Abstract: Big Iron in Silicon Valley: Silicon Valley IBM-Based Start-Ups, 1967-1975

Ross Bassett

Abstract

This paper examines the start-up companies formed in Silicon Valley by defectors from IBM's disk drive and computer development organizations in the Santa Clara Valley from 1967 to 1975. While several of these start-ups, Information Storage Systems and Amdahl, had a measure of success, their ability to grow was severely hampered by the extent to which they conceptualized themselves as offering IBM-compatible, rather than general purpose, products. The networks involved in establishing these new enterprises show few connections with the networks that developed around Fairchild Semiconductor, which were essential to the development of the semiconductor industry in Silicon Valley. This was most dramatically shown by Trilogy Systems, a second-generation IBM start-up founded by Gene Amdahl, which blew through $250 million without ever establishing a successful product, and in doing so violated every tacit rule of Silicon Valley entrepreneurship. This paper broadens our understanding of what made Silicon Valley work, by showing through a non-sustainable network of innovation, some of the key factors behind the sustainable network that was developed through Fairchild Semiconductor.