Silicon Valley
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Silicon Valley: Startups, Strategies, and the Stanford Connection James F. Gibbons The following is an edited transcription of the plenary address given by James F. Gibbons, Dean of the Stanford University School of Engineering, at the 1994 MRS Spring Meeting.
My talk today is based on a series of observations I started making about five years ago in response to a question someone asked me: "What role had the Stanford School of Engineering played in the development of Silicon Valley?" Although Stanford, in fact, probably gets more credit for Silicon Valley than it deserves, I thought the question merited some analysis, especially since I had for some time been following some of the Silicon Valley firms, and working with some of them. So I did a small, sort of lefthanded study of these companies, involving talks with many of their founders, and out of that came this presentation— which, by the way, I first gave on Wall Street to a Stanford alumni club. My subject is rather ambitious—a mini history of Silicon Valley—but my purpose is to give you some background on just how the legendary high-tech firms got started, what kinds of firms they are, how their individual economies developed, and what impact they had, as a whole, on the economy of Silicon Valley and the country. First, let's talk about startups—the types of startups, the length of time needed to determine whether or not they'll be viable, and the requirements for their success. Three Types of Startups
Looking across the Silicon Valley at any given time, you will find, in general, three types of startup firms. The first type is a company that has, already in place, a workable product or idea that does not require extensive product or market development. A firm typical of this category is SUN Microsystems, whose product, the SUN Workstation, was the "solution" to a problem generated about a decade ago in a Stanford Computer Science Department graduate seminar. As a result of that seminar and related activities, Andy Bechtolsheim and his colleagues conceived the workstation, and
recognized that it could be put together with easily available parts. The group built a prototype to test the market for their product, found a significant potential, and proceeded to develop SUN 1, SUN 2, and SUN 3 in rapid succession. In terms of establishing a time scale, you can tell if a firm in this first category is going to be successful or not in a relatively short period of time—something like two to five years.
No successful firm I know of has ever been formed without a highly qualified team. The second type of firm is one that has a working prototype of a product that requires some development before marketing can begin. An example of such a company is MIPS Computing Systems. MIPS, as some of you may know, is a RISC architecture semiconductor company formed in part by my Stanford colleague, John Hennessy and four of his graduate students. In their PhD work, Hennessy's group was trying to establish benchmarks for a very promising RISC architecture, to determine if it wou
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