More than 92 public Bay Area tech companies trace back to the founders and employees of one firm. A research analyst counted them in 2014, and their combined market value then topped $2 trillion. The firm was Fairchild Semiconductor.
Eight former employees of the Shockley Semiconductor Laboratory in Mountain View, California, founded Fairchild in 1957. The company turned out transistors, LEDs and integrated circuits. It also had Stanford University and UC Berkeley nearby, and the Bay Area already had decades of successful ventures behind it. Fairchild grew fast in that soil.
Three founders, three ideas
Jean Hoerni invented the planar process. Robert Noyce used that method to conceive the integrated circuit. Gordon Moore and his “law” pushed chip makers toward packing billions of transistors on a chip while the cost per transistor kept falling.
Intel and AMD both came out of Fairchild. So did Sequoia Capital and Kleiner Perkins Caufield & Byers, which former Fairchild staff and others formed as pioneering venture investors.
“Everytime we came up with a new idea, we spawned two or three companies trying to exploit it,” Moore said.
Stock options and walking around
Fairchild handed out stock options early. The Computer History Museum says that encouraged risk-taking and, in some cases, produced vast personal fortunes that were often reinvested in other startups.
Management leaned on the Hewlett-Packard habit of “management by walking around.” Managers talked directly with employees instead of working through layers of hierarchy. The museum traces today’s flat organizations and informal workplaces in Silicon Valley to that style.
Many of the offshoots, known as “Fairchildren,” failed because of weak products, bad timing or poor management. Their talented staff usually found new work quickly. The company’s own fortunes peaked in the late 1960s.
Sources
- Spinoff: Fairchild & the Family Tree of Silicon Valley
- Exploring Silicon Valley's Rich Tech History: A Guide to the Pivotal Landmarks
