was that contribution? This: When the GIs came home from the war filled with an ambition to be part of the future, when Shockley came home to California to start his transistor company, and when the Lockheed brothers, grown rich building airplanes in Burbank and looking for a place to enter the missile business, they all saw the same opportunity. Santa Clara Valley: underpopulated, with cheap land, and yet with an astonishingly sophisticated local culture and infrastructure. An incubator of new technology businesses just waiting to be switched on. A place where they could find everything they needed to build great companies and invent the modern world. And at its center, the dynamo of this singular place: Santa Clara Mission and University.
Today, after 70 years of other communities and regions across the country and around the world trying and failing to duplicate the miracle of Silicon Valley, we now know that this place wasn’t just special but unique.
So, to answer the question with which we began this story: Would there be a technology community here in Santa Clara Valley without Santa Clara Mission and University? Probably, in some form. But would it be Silicon Valley, the heart of the Digital Age, the capital of the world’s high technology industry?
Most certainly not.
Michael S. Malone ’75, MBA ’77 is a writer, producer, entrepreneur, and the world’s first daily tech reporter. He was also the longest-running columnist in the history of The Santa Clara. He teaches professional writing in the Department of English, and his most recent book is The Intel Trinity: How Robert Noyce, Gordon Moore and Andy Grove Built the World’s Most Important Company. Read more about that.