History of Silicon Valley: 1891-1956

Aug 21, 2021

In 1891, Stanford University was founded.

the need for another university in California is about as great as that of an asylum for decayed sea captains in Switzerland. – The New York Mail

In 1909, Cy Elwell, a recent electrical engineering graduate from Stanford, went to work for a company that developed a wireless telephone – one that transmitted voice over the radio. Elwell would convince Stanford president David Starr Jordan to put up $500 in venture capital. Other professors soon joined in. The company would become the Federal Telegraph Company (FTC), based in Palo Alto.

This partnership would mark the start of a fruitful relationship between the technology industry and Stanford.

By 1920, Stanford had become a hotbed for radio research. It was one of the only universities offering courses in the subject, and Stanford had established itself as a top school in the new discipline of electrical engineering. One student would stand out and ultimately be donned "the Father of Silicon Valley."

Fred Terman was the son of a Stanford professor (notably, the one that invented the IQ test) and an amateur radio enthusiast. After graduating, he would work for Federal Telegraph, only to go back to school and get a Ph.D. in Electrical Engineering from MIT before leading the newly created radio lab at Stanford.

Terman's lab would produce thousands of great engineers. However, these engineers would have to go back East to find jobs once they graduated. What the area needed were companies to support these graduates. Two of Terman's students would create a company that did just that: David Packard and William Hewlett.

The connection between Terman and HP doesn't end there. When Terman was named Dean of the Engineering School at Stanford in 1945, the university was surrounded by fruit orchards. Stanford was still a financially struggling regional school but had land rights to 8,800 acres surrounding the school.

Stanford planned to lease out the land for different uses, such as the Stanford Shopping Center, which still exists today. When Terman found out, he thought about what he had learned studying under Vannevar Bush at MIT. The MIT Model was a revolving door between the university and industry, one providing research and development, the other providing high-paying jobs.

Terman's brainchild was the 700-acre Stanford Industrial Park, now known as Stanford Research Park. Hewlett Packard would become one of the first tenants. Over the years, companies that have operated out of Stanford Industrial Park include Tesla, Xerox PARC, Steve Jobs's NeXT Computer, Facebook, General Electric, Lockheed Martin, Nest, Skype, SAP, and VMWare.

In 1956 Silicon Valley would change forever. It was the year that HP moved into its new headquarters at Stanford Industrial Park. That same year, semiconductor research and Nobel prize winner William Shockley would move the Shockley Semiconductor Laboratories to Mountain View, California, in Silicon Valley.

Shockley Semiconductor would become one of the most important companies in Silicon Valley lineage. In part two, learn about the traitorous eight.