The Spirit Of Independence; The Valley

"The man with a new idea is a crank -- until the idea succeeds." -- Mark Twain

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They call it merely "the Valley," as if geography were destiny. As if there were no other place in the world quite like it.

Which, of course, there isn't.

Silicon Valley, the capital of the high-technology revolution. Where the gossip at lunch at Nolan Bushnell's Lion and Compass Restaurant is about who's going public, or going under. Where the classified ads read, "Used Mac for sale" and "Hard-charging company founder, f., 30s, seeks m., same." Where the chief of police is a Harvard-educated mystery novelist who talks like a management consultant.

The world has watched in wonder, and envy, as its future has seemed to come out of these 1,350 square miles. There are other high-tech centers, too, of course: hopeful upstarts with nicknames like Silicon Gulch and Silicon Rain Forest. But the brass ring shines brightest in California. The Valley has gone from pastoral to postindustrial in less than a generation, turning hackers into millionaires, then into hackers again. Nowhere else is the success -- or the excess -- of the entrepreneur more dramatic.

But the new technologies, as dazzling as they are, are only part of the story. The critical accomplishment is not simply in creating five generations of computers in less than a human life-time, but in binding people together into companies to make it happen. And the critical weakness may be the Valley's single-minded devotion to that goal.

"We decided to make a computing machine that would be all electronic." -- J. Presper Eckert

Today, J. Presper Eckert's title is vice-president and technical adviser at Sperry Corp. Forty-two years ago, as a 24-year-old graduate student, Eckert and John W. Mauchly began work on ENIAC, the world's first electronic digital computer. In 1947, the two set up their own business, Eckert-Mauchly Computer Corp., and shortly therafter developed UNIVAC, the first commercial computer.

I was at the University of Pennsylvania, in the Moore School of Electrical Engineering, one of three places in the world that had a differential analyzer -- an impressive-looking bunch of gears and motors and wheels for calculating differential equations. When World War II came along, the government took over the machine to work on gun-firing tables. There was tremendous pressure to get the computing done.

Professor Weygant and I had some ideas about improving the differential analyzer. He and I and another student managed to get it to go 10 times as fast and to be 10 times as accurate. This was about as far as you could go without a full redesign and reconstruction.

Ultimately, Dr. Mauchly and I decided to make a computing machine that would be all electronic and all digital. A group of us went down to Aberdeen, Md., to the Ballistics Research Laboratory, and this set the wheels in motion. Since it was considered urgent, we actually started work in Philadelphia the next day, getting people together and assembling equipment.

The work went on for about 3 years before the machine was finally finished. It ran for about 10 years at Aberdeen before it was retired. This was pretty good for a prototype experimental machine. It wasn't like the Wright brothers' first airplane -- which, though it demonstrated new principles, didn't establish any passenger or freight service. Our machine not only demonstrated new principles, it did important work.

Originally, Mauchly and I wanted to stay at the university. But some professors tried to get us to give our patent rights back to the university, essentially for free. These same professors fired us when we did not agree. We left the university and didn't do much research work for a couple of months, until we got the Census Bureau interested in building a machine.

Later, though, we had to sell our business. There was an airplane crash, where the people who were raising our money were killed. We sold out to Remington Rand, which later merged with Sperry.

Unfortunately, in the early computer days, people weren't ready to put much money into our ideas. Banks could see putting money into steel or locomotive manufacturing, things made of iron, the so-called smokestack industries. But our kind of stuff looked like a pipe dream to them. Of course now the smokestack industries are going up the chimney, and the pipe dreams have come true.

"The key entrepreneurial act has been creating an organization." -- Alfred D. Chandler

Alfred D. Chandler, Straus professor of business history at the Harvard Business School, is widely considered the dean of business historians.

There have been two earlier entrepreneurial periods. The first was the second Industrial Revolution of the 1880s and '90s. The second was in the 1920s, when the great entrepreneurs, the Sloans and the Fords, put together their giant enterprises. In those industries, in order to stay in business, you not only had to exploit the technology, you had to build up your organization.

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