Spinoffs are an important way that technical knowledge, specific skills, and experience spreads. They extend the impact of innovative technologies far beyond their place of birth.
Companies that trace their origins to the founders and employees of legendary Fairchild Semiconductor, known as “Fairchildren,” established Silicon Valley as a world center of entrepreneurial activity and technological leadership. Many Fairchildren failed due to weak products, unfortunate timing, or poor management, but talented employees quickly found new opportunities in Silicon Valley’s dynamic entrepreneurial ecosystem.
Founded in 1957 by eight former employees of the Shockley Semiconductor Laboratory in Mountain View, California, Fairchild pioneered a host of industry leading semiconductor products including transistors, LEDs, and ICs. Coupled with the academic resources of Stanford University and UC Berkeley, successful Bay Area ventures over many decades had established a strong local foundation of enterprise and technical expertise. Fairchild’s extraordinary success and growth capitalized on being planted in this fertile ground.
Fairchild’s success was based on revolutionary insights by three cofounders. Jean Hoerni invented the planar process. Robert Noyce used the planar method to conceive the integrated circuit (IC). Gordon Moore and his “law” encouraged IC advancements that today enable billions of transistors on a chip at rapidly declining cost per transistor. Intel, AMD, other Fairchildren, and companies worldwide created generations of chips that have transformed the way we work, live, and play.
Financial rewards for Fairchild founders encouraged others to pursue their dreams of professional freedom and monetary success. Sequoia Capital and Kleiner Perkins Caufield & Byers—formed by Fairchildren and others—sprang up as pioneering venture investors. Fairchild’s early granting of stock options stimulated risk-taking, economic growth, and (in some cases) vast personal wealth often re-invested in other startups.
Fairchild management emphasized openness over hierarchy that built on the Hewlett-Packard approach of “management by walking around.” This encouraged direct employee interaction that evolved into today’s distinctive Silicon Valley style of “flat” organizational structures, emphasis on technical skills, and informal work environments.
Although the company’s fortunes peaked in the late 1960s, the Fairchildren and their successors transformed Silicon Valley into today’s hotbed of innovation and economic growth. In 2014, a research analyst traced more than 92 public Bay Area tech companies to the founders and employees of Fairchild. At that time, the market value of all these companies was more than $2 trillion.
AMD, Amelco, Applied Materials, GMe, Intel, National
Over the decade of the 1960s, more than 30 startup companies emerged on the southern San Francisco Peninsula to pursue the opportunity for silicon semiconductor devices in computers and new consumer products, including color TV. Most of them spun out of Fairchild Semiconductor that was founded in 1957 by eight disaffected employees from the laboratory of William Shockley, the coinventor of the transistor, in Mountain View, California. One month later the USSR launched Sputnik, creating a demand for silicon transistors in US aerospace systems. Fairchild became an overnight financial and technical success and established semiconductor manufacturing as the primary growth industry of the region, thus giving rise to the nickname “Silicon Valley.”
Learn more about spinoff companies from the 1960s.
Apple, KLA, KPCB, Oracle, Sequoia, U-B Networks, VLSI
Together with floppy-disk drives and compact software operating systems, the introduction of second generation microprocessor devices from Intel (8080), Motorola (6800), MOS Technology (6502), and others in the mid-1970s enabled the development of low-cost, personal microcomputer systems for business and hobbyist users. Many innovative Silicon Valley PC pioneers such as Apple, Cromemco, IMSAI, Morrow, and Osborne were staffed and/or funded by Fairchild alumni.
Learn more about spinoff companies from the 1970s.
Altera, Cadence, Cisco, Linear, LSI Logic, Maxim, SanDisk, Sun, VLSI
Widespread adoption of personal computers and workstations by business and industry in the 1980s created a demand for electronic sharing of information. The Ethernet network architecture from the Palo Alto Research Center (PARC) of Xerox Corporation proved popular in small office and educational applications. Many Silicon Valley companies founded during this decade built chips, systems, and software for Ethernet and other network solutions.
Learn more about spinoff companies from the 1970s.
Brocade, eBay, Google, Juniper, Nvidia, Yahoo!
By the 1990s, the internet and associated World Wide Web tools had emerged as a global system of interconnected computer and communications networks that enabled the widespread publication, manipulation, and consumption of information by businesses and consumers. Many Silicon Valley hardware and e-commerce vendors (pets.com, Webvan, etc.) enjoyed dramatic growth during the “dotcom” boom until derailed by the subsequent stock market crash. Startups with more robust business models, such as eBay, Google, and Yahoo, survived.
Learn more about spinoff companies from the 1990s.
Facebook, LinkedIn, Tesla, WhatsApp
Handheld mobile computing, pioneered by the Apple Newton (1993) and Palm Pilot (1997) personal digital assistants, found limited appeal until they could be interconnected via wireless and mobile operating systems. Early smartphones from Silicon Valley companies such as the HP OmniGo and Handspring Treo were eclipsed by the popular success of the Apple iPhone (2007) and App Store and Google Android-based products (2008).
Learn more about spinoff companies from the 2000s.
Instagram, Niantic, Pinterest, Snapchat, Uber
By now expanded to the city of San Francisco, Silicon Valley continues to play a major role in the development of hardware and software platforms that enable mobile social media applications combining significant computing power with artificial intelligence capabilities to replace traditional commerce and entertainment services, from autonomous vehicles to the distribution of information.
Learn more about spinoff companies from the 2010s.