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we can very accurately say that this
piece of land has shaped the world
where we live in this is the famous
silicon valley it's fast-paced
alluring and intimidating all at the
same time when we started slight beam
we used to live in an apartment
somewhere around
somewhere around here and the google
flex the the offices of google
were here this is microsoft this is
cisco over here
apple over here and facebook over here
so
why did all these tech companies decide
to settle
around the same place
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if the state of california were a
country it'd be the fifth
largest economy in the world bigger than
india and the uk
in france and brazil california
generates more than two trillion
dollars california's economy is now the
fifth biggest in the world
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back to silicon valley how did this
place come to exist
the story is really more than just
computers so let's explore the
coincidences that made this cradle of
innovation possible
welcome to company friends
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this is silicon valley in the 20s and
30s
and back then there was the occasional
zeppelin some radios and prunes it even
went under a different name
the orchard region was known as the
valley of hearts delight
california as the entire us was
navigating the great depression back
then
but in this area in particular there was
an additional problem
people were fleeing they were all
leaving to find jobs on the east coast
frederick turman was a professor at
stanford university's department
of electrical engineering and this
migration really troubled him and he
knew that he had to do something about
it
he knew that he had to do something to
create jobs in the area so he fought
to convince companies to establish in
san francisco
and to do so he planned to use the
newest technology at the time
radio radio brings endless hours of
entertainment
information center of the universe
radio was vital because turman's plans
came when the united states armed forces
were using the coastal regions to their
advantage
thanks to the massive areas they were
able to create
zeppelin basis and extensive testing
facilities
so eventually the demand for technical
knowledge increased
and the problem was the shortage of
talent so in the mid-30s
turman was working hard to attract both
companies and former students
and one stanford alum did return a guy
named
bill hewlett he started working on
developing oscillators and improving
light bulbs and turman puzzled to get
some funding for him
and he found another former student and
a close friend of hewlett
dave packard and they of course founded
a company in 1939 and instead of calling
it
bill dave they called it hewlett-packard
was that the best joke we could come up
with
the military was also spending big bucks
in the area to better their test ground
and say what you will about the military
they're always a good customer
now in the 40s turman worked to build
the stanford
industrial park and it was different
from other parks because it would only
leads to high technology companies
benefiting
stanford in the process and turman's
vision worked the first company to sign
a lease
was varian associates in 1959 and they
produced vacuum tubes which were a big
thing back then
and many other companies soon followed
some names included eastman codec
general electric lockheed and shockley
transistor laboratory
and we have to talk about that one the
name might not mean anything
to you these days but william shockley
helped create
silicon valley and much more but unlike
terman
this guy doesn't have a great reputation
in late 1939 or early 1940s one must
learn from these failures and not be
stopped by then you will be so
conservative that i don't think you'll
bring his views on racism and eugenics
made him one of the most
controversial people in science help at
one point he suggested creating a sperm
bank only with nobel prize
winners intelligence magazine named him
the second most controversial researcher
which was a thing apparently but he's
vital to the silicon valley story he
first worked with bell laboratories
where he helped co-invent the transistor
these tiny transistors are destined to
play a big part in our electronic aid
different types for different purposes
and if you don't know what a transistor
is
just know that they used to look like
this and now your smartphone has
millions of them inside this landed him
a nobel prize
and of course a big ego in 42 shockley
left bell to start his own business
and his plan was to use silicon as the
base for diodes which
is more stable than germanium which was
previously used
so this was some game changing tech but
shockley
was driving his employees crazy he was
excellent at spotting talent
but he would demoralize the promising
young engineers
he was obsessed with incessant
psychological tests and even
lie detectors he also grew paranoid of
his ideas and became jealous of his
co-workers
his attitude and bad business decisions
made him blind to his own mistakes
and his eventual demise his silicon diet
idea failed
and the work environment at shockley was
so toxic that many were just unable to
continue
after just one year of working with him
eight of his employees
left to create another company and
shockley would call them the traitorous
eight
together these young mercenaries formed
fair child semiconductors and yes they
would work with silicon transistors and
eventually
conductors but fairchild wouldn't only
be a successful company
it would also shape silicon valley as of
2014
92 companies came from first or second
generation individuals
with origins in fairchild companies like
intel and nvidia amd
and venture funds like kleener perkins
and stanford wasn't far behind the
stanford
research institute which was formed in
1946 became part of arpanet the very
primitive
first iteration of the internet computer
mouse watched hd television were
invented here at sri
their success spurred others xerox
created its palo alto research center or
park
there it produced components such as the
graphic user interface
essential for modern computers and the
place was no longer about
prunes it was the country's computer
hub with names such as apple and atari
oracle and others
but it still didn't have a name this is
the january 11th
1971 issue of electronic news and it has
an article that reads
silicon valley usa now electronic news
was what many historians called
the bible of the technology sectors
whatever it wrote about
it had to be a big deal and one of its
journalists don hoffler
focused on corporate gossip product
failures and insider details
kind of like us according to the site
computer history over
lunch with some managers one of them
said something about silicon valley
and huffler loved the term so after the
meeting he changed the article's title
on monday january 1171 the first three
pieces called silicon valley usa came
out
hoffler had made history but he didn't
know it in an interview 10 years later
hoffler said
how was i to know that the term would
quickly be adopted
industry-wide and finally become generic
worldwide
well it did but the term wasn't only
about technology it was about
relentless effort and how individuals
can create giants
of the industry fairchild's impact was
obvious but
why did the place remain as the go-to
destination
for tech even after all those years in
the coming years the success
of these companies and their employees
brought a massive financial impact to
the area which
came with its own set of problems begin
tonight in san jose where the city's
homeless problem is becoming a pr
problem take a look at this people
living in rvs parked along
major streets he has to move and being a
google employee
doesn't guarantee a place to stay in
mountain view salaries are high
but rent is just plain insane rent for a
one bedroom apartment in 2020 was
on average two thousand and forty
dollars and hey this was
cheaper than 2019 it has reached values
of four thousand dollars
good friends of mine that live in the
area make six figure salaries
and barely make ends meet making 100 to
150k a year is cool
but what gives if all of that goes to
rent people have tried workarounds like
container homes or literally ditching
rent to live in an rv park
many locals have been pushed out because
prices are just unaffordable if you
don't work in tech
and the bay area of course has the third
highest rate of homelessness
in the us so why do these companies keep
establishing themselves
in silicon valley there's there's a lot
of debate about the other reasons why
silicon valley is a success and
especially why other places haven't been
able to replicate it
and one theory is that all the money is
there yes
the acquisitions and the previous exits
all the money is there and that's why
all the companies keep spawning there
well yes and no second reason is that
companies are choosing to stay in
silicon valley
fairchild spawned many enterprises but
they didn't leave
they were part of this close-knit
network this
community that went far back as
university years so
it made perfect sense to stay close to
these contexts that you had created
these professional networks gave way to
another critical factor
for silicon valley's success those
around you
could help you develop new products
using their own technology
it's it's great it's it's the papal
mafia story
actually and if you haven't go watch our
video about it a third reason is
diversity
there are many universities packed with
highly qualified students
they're filled with ambition who want to
change the world
plus their backgrounds they have they
come from different nationalities
cultures and practices they're make they
make up for this boiling pot of ideas
so it's logical that companies that
invested in the valley once
are willing to do it again it's this
energetic cycle of reinvestment
a fourth theory is work culture because
there's a seriously collapsing barrier
between
work and life especially in silicon
valley yes you have the casual dress
code the free office meals
remote work long before the pandemic
everybody works
all the time in the valley 40 hour work
weeks are a scam
they don't exist the perks are great but
everything is there
so that you never leave because you have
to
it's what it takes to make it there i've
done it we did it we did the 16-hour
workday when we lived over there
in the early stages of the company but
it's unsustainable
this is a valid theory but there's a
fifth reason
it's a subtle and legal peculiarity that
helped create
this startup paradise but for that we
need to go back to 1872
except as provided in this chapter every
contract by which anyone is restrained
from engaging in a lawful profession
trade or business of any kind is to that
extend
void that's what the california code
section 16600 says which is an updated
version
of an 1872 law under california's civil
code
what does it mean outside of california
if a company hires someone chances are
they have to sign an agreement
this document says that if they leave
their employer they can't work for
competitors
for a determined period of time usually
about two years so in short
this is a non-compete agreement or nca
then there's non-disclosure agreements
or ndas
this document forbids any employee from
revealing confidential information about
the company and yes
ncas and ndas both exist in california
but california courts
declare these contract clauses as
legally unenforceable
they are null even if the former
employee moves to another company or
even starts a company that directly
competes
with the former employer so in
california it's an
inalienable right for a person to quit
to find work
in any other legally sanctioned capacity
so ndas
and nca's cannot block this opportunity
so it's this tiny detail that might be
essential
for creating silicon valley's culture
silicon valley is not just a region in
california connections happen
sheer luck the culture of silicon valley
can be fascinating for the outsiders
silicon valley has remained relevant
through the decades the 60s 70s 80s and
90s
each was a different generation but
something ties them together
this intense techno optimism links
all the generations together they share
this belief that technology will be
a means by which we make the world a
better place
beyond that these companies also love
or need the hustle survival of the
fittest
yes your buddies with the rest but the
rest won't feed you
at least not for free and to survive and
to make it in the valley
it takes a certain someone as well as a
certain network
a certain combination of companies
around you so
can it be replicated one of the arguable
silicon valleys of the world is shenzhen
a special administration region
established in china
near hong kong they like to call
themselves
another silicon valley and they have
churned out some pretty
massive companies but their potential is
still limited
by the stability and restrictions of
their government
their currency and their cultural
barriers economics explains did a
fantastic video on this by the way
silicon valley has the combination of
talent experience
and capital this capital is wealth that
was created precisely
by tech companies so these are investors
that are bound to invest in the same
things
there's a stable government despite you
know
this which makes the stability of
silicon valley
pretty unparallel around the world as
for other parts of the world
i'm costa rican and in latin america i
hear the term new silicon valley
way too many times it can't be done any
city
or country coming up with that tagline
is just being extremely naive but what
do you think
can it be replicated let us know in the
comments hope you enjoyed this video as
always do the thing the subscribe the
like the comments we appreciate it
and we'll see you next week
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