Entrepreneurial Phenomenon a Matchless Competitive Advantage
Peters, Tom, THE JOURNAL RECORD
Just a few years ago, Silicon Valley was the center of rip-roaring, Wild West competition. Now its biggest firms and their industry associations (such as the Semiconductor Industry Association and the American Electronics Association) have become the establishment.
The former high-tech upstarts and their slick lobbyists hog the national media spotlight and are defining the economic policy debate. Their agenda:
- More protection from foreign ``cheaters.''
- Relaxation of anti-collusive legislation (such as anti-trust strictures).
- Greater Department of Defense involvement in a lengthy list of ``critical'' technologies.
But there is another story, if you look beyond the nightly TV news and The Washington Post. Consider the business section of The San Jose Mercury News, Silicon Valley's paper of record, on June 8, 1989 - a day chosen at random.
The lead item is about Acuson Corp. of Mountain View, Calif. Never heard of it? Shame on you. The 1978 startup had $169 million in sales in 1988 and a tidy $28 million after-tax profit. It's the leader in domestic ultrasound medical technology, with a 21 percent market share.
Chief Executive Officer Samuel Maslak studied ultrasound at the Massachusetts Institute of Technology and then took his skills to Hewlett-Packard. But he left because, ``HP and I didn't share the same sense of urgency in developing ultrasound technology.''
Maslak initially refinanced his home to start the company, though today he's a beneficiary of substantial venture capital. (Over $20 billion of unsung self-financing and aunt and uncle money goes into an annual business-startup pot that is many times the size of the formal venture capital pool.)
Maslak is not the only HP refusenik. Steve Wozniak did a stint there and couldn't find much enthusiasm for his ideas, either. So he and Steve Jobs (unhappy at Atari), neither with a university credential, teamed up to start Apple Computer.
Billion-dollar Tandem Computer, world leader in on-line transaction processing, is also among those owing a debt to HP. Tandem's founder, Jim Treybig, left the big outfit because it failed to support his then-mildly exotic proposal.
So $10 billion Hewlett-Packard is now a part of the establishment - a place at which clever people train, before departing to do the world's truly interesting (risky) work.
Whoa, don't write Hewlett-Packard off so fast. After a couple of somewhat rough years, the company is sitting in the cat-bird seat these days. Why? Because its bet-the-company plunge into reduced-instruction set computing (RISC) has led to a major success with its new Spectrum series of minicomputers. …