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The legacy of Robert Noyce

The Smiling Salesman, conspicuous consumption and the cubicle--Silicon Valley has a lot to thank the chip industry legend for, says News.com's Michael Kanellos.

The year was 1948. His girlfriend was pregnant and needed an abortion. His university expelled him for a semester for stealing a pig--a felony. To make ends meet, he bought a $10 suit and took a job at an insurance company.

From the look of it, you wouldn't think that Intel co-founder Robert Noyce was bound for glory.

"The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley" by Leslie Berlin is the first full-fledged biography of Noyce--and in a lot of ways, it's long overdue.

Noyce was one of the key figures at Shockley Semiconductor and later at Fairchild Semiconductor, two companies that helped launch the electronics industry and plant its center of gravity in Northern California.

As a scientist, he came up with a way of proving whether tunneling--a then-theoretical principle of quantum mechanics--existed. He never tested the idea. Leo Esaki pursued his own research on the subject and got the 1973 Nobel Prize in Physics for it.

Noyce clearly changed the way corporate America worked.

Noyce (along with Jay Hoerni and others) devised a version of the integrated circuit. Jack Kilby of Texas Instruments came out with one first, but the version Noyce came up with became the basis for the chip industry. Had Noyce not died in 1990, many believe he would have shared the 2000 Nobel Prize for Physics with Kilby.

But just as important, the book underscores Noyce's role in establishing one of the two principal archetypes of the electronics industry: the Smiling Salesman.

The Smiling Salesman school of thought emanates from the belief that life, by and large, really should be enjoyed. Newfound wealth is best used by buying private helicopters and going on ski vacations. Current problems will lead to future opportunities. Employees will exceed expectations when given interesting problems and left alone.

"The people that are supervising it (a project) are more dependent on their ability to judge people than they are dependent on their ability to judge the work that is going on," Noyce said in 1965.

This optimistic outlook, which Noyce helped forge, percolates throughout the industry and has become both a legacy and a driving force of it. Job-hopping and/or starting your own company, for instance, are looked at as legitimate, if not admired, ways to move up in the world.

But in the 1950s, when Noyce and others left Shockley to start Fairchild, that wasn't the case. Founder William Shockley (the model for the Valley's other principal archetype, the Psycho Nitpicker) branded the defectors the Traitorous Eight when they quit. Shockley may have engaged in questionable behavior--like publicly humiliating employees and threatening to give them lie detector tests--but he had a huge reputation. Few wanted to back the upstarts.

"Every company (except Fairchild) turned the idea down flat, without even asking to meet the men involved. Some firms may have found the pith of the letter--please give a million dollars to a group of men between the ages of 28 and 32 who think they are great and cannot abide working for a Nobel prize winner--unpalatable," Berlin writes.

Modern-day venture capital--which seems to run on its own, often abrasive, version of buoyancy--also came out of the deal. The banker who cut the Fairchild deal was Arthur Rock, a founder of Venrock Associates, which later backed Intel and Apple Computer. One of the Eight also discovered he had an aptitude for finance: Eugene Kleiner, who founded Kleiner, Perkins, Caufield & Byers.

The optimistic outlook Noyce helped forge percolates throughout the industry and has become both a legacy and a driving force of it.

Noyce also helped popularize employee stock options. Fairchild was the birthplace for Intel, National Semiconductor and Advanced Micro Devices, among others for a very good reason. Management there viewed stock options as a form of "creeping socialism" and kept most of the rewards for themselves.

Subsequent years saw the tech industry embrace the cubicle (a way to level the distinction between office execs and regular employees), bonuses for individual rank-and-file employees, and company cafeterias where everyone mingled.

Noyce, of course, had his flaws. Not one for details, he inevitably had to step away from hands-on management in all of his ventures. He avoided confrontation and often got credit for other people's work. During his first marriage, he had his girlfriend, an Intel employee, deliver packages to his house to experience the thrill of almost being caught.

Nonetheless, he clearly changed the way corporate America worked. Julius Blank, one of the Traitorous Eight recalled his first meeting with Noyce. To make it to the inaugural party at Shockley, Noyce drove straight from Utah to California in a rainstorm with a broken windshield wiper, chain smoking to stay awake.

"He hadn't shaved, he looked like he'd been living in his suit for a week and he was thirsty," Blank once said in an interview. "There was a big goddamn bowl of martinis on the table there. Noyce picks up the goddamn bowl and starts drinking it. Then he passed out. I said to myself, 'This is going to be a whole hell of a lot of fun.'"