fairchildMAFIA

When Sarah Lacy started PandoDaily, she used the metaphor of the Pando tree to describe what she loved about startups:

Measuring 43 hectares and weighing 6,000 tons, they’re pretty impressive above ground. But what really matters is what is happening below. The interconnected root system is the oldest living organism in the world. No matter what happens above ground, that root system stays alive, and continually shoots up new trees.

If each startup is the individual root in this metaphor, then the 6,000 ton tree trunks are the great families of Silicon Valley. Fairchild. Paypal. Oracle. Netscape. “Mafias” we call them today. The number of companies that have sprung out of these four giants and their founders, whether through acquisition or investment, is staggering.

But how do you visualize this ecosystem? How do you display the hundreds of tangled startup roots yet make it comprehensive?

To overcome these challenges we tapped students of Jay Rosen’s Studio 20 digital journalism class at NYU. During the Spring Semester, Rosen and his students embarked on a project called “The Networked Beat.” Rosen’s basic thesis is that journalists can more effectively cover their beat by identifying and giving voice to the smartest experts and observers in a given field. To do this, journalists should use whatever technology and techniques are available, whether that means crowdsourcing on Twitter or writing an algorithm that collects and sorts publicly-shared information.

To test these theories, Rosen assigned small groups of students to media organizations including Fast Company, the Wall Street Journal, Quartz, Mashable, and us. I had the pleasure of working with students Simran Khosla, Jesse Kipp, and Nuha Abujaber (the developer Jonathan Soma helped build the visualizations that the students designed).


Here’s what they did: First the students researched each mafia and tracked down as many startups and organizations connected to them as possible. We knew it’d be impossible to identify with absolute certainty every single startup connected to each Mafia. So we included a crowdsourced element. Is your company — or do you know one — that a member of the Fairchild mafia invested in or acquired? Fill out the form and if the information checks out we’ll add it to the map. The students and Soma created an ingenious method allowing the visualization to be updated live as simply as adding a few fields of data to a spreadsheet (for most of this data we used Crunchbase)

Then comes the visualization part. Using HTML5, Soma was able to map out each connection, whether it’s an acquisition, a merger, or founding, or an investment, and do it over time so users can drag a scroller across the decades to see more and more companies spring up out of the original Mafiosos (that’s the fun part).

So here’s where we begin our four-part series on the four great families of Silicon Valley. First up is the Fairchild Mafia, the so-called “Traitorous Eight” who left Shockley Labs to start Fairchild Semiconductor in 1957, setting the stage for nearly every modern tech company and forever altering the course of Silicon Valley history.

Check out the visualization below then read our brief history of the semiconductor company that changed the world.

Click here to see every startup that sprung out of the Fairchild Mafia

(startup descriptions pulled from Crunchbase)

Is your company or a company you know missing? Click here to submit your information and get on the map!

Fairchild: A History

They don’t call it Silicon Valley for nothing.

One of the earliest companies to attract top technical talent to the Bay Area was Shockley Labs, a manufacturer of silicon semiconductor devices that started in 1954. But the story of Shockley truly began seven years earlier at MIT’s Bell Labs, when scientist William Shockley helped invent the first transistor. The device was a half-inch slab of germanium and gold and could amplify a signal’s output to a degree greater than its input. It was enormous compared to today’s semiconductors, which can pack millions of transistors onto a single chip. Nevertheless it was a monumental discovery that would spark the computer revolution and earn Shockley a Nobel Price.

But after the invention, things between Shockley and Bell Labs turned sour. Shockley demanded to be the sole name on the transistor patent, because he came up with the original idea, even though the device Walter Brattain and John Bardeen eventually developed was significantly different. He petitioned Bell’s lawyers which turned out to be a fatal move. The lawyers discovered a patent from the 30s for a device very similar to Shockley’s idea. As a result, not only would Shockley fail to be the sole assignee on the patent, his name wouldn’t appear at all.

In 1953, Shockley left Bell Labs and headed West to Pasadena. At the time, Dallas-based Texas Instruments was hard at work developing commercial silicon transistors. Shockley wanted a piece of the action, and with financial backing from Arnold Beckman, the inventor of the pH meter, Shockley founded the Shockley Semiconductor Laboratory in Mountain View, California, the company that would help give Silicon Valley its name.

From 1955 to 1956, Shockley hired some of the brightest engineers in the country, including Gordon Moore, who coined the phrase Moore’s Law to describe the exponential growth of computer power over time, and Eugene Kleiner, who would go on to become a pioneer in venture capital.

By 1957, however, Shockley’s relationships with colleagues were once again strained. Shockley’s paranoia, which included demanding lie detector tests to find out who left a broken thumbtack in a door that accidentally cut a secretary, has been well-documented in Broken Genius. It all came to a head on September 18 of that year when Moore, Kleiner, Julius Blank, Victor Grinich, Jean Hoerni, Jay Last, Robert Noyce, and Sheldon Roberts (who Shockley famously called “The Traitorous Eight”) started their own company called Fairchild Semiconductor with the backing of aviation magnate Sherman Fairchild.

Fairchild made its first big breakthrough in 1958 when Robert Noyce and his team (assisted by Texas Instruments research) invented a way to fit an entire circuit, not just the transistor, onto a single silicon chip. Thus the integrated circuit was born. Before long Fairchild was generating $130 million a year in revenue, according to PBS.

But Fairchild’s innovations extended beyond technology. CNN’s Leslie Goff writes, “The creation of Fairchild Semiconductor would establish a model for entrepreneurs for the rest of this century. Each of the men was promised stock options, a then unheard-of arrangement. They dispensed with job titles and had an open working relationship.”

The integrated circuit and silicon chips have arguably done more to shape modern living than any other invention of the past hundred years. And Fairchild’s template for the modern startup, where every employee is a stakeholder, continues on today. As our visualization shows, the influence of the traitorous eight extends far beyond the work done at Fairchild Semiconductor.

Moore and Noyce would go on to start Intel, today the largest semiconductor chip maker in the world, based on revenue. Kleiner started venture firm Kleiner Perkins Caulfield & Byers, which made key investments in some of the most important technology companies of all time, including Google, Amazon, Netscape, Twitter, Genentech, and Sun Microsystems, not to mention hundreds of diverse startups from SoundCloud to Square to Dollar Shave Club.

Each of these eight left his mark on the world beyond Fairchild. Jean Hoerni founded Intersil, one of the earliest microprocessor manufacturers. Victor Grinich became CEO of Identronix, an early pioneer in radio frequency identification (RFID). Julius Blank launched technology firm Xicor, which sold in 2004 for $529 million. Sheldon Roberts founded electronics manufacturer Amelco, which was acquired by the now-billion dollar tech conglomerate Techdyne. And Jay Last founded the Archeological Conservancy. It preserves prehistoric and historic archaeological sites in the United States. (Okay, not very tech-y, but still cool.)

Fairchild, Paypal, Oracle, and Netscape are more than just important companies. They’ve bred other endeavors and advancements, either through investment or acquisition or inspiration. But it was Fairchild that set the template for the “tech company mafia.”

[Art by Simran Khosla]