The book Valley of Genius is, as the subtitle reads, the Uncensored History of Silicon Valley (As Told by the Hackers, Founders, and Freaks Who Made It Boom). It’s a collection of stories around situations and companies in silicon valley written by quotes from different people. It must have been amazingly hard to write as the author really just interviewed people and then structured what they said by collating 50 quotes by 10 people together into a story around e.g. Pixar.
My deepest respect go to the author, Adam Fisher.
So why is silicon valley special:
Stone: The infrastructure is here: the real estate people, the legal people, the you-name-it people. They get start-ups, so it’s easier: “Oh, okay, you’re a start-up. So, here you go.” It’s just easier to do start-up stuff, because everyone in the whole ecosystem knows about start-ups.”
On what the early hackers were building with that internet:
Jamie Zawinski: We weren’t building a toy. We were building a communications medium. We were letting people connect to each other in a way that they hadn’t been able to before. It was the opposite of television; it was giving people a voice.
The problem of the wrong people coming to silicon valley during the first bubble:
Sean Parker: And then it becomes the post–social media era. It’s all the people who would have become investment bankers who want to go start internet companies, and it’s a purely commercial, purely transactional world. It’s just become this transactional thing, and it’s attracted the wrong type of people. It’s become a very toxic environment. A lot of people have shown up believing, maybe correctly, that they can cash in. But that’s Silicon Valley the ATM machine, not Silicon Valley the font of creativity and realization of your dreams.
Around the special kind of people that are founders:
Steve Jobs: The people who really create things that change this industry are both the thinker and the doer in one person.
On building programming tools:
Alan Kay: In programming there is a widespread theory that one shouldn’t build one’s own tools. This is true — an incredible amount of time and energy has gone down that rat hole. On the other hand, if you can build your own tools then you absolutely should, because the leverage that can be obtained can be incredible.
By the way, Flickr was a tool as part of a possible game and Slack an internal tool for a company building a game, both companies built by the same founders.
The really really and amazing story of the founding of Atari:
Nolan Bushnell: I got on a flight to Chicago and called on Bally and said, “Would you like to license my next game? A driving game? It’s going to cost you this much of money in development.” They said, “Yeah, we’d love to do it!” And so I had my cash flow in hand. I went back to Nutting and said, “I’m going to have to leave.”
Ted Dabney: We wound up getting this contract, $4,000 a month for six months to develop a video game and a pinball machine for Bally.
Al Alcorn: Nolan then goes and hires me, employee number three, and we go off and start Atari.
Seriously? WTF!
Ted Dabney: Bally paid for it. They paid $24,000 to us for that game, but Bally kept not accepting the game, kept not accepting it. Nolan and Al and I were sitting around looking at each other: What are we going to do?
Al Alcorn: So Nolan said, “Put it out on location.” We put it next to a Computer Space at Andy Capp’s Tavern. I remember the day we put it in. Nolan and I popped it in one day after work and went and bought a beer and watched until somebody played it. I never thought anybody would play it! Think about it. There’s no instructions. It just says “Pong,” which meant nothing. There’s two knobs and a coin box. What’s the motivation here? So, some guy plays it. Nolan went up to him afterward: “What did you think of that?” And the guy said, “Oh yeah, I know the guys who made this machine.” And I’m thinking, Save the bullshit for the ladies. So we left. Not long afterward, Alcorn receives a phone call from Andy Capp’s Tavern.
Al Alcorn: The machine stopped working. It didn’t surprise me. It was just thrown together quick and dirty. It was never meant to run on location. So, I went there after work and the attract mode was working, so that tells me most of the thing is working. So what’s wrong with it? I open up the coin box — it was a Laundromat bolt-on coin box — to give myself a free game to see what was going on, and when I opened that coin box up it was just jammed full of quarters. I can fix this! I told Nolan, “Wow, this is interesting…”
You stumble upon your greatest successes. Remember that.
Michael Malone: It’s hard to capture just how crazy Nolan was in those early days. He was a wild man. He was young. He lived high. He had the Rolls-Royce. The code name for each new product was named after some hot girl on the assembly line. He really did have that master-of-the-universe thing. I mean there was coke with the assembly-line girls in the hot tub. This guy did the whole Cash McCall thing. He was just throwing out sparks in every direction.
or
Ray Kassar: When I arrived there on the first day I was dressed in a business suit and tie and I met Nolan Bushnell. He had a T-shirt on. The T-shirt said: I LOVE TO FUCK. That was my introduction to Atari.
Nolan seems to have been a character.
Why corporates sometimes fail … :)
Alvy Ray Smith: I get the call from Jerry Elkind, my boss. He says, “We’re going to let you go.” And I went, “Well, why?” And he said, “Well, we’ve decided not to do color.” I said, “But Mr. Elkind, the future is color. It’s obvious. And Xerox owns it completely!” He said, “That may be so, but it’s a corporate decision to go black-and-white.” Okay, bye.
Amazing stories on Steve Jobs:
Al Alcorn: And he came back a few months later. I remember Ron Wayne came in and said, “Hey, Stevie is back.” And I said, “Steve who?” “Steve Jobs.” Oh that kid, yeah. “Oh, bring him in.” And I wish I had a camera. He was wearing a saffron robe, shaved head, barefoot, had a Baba Ram Dass book, Be Here Now. Steve gives me the Baba Ram Dass book and says, “Can I have my job back?” “Sure.”
Fun stuff you could do with the Apple II.
Andy Hertzfeld: For the Apple II you could write programs that played music — but it had no real sound hardware. All you could do with the software was hit a memory address, which I still remember: C030. So if you hit C030 it would produce a “click” on the speaker. That was all the hardware could do. But if you did that a thousand times a second with software you’d get a one-kilohertz tone, if you did it three thousand times a second you’d get three kilohertz. And the Apple II was literally full of stuff like that, where by just using tiny little bits of resources it could do amazing stuff. In fact, just looking at the Apple II design gave you the feeling that anything was possible, if you were just clever enough. That’s what the main lesson.
But back to Atari, which is one of the best parts.
David Crane: Pitfall took me about a thousand hours sitting at a computer to do. Now that’s a long time except it’s only a few months. Six or seven months. And it turns out that Pitfall earned Activision $50 million wholesale. So I made for them $50,000 an hour given the thousand hours I worked on it.
[…]
Alan Kay: That year Atari’s gross just by itself was $3.2 billion, and that was several hundred thousand dollars more than the entire movie industry in Hollywood. So at that time Atari was bigger than all of Hollywood: They had money coming out of their ears!
[…]
Alan Kay: They used to send the corporate jet up the coast to get shrimp for the executive dining room, and the joke was you could tell how Atari was doing by the size of the shrimp in the executive dining room.
[…]
Howard Warshaw: By mid-1984 we were down to two hundred people. So, in about a year and a half the company goes from ten thousand employees to two hundred employees, and I was still one of those people. It was a dark time.
Simply Amazing.
Jamis MacNiven: Titans rise, titans fall — that’s the nature of the world. It just happens faster in Silicon Valley.
The startup that was eBay and how Pierre came to his boss who didn’t see it.
Michael Stern: So Pierre came to me when I was the general counsel in 1994 and said, “I’ve created this little electronic community. I’m getting people to talk to each other about trading tchotchkes. We’re creating traffic on the network and getting people into a community. That’s kind of in our sweet spot, isn’t it?” That was General Magic’s thing: the whole notion of electronic community. I said, “That’s the stupidest idea I’ve ever heard! If you want to do it, bye, see you later.” That was eBay.
And this was its power:
Joey Anuff: When eBay came around I couldn’t think of anything better to do than buy every single toy my parents ever told me I couldn’t get. Like Bionic Bigfoot from The Six Million Dollar Man. Still in the box! It was a fucking miracle.
And there were funny side effects:
Steve Westly: eBay has this stunning idea: that they will enable you to sell anything to anyone. But there’s these wild downsides, like, one Saturday I get a call from our engineering department saying the FBI is calling and they want to know why we have an operational rocket launcher for sale.
But let’s get to the eBay IPO:
Jim Griffith: Goldman Sachs had scheduled the IPO for October of ’98.
Steve Westly: We’re there with literally the most serious people from Goldman Sachs, and they’re saying like, “How big do you think the Beanie Baby playing-card sports-card trading-card industry is? One hundred million? Two hundred?” And that’s when I jumped up and said, “Well, you know we now have a thousand categories and we have an average eleven hundred items per category and we have a sell-through rate of X, and we’re adding categories at this rate, and by the way, we’re going into more geographic areas, and so we think this is a multi-billion-dollar company,” and we were able to convince the people from Goldman Sachs that we might be on to something.
And then came the first trade:
Brad Handler: There was a long wait before the first trade. It was more than an hour after the market opened, and when the first trade came across the tape I think it was somewhere in the fifties. We all realized that our lives had all irrevocably changed. In that instant everyone in that room was probably worth more than their parents had ever made in their lifetimes.
This sounds amazing but at the same time, it was a website, with immense growth, so this is what happened there:
Steve Westly: I was used to this, because I’d have to be handling marketing, and the press would start calling and asking when the site would come back up, and I’d talk to engineering and we’d say, “Fifteen minutes,” or “Forty-five minutes,” but that day there was an outage to the extent where engineering for the first time ever said, “We don’t know.” I said, “What do you mean, you don’t know?” This was a bad one.
Pete Helme: It made the whole site unusable, and nothing worked, and people had to scramble, all the engineering teams got together, and Meg was there, rallying the troops: “How do we figure this out?”
Jeff Skoll: Part of the problem was that the only person that knew how the system worked was Mike Wilson. Pierre had worked with him before at The Well. And Mike worked his tail off: He was in the office seven days a week. And Mike for the first time in three years took a vacation. He went off to the Caribbean somewhere and he was sort of out of touch for a week, and that was the week the system went down. Pierre had long since lost track of what was going on, Meg didn’t have a clue — that’s not her background — and neither did the other engineers in Mike’s group. The holy grail was held by Mike, so nobody really understood what was wrong.
[…]
Pierre Omidyar: It was front-page news. We had CNN satellite trucks in the parking lot. It was big, big. It was, “The world is watching, this company is gone. It’s going away.”
[…]
Maynard Webb: And Meg had promised, based on the June outage, that we would do a free listing day, which meant we took the fees away, and everybody would go crazy for twenty-four hours, and our site traffic would double or triple in volume — which is not necessarily a recipe for greatness when you’ve had scale issues.
It must have been fun, and hell, and fun, and hell, and fun.
Steve Westly: The stock split twenty-four to one from the initial IPO. It turned out to be a thousand-to-one return on the venture investment. Still one of the biggest in history.
How Steve Jobs bought Pixar:
Ralph Guggenheim: The story I was told was that there was a conference call between Steve and the execs at Lucasfilm, and you can imagine execs in a conference room with a speakerphone on the middle, and Steve’s on one end of the phone and all of these execs are trying to negotiate with him at the other end. Steve says something like, “I’ll give you five million dollars for the thing. I’m going to have to put in another five million dollars. That’s my offer!” And one of the execs undoubtedly said, “What! Five million? That’s not nearly enough.” And I was told that Steve said, “Fine, go fuck yourself!” and instead of going and fucking themselves they took the offer and they closed the deal.
And on to Steve finally finding out about the first Pixar movie, Toy Story:
Alvy Ray Smith: So Steve’s busy running NeXT and Disney took the movie to New York and the critics saw it. They went nuts and they said, “This is going to be a huge success!” And as soon as Steve heard that he pushes Ed aside to be there when the cameras roll.
Then we go on to Netscape:
Jim Clark: I clicked around, I found Marc’s e-mail, sent him an e-mail right there saying, “This is Jim Clark. You may not know who I am, but I am the founder of Silicon Graphics, and if you know me, you know that the news has come out that I am leaving Silicon Graphics. I would like to start a new company. I would like to know if you would like to get together and join me to talk about that.” Ten minutes later, he responded. Marc Andreessen: I said, “I know who you are.”
And how they thought about what to do:
Marc Andreessen: We were talking one day and we said, “Well, this internet thing — no one takes it seriously but it’s growing vertically…”
Jim Clark: All I had to do was look at the growth of Mosaic for a year and see that it grew to a million users, and I figured there was a network effect of people getting online.
Marc Andreessen: The idea was to basically do a new version of Mosaic but from scratch, and in particular do it as a real product.
Jim Clark: I said, “Okay, let’s hop on a plane and go out and recruit your buddies.”
Aleks Totić: Then Marc calls: “Hey, we’re flying in — I think we’re doing it: We’re going to do the Mosaic killer.”
And Jim Clark about Jamie from further up, or simply about geeks:
Jim Clark: He had half of his head shaved. Some stylistic statement on his part. I completely ignored it. It did not matter to me; I did not give a hoot. He was a great programmer, brilliant young guy. I do not think anyone bothered. People have just got to realize that a computer geek is respected on the basis of how much code he can write and the quality of code he can write. People do not give a crap what he looks like. If you generate good code quickly, no one cares. Jamie made everyone a lot of money.
And then a big one about Google.
Scott Hassan: Very quickly, in six to eight weeks, we were able to build the whole structure of Google. It was mostly just Sergey and I from two a.m. to six a.m. in the morning.
And the drain Google took on the Stanford network.
Larry Page: We caused the whole Stanford network to go down. For some significant amount of time nobody could log in to any computers at Stanford.
And that they won’t get broke:
Andy Bechtolsheim: The question, of course, is, “How do you make money?” And the idea is, “Well, we’ll have these sponsored links and when you click on a link we’ll collect five cents.” And so I made this quick calculation in the back of my head: Okay, they are going to get a million clicks a day at five cents, that’s fifty thousand dollars a day — well, at least they won’t go broke.
Which in the end really was not so easy and if you read The Search you see the other side. But still they got first investment:
Sergey Brin: He gave us a check for a hundred thousand dollars, which was pretty dramatic. The check was made out to “Google Inc.,” which didn’t exist at the time, which was a big problem. […] We hadn’t really discussed valuations and stuff like that. He figured it would pay off, and he was right. We finalized all the details on the round after that. I guess we figured if we didn’t agree later, that it would be a loan. He liked us and he just wanted to sort of push us forward.
Because the Google founders actually were at Burning Man:
Brad Templeton: In the early years Sergey would just actually sleep in whatever camp he found himself in at the end of the night. Google is incorporated immediately after the return from Burning Man.
And it gets even funnier:
Heather Cairns: They handed me a folder full of checks for like $100,000, $200,000 from Andy Bechtolsheim, Jeff Bezos, David Cheriton. They sat in the back of my car for weeks because I couldn’t get out of work in time to even get a bank account opened.
And at the end Google people just wanted to continue to be in a frat house.
David Cheriton: I’m tempted to say it was like a frat house, although I’m not sure I’ve ever been to a frat house. It was a long way from a professional company — frankly, once I invested I really didn’t have the sense for some time whether these guys were really taking the company routine seriously or not, so I used to say, “Well, I spent $200,000 on a T-shirt.”
I mean check this:
Charlie Ayers (note: first chef at Google): I come from the world of the Grateful Dead, so I know how to party, and so on the ski trips in Squaw Valley I would have these unsanctioned parties and finally the company was like, “All right, we’ll give Charlie what he wants.” And I created Charlie’s Den. I had live bands, deejays, and we bought truckloads of alcohol and a bunch of pot and made ganja goo balls. I remember people coming up to me and saying, “I’m hallucinating. What the fuck is in those?” It was like something out of The Hangover — hot girls drooling all over themselves and people passed out on the chairs.
Larry Page: All sorts of fun things.
Charlie Ayers: Larry and Sergey had like this gaggle of girls who were hot, and all become like their little harem of admins, I call them the L&S Harem, yes. All those girls are now different heads of departments in that company, years later. […] Sergey’s the Google playboy. He was known for getting his fingers caught in the cookie jar with employees that worked for the company in the masseuse room. He got around.[…] HR told me that Sergey’s response to it was, “Why not? They’re my employees.” But you don’t have employees for fucking! That’s not what the job is.
It was wild times back then.
The joke used to be at the time, this being ’97 through 2000 — the golden era — was basically all you had to do was stand at the corner with a cocktail napkin, and VCs would throw money at you from a passing car. I loved it.
Ev Williams: I remember leaving some party with a bottle of champagne. It was like, “You’re leaving? Have a bottle of champagne!” In those days, it wasn’t a ridiculous gift…
[…]
Jamis MacNiven: There was a guy — the name of the company was Pixelon — he raised fifteen, eighteen million dollars, had no product, went to Las Vegas, hired the Who and, I think, Kiss.
Jamis MacNiven: Draper Fisher Jurvetson once rented one of the biggest buildings in the world, Hangar One at Moffett Field — it was where the USS Macon zeppelin was — and filled it with amusement park rides. There must have been eleven thousand pounds of shrimp and it was raging. Barbara Ellison, Larry’s ex-wife, used to throw parties with zebras and elephants and giraffes. There was a party once that had army tanks driving around with naked women. One guy had a huge party and hired these four party girls, to just walk around completely naked, in Woodside, on a Sunday afternoon!
And you always think it is about work only over there. :)
Ev Williams: The thing that people missed was that it was the financial bubble that burst, not the internet. This whole time usage of the internet continued to climb dramatically.
On to the next big one, Apple. Steve coming back wasn’t an accident.
Larry Ellison: We used to go for these long walks in Castle Rock State Park over by the coast. It cost $5 billion to buy Apple in those days, it was run by a fellow named Gil Amelio. I had raised the money. I was going to give Steve 25 percent of the company, and we were going to take it private and he was going to run it. And Steve said, “You know, Larry, I think I figured out a way I can get control of Apple without you having to buy it.” I’ll never forget this conversation as long I live. I said “Okay…” and then he said, “Yeah, I think I can get them to buy NeXT Computer and I’ll go on the board, and eventually the board will recognize that I’m a better CEO than Gil Amelio and I’ll become CEO.”
Let’s get to the iPod:
Tony Fadell: So I am getting on a ski lift in Vail, and I get this call: “Hi, this is Jon Rubinstein from Apple,” blah blah blah. The very next week I had my first meeting with Jon.
Jon Rubinstein: There was a key meeting. It’s me and Phil Schiller and Jony — there was a group of us, but Tony is the lead.
Tony Fadell: Steve comes in the room, does not say a word, takes the checklist, throws it on the desk, and gives the vision for it. Ron Johnson: It was, “I want to make a music device and I want it to hold all your music, I want it to be digital, with great software so you could take your music everywhere.” I don’t think he had thought of “a thousand songs in your pocket” yet, but that was what he was imagining.
How Apple used being small back then:
Jon Rubinstein: We put together a pitch to the music companies: “Look, we’re at 2 percent market share with the Mac — we are not successful, so you have no downside to licensing us the music. You can do this experiment and it will cost you nothing.” If we’d been wildly successful in the market, there’s no way they would have licensed it to us. We didn’t matter, so they could license to us and who cares, right?”
[…]
Mike Slade: People didn’t really think that the iPod was going to be a viable product for Windows, because it was a pain in the butt to hook it up to FireWire. It was kind of a hack for a Windows user until the USB 2.0 iPod came out. That’s one of the reasons why the music companies were willing to give him the Windows option. Jon Rubinstein: By then it was, “You’re kind of pregnant, so it is too late to back out now.”
Then comes facebook and its first investment:
Mark Pincus: And then Sean put together an investment round quickly, and he had advised Zuck to, I think, take $500,000 from Peter Thiel, and then $38,000 each from me and Reid Hoffman. Because we were basically the only other people doing anything in social networking. It was a very, very small little club at the time.
And Facebook worked at night:
Ezra Callahan: When we first moved in, the office door had this lock we couldn’t figure out, but the door would automatically unlock at nine a.m. every morning. I was the guy that had to get to the office by nine to make sure nobody walked in and just stole everything, because no one else was going to get there before noon. All the Facebook guys are basically nocturnal.
And they actually pushed code in the middle of the night to not effect too many people.
Ruchi Sanghvi: So then we would only push out code in the middle of the night, and that’s because if we broke things it wouldn’t impact that many people. But it was terrible because we were up until like three or four a.m. every night, because the act of pushing just took everybody who had committed any code to be present in case anything broke.
DOMINATION!
Ezra Callahan: We had company parties all the time, and for a period in 2005, all Mark’s toasts at the company parties would end with “Domination!”
Mark Zuckerberg: Domination!!
[…]
Max Kelly: We literally tore the Yahoo offer up and stomped on it as a company! We were like, “Fuck those guys, we are going to own them!” That was some malice-ass bullshit.
Mark Zuckerberg: Domination!!!
[…]
Steve Jobs: I admire Mark Zuckerberg. I only know him a little bit, but I admire him for not selling out — for wanting to make a company. I admire that a lot.
So what is the difference between Google and Facebook? (and then on to Odeo and Twitter)
Ev Williams: Roughly speaking, there are two engineering cultures in Silicon Valley, which you could describe as hackers and engineers. And obviously Google is engineers. Engineers generally have computer science degrees and higher. They study the fundamentals. Hackers just want to make stuff work, and it’s not about doing it right necessarily. Facebook was kind of famously built by hackers, but they’re not the hippie hackers. Hippie hackers are a particular strain of hackers, and Noah is a total hippie. And so we hired hippie hackers — I mean Noah really hired these people. They are his people, he got along with them.
[…]
Biz Stone: Those guys were a pain in the ass. They would specifically sit down during a stand-up meeting — on purpose! There was one stand-up meeting where they were sitting down and Ev was like, “Guys, please, I need everyone here by ten a.m.” Because everyone was showing up at noon or whatever. And one of the guys raised his hands and said, “I have a question.” And Ev was like, “Yes?” And he said, “What’s our motivation?” And Ev just lost it. Ev just yelled out, “It’s your fucking job!!”
I feel Ev. :)
So the launch of Twitter at South by Southwest.
Ray McClure: Twitter just totally took over South by Southwest that year.
Biz Stone: A couple of things that happened. One is this story of the guy at the bar who tweeted, “This bar is too loud. If anyone wants to talk about projects let’s go to this other bar that’s quiet.” And then in the eight minutes it took him to walk there eight hundred people had showed up! That was my realization that, Oh, shit. We definitely invented a new thing. We definitely made something that the world had never seen.
This was a great book to read. So let’s end with this:
Nick Bilton: And at the end of the day, Twitter became a place for people to become more famous, and not a place for conversation.
@RealDonaldTrump: My daughter Ivanka thinks I should run for President. Maybe I should listen.
Nick Bilton: Twitter today is one person talking to a lot of people — not a conversation. And I don’t think that we as human beings were designed to enable 320 million people to have a conversation together.
Steven Johnson: It’s true, Twitter is not a conversational medium, and that’s fine. Not everything has to be a conversation medium. So if you are judging it by that standard, then yes, it’s a failure. But I have found Twitter, personally, to be just a great addition to my life.
@RealDonaldTrump: I love Twitter… It’s like owning your own newspaper — without the losses.
Book Review: Valley of Genius was originally published in Oliver Thylmann’s Thoughts on Medium, where people are continuing the conversation by highlighting and responding to this story.
