Ray Zinn, the longest serving CEO in Silicon Valley, discusses the history of silicon as only he can, having watched it from Shockley to Facebook.
In Part I, Ray and Goldman Sachs analyst Peter Marchetti cover the early days of Silicon Valley and how that led to mass innovation.
Peter Marchetti has spent the past 20 years as an advisor to some of the most significant families and foundations in the country. He joined the Goldman Sachs team in 2000 after receiving his MBA from the Haas School of Business at the University of California, Berkeley.
Ray Zinn: Hello, everyone. Welcome to another fantastic Tough Things First podcast. We’re so delighted to have you with us again today. This is going to be a very, very special series of podcasts that we’re going to do, which is all about the history of Silicon Valley. You’re going to get to hear from start to finish, if you’re interested anyway, about Silicon Valley, you’re going to get a chance to hear about that. It’s great to have a very special guest today, someone who is a good friend of mine who has expressed a lot of interest in the history of Silicon Valley.
It’s because of him that I’ve decided to do this series of a broadcast. Now we’re not sure how many is doing a high out, but my guess is somewhere between five and six will be about the history of Silicon Valley. It’s going to take a bit of time to cover all this. We apologize in advance. If it seems a little bit chopped up as we go through it, because in 60 years, that’s a lot of history. With me today, I have my good friend, Pete Marchetti, who is a financial advisor. Welcome, Pete, to the podcast.
Peter Marchetti: Morning, Ray. Thanks for having me. I’m excited.
Ray Zinn: Well, I’m excited too. Let’s just dive into it. I’m going to give a little bit of a preliminary about this so that people will understand. Silicon Valley really didn’t become the name Silicon Valley until 1969, but it actually started much earlier than that, the whole thing about Silicon Valley, the area, anyway. We call it the Bay Area right now. Just a little bit of a background there. The people that were actually the founders of Silicon Valley as you would, what they call the Traitorous Eight, actually began back at Bell Labs in I think Pennsylvania.
Bell Labs actually started from Alexander Graham Bell who actually invented the telephone. The name Bell Labs comes from his name, Alexander Graham Bell, the inventor of the telephone, which is, again, probably our first electronics that we’ve ever had. Anyway, and so that’s a bit of a start of that that I want to cover, is that the Bell Labs people were the ones that actually got this thing undergoing in Dr. Shockley who left Bell Labs and then took with him the Traitorous Eight and came to the Bay Area, basically, in the area of Palo Alto, Mountain View area. With that, Pete, you’re going to be the guest speaker today. You start firing away with your questions, because you have lots of interesting questions.
Peter Marchetti: Yeah. Well, I appreciate that, Ray. As I said, I’m excited to be here today. We’ve had a lot of conversations over the years about, through your experiences, what Silicon Valley is and how it’s evolved to where it is today. I got to say, I think there’s very few people out there that have not just the experience of having worked in the namesake industry for as long as you did and running companies and being involved in the industry, but then also have the amazing ability to recollect names and anecdotes and just situations.
Through our conversations, I know I’ve learned a lot. I got to say, today, I’m really interested as just another kind of a listener of the podcast, if you will, to hear more of your stories. One of the things that I guess when I think about our discussions that I’ve never really hear you talk about is, you grew up in the Imperial Valley really far Southern California. I think it was a little bit more of a rural area where you grew up. Then you went to school in Utah. Again, not really a metropolitan area, I think, around BYU.
Then you decided to come to Silicon Valley or what was not then yet Silicon Valley. You decided to move to the Bay Area to work in transistors. I guess I am wondering, what led to that? What was the allure at the time for somebody like you, a young engineer who had been from other parts of the country to move here at that time? What drew you?
Ray Zinn: Well, as you mentioned, I grew up in Imperial Valley. My dad was a cattle rancher. There’s 11 children in our household. I grew up in a very strong family background, mainly agrarian. I just didn’t want to be involved in the cattle business or in agriculture. I went to school. As you mentioned, I went to BYU in Provo, Utah. I started in 1955, which is interesting, because Shockley actually came much earlier about the same timeframe, anyway, to the Bay Area by the time I started my university studies. I graduated in 1960.
I graduated in industrial management and engineering. I was dating a gal from Sunnyvale, California, which is in the Bay Area. She got me a job at United Technology, which is an aerospace company, part of Pratt & Whitney. Anyway, United Technology was a big aerospace outfit making rocket engines. That sounded exciting to me because I want to be an astronaut. I thought, well, here’s a way to get in to become an astronaut, is to come to the Bay Area and work for this rocket motor company because that sounded really, really exciting.
That’s what brought me to the Bay Area in July of 1960, was my opportunity to work for United Technology, which is still in existence. They still make rocket motors, I think. That’s what brought me there, brought me to Silicon Valley.
Peter Marchetti: That’s great. 1960, that was just a few years after Shockley had started Shockley Semiconductor. You really were here almost at the formation of the semi industry. It wasn’t even the semi industry back then, right? It was called something different. Semiconductors were not yet a name component at that time.
Ray Zinn: Well, semiconductors had a name. They’d been in existence for a number of years by Westinghouse and Sprague and TI and some of those companies were making semiconductors. They’re making passive components, resistors, capacitors, diodes. In fact, the first semiconductor, basically, was a diode, which has got two leads on. It’s got an anode and a cathode. That was the beginning of it, was that real simple part, which just had two leads. In fact, that’s how Fairchild got started, was making diodes. We call it the diode plant at Fairchild. They weren’t silicon.
They were germanium, which is a different type of material than silicon. Silicon really hadn’t taken hold at that point early on, anyway, in the early ’50s. They did make passives, like I said, diodes, capacitors, resistors, and so forth. Those are what we call passive devices. Even a diode is more of a passive device as opposed to an active device like a transistor. They did make transistors in those days. They just made them out of germanium.
Peter Marchetti: What would be interesting to hear is, for everybody that’s listening, you moved here in 1960 and understand why you came here. It would be great to understand what does the landscape look back then? I’ve been here since ’94 and I think about how different driving along 101 looks or along 280 and seeing the development of office parks and big buildings and all that. In 1960, I think about the development from that point going forward had to be dramatic. As a new person moving to the Bay Area, can you maybe help to paint a picture for us of what it looks like when you were driving along 101, which wasn’t even that old of a highway probably back then.
Ray Zinn: Yeah, it’s tough.
Peter Marchetti: Or what the neighborhood look like? Basically, what was it like to be an inhabitor in the Silicon Valley back in the …
Ray Zinn: It was called Bayshore Freeway. That was the major artery. In fact, it began with El Camino Real, which was a highway that run from Los Angeles, actually San Diego, all the way up to San Francisco. It was all stop and go, because every city had a stop sign or stoplights. That was El Camino, what’s famously known as El Camino Real, which means a King’s Highway. Then they put in the Bayshore Freeway. Again, it wasn’t called 101, it was called Bayshore. Highway 1 actually was part of El Camino. Highway 1 still exists.
It still runs along the coastline all the way from LA, all the way up to coast, all the way to Oregon. Bayshore Freeway, it was known, run from, basically, Gilroy, California, which is just about 20 miles Southeast of San Jose on up to San Francisco. It had all the stoplights on it. There was no highway as you would called Bayshore Freeway. I guess freeway, meaning there was no toll on it. It mean it was free, but there had a lot of orchards, a lot of prune and pear and … Let’s see, what’s the other … apricots.
Peter Marchetti: Apricots were big too.
Ray Zinn: Yeah, a lot of apricots. Basically, from where highway 17 or 80 begins, all the way to Mountain View, those were all orchards. Just imagine, you’re just driving through a bunch of orchard land and there were no real companies, no little buildings there, except when you got to the airport, to …
Peter Marchetti: Moffett Field, right?
Ray Zinn: Moffett Field, yeah, when you got to Moffett Field. That’s what the big facility there, was the facility on Moffett Field where Lockheed was. Then if you drove up a little bit further, then you would get to some more companies like Ampex and Varian and so forth. There weren’t a lot of very large companies. San Jose was a sleepy town, probably less than 300, 000, 400,000 people. It was not the big metropolitan place it is now with over a million-and-a-half people. Does that answer your question?
Peter Marchetti: Yeah, that’s great. That’s super helpful. How about like, again, as a young worker moving to the Bay Area or having a young family in the Bay Area, what were the activities that people did to occupy their time when they weren’t at work?
Ray Zinn: Well, the normal sports, baseball, football, soccer, all those things were still … There’s a lot of boating, sailing, because you had the Bay area, had the San Francisco Bay for sailing, had Santa Cruz, and Half Moon Bay, and Monterey. A lot of boating, a lot of sailing were the activities, as well as tennis and golf and all the normal ones that you have today. That was what people did other than their regular card games and stuff like that they would play at night as families.
Peter Marchetti: Right, not too different maybe than from what we experience today without all the electronics being involved. How about in terms of … I think about conversations that happen at parties or when people gather together and technology dominate so much of the discussion in the Bay Area nowadays. How about back then? There was a lot of growth. There were a lot of companies popping up. Was it like that back then? Was …
Ray Zinn: No, no, no. As I said, it was mainly … You had peanut butter companies, you had canning national foods, canning company, a lot of canneries because of the produce that was in the area. Mainly, it was more of an agrarian with canneries. That’s where people mainly worked, was at the canneries. Smuckers was there or the jam company, large canning company. It’s mainly a revolved around an agrarian society.
Peter Marchetti: Got it. If you had to list the largest employers to the companies that dominated the landscape as much as any, who would those companies have been back then? You mentioned Smuckers. I’m assuming that was a big one.
Ray Zinn: Yeah. All the food companies, National Can, American Can, mainly, the big companies were the big canneries. They’re not there anymore, by the way. The canneries were, FMC, which is Food Machinery Corporation. They made a lot of military equipment, jeeps and tanks and so forth, was another big company. Lockheed was a big employer. Probably the largest employer was Lockheed, Lockheed Aerospace, which is right there where NASA was their facility. Then Ampex, Varian were the big electronic companies. Hewlett-Packard was there.
IBM had a big facility down in South San Jose. From electronics point of view, the biggest employers were probably IBM and South San Jose. Memorex was there where they made a recording media. Ampex made, again, recordings, the VCRs. The Hudson, probably a name nobody can remember. Then you had Varian made a lot of electronic equipment, so did Hewlett-Packard. Hewlett-Packard instruments made a lot of electronic … Oscilloscopes, curve tracers, things like that.
Then, of course, you had Lockheed, wasn’t so much electronic because they made airplane engines and airplane parts. Then going up to the peninsula, you mainly had the bankers living in the cities that were north of Mountain View, places like Menlo Park, wasn’t very popular, but it was a place where the bankers held out. Then they drove into the city or took the train into the city.
Peter Marchetti: That’s great. From your experience, you started at United Technologies and then you went to, where from there? Was that when you went over to Fairchild?
Ray Zinn: Yeah. In 1961, I met a gal and we got married. Her father worked for Fairchild. We’d go over to her parents’ home for dinner. He kept talking about how wonderful it was to work at this new industry called semiconductors. His company was called Fairchild Camera and Instrument, was the original name of it. He said, “Lot of excitement, lot of great things happening, they pay well. It was really exciting.” He got me all excited about semiconductors. I had decided to leave United Technology, which was basically in Sunnyvale.
Then down in South San Jose, they had a big test facility down there where I worked. I decided to join this new fledgling industry called semiconductors. Of course, the company, the only one at that point that was there was Fairchild. We were in one little small building on Whisman Road and then we were all together. They did have a facility in Palo Alto called Fairchild Research. We’ll cover that later. I think at this point, Pete, let’s tie this one off. We’ll go on to the second in the series, which we’ll cover more about the industry, because we’re beginning to talk about the industry.
Thanks everyone for joining with us. This is going to be a series, history of Silicon Valley. Those of you who are interested, stay tuned. You’re going to get to hear a lot of great stuff now about the history of the Valley, because I started, as Pete said, very, very early on, 1960 is when I actually started employment in the Bay Area before it was called Silicon Valley. Thanks, Pete, for being with us today. We really appreciate you joining us. For all of you, please come and visit our website, toughthingsfirst.com. You can follow us on Twitter, Facebook, and any other source.
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