THE CODE: Silicon Valley and the Remaking of America
By Margaret O’Mara

SILICON VALLEY’S MOST POPULAR MYTHS & LEGENDS   

At first glance “THE CODE” is another one in a long line of books glorifying the Silicon Valley mystique and the superstar geniuses that built its tech. legend. The Code is certainly an account of the Valley’s history. But it takes a very different perspective not commonly seen among recent authors, and delves into stories not commonly shared or known about its evolution.

Silicon Valley came to represent the innovative power of capitalism freed from the clutches of uptight men in mid-century business suits, bestowed upon the masses by a new, appealing folk hero: the cherub-faced start-up founder hacking away in his dorm room. That it allowed brilliant young people to turn crazy ideas into world-changing companies practically overnight. The text does focus on the past four decades or so of Silicon Valley. It relates the story of how how Amazon, Apple, Microsoft, Google, and Facebook established domination over the international technology market.

There’s references to legendary watering-holes that became meeting hubs of early tech entrepreneurs and venture capital investors. In the early 1970s, Don Hoefler, a writer for Electronic News, practically spent his entire after-hours at what he called his “field office” — a faux-Western tavern known as Walker’s Wagon Wheel, in Mountain View, Calif. Wagon Wheel still endures as a popular meeting spot for techies. During the 1970s and 1980s, many of the top engineers from Fairchild, National and other companies would meet there to drink and talk about the problems they faced in manufacturing and selling semiconductors. It was an important meeting place where even the fiercest competitors gathered and exchanged ideas. (Sadly Wagon Wheel was forced to shut down in 1997, and the city bulldozed it in 2003, despite the faint protests of old-time valley techies.)

The book spans four broad acts, mimicking the typical life-cycle of a technology venture in Silicon Valley – “Start Up,” “Product Launch,” “Go Public,” and “Change the World”

A VIEW FROM WASHINGTON    

However its author comes from a very different place compared to authors that attempted to document Silicon Valley history in the past. Margaret O’Mara (now a a historian at the University of Washington) draws on her background and her time spent in government. She worked in the White House of Bill Clinton and Al Gore in the earliest days of the commercial Internet. The political characters we know so well of that time H Ross Perot, Paul Tsongas, Ronald Reagan also make strong appearances in the book. She also had a ringside seat to many decisions taken in Washington that shaped what was to become the Silicon Valley as we know it today.

O’Mara credits the role that US government played in Silicon Valley’s rise. She manages to relate Silicon Valley to a much bigger context of America’s post-war social and economic transformation, demonstrating that at every stage of its development, its evolutionary path, it is much closer to mainstream development of many of America’s largest industrial behemoths, than people realize. Her book confidently outlines how deeply intertwined Silicon Valley has always been with the federal government, and how little the lay person really understands the secrets of the Valley’s real drivers of success.

THE INVISIBLE HAND OF NATIONAL POLICY (& THEIR FUNDING SUPPORT)   

That invisible bonds between the link between technology industry and the government security apparatus is the most interesting angle of this book, and the author has many anecdotes and stories of individuals to share in making this point.

However, she bravely eschews the most commonly held sacred myth, that of a tribe of misfits working against the grain, that of being the product of American entrepreneurialism and laissez faire, for an alternate logical narrative that it was well aided and abetted by a wide swath of American society both inside and outside the Valley. There always was a clear agreement among views of the country’s political, cultural, and technical elites that Silicon Valley held the key to the future. She also points to its infallibility. That its belief in its own mythology has deepened into a collective hubris that has led to astonishing triumphs as well as devastating second-order effects.

There is also evidence of the Valley looking to political elites for policy guidance during times of existential threats. In the 1980s with rising competition in semiconductors – among other areas, such as the Sony Walkman – when leading Silicon Valley voices called for the government to organize a consortium to boost American competitiveness. Citing the September 1982 California Commission on Industrial Innovation report that – “California shows that the spirit of risk-taking is alive in well in America’, but that due to growing competition from Japan, the government ‘must do whatever is necessary to guarantee that our cutting-edge industries – like semiconductors, computers, telecommunications, robotics and biotechnology – retain their competitive lead.”

THE PIVOTAL ROLE OF STANFORD UNIVERSITY   

Another important player covered substantially in O’Mara’s book is the role played by Stanford University, the powerful institution that played midwife to many of the Valley’s startups. Stanford’s role in creating the framework for innovation is well acknowledged today. At the end of World War II, when the region was still the sleepy, sun-drenched Santa Clara Valley, home to farms and orchards, an upstart Stanford University, and small electronics and aerospace firms was all that lay scattered. Then came the space and arms races, given new urgency in 1957 with the launch of Sputnik, which suggested a serious Soviet advantage. Millions of dollars in government funding flooded technology companies and universities around the country. An outsize portion went to Northern California’s burgeoning tech industry, thanks in large part to Stanford’s far-sighted provost Frederick Terman, who reshaped the university into a hub for engineering and the applied sciences.
Stanford and the surrounding area became a hive of government R&D during these years, as IBM and Lockheed Martin opened local outposts and the first native start-ups hit the ground.

SILICON VALLEY’S LEGENDARY IMAGE-MARKETING & PR MACHINE   

The role played by marketing gurus (such as Regis McKenna) shaped the tech companies’ images, educators evangelized for technology in schools, best-selling futurists preached personalized tech as a means toward personal liberation. The persona of Steve Jobs was the outcome of careful image-design – that of a cowboy capitalist and touchy-feelie hippie rolled into one.

The media regularly turned Silicon Valley entrepreneurs into international celebrities with flattering profiles and cover stories—living proof that the mix of technological innovation, risk taking, corporate social responsibility, and lack of regulation that defined Silicon Valley in the popular imagination was the template for unending growth and prosperity, even in an era of de-industrialization and globalization.

THE GOVERNMENT LOBBYISTS    

So were massive lobbying for tax cuts and deregulation disguised as Silicon Valley’s massive charitable largesse. One account states, in 1982, Jobs offered to donate a computer to every K–12 school in America, provided Congress pass a bill giving Apple substantial tax write-offs for the donations. He even showed up in Washington to gather support for what became known as the Apple Bill. A mania for computer literacy was sweeping the nation as an answer to the competitive threats of globalization and the re-escalation of the Cold War’s technology and space races. Yet even as preparing students for the Information Age became a national priority, the Reagan era’s budget cuts meant that few schools could afford a brand-new $2,400 Apple II computer. Earlier in 1978, the Valley’s venture capitalists formed an alliance with the Republicans to kill then-President Jimmy Carter’s proposed increase in the capital gains tax.

CONCLUSION

Margaret O’Mara has deployed a very diverse array of personalities, events, entities ranging from the very famous to obscure (but powerful Valley players in their own right) to weave a politico-historical narrative of Silicon Valley’s history that is both an exciting read, and eye-opening to many at the same time.

BOOK REVIEW – THE CODE: Silicon Valley and the Remaking of America