The university research and high technology connection

One of the primary building blocks to creating Silicon Valley was the connection between Stanford University and other institutions of higher education.

The link encouraged practical ideas that were fostered in the classroom to be commercialized in the real world. This was an attitude originally insisted upon by Senator Leland Stanford as he traveled the east coast during the late 1880s interviewing professors for his new university.

At the time, almost all universities were centers of learning for literature, philosophy and the classics. Shortly after Stanford University opened in 1891, the senator passed away. His legacy of the university encouraging the commercialization of practical ideas continues to this day.

Federal Telegraph
The first high technology company having a relationship with Stanford University was Federal Telegraph. In 1909, Federal set up shop in Stanford University’s town of Palo Alto. Stanford’s president, David Starr Jordan, and a few faculty members provided the initial capital and the company hired many of the university’s graduates.

Federal became famous for inventing the audion, a little bulb that enabled radio transmission across the Atlantic Ocean for the first time. When the company was acquired in 1931 by ITT and was moved to New Jersey, many of its engineers remained in Northern California. In Hewlett-Packard’s early years (1939 – 1945), several of Federal’s former employees provided expertise for HP.

Bill Hewlett and Dave Packard were Stanford graduates and hired most of their engineers straight out of Stanford. They maintained a symbiotic relationship with the university and its research.

As other companies were attracted to pre-Silicon Valley (including Bill Shockley’s Shockley Semiconductor), these corporations often would establish informal relationships with Stanford through its professors, students and graduates.

This practice extended to many other Bay Area universities including the University of California, Berkeley, the University of California, San Francisco, Santa Clara University and San Jose State University.

A healthy beginning
All of this coziness between higher education and entrepreneurial high technology was a very healthy beginning to creating Silicon Valley. In fact, hundreds of locales around the world are encouraging university/high-tech relationships. But there are five other necessary ingredients to duplicating the entrepreneurial risk culture of Silicon Valley. They are:
■  Role models
■  A culture that forgives failure
■  Venture capital
■  A level playing field
■  What Steve Jobs calls “the beehive effect.”

These ingredients do not occur overnight; it takes time and determination. In the next five columns, we’ll cover each of these topics in more depth.

John McLaughlin is founder and president of the Silicon Valley Historical Association.