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Kleiner composed a letter to the person in charge of his father’s account. “We have an experienced and well-diversified group of men with background in the fields of physics, electronics, engineering, metallurgy,
and chemistry,” he wrote. With $750,000 to cover salaries and expenses, “we believe that we could get a company into the semiconductor business within three months.” Kleiner continued, “The initial product would be a line of silicon diffused transistors of unusual design applicable to the production of both high frequency and high power devices. It should be pointed out that the complicated techniques for producing these semiconductors have already been worked out in detail by this group of people and are not restricted by any obligation to the present organization.”
to “think about the fundamentals of the physics”—
“Why won’t this work?”
“What fundamental laws will it violate?”
“the job of the manager is an enabling, not a directive job … coaching, and not direction, is the first quality of leadership now. Get the barriers out of the way to let people do the things they do well.”
In the lab, informal company policy allowed “PhDs to play with their ‘toys’ [ideas] for about a year” before expecting results. If an idea appealed to a researcher—for whatever reason—he was free to pursue it. This rather loose definition of relevance led Fairchild researchers to develop roughly one-sixth of all major integrated circuit innovations during the technology’s first two decades.
one issued in April 1964, that required all televisions be equipped with UHF tuners, a law that effectively forced the introduction of transistors into every television in the United States—
Change in regulation that shaped the semiconductor market
he also worried that such specificity limited a lab’s creative flexibility to explore the “interesting slop” that might unexpectedly emerge in the midst of research. “A young organization, especially in the electronics industry has to be fast moving,”
He was not directly responsible for this particular idea, but he gave an employee both the freedom to pursue it and the promise of a thoroughly engaged audience when he wanted to discuss it. Once Noyce believed in the idea himself, he pushed it up the corporate hierarchy with little concern for how foolish it might have sounded or made him appear. Later, the once-crazy idea became standard operating procedure for the entire industry.
“We simply lost it. I mean, it’s like all of a sudden the bread came out of the oven and it was all flat. It just didn’t work any more…. I said to Bob, ‘My god, this is terrifying. Oh my god, we’re going die.’ He said, ‘Oh no. We’ll figure it out.’ … He was completely relaxed about it; it was wonderful [and] calming to me.”
Noyce’s greatest strength as a manager was that he gave people confidence in themselves.
If the integrated circuit manufacturers designed and built the circuits themselves, what would the engineers at the customer
companies do? Moreover, why would a design engineer with a quarter-century’s experience want to buy circuits designed by 30-year-old employee of a semiconductor manufacturing firm?
In effect, Noyce was betting Fairchild’s bottom line against two hunches. He suspected that if integrated circuits could make their way into the market, customers would prefer them to discrete components
and would begin designing their products around the new devices. He also calculated that as Fairchild built more and more circuits, experience curves and economies of scale would enable the company eventually to build the circuits for so little that it would be possible to make a profit even on the seemingly ridiculously low price. Gordon Moore has said that Noyce’s decision to lower prices to stimulate demand so that the production volumes could grow and the cost of production be decreased accordingly was as important an “invention” for the industry as the integrated circuit itself.
To explain how volume can more than make up for price cuts, Noyce liked to use a book-printing analogy. The first copy of a book, taken by itself, is extremely expensive because the printer must buy equipment, typeset, proof, and otherwise ready the document for printing. Once the process is in place, however, every additional copy is relatively cheap because the investment in materials and equipment for the original printing is fixed.
“I’m thinking of leaving Fairchild,” Noyce told Moore in the offhanded tone he so often used to announce big news.
Moore had told Noyce that he thought semiconductor memories were “one of the first ideas I’ve seen in a long time that you could probably start a company on.”
the semiconductor industry’s progress in squeezing ever more devices onto a circuit meant that soon it would be possible to build an integrated circuit complex enough to be practical for computer memories.
Noyce’s manner of offering general directives rather than following up on specific process details was ideal for supervising highly creative technical work—indeed, it was the source of his success as the head of R&D—but this management style did not translate well to large, multifaceted organizations.
He later elaborated: “One thing I learned at Fairchild … is that I don’t run large organizations well. I don’t have the discipline to do that, have the follow through…. My interests and
skills are in a different place, that’s all. It’s getting people together to do something, but that only works for me in a smaller group.”
they had worked together productively for more than a decade, thanks to their remarkably complementary skills. Where Noyce saw the big picture, Moore could discern detail. Where Noyce had honed his abilities to construct strong connections between Fairchild and various outside constituencies (the press, the board, customers, suppliers), Moore had become an expert leader within the company itself. Noyce rarely set foot in the lab after 1965, but Moore had an intensely loyal following in R&D, which he led with a light hand and a quiet, laid-back style that recalled Noyce’s approach but added the
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And for all their apparent differences, Noyce and Moore shared one key trait—a burning competitive desire to do something extraordinarily well.
“We are only going to hire perfect people,” Noyce told his oldest children one summer afternoon. “A small bunch of people who know what they are doing can accomplish much more than a big group of people who don’t know what they are doing.”
“I felt I was young enough that this wouldn’t be my last job opportunity. If this panned out, great. If not, there would be other opportunities.”
“Integrated Electronics” (abbreviated to “Intel”).
“The man has to have a killer instinct,” Rock said. “He has to know where the game is—on the bottom line.”
know that the company intended to fund both a stock option plan and a stock purchase plan for employees. The founders believed that stock ownership was the best guarantee of both loyalty and innovation.
Owning stock, on the other hand, gave employees an incentive to pursue high-risk, high-reward, next-generation products—
Intel reserve for itself the “option to purchase stock of an employee who quits the company or is fired within a short period of time.”
Noyce did by typing up three pages, the meat of which said that Intel was going to try to build semiconductors “not of the types of integrated circuits now on the market” and that Intel “will seek to extend the technology to higher levels of integration.”
Noyce and Moore were among the most optimistic. They knew that Intel would lose money until production got up to speed, but their business plan assumed only two years of losses. In effect, Noyce and Moore were saying that in 730 days their company would design a circuit, build a production line, produce in mass quantities a technology that had never before gone beyond lab prototyping, and then sell enough of those circuits to turn a profit.
“more aggressive than I had ever planned on.”
“These guys seemed to be holding the challenge in their hands and steering the future.”
structure Intel as what Noyce called “a two-headed monster,” with power split evenly between him and Gordon Moore, was a direct result of Noyce’s having confronted his own managerial limitations at Fairchild. Intel’s board of directors, which included Rock, Noyce, Moore, Richard Hodgson, and senior executives from several computer companies who could bring a customer’s perspective to board deliberations, was an intentional response to Noyce’s experiences with the Fairchild trustees who had been unburdened with any knowledge of semiconductors.
Processes developed in R&D were tested and fine-tuned with the same equipment used for commercial manufacturing. By “co-locating” development and manufacturing in this way, Moore and Noyce hoped to ensure that Intel did not waste its time developing high-concept devices that could not be built.
Noyce and Moore developed the three-pronged attack on the assumption that if one approach did not work out, maybe another one would. Moreover, the bipolar and MOS approaches could share many techniques and facilities, which meant that the company’s effort, when it came to buying equipment and developing operating procedures for growing crystals, cutting wafers, maintaining cleanliness, and the like, was not as fractured as might appear on first blush. If, in the best-case scenario, more than one process yielded success, each was targeted to serve a different market and to work in tandem with
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Researchers could adopt the “pretty” approach, in which they devote a great deal of time and effort to developing a technique or machine that will allow them to test their ideas with exact measurements that yield final definitive answers. Or a researcher could try the “quick and dirty” way, moving forward with an idea as soon as a rather rudimentary test indicates it will probably work. Noyce believed that the quick-and-dirty method generated “90 percent of the answer in 10 percent of the time.”
there was another benefit to operating on the Noyce principle, according to Moore. The company produced few spin-offs “because it does not generate a lot more ideas than it can use.”
Grove followed up to confirm people kept their commitments.
Noyce believed that for a company to be successful, it “must keep the vision of product and direction very narrow, while keeping the peripheral vision of market forces affecting the business very broad.” Noyce would provide the necessary wide ranging vision and Grove would provide the equally necessary precision focus.
He and Moore set aside one lunch hour each week to eat with small groups of employees, and a morning every month to talk to industry analysts.
Noyce’s interactions with potential customers in the first months of Intel’s existence revolved around determining market needs.
NOYCE ALWAYS MAINTAINED that the “genesis” for any successful thinking about semiconductor products “must not be ‘we have this product, how do we get rid of it?’ but ‘this is a critical product.’” The technology itself interested Noyce less than the need for the technology, a distinction that he explained thus: “A company must go out and find what the customer wants. Where is the need? Where is the opening? … The need
is not for, say, half a million ¼-inch drill bits. The need is that there are ten million ¼-inch holes that need to be drilled.” Even if a customer thinks he needs a drill bit, it was Intel’s job, in Noyce’s estimation, to recognize that the real need was to make a hole, and then to find the best way to make it.
“This is a funny deal with the microprocessor,” explains Gordon Moore. “There was no real invention [in a technical sense]. The breakthrough was a recognition that it was finally possible to do what everyone had been saying we would some day be able to do.”
In the midst of all this confusion and uncertainty, one fact emerges with surprising clarity—Bob Noyce was absolutely essential to the microprocessor’s development and success at Intel.
“the microprocessor would not have happened at Intel if it had not been for Bob.”
