domination of the computer business – be the beginning of its downfall.
As it faces the challenges ahead, Intel has a number of strengths. Its management team, almost entirely developed internally, is extremely strong. Its corporate culture allows the company to set objectives, communicate them swiftly to its workforce, and make a good attempt at achieving them. Its compensation system, which rewards hard work and loyalty with stock options worth millions, but checks underperformance with regular reviews and ‘corrective action’ programmes for laggards, is highly successful in motivating Intel people to give their best. And its lack of hierarchy makes it easier to respond swiftly to change and to make rational decisions.
But the Intel that Andy Grove has created also has its weaknesses. The company has been plagued by arrogance since its earliest years. It has frequently taken a high-handed approach to its customers, and suffers from the ‘Not Invented Here’ syndrome as badly as many technology companies. Most alarmingly, the company has found it increasingly hard to accept outsiders into its senior ranks. Like transplanted organs, managers brought into Intel from outside have more often been rejected by the patient than absorbed.
These weaknesses are likely to come into renewed focus when Andy Grove departs from the scene. To many insiders, a post-Grove Intel is still unimaginable. After managing the company’s operations for two decades, and more recently guiding its strategy too, Grove has become almost synonymous with Intel. Yet he passed his sixty-second birthday before this book was published, and had a narrow escape from prostate cancer in 1996.
In theory, the succession is settled. Craig Barrett, Intel’s chief operating officer, was promoted to the company’s presidency in May 1997. He now officially handles the company’s day-to-day business and is ideally placed to succeed Grove on his retirement. But there must be a question about whether a less forceful, less driven personality than Grove will be able to lead the company with the same success.
Ultimately, the deciding issue will be people. And it is people, not technologies or strategies, who are the focus of this book. Its aim is to offer an account of Intel’s story as seen through the eyes of dozens of different employees, from the most junior to the most senior. The lives of these people don’t add up to a comprehensive history of the company. Since the company has always refused to cooperate with outsiders attempting to tell its story from an independent standpoint, that may have to wait for many years until the secrets of Intel’s current operations are no longer of commercial value. Instead, the intention here is to give a glimpse of life inside Intel – and in doing so to say something about one of the most extraordinary and most ruthlessly successful businesses in history.
‘We are really the revolutionaries in the world today – not the kids with the long hair and beards who were wrecking the schools a few years ago.’
GORDON MOORE, Intel founder,
quoted in Fortune magazine
YOU PROBABLY THINK you can skip this chapter.
The scene is already in your mind. It’s late at night, and the garage is entirely dark except for the pool of light cast on the workbench by a low-cost anglepoise lamp. The future billionaire is hunched over the computer, oblivious to the clutter of empty pizza boxes around him, absorbed in his work. His hair is unwashed, and he’s been wearing the same grimy T-shirt almost every day since he dropped out of college. He has few contacts and no backers. His only assets are his technical skills and the brilliant powers of persuasion and negotiation that will blossom over the years to come.
There’s probably no single company that conforms to every one of these stereotypes. But most of America’s most successful technology companies display at least some of them: modest beginnings, fighting against the odds, brilliant ideas that go against conventional wisdom, founders who are outsiders and have nothing to lose if they fail. Look at Steve Jobs and Apple, or Bill Gates and Microsoft. These are the models that we’ve come to think of as the ways to start a successful high-tech company.
The creation of Intel Corporation in 1968 was quite different.
Instead of being young and rebellious, its two founders were middle-aged and respectable. Instead of being poor and isolated, they were prosperous and known already as leading figures in their industry. Instead of labouring for months or even years to find a backer for their venture, they rounded up $2.3m of funding in an afternoon, on the basis of a couple of sheets of paper containing one of the sketchiest business plans ever financed.
The two most important words of the business plan were Robert Noyce. Forty years old, Noyce was the general manager of Fairchild Semiconductor, one of the most prominent businesses in the Bay Area to the south of San Francisco. But he was more than that: he was one of the creators of the integrated circuit.
To understand the significance of this, you have to remember that the earliest computers used vacuum tubes as the basic elements of their circuits. Vacuum tubes, working like small-sized light bulbs, were bulky and unreliable – and since they had to be heated before they could work properly, they were also gluttonous consumers of electricity. A large computer could easily be big enough to require its own little power station – and its vacuum tubes pumped out enough heat to turn a massive room into an oven.
The building-block of today’s electronics industry is a miniature switch that takes advantage of the fact that certain crystals, such as silicon, sometimes conduct electricity and sometimes don’t. This switch, dubbed a ‘transistor’, earned a Nobel Prize for the three physicists at Bell Labs who discovered it in 1948. The early transistors were smaller, and needed no heating element to make them work. Moreover, unlike a light bulb they didn’t need to be changed every so often. But they shared one of the drawbacks of the vacuum tube: to build a computer, you had to connect them one by one into electrical circuits.
Bob Noyce’s claim to fame was making it possible to put more than one transistor on to the same fragment of silicon. The circuits built using this technique became known as ‘integrated circuits’. Coincidentally, two different teams in different companies 2,000 miles apart conceived the integrated circuit almost simultaneously in 1959. The winner of the first integrated-circuit patent was Jack Kilby, an engineer at Texas Instruments. But it was Noyce and his colleagues at Fairchild Semiconductor who succeeded in turning the integrated circuit from a laboratory prototype into a product that could be mass produced in ever-increasing numbers and ever-falling prices – and Noyce who had made it possible for engineers to dream of myriad new products that had never before been possible.
Noyce did not fit the stereotype of the inventor. He was gregarious, charming, athletic and handsome. Brought up in Grinnell, a small town in Iowa where his father was a Congregational minister, he was a boy scout who went to Sunday school every week and graduated valedictorian at the local high school. His entry in the school’s year book described him as the Quiz Kid, ‘the guy who has the answers to all the questions’, who played in the school band, sang in its chorus, was a leading light of the Latin and science clubs, and acted in six plays. At college, he was the swimming team’s best diver, and took the lead in a radio soap opera. The sole cloud over his exemplary youth, which formed the centrepiece of a profile of Noyce that Tom Wolfe wrote for Esquire in 1983, was an incident at college when he and a fellow-student stole a
