Thursday, February 15, 2007
investor advocate Larry Sucharow
Lindsay sits down with the nicest guy in a power-suit: investor advocate Larry Sucharow, Managing Partner of Labaton Sucharow & Rudoff LLP.
Monday, February 12, 2007
How to Profit from India
take a gigantic leap in terms of a foreign investor's understanding of where India stands financially and what its market represents in terms of an opportunity for them.
Aaron Chaze has 15 years of research and analytical experience in India and Canada
http://www.financialsense.com/Experts/2007/Chaze.html
Aaron Chaze has 15 years of research and analytical experience in India and Canada
http://www.financialsense.com/Experts/2007/Chaze.html
Monday, February 5, 2007
Steer Clear of Bad Job-Hunting Advice
by Penelope Trunk
http://finance.yahoo.com/expert/article/careerist/19128
Posted on Wednesday, January 3, 2007, 3:00AM
Among the most common types of career advice that people toss around are tips for job hunting. But be careful who you take advice from, because the workplace is changing very fast right now. As the new generation makes its voice heard at work, a lot of the old rules no longer apply.
Here are eight job-hunting rules that will hold you back if you're not careful:
Bad Rule No. 1: Draw a clear picture of yourself
A résumé is not an autobiography, it's a marketing document. So the goal is not to tell every single thing about yourself, but rather to get an interview. And the best way to land an interview is to make the employer want to find out more about you.
This is why a résumé should be a tease, not treatise. (This is a great example of why that old rule about keeping your résumé to one page is still a very good one.)
Bad Rule No. 2: Don't be too narrow
If you're not narrow, then what are you selling? Think about cars. Is a BMW the car that meets every need for every person? Is a Saturn the car for high-end and low-end markets? You're no different from a car. You can't be everything to everyone.
If you want to stand out, you have to stand for something. This is your unique selling proposition, and once you have one, you'll naturally focus your résumé a little more sharply than, say, a generalist who, in trying to get every job, isn't a fit for any job.
Sure, this means you have to decrease the pool of jobs you'll take. But when it comes to getting flexibility from employers, it's the specialists, not the generalists, who get what they want. That's because the specialists are the hardest to replace.
Bad Rule No. 3: Don't job-hop
The Bureau of Labor reports that people under 30 switch jobs every 18 months. Most people who cite these statistics are aghast at the lack of loyalty in the workforce. But I say, who cares about loyalty? You know what it got the baby boomers? Layoffs.
Job-hoppers are generally happier in their work. They have more passion for their career because their work changes before it gets boring, and they have better vacations because they can really relax between jobs.
Bad Rule No. 4: Don't have gaps in your résumé
This is a good piece of advice if you're going to make work the only thing in your life. Because if you have nothing else in your life, a gap in your résumé means you're staring off into space.
But if work is a means to do other fun things, a gap is a way to grow, and you can say that in an interview.
When someone asks me about the gap in my résumé, I explain how I lived on a French farm and learned a lot about business and life while I plucked the chickens I ate for dinner.
Bad Rule No. 5: Don't have typos in your résumé
I'm not recommending that you misspell words on purpose, but I am recommending that you chill out about the typos. How can you possibly send out perfect résumés every time? Especially if you're customizing each résumé for each job, which is what you should be doing.
Look, if proofreading were such an easy job then publishing companies wouldn't have to hire proofreaders. So don't make yourself crazy about the typos, because while 10 typos is a sign of incompetence, one typo might be a sign that you have a moderate and healthy standard of perfectionism.
Bad Rule No. 6: Honesty is most important
Résumés are marketing documents, so write yours that way. Give an employer exactly what they want without saying something false.
If you're marketing Pop-Tarts, do you start by saying they have a lot of sugar? Not if you want parents to buy them. You say Pop-Tarts have fiber, maybe. Of course, they don't have a lot. But saying it has some fiber isn't false.
My own résumé says, "Boston University, graduate program in English, wrote master's thesis about hypertext." I never graduated from my program (because I got an amazing job offer based on that thesis). But I did write my master's thesis. It's not a lie. Anyway, it would be insane to say, "English graduate program, cut out early."
The bottom line about honesty: Don't be more forthcoming in your own marketing materials than the marketing manager for Pop-Tarts would be in hers.
Bad Rule No. 7: Clean up your online identity
Stop stressing about the stupid stuff you posted when you were drunk (or worse, not drunk). It's out of your control.
Instead, build a more current online identity that will pop up highest when an employer or recruiter does an online background check (which about 70 percent do). One way to get your new identity to the top of the search engines is to use Naymz, a service that helps control what people find out about you online.
Another way to control what people see about you is to blog. A blog can represent you effectively to the online world, and a good blog will show up higher in searches than almost any kind of page that could damage you.
Bad Rule No. 8: Treat a job hunt like a project and be a project manager
That's great advice if you look for a job four times in your whole life. But today, job hunting is so frequent that often there's no downtime -- not even while you start a new job.
Also, job hunting is continuous today because it's mostly about networking, and you can't build your network if you're taking breaks, because being good at networking means being a good friend. And who takes breaks from that?
So treat your job hunt like a personal development project. And question all the advice people give you. Ask yourself, is this the advice someone was giving 20 years ago? Because if the answer is yes, then you probably need some new advice for today.
http://finance.yahoo.com/expert/article/careerist/19128
Posted on Wednesday, January 3, 2007, 3:00AM
Among the most common types of career advice that people toss around are tips for job hunting. But be careful who you take advice from, because the workplace is changing very fast right now. As the new generation makes its voice heard at work, a lot of the old rules no longer apply.
Here are eight job-hunting rules that will hold you back if you're not careful:
Bad Rule No. 1: Draw a clear picture of yourself
A résumé is not an autobiography, it's a marketing document. So the goal is not to tell every single thing about yourself, but rather to get an interview. And the best way to land an interview is to make the employer want to find out more about you.
This is why a résumé should be a tease, not treatise. (This is a great example of why that old rule about keeping your résumé to one page is still a very good one.)
Bad Rule No. 2: Don't be too narrow
If you're not narrow, then what are you selling? Think about cars. Is a BMW the car that meets every need for every person? Is a Saturn the car for high-end and low-end markets? You're no different from a car. You can't be everything to everyone.
If you want to stand out, you have to stand for something. This is your unique selling proposition, and once you have one, you'll naturally focus your résumé a little more sharply than, say, a generalist who, in trying to get every job, isn't a fit for any job.
Sure, this means you have to decrease the pool of jobs you'll take. But when it comes to getting flexibility from employers, it's the specialists, not the generalists, who get what they want. That's because the specialists are the hardest to replace.
Bad Rule No. 3: Don't job-hop
The Bureau of Labor reports that people under 30 switch jobs every 18 months. Most people who cite these statistics are aghast at the lack of loyalty in the workforce. But I say, who cares about loyalty? You know what it got the baby boomers? Layoffs.
Job-hoppers are generally happier in their work. They have more passion for their career because their work changes before it gets boring, and they have better vacations because they can really relax between jobs.
Bad Rule No. 4: Don't have gaps in your résumé
This is a good piece of advice if you're going to make work the only thing in your life. Because if you have nothing else in your life, a gap in your résumé means you're staring off into space.
But if work is a means to do other fun things, a gap is a way to grow, and you can say that in an interview.
When someone asks me about the gap in my résumé, I explain how I lived on a French farm and learned a lot about business and life while I plucked the chickens I ate for dinner.
Bad Rule No. 5: Don't have typos in your résumé
I'm not recommending that you misspell words on purpose, but I am recommending that you chill out about the typos. How can you possibly send out perfect résumés every time? Especially if you're customizing each résumé for each job, which is what you should be doing.
Look, if proofreading were such an easy job then publishing companies wouldn't have to hire proofreaders. So don't make yourself crazy about the typos, because while 10 typos is a sign of incompetence, one typo might be a sign that you have a moderate and healthy standard of perfectionism.
Bad Rule No. 6: Honesty is most important
Résumés are marketing documents, so write yours that way. Give an employer exactly what they want without saying something false.
If you're marketing Pop-Tarts, do you start by saying they have a lot of sugar? Not if you want parents to buy them. You say Pop-Tarts have fiber, maybe. Of course, they don't have a lot. But saying it has some fiber isn't false.
My own résumé says, "Boston University, graduate program in English, wrote master's thesis about hypertext." I never graduated from my program (because I got an amazing job offer based on that thesis). But I did write my master's thesis. It's not a lie. Anyway, it would be insane to say, "English graduate program, cut out early."
The bottom line about honesty: Don't be more forthcoming in your own marketing materials than the marketing manager for Pop-Tarts would be in hers.
Bad Rule No. 7: Clean up your online identity
Stop stressing about the stupid stuff you posted when you were drunk (or worse, not drunk). It's out of your control.
Instead, build a more current online identity that will pop up highest when an employer or recruiter does an online background check (which about 70 percent do). One way to get your new identity to the top of the search engines is to use Naymz, a service that helps control what people find out about you online.
Another way to control what people see about you is to blog. A blog can represent you effectively to the online world, and a good blog will show up higher in searches than almost any kind of page that could damage you.
Bad Rule No. 8: Treat a job hunt like a project and be a project manager
That's great advice if you look for a job four times in your whole life. But today, job hunting is so frequent that often there's no downtime -- not even while you start a new job.
Also, job hunting is continuous today because it's mostly about networking, and you can't build your network if you're taking breaks, because being good at networking means being a good friend. And who takes breaks from that?
So treat your job hunt like a personal development project. And question all the advice people give you. Ask yourself, is this the advice someone was giving 20 years ago? Because if the answer is yes, then you probably need some new advice for today.
Saturday, February 3, 2007
The Platform Company Model
"That’s a key part of your argument in “Our
Brave New World.�? Perhaps you’d best explain.
Louis: Basically, the emergence of the platform company
model has allowed U.S. companies to outsource
manufacturing, the most volatile part of the production
cycle, to the developing world. So if underlying
economic activity comes in weaker than forecast, the
platform companies in the West don’t have to slash
labor and inventories. It is their suppliers that have
to lay off workers etc., while the designers and marketing
people and other service workers in the West
find their services still in demand. Of course, the loss
of industrial jobs in the West is very bad news for
hard hats—and for politicians dependent on organized
labor. But it has actually tended to tame economic
volatility in the West. Put another way, with
services gaining an ever-more-important piece of the
economic pie, the variable of adjustment for Western
economies is no longer employment or profits. It is
imports. Which decreases the volatility in our economy, and has very important consequences. If people
are more secure in their jobs, they feel more confident
taking on big mortgages and basically leveraging
their futures.
I’m not sure that really applies beyond a very
Wall Street-centric segment of U.S. society.
Louis: I disagree. In the U.S. over the past 15 years,
we have moved from something like 22% of people
working in industry, what you would call fairly cyclical
jobs, to only 12%—and that 12% is probably a
pretty sticky number. But that is a great development
because we know that industrial jobs are not as
secure as service jobs. It is just the nature of the
game. Industry is just a far more cyclical game. So
we have written a lot on this new business model,
the platform company, which is a lot less volatile.
Take IKEA as an example. Let’s imagine their sales
slow down in the U.S. this winter because gas bills
are high and interest rates are high or whatever, and
that IKEA somehow failed to forecast the slowdown.
What are they going to? They are not going to fire
the furniture designer in Sweden or the salesman in
New Jersey. They are going to call the guy in Poland
or the guy in Mexico who makes the stuff and say,
“Last month we ordered 50,000 cupboards and this
month we only need 20,000.�? The adjustment will
be taken in Poland or Mexico, not in either Sweden
or the U.S. That leads me to this third point— I am
touching a lot of themes here—which is that as the
IKEAs and Apples and Dells, all the Western platform
companies, basically move out of manufacturing,
their need for capital is a lot less.
It is?
Louis: Let’s again take IKEA as an example. IKEA
never went to the equities market. It never went to
the bond market. Yet its stores are pretty much in
every big city in the world. This is because when you
have 20 designers in a warehouse in Stockholm and
you are basically producing on your suppliers’ balance
sheets, you don’t need much capital. That
brings me back to all the excess liquidity in our system.
What we have now are financial markets organized
to take money from the rich Western saver
and bring it to the rich Western companies. But
increasingly the Western companies say, “Hey,
thank you very much. But I don’t need it. I can
finance myself from my own cash flows or I finance
myself from my producers’ balance sheets.
Companies like Wal-Mart, like Dell, don’t need the
market’s capital. Frankly, the only reason these
companies are listed is to give options to the managements.
So now we have the West’s pool of capital
looking for a home. It goes into housing, it goes into
bonds, it goes into junk bonds, it goes into emerging
markets. It goes wherever it can, to try to find a
yield. That’s why liquidity is everywhere, and given
the reality of this brave new world in which we live,
it’s not going away anytime soon. But I don’t think it
is anything we can bemoan.
welling@weeden DECEMBER 15, 2005 PAGE 13
Brave New World.�? Perhaps you’d best explain.
Louis: Basically, the emergence of the platform company
model has allowed U.S. companies to outsource
manufacturing, the most volatile part of the production
cycle, to the developing world. So if underlying
economic activity comes in weaker than forecast, the
platform companies in the West don’t have to slash
labor and inventories. It is their suppliers that have
to lay off workers etc., while the designers and marketing
people and other service workers in the West
find their services still in demand. Of course, the loss
of industrial jobs in the West is very bad news for
hard hats—and for politicians dependent on organized
labor. But it has actually tended to tame economic
volatility in the West. Put another way, with
services gaining an ever-more-important piece of the
economic pie, the variable of adjustment for Western
economies is no longer employment or profits. It is
imports. Which decreases the volatility in our economy, and has very important consequences. If people
are more secure in their jobs, they feel more confident
taking on big mortgages and basically leveraging
their futures.
I’m not sure that really applies beyond a very
Wall Street-centric segment of U.S. society.
Louis: I disagree. In the U.S. over the past 15 years,
we have moved from something like 22% of people
working in industry, what you would call fairly cyclical
jobs, to only 12%—and that 12% is probably a
pretty sticky number. But that is a great development
because we know that industrial jobs are not as
secure as service jobs. It is just the nature of the
game. Industry is just a far more cyclical game. So
we have written a lot on this new business model,
the platform company, which is a lot less volatile.
Take IKEA as an example. Let’s imagine their sales
slow down in the U.S. this winter because gas bills
are high and interest rates are high or whatever, and
that IKEA somehow failed to forecast the slowdown.
What are they going to? They are not going to fire
the furniture designer in Sweden or the salesman in
New Jersey. They are going to call the guy in Poland
or the guy in Mexico who makes the stuff and say,
“Last month we ordered 50,000 cupboards and this
month we only need 20,000.�? The adjustment will
be taken in Poland or Mexico, not in either Sweden
or the U.S. That leads me to this third point— I am
touching a lot of themes here—which is that as the
IKEAs and Apples and Dells, all the Western platform
companies, basically move out of manufacturing,
their need for capital is a lot less.
It is?
Louis: Let’s again take IKEA as an example. IKEA
never went to the equities market. It never went to
the bond market. Yet its stores are pretty much in
every big city in the world. This is because when you
have 20 designers in a warehouse in Stockholm and
you are basically producing on your suppliers’ balance
sheets, you don’t need much capital. That
brings me back to all the excess liquidity in our system.
What we have now are financial markets organized
to take money from the rich Western saver
and bring it to the rich Western companies. But
increasingly the Western companies say, “Hey,
thank you very much. But I don’t need it. I can
finance myself from my own cash flows or I finance
myself from my producers’ balance sheets.
Companies like Wal-Mart, like Dell, don’t need the
market’s capital. Frankly, the only reason these
companies are listed is to give options to the managements.
So now we have the West’s pool of capital
looking for a home. It goes into housing, it goes into
bonds, it goes into junk bonds, it goes into emerging
markets. It goes wherever it can, to try to find a
yield. That’s why liquidity is everywhere, and given
the reality of this brave new world in which we live,
it’s not going away anytime soon. But I don’t think it
is anything we can bemoan.
welling@weeden DECEMBER 15, 2005 PAGE 13
The Starbucks Story
"I tried to build an environment and a place that could provide our customers with an oasis, a
'Third place' away from home or work, that would exceed their expectations."
Planet Starbucks (B): Caffeinating the World
Ten years ago, we had 125 stores and 2000 employees. [Today,] we have 60,000 people working
in 28 markets outside North America, serving approximately 20 million customers a week. Our
core customer is coming in about 18 times a month. With the majority of adults around the
world drinking two cups of coffee a day and with Starbucks having less than 7% share of total
coffee consumption in the U.S. and less than 1% worldwide, these are the early days for the
growth and development of the company. We’ve got a model that has been well tested from
market to market.
Q&A With Starbucks’ Howard Schultz
BusinessWeek Online, September 9, 2002
http://globalgateway.thund
[Easier to read at above link]
Peter Maslen, President of Starbucks International, had just returned from Greece where the company
had opened its first café in downtown Athens. He had logged thousands of miles over the past few years
shuttling from country to country extending the boundaries of the Starbucks empire. In anticipation of
stagnating growth in North America, the company had embarked on a global expansion strategy with
the objective of becoming “a great, enduring company with the most recognized and respected brand in the
world.�?
Starting with Japan in 1995, the company had blazed through several key markets in Asia and
Europe. The company looked to move into more of the emerging world, including Latin America.
While much of the developed world had been conquered—or at least attacked—new growth potential
had shifted to the less-developed regions. Although the company had already established beachheads in
several emerging markets, many believed that the infrastructure and disposable income in these regions
would present forbidding obstacles for Starbucks’ expansion strategies. As Peter Maslen sipped his cup
of steaming espresso, his mind wandered to the challenges his company faced in global markets. Did it
make sense for Starbucks to continue expanding globally at such a breakneck pace? Would the firm be
able to meet the market’s insatiable appetite for earnings growth with its ventures into European and
emerging markets?
History
Starbucks was founded in Seattle by Gerald Baldwin, Gordon Bowker and Ziev Siegl in 1971 as a
gourmet coffee bean roaster and distributor. In 1982 Howard Schultz joined the company as a member
of their marketing team. After a visit to Italy for a trade show, Schultz urged the partners to consider
opening espresso bars in conjunction with their coffee sales. In 1984 Starbucks opened its first espresso
bar in a small corner of the company’s downtown Seattle Starbucks store, to rave reviews. Although
Schultz urged the company to expand the espresso bar line, the controlling partners, now Baldwin and
Bowker, were unwilling to enter what they considered the fast food business, wishing to focus on the
coffee roasting niche market.
2 A07-03-0013
Howard Schultz then left Starbucks, and with the financial backing of his former partners, opened
Il Giornale in 1985, an espresso bar that sold coffee and assorted coffee beverages made exclusively with
Starbucks’ beans. Two years later, Schultz bought the former Seattle Starbucks company, six stores and
roasting plant, for $3.8 million from Baldwin (who wished to focus on managing Peet’s Coffee) and
Bowker (who wished to cash out of the business). Schultz now was in control of Starbucks, and with
new investors, began building a global business which reached sales of $3.28 billion by 2002 and was
acclaimed one of the top 100 growing global brands.
The Starbucks Experience
Howard Schultz’s dream was to take the concept of the Milan espresso bar to every corner of every city
block in the world. Captivated by the sense of community and neighborliness that he had seen in the
cafes in Milan, Schultz wanted to transplant a similar ambience into each Starbucks store. This desire
originated in the very first coffee experience that Schultz had in Milan. While attending a housewares
show in the city of over a thousand cafes, Schultz was quite impressed by the way in which the baristas
(coffee brewers) prepared a cup of espresso. It was pure theater to see a barista move effortlessly as he
ground the beans, pulled the espresso, and steamed the milk, seemingly at the same time and all the
while carrying on a conversation with the customer. It was precisely this experience that Schultz wanted
to bring to each of the Starbucks cafes. He envisioned each café as a gathering place for neighbors and
friends or a place of quiet contemplation and perhaps even a neighborhood office for the work a day
customer who might stop by to catch up on work and a steaming espresso at the same time. The
Starbucks café was indeed a destination. The Starbucks Experience had been designed to be pleasant,
uplifting and diverse.1 Experience and ambience were central to the Starbucks strategy. As Schultz
observed,
We certainly don’t ignore the product, but it is something we always knew we had and a lot of
others didn’t. But we built the business through experience, not through the product.
“Schultz’ Caffeinated Crusade,�? Brandweek, July 5, 1999
I tried to build an environment and a place that could provide our customers with an oasis, a
“Third place�? away from home or work, that would exceed their expectations.
M. Pendergrast, “The Starbucks Experience Going Global,�?
Tea and Coffee Trade Journal, Vol. 174, Issue 2, Feb. 20, 2002
The cafés exuded a sense of chic and featured comfortable seating, sometimes even sofas, a selection
of leading newspapers and magazines including Starbucks’ own in-house weekly, and the strong
aroma of rich coffee wafting through. In addition to a broad selection of coffee and Italian style espressos,
the cafes offered several blends of special teas, localized pastries, and coffee brewing equipment. The
stores themselves were designed to be bold and striking in their color palettes, often using primary
colors. The ambience of the cafes was accentuated by piping selected music to complement the atmosphere
of warmth and comfort. Employees were trained to not only provide advice on coffee selection
and appropriateness to potential customer needs, but to engage the customer.
Location, Location, Location
The company displayed remarkable business savvy in choosing its locations. It focused on spots that
provided ready access to consumer foot traffic, typically in densely populated neighborhoods. Stores
were located in such a way to blanket a neighborhood and often several stores competed for patronage
on the very same street. Starbucks had however been both admired and criticized for these marketswarming
expansion techniques that were used to proliferate within defined market locales. This approach
to first-mover advantage in a market space gave Starbucks sufficient time to establish itself while
holding competitors at bay. The downside however was the cannibalization of revenues across stores
1 “Schultz’ Caffeinated Crusade,�? Brandweek, July 5, 1999.
A07-03-0013 3
located in close proximity to one another. Between 1995 and 1998 Starbucks had averaged $0.69
million per store per year. Beginning in 1999, this revenue per store value had continuously declined,
falling to $0.56 million per store in 2002.
Friday, February 2, 2007
What Drives Silicon Valley
http://en.wikipedia.org/wiki/Silicon_Valley#History
The San Francisco Bay Area had long been a major site of U.S. Navy work, as well as the site of the Navy's large research airfield at Moffett Field. A number of technology firms had set up shop in the area around Moffett to serve the Navy. When the Navy moved most of its West Coast operations to San Diego, NASA took over portions of Moffett for aeronautics research. Many of the original companies stayed, while new ones moved in. The immediate area was soon filled with aerospace firms.
However, there was almost no civilian "high-tech" industry in the area. Although there were a number of excellent schools in the area, graduating students almost always moved east or south (that is, to Los Angeles County) to find work. This was particularly annoying to Frederick Terman, a professor at Stanford University. He decided that a vast area of unused Stanford land was perfect for real estate development, and set up a program to encourage students to stay in the area by enabling them to easily find venture capital. One of the major success stories of the program was that it convinced two students to stay in the area, William Hewlett and David Packard. In 1939, they founded Hewlett-Packard, which would go on to be one of the first "high tech" firms in the area that was not directly related to NASA or the U.S. Navy.
In 1951 the program was again expanded with the creation of the Stanford Industrial Park (later Stanford Research Park), a series of small industrial buildings that were rented out at very low costs to technical companies. Its first tenant was Varian Associates, founded by alumni in the 1930s to build military radar components. Today this sort of office space is commonplace and referred to as a technology incubator, but at the time it was practically unknown. In 1954, the Honors Cooperative Program, today known as the co-op, was established to allow full-time employees of the companies to pursue graduate degrees from the University on a part-time basis. The initial companies signed five-year agreements in which they would pay double the tuition for each student in order to cover the costs. By the mid-1950s the infrastructure for what would later allow the creation of "The Valley" was in a nascent stage due to Terman's efforts.
It was in this atmosphere that a former Californian decided to move to the area. William Shockley had quit Bell Labs in 1953 in a disagreement over the way the transistor had been presented to the public which, due to patent concerns, led to his name being sidelined in favor of his co-inventors, John Bardeen and Walter Houser Brattain. After divorcing his wife, he returned to the California Institute of Technology where he had received his Bachelor of Science degree, but in 1956 moved to Mountain View, California to create the Shockley Semiconductor Laboratory as part of Beckman Instruments and to live closer to his aging mother.
There he intended to supersede the transistor with a new three-element design (today known as the Shockley diode) that he felt would take over the market, but the design was considerably more difficult to build than the "simple" transistor. As the project encountered unexpected difficulties, Shockley became increasingly paranoid. He demanded lie detector tests on the staff, posted their salaries publicly, and generally annoyed everyone. The straw that broke the camel's back occurred when he flew into a rage when a secretary cut her finger, an event he claimed was an intended attack on himself. When it was later demonstrated the cut was from a broken thumbtack the damage was already done, and in 1957 eight of the talented engineers he had brought to the West Coast left and formed Fairchild Semiconductor.
Over the next few years this pattern would repeat itself several times, as engineers lost control of their own startups to outside management, and then left to form new companies. AMD, Signetics, National Semiconductor, and Intel all started as offshoots from Fairchild, or alternatively as offshoots of other offshoots.
By the early 1970s there were many semiconductor companies in the area, computer firms using their devices, and programming and service companies serving both. Industrial space was plentiful and housing was still inexpensive. The growth was fueled by the emergence of the venture capital industry on Sand Hill Road, beginning with Kleiner Perkins in 1972; the availability of venture capital exploded after the successful $1.3 billion IPO of Apple Computer in December 1980.
The Valley also significantly influenced computer operating systems, software, and user interfaces. Using money from NASA and the U.S. Air Force, Doug Engelbart invented the mouse and the graphical user interface in the mid-1960s while at Stanford Research Institute (now SRI International). When Engelbart's Augmentation Research Center went into decline due to personal conflicts and the loss of government funding, Xerox picked up many of Engelbart's best researchers. In turn, in the 1970s and 1980s, Xerox's Palo Alto Research Center (PARC) played a pivotal role in object-oriented programming, graphical user interfaces (GUIs), Ethernet, PostScript, and laser printers. Hewlett-Packard is credited with inventing the ink jet printer, while Ampex (in Redwood City) is credited with inventing the video cassette recorder.
The diaspora of Xerox inventions led directly to 3Com and Adobe Systems, and indirectly to Cisco, Apple Computer and Microsoft. Apple's Macintosh GUI was largely a result of Steve Jobs' visit to PARC and the subsequent hiring of key personnel. Microsoft's Windows GUI is also based on PARC's work, if less directly. Cisco's impetus stemmed from the need to route a variety of protocols over Stanford's campus Ethernet. While Xerox itself had marketed equipment using these technologies yet seemed incapable of more fully capitalizing on them, they were too important to not flourish elsewhere.
There are contradictions in the Valley's successes as well. As David Naguib Pellow and Lisa Sun-Hee Park claim in one of their recent works about the area:
"While typically lauded as the engine of the high-tech global economy and a generator of wealth for millions, Silicon Valley is also home to some of the most toxic industries in the nation, and perhaps the world. Next to the nuclear industry, the production of electronics and computer components contaminates the air, land, water, and human bodies with a nearly unrivaled intensity.
"The Valley is also a site of extreme social inequality. It is home to more millionaires per capita than anywhere else in the United States, yet the area has also experienced some of the greatest declines in wages for working-class residents of any city in the nation. Homes are bought and sold for millions of dollars each day, yet thousands of fully employed residents live in homeless shelters in San Jose, the self-proclaimed 'Capital of Silicon Valley.' Silicon Valley also leads the nation in the numbers of temporary workers per capita and in workforce gender inequities. Moreover, the region has an entirely non-unionized workforce and is as racially segregated as the most big urban centers."
Although semiconductors are still a major component of the area's economy, Silicon Valley has been most famous in recent years for innovations in software and Internet services. The Valley is generally considered to have been the center of the dot-com bubble which started in the mid-1990s and collapsed after the NASDAQ stock market began to decline dramatically in April of 2000. During the bubble era, real estate prices reached unprecedented levels (for a brief time, Sand Hill Road had the most expensive commercial real estate in the world) and the booming economy resulted in severe traffic congestion.
Even after the dot-com crash, Silicon Valley continues to maintain its status as one of the top research and development centers in the world. A 2006 Wall Street Journal story found that 13 of the 20 most inventive towns in America were in California, and 10 of those were in Silicon Valley.[2] San Jose led the list with 3,867 utility patents filed in 2005, and number two was Sunnyvale, at 1,881 utility patents.
The San Francisco Bay Area had long been a major site of U.S. Navy work, as well as the site of the Navy's large research airfield at Moffett Field. A number of technology firms had set up shop in the area around Moffett to serve the Navy. When the Navy moved most of its West Coast operations to San Diego, NASA took over portions of Moffett for aeronautics research. Many of the original companies stayed, while new ones moved in. The immediate area was soon filled with aerospace firms.
However, there was almost no civilian "high-tech" industry in the area. Although there were a number of excellent schools in the area, graduating students almost always moved east or south (that is, to Los Angeles County) to find work. This was particularly annoying to Frederick Terman, a professor at Stanford University. He decided that a vast area of unused Stanford land was perfect for real estate development, and set up a program to encourage students to stay in the area by enabling them to easily find venture capital. One of the major success stories of the program was that it convinced two students to stay in the area, William Hewlett and David Packard. In 1939, they founded Hewlett-Packard, which would go on to be one of the first "high tech" firms in the area that was not directly related to NASA or the U.S. Navy.
In 1951 the program was again expanded with the creation of the Stanford Industrial Park (later Stanford Research Park), a series of small industrial buildings that were rented out at very low costs to technical companies. Its first tenant was Varian Associates, founded by alumni in the 1930s to build military radar components. Today this sort of office space is commonplace and referred to as a technology incubator, but at the time it was practically unknown. In 1954, the Honors Cooperative Program, today known as the co-op, was established to allow full-time employees of the companies to pursue graduate degrees from the University on a part-time basis. The initial companies signed five-year agreements in which they would pay double the tuition for each student in order to cover the costs. By the mid-1950s the infrastructure for what would later allow the creation of "The Valley" was in a nascent stage due to Terman's efforts.
It was in this atmosphere that a former Californian decided to move to the area. William Shockley had quit Bell Labs in 1953 in a disagreement over the way the transistor had been presented to the public which, due to patent concerns, led to his name being sidelined in favor of his co-inventors, John Bardeen and Walter Houser Brattain. After divorcing his wife, he returned to the California Institute of Technology where he had received his Bachelor of Science degree, but in 1956 moved to Mountain View, California to create the Shockley Semiconductor Laboratory as part of Beckman Instruments and to live closer to his aging mother.
There he intended to supersede the transistor with a new three-element design (today known as the Shockley diode) that he felt would take over the market, but the design was considerably more difficult to build than the "simple" transistor. As the project encountered unexpected difficulties, Shockley became increasingly paranoid. He demanded lie detector tests on the staff, posted their salaries publicly, and generally annoyed everyone. The straw that broke the camel's back occurred when he flew into a rage when a secretary cut her finger, an event he claimed was an intended attack on himself. When it was later demonstrated the cut was from a broken thumbtack the damage was already done, and in 1957 eight of the talented engineers he had brought to the West Coast left and formed Fairchild Semiconductor.
Over the next few years this pattern would repeat itself several times, as engineers lost control of their own startups to outside management, and then left to form new companies. AMD, Signetics, National Semiconductor, and Intel all started as offshoots from Fairchild, or alternatively as offshoots of other offshoots.
By the early 1970s there were many semiconductor companies in the area, computer firms using their devices, and programming and service companies serving both. Industrial space was plentiful and housing was still inexpensive. The growth was fueled by the emergence of the venture capital industry on Sand Hill Road, beginning with Kleiner Perkins in 1972; the availability of venture capital exploded after the successful $1.3 billion IPO of Apple Computer in December 1980.
The Valley also significantly influenced computer operating systems, software, and user interfaces. Using money from NASA and the U.S. Air Force, Doug Engelbart invented the mouse and the graphical user interface in the mid-1960s while at Stanford Research Institute (now SRI International). When Engelbart's Augmentation Research Center went into decline due to personal conflicts and the loss of government funding, Xerox picked up many of Engelbart's best researchers. In turn, in the 1970s and 1980s, Xerox's Palo Alto Research Center (PARC) played a pivotal role in object-oriented programming, graphical user interfaces (GUIs), Ethernet, PostScript, and laser printers. Hewlett-Packard is credited with inventing the ink jet printer, while Ampex (in Redwood City) is credited with inventing the video cassette recorder.
The diaspora of Xerox inventions led directly to 3Com and Adobe Systems, and indirectly to Cisco, Apple Computer and Microsoft. Apple's Macintosh GUI was largely a result of Steve Jobs' visit to PARC and the subsequent hiring of key personnel. Microsoft's Windows GUI is also based on PARC's work, if less directly. Cisco's impetus stemmed from the need to route a variety of protocols over Stanford's campus Ethernet. While Xerox itself had marketed equipment using these technologies yet seemed incapable of more fully capitalizing on them, they were too important to not flourish elsewhere.
There are contradictions in the Valley's successes as well. As David Naguib Pellow and Lisa Sun-Hee Park claim in one of their recent works about the area:
"While typically lauded as the engine of the high-tech global economy and a generator of wealth for millions, Silicon Valley is also home to some of the most toxic industries in the nation, and perhaps the world. Next to the nuclear industry, the production of electronics and computer components contaminates the air, land, water, and human bodies with a nearly unrivaled intensity.
"The Valley is also a site of extreme social inequality. It is home to more millionaires per capita than anywhere else in the United States, yet the area has also experienced some of the greatest declines in wages for working-class residents of any city in the nation. Homes are bought and sold for millions of dollars each day, yet thousands of fully employed residents live in homeless shelters in San Jose, the self-proclaimed 'Capital of Silicon Valley.' Silicon Valley also leads the nation in the numbers of temporary workers per capita and in workforce gender inequities. Moreover, the region has an entirely non-unionized workforce and is as racially segregated as the most big urban centers."
Although semiconductors are still a major component of the area's economy, Silicon Valley has been most famous in recent years for innovations in software and Internet services. The Valley is generally considered to have been the center of the dot-com bubble which started in the mid-1990s and collapsed after the NASDAQ stock market began to decline dramatically in April of 2000. During the bubble era, real estate prices reached unprecedented levels (for a brief time, Sand Hill Road had the most expensive commercial real estate in the world) and the booming economy resulted in severe traffic congestion.
Even after the dot-com crash, Silicon Valley continues to maintain its status as one of the top research and development centers in the world. A 2006 Wall Street Journal story found that 13 of the 20 most inventive towns in America were in California, and 10 of those were in Silicon Valley.[2] San Jose led the list with 3,867 utility patents filed in 2005, and number two was Sunnyvale, at 1,881 utility patents.
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