#166 Robert Noyce (Intel)

What I learned from reading The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley by Leslie Berlin. ---- [0:01] Bob Noyce took me under his wing,” Steve Jobs explains. “I was young, in my twenties. He was in his early fifties. He tried to give me the lay of the land, give me a perspective that I could only partially understand.” Jobs continues, “You can’t really understand what is going on now unless you understand what came before.” [2:00] He inspired in nearly everyone whom he encountered a sense that the future had no limits , and that together they could , as he liked to say, “Go off and do something wonderful.” [3:15] Warren Buffett , who served on a college board with Noyce for several years said: “Everybody liked Bob. He was an extraordinarily smart guy who didn’t need to let you know he was that smart. He could be your neighbor, but with lots of machinery in his head.” [12:01] Noyce was slowly gathering experiences that would anchor his adult approach to life, which was not so much an approach as a headlong rush into any challenge with the unshakable assumption that he would emerge not only successful, but triumphant. [14:18] Every night before he fell asleep, Noyce would mentally rehearse each of his dives in slow motion until he could see himself executing them perfectly. He called this habit “envisioning myself at the next level,” and he carried it with him throughout his life. In his mind’s eye, he could always see himself achieving something more. [21:16] Bob was not the type to slow down for much of anything. [33:02] His approach was to know the science cold and then “forget about it.” He did not slog or grind his way to ideas; he felt they just came to him. When he heard Picasso’s famous line about artistic creativity — “I do not seek; I find” — Noyce said that he invented in the same way. [35:31] “I don’t have any recollection of a ‘ Boom! There it is!’ light bulb going off, ”Noyce later said of his ideas. Instead, he conceived of the integrated circuit in an iterative method he described thus: “[ I thought,] let’s see, if we could do this, we can do that. If we can do that, then we can do this. [It was] a logical sequence. If I hit a wall, I’d back up and then find a path, conceptually, all the way through to the end. [Once you have that path], you can come back and start refining, thinking in little steps that will take you there. Once you get to the point that you can see the top of the mountain, then you know you can get there.” [45:48] We were a hard, young, hungry group. Our attitude was ‘We don’t give a damn what money you have to offer, buddy. We’re going to do this ourselves.’ [1:08:55] Noyce was invited to dinner at the home of an entrepreneur whose company the his fund had supported. After the dishes had been cleared and the children sent to bed, Noyce listened as the company founder explained that some day, if the business did well, he would like to move his family into a bigger, nicer house. Noyce looked up at him and said very quietly, “You’ve got a nice family. I screwed up mine. Just stay where you are.” Twenty - five years and a successful company later, the entrepreneur has not moved. [1:09:45] His financial success directly benefited the entrepreneurs whose companies he funded, but the stories about Noyce’s success indirectly inspired many more. One entrepreneur put it this way: “Why do we love this dynamic environment? I’ll tell you why. Because we have seen what Steve Jobs, Bob Noyce, Nolan Bushnell [founder of Atari], and many others have done, and we know it can and will happen many times again. ”In other words, if they could do it, why couldn’t he? Such rationale functioned as a self - fulfilling prophecy in Silicon Valley, propelling the region forward on a self - perpetuating cycle of entrepreneurship and wealth. (This is what I hope Founders does.) ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  "Bob Noys took me under his wing," Steve Jobs said. "I was young, in my twenties, and he was in his early 50s. He tried to give me the lay of the land, to give me a perspective that I could only partially understand. 'You can't really understand what is going on now unless you understand what came before,' Jobs said. Before Intel and Google, before Microsoft and Apple, and Pixar, and stock option millionaires, and billionaire venture capitalists, there was a group of eight young men, six of them with PhDs, none of them over 32, who disliked their boss and decided to start their own transistor company. It was 1957.

• 0:44David Senra?

  Leaving the group of eight was an Iowa-born physicist named Robert Noys, a minister's son and former champion diver, with a doctorate from MIT and a mind so quick that his friends called him Rapid Robert. Over the next decade, Noys managed that company, called Fairchild Semiconductor, by teaching himself business skills as he went along. In 1968, Noys and his Fairchild co-founder Gordon Moore launched their own new venture, a tiny company they called Intel. Noys believed that big was bad, or if not downright bad, at least not as much fun as small companies in which everyone works much harder and cooperates more.

• 1:26David Senra?

  When he left daily management at Intel in 1975, he turned his attention to the next generation of high-tech entrepreneurs. That's how he met Jobs, and that's how he came to serve on the boards of a half a dozen startup companies and informally provide seed money to many more. He strongly believed he was doing his part, as he put it, "to restock the stream I've fished from." He always threw himself entirely into the activity at hand, and whatever he did, he tried to excel. His powers of persuasion were legendary. He inspired in nearly everyone whom he encountered a sense that the future had no limits, and

• 2:07David Senra?

  that together, they could, as he liked to say, "go off and do something wonderful." He was like the Pied Piper: "If Bob wanted you to do something, you did it." His was not a simple personality. He was a small-town boy suspicious of large bureaucracies. Yet he built two companies that between them employed tens of thousands of people. He was a preacher's son who rejected organized religion, an outstanding athlete who chain-smoked, and an intensely competitive man who was greatly concerned that people like him. His favorite ski jacket featured a patch that declared "No guts, no glory." And it was a fitting motto for a man who flew his own airplanes and chartered helicopters

• 2:52David Senra?

  to drop him off on mountain tops so he could ski down through the trees. He was worth tens of millions and owned several planes and houses, but nonetheless somehow maintained a just-folks sort of charm. Warren Buffett, who served on a college board with Noyce for several years, said, "Everybody liked Bob. He was an extraordinary smart guy who didn't need to let you know he was that smart. He could be your neighbor, but he had lots of machinery in his head." His mother described him best when she said that he liked to do a lot of things and do them well. That was an excerpt from the book that I'm going to talk to you about today, which is "The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley," and

• 3:37David Senra?

  it was written by Leslie Berlin. Okay, so all the way back on Founder's Number Eight, I read the book The Intel Trinity and focused mainly on Bob Noyce. And I discovered Bob Noyce by reading a biography of Steve Jobs, and Steve Jobs talks about at length how important Bob Noyce was as a mentor and how much he learned from him. So that's how I found that book. Now, I think, is another great time to dedicate an entire podcast to Bob Noyce, because last week, and I consider this part two from last week's podcast, okay? And William Shockley and Bob Noyce both worked in the same industry. Bob Noyce used to work for William Shockley. Let's say they even have the same level of intelligence and similar skills. Yet why was William Shockley, at the end of his life, such a failure that his wife couldn't

• 4:21David Senra?

  even have a funeral for him because no one would go? And yet Bob Noyce had thousands of people at his funeral, wind up achieving all the dreams of starting companies and directing technology and building wealth that William Shockley had but failed to achieve? So I think of William Shockley as a perfect example of what not to do. And Bob Noes is a perfect example of what to do. And so the good way to think about Bob Noes is he's the anti-shockling. And that term will come up several times today. I want to go right into the beginning of his early life, though. I was reading over the highlights that I had just now, and I was surprised, not surprised, but I think the part of this book that I found most interesting was actually his time at Fairchild Semiconductor.

• 5:06David Senra?

  He's in his early 30s, and it's because we see him struggle with self-doubt and how he overcame that and not let that get in the way of actually building, well, it was being one of the fastest-growing companies in the history of American business, which was Fairchild Semiconductor. And then not only able to do that, but to do it twice and do it again when he's in his 40s and do it with Intel, that I found very interesting. So first, before I get there, let me tell you a little bit about his personality and his early childhood. So he was competitive from day one. He's very charismatic, very soft-spoken. You heard Warren Buffett say, you know, he's very, he didn't even, you knew he was intelligent by talking to him, but he did not show it to you. He wasn't aggressive in any means. But that did not mean that he did not have an internal desire, a very strong desire

• 5:49David Senra?

  within him to be the best at whatever he was doing. So it says, "Bob Noes's earliest childhood memory involves beating his father at ping-pong and feeling absolutely devastated when his mother's reaction to this was, 'Hey, wasn't that nice that Daddy let you win?'" Even at age five, Noes was offended by the notion of intentionally losing at anything. "That's not the game," he said. "If you're going to play, you play to win." And one of, I think, the early motivating factors for Robert Noes is why not only was he driven as a young boy, but his, he grew up during the Depression. And the Depression was having a devastating effect to his family's finances. His father is a minister. Bob, at this point, is just a little kid. And his father's name is Ralph.

• 6:31David Senra?

  It says, "Ralph's salary was once $2,400 a year, and it now plummeted. In 1934, he was paid only $1,200 a year." So he's already down 50%. It gets worse the next year. "By mid-1935, the church was five months in arrears." So now he's not even getting paid. "Often, he was given a wagonload of corn cobs or ham in lieu of pay."

• 6:55David Senra?

  And this causes his dad to have to find other means of employment. He was, they had four boys. He was there constantly when the kids were little, but because he needed to find a new job, now he's got to travel all over the country. And in his father's absence, he starts to have this early rebellious, like, misfit streak. So it says, "In a single year, Ralph had to drive more than 25,000 miles of twisting rural roads and addressed 110 different audiences. His boys felt lucky if he made it home for Sunday dinner once every six weeks. His mother called these years 'mothering with a daddy on the road,' and this is where we start to see that he starts, he gets into this early misfit behavior. Harriet, that's his mom, had her hands full, we called the neighbor.

• 7:38David Senra?

  These boys, especially Bob, were into devilment." What a great word, by the way. "Bob started smoking cigarettes, and he and his friends enjoyed tipping over outhouses on nearby farms." So this rebellious streak that he's exhibiting when he's a young boy, he brings with him to college. And one of, he talks about one of the most important lessons that he learned was in college. He winds up stealing, him and a group of his fellow classmates in college, they wind up stealing, as a prank, stealing a pig from a farmer. And he's going to this college called Grinnell, it's in a tiny, tiny little town. And Bob had the bad luck that the person, the farmer that he stole the pig from winds up being the mayor of the town and wants to press charges.

• 8:23David Senra?

  And he becomes very close to being expelled from college. And at that time, if you got expelled from one college, other colleges wouldn't accept you. So he talks about how being so close to his entire life, because what he was passionate about was studying physics, to being derailed by one stupid mistake, which is the lesson he took away. It's like, one bad decision can ruin your life. We're not there yet, but this is how, this is how a friend of his in high school described Bob when he was in high school. "It seemed like he was always in a hurry to get somewhere, and he got there." He starts taking college-level physics courses. And this is an insight into the brilliant mind that everybody said was very apparent when he got older, a sign that this was there even when he was a young person. And he meets probably the most important teacher that he ever has.

• 9:08David Senra?

  And he winds up maintaining a relationship with this teacher for his entire life. And his teacher's always constantly, not only is he proud of Bob's achievements later on, but he's always checking up on him. In fact, when Bob goes to MIT, this teacher, his last name is Gail, was worried because he himself did not have a PhD. He's like, maybe I was his teacher, maybe I wasn't qualified. What if I sent him off to go from a tiny little town to now the quote-unquote "big leagues" in MIT? What if he's not ready? So that just gives you an insight. He winds up writing to the college, like, "Please tell me, give me updates on Nois's progress." This is somebody that cared deeply about teaching, cared deeply about the people.

• 9:49David Senra?

  And I think I can't overstate that effect, the effect that knowing somebody that cares that much about you as a young person has. And Nois never, he never forgets that, and he always tries to repay that. So anyways, we're not there yet. In his introductory course, Gail focused on demonstrating the relevance of physics to daily life. This is just a smart way to teach. He eschewed note-taking. He said that's what textbooks are for. In favor of real-life demonstrations. And he did not make the demonstration theoretical. He tried to focus on practical knowledge. So he says, "With what force did the snowballs he hurled against the side of a science building hit the bricks? Why did a skater spin faster when she pulled her arms to her side, an ice skater?

• 10:31David Senra?

  Why could you fill a drinking straw with water, seal the top of your finger, and lift the straw without spilling the water? How could you prove your answers to these questions? His stock of aphorisms was legendary." And this is advice that he's giving a young Bob Nois. "Have the courage of your convictions," he would urge, a student hesitating to guess an answer. "Be brave." When a student with real promise began to ramble, Gail would gently admonish, "If you can't divine it in one sentence, you probably don't understand it."

• 11:03David Senra?

  And around this time, his older brothers, he felt he lived in their shadow. They were extremely smart, extremely accomplished. And so he's hearing, he's getting letters and he's hearing about everything they're accomplishing. And the note I left myself was, man, you're going to do so much more than this. Just wait. And really the lesson to this short paragraph is we really can't predict how far we're going to go, what we will experience, as long as we don't give up. So it says, "He listened attentively to his brother's stories about his trip to New York City." Remember, this is a small-town farm boy, right? "He listened attentively to his brother's stories about his trip to New York City, with a mixture of envy and insecurity that was his typical response to any of his brother's accomplishments. He wrote to his parents. So he," meaning his brother, "had seen the Statue of Liberty. Wow, someday I may get to as well.

• 11:48David Senra?

  I hope. I'd better not stop dreaming." So even in that paragraph, we're seeing that little glimmer of insecurities, what the author described it as. Keep in mind that that was temporary. He did have a lot of confidence in himself. And I really feel this next paragraph is just a great mindset to adapt. So it says, "Nois was slowly gathering experiences that would anchor his adult approach to life, which was not so much an approach as a headlong rush into any challenge, with the unshakable assumption that he would emerge not only successful, but triumphant. It was a risk for him to jump from his job in Philadelphia to go work, to move across the country to work with Shockley. When he realized that Shockley's crazy and a terrible manager, it was a risk for him to try to jump to Fairchild Semiconductor,

• 12:33David Senra?

  which he was one of the founders of. Then after realizing, hey, this has grown too much. I'm not enjoying the managerial part of this job. I want to go back to the beginning of working in the lab and actually building the technology. It was a risk for him to jump to Intel." And so we see this over and over again, that, you know, there's many times in his life that he said, okay, maybe he said, oh, wait, that's, you know, that's too much of a bigger risk. I'm just going to stay here. I'm going to settle. And if you do that, you snuff out your own potential. So you've got to have this mindset. It's like, you know what? I may not have the skills yet, but guess what? I know how to learn. I can learn these mindsets. Excuse me, I can learn the skills I need to do whatever's, to tackle any problem that's in front of me. And Bob has, through, gained through experience, he's got a lot of ideas that he's gonna tell us about, like, not only management, but just risk-taking, just the way he thinks.

• 13:18David Senra?

  He's got a beautiful, beautiful mind. As much as I hate Shockley, and Shockley may have been the most distasteful person I've ever, out of all the, you know, 160-something biographies I've read for the podcast, Shockley's probably the one I dislike the most. On the other end of the spectrum, like, I really do admire Noise. He's not perfect. He's gonna make a lot of mistakes with his family, which he talks about, and he advises younger entrepreneurs not to. But he's an extremely likable and intelligent person. And I think my life's better by reading his biography and by learning of his existence. All right, we're not there yet, though. This is his father's description of Bob, which is a perfect way to describe him. "Bob thrived on adrenaline and gasoline." Now, while he's in college, he packs his days, and he does this for the rest of his life,

• 14:00David Senra?

  he packs his days full of interesting things. He's not the kind of person that's just gonna sit around and loaf around. And something he did, in addition to his rigorous physics course load, is he got interested in diving. And so he wound up being a, competing in diving. And this is where, what he's doing here to, for, before diving competitions, is, I think, a good idea to, to apply to whatever goal that you happen to have right in front of you. And that's envisioning yourself at the next level. And it says, "Every night before he fell asleep, Noyce would mentally rehearse each of his dives in slow motion until he could see himself executing them perfectly. He called this habit 'envisioning myself at

• 14:45David Senra?

  the next level,' and he carried it with him throughout his life. In his mind's eye, he could always see himself achieving something more." Now, when I read that, there's a, a lot of ideas that are expressed by different people through different times in history, that maybe not even knew each other, right? But they have different ways of saying similar ideas. And when I read what he's talking, what Bob Noyce is calling... Envisioning myself at the next level, it made me think of this quote by Marc Andreessen, who is full of quotes. If you go back to Founder's number 50, I read the P. Marka, his blog archive, which you could actually, if you Google, I think if you go back in the show notes of Founder's 50, I included the link, because you can, anybody can download this for free. I think it's like 200 and some pages. I highly recommend reading it

• 15:30David Senra?

  and obviously listening to the podcast I did on it, because Marc's a really brilliant guy. But he's also got great quotes and aphorisms that he's just got a great way to communicate that stick with you forever. I haven't read it in, what, two years, something like that? And I always think about it. So when Bob is talking about envisioning yourself at the next level, this is, I feel, a similar idea. And it's Marc Andreessen's idea about how malleable that the world around us is, that we may not even know that. So he says, "The world is a very malleable place. If you know what you want, and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think." Bob is doing the same thing. He's just doing

• 16:12David Senra?

  it in his mind. He's saying, "I'm going after this with energy, drive, passion. And this is what I want, the end goal is. I want the world to reconfigure around me. So I'm executing these dives perfectly." He also applies this to, he invents the integrated circuit, the founding of his two companies, the, any kind of skill. He wants to learn how to be a pilot. He wants to learn how to fly jets. And it's this whole thing, it's just like putting all your focus and energy into what do I want my life to be? You're not a bystander. You're the main character. Act like it. Nois was fascinated by the transistor. This is where he comes to idolize Shockley before he meets him, because Shockley, of course, invented the transistor. Well, that's debatable, but he was at least on the team that invented the transistor, okay? So he's, Bob's young. He's 21 years old when he first hears about

• 16:57David Senra?

  the transistor, but he immediately grabs him. And it says, "It is impressive that Nois at 21 was able to understand the Bell Labs report describing these events." They're talking about, obviously, we know from last week, that the transistor was invented within Bell Labs. It says, "The report had been written by PhD scientists for senior electronic researchers, not for undergraduates." Yet Gale, going back to his, the most important teacher in his life, "Yet Gale insists that when it came to transistors, it would be a gross overstatement to suggest that I taught Bob much. We learned about them together." That makes me think of Bill Gates when we read the book, The Hard Drive. I think it was Founder's number 140. And Bill was like, what is it, 8th grade, 9th grade, something like that, when he discovers computers at Lakeside?

• 17:41David Senra?

  And his teacher says something that's hilarious. He's like, "I knew more about computers than Bill Gates on the first day, but not after that." Because he just said Bill just stayed in there and absorbed all the information he possibly could. So it was funny to see the echo here reaching Gal and Nois. The information that Nois absorbed about the transistor in his last months at Grinnell inspired him. Nois graduated a double major in math and physics. He also received an honor from his classmates, this was hilarious, the Brown Derby Prize, which recognized the senior man who earned the best grades with the least amount of work. That's not the funny part. The funny part is how he describes that to his parents. Or, as Nois preferred to explain to his parents, "The recipient was the man who got the best returns on his time spent studying."

• 18:23David Senra?

  Okay, so at this point, Bob goes off and he's at MIT. He's doing his graduate work, studying physics, and he goes and visits his brother again. And he starts, he leaves that meeting, and he's depressed and he's insecure. He doubts the path of his life, the direction of his life. And the reason I include this is because, one, I think most people would be surprised, it's in almost every single book that we study here. So that tells you, like, everybody goes through this. A lot of people go through this, they get scared of that feeling and they quit, or they stop, or they go to comfort. But that's not the right move. You gotta push through it, just like, "Okay, this is normal. Everybody's gonna feel this. It's temporary. I may feel like this for a few days, maybe a few weeks, whatever it is, but I'm gonna keep going forward." I always think about, using Bill Gates as another example. You know, he's very cocky when he's younger.

• 19:07David Senra?

  He's like, "I'll be a millionaire by 30." He was worth like 350 million by the time he was 30, so he's rather wrong about that. He says, "I'll be a millionaire by 30, I just don't know how." But then he also talks about having periods of intense doubt, where he, I think the quote was, "He was a philosophically depressed guy, just lying about, not knowing the direction of his life." More recently, Dr. Seuss goes to dinner with friends after college, and he's like, "What is going on? I'm the only one out of my college group of friends that doesn't know what he's doing in his life." And so this is what Nois is, is happening to Nois. So again, when you feel like this, just remind yourself it's normal and just keep pushing. His own life struck him as so bleak. That for one of the few times in his life, Bob Noes openly questioned what he was doing.

• 19:50David Senra?

  "The whole of the visit to my brother served to point out to me how misdirected I am." And think about how absurd he is. He's studying, he's in graduate school at MIT. Like, you're doing okay, man. Don't worry about it. But again, our mind can play tricks on us. "These people have some worthwhile goals in life. It doesn't seem to me that I have." And now we get to the part, my note on this is very simple. "Reading this made me happy. This guy cares about Noes." And this is, again, invaluable to us. At the end of Noes's first year of graduate school, Nathaniel Frank, that's somebody at MIT, replied to Gail's letter requesting information about Noes's performance. "Mr. Noes has been an outstanding student in all respects. We are sufficiently impressed with his potential that we have nominated him for a fellowship in physics for the next academic year, and he has received his fellowship.

• 20:33David Senra?

  You are to be congratulated on the excellence of the training which has had, which he has had, and we look forward to an outstanding performance by Mr. Noes." Grant Gail kept this letter for the rest of his life. So it's around this time that Noes develops his lifelong love of skiing. And this is how Noes learned to ski, but really, that's not the point. The point I'm bringing this to your attention is because everything he does is like this. Remember, his nickname was Rapid Robert. So he's like, "Okay, I'm not going to start on the bunny slopes. I'm going to go right to the hard part, and I'm going to put myself in uncomfortable positions and force myself to learn." "Noes apparently started on the intermediate runs, on the assumptions that since he would end up there soon enough, why not just skip the bunny slopes and aim high?" This is how his brother described it this time.

• 21:18David Senra?

  "Bob was not the type to slow down for much of anything." Now, it's interesting to me, at this point, Bob is going to describe one of his professors. And this is the first example of him being the anti-Shockley. "Noes was interested in other people. Shockley was not. Noes, who had a profound distrust of people he thought overly, he had a, excuse me, he had a profound distrust of people he thought overly cerebral. He once described his professor's mind as perverted, too much wrapped up in his own field and closed to anything else. He would sit in silence rather than talk about anything but math." Go back to the story of Shockley, which I found one of the most disgusting things he ever did. He's got an adult son. His son buys a magazine because he knows his father likes electronics and physics.

• 22:04David Senra?

  They're in New York and he's talking to him about it on the first day. The second day, he's like, "Okay, well, I've had enough about physics. Can we go, let's go drink a beer, Dad. Let's go watch a movie. Let's go do some father and son bonding." And Shockley's response is, "I like to teach physics. If you want to learn physics, I'll stay. If not, I'm going back to California." Leaves the next day and never speaks to his son again. Terrible person. This is Nois at 28 years old. He's graduated. He took a job at this company called Philco. And remember this part. At 28, now in five years, his life is not going to be like this. At 20 years old, it says, "In August 1955, Nois noted, 'My current assets are: I have household furnishings for an apartment. I have a car valued at $700. I have $300 in the bank.

• 22:46David Senra?

  I have stocks about $650 and I have a $20,000 life insurance policy. My current liabilities, other than household running expenses of about $400, are debts to the extent of $500. My wife and children live with me and are wholly dependent on me for their support.'" Remember, that's him at 28. Essentially, he doesn't have much. His net worth is very close to zero. He does have a job and he is supporting his two, I think he's got one child and a baby on the way, and then he's married as well at that time. So this is where his life starts to intersect with Shockley. So it says, "On January 19, 1956, Nois answered his telephone. The man at the other end of the line greeted him with two words. 'Shockley here. William Shockley, the inventor of the transistor assumed Nois knew who he was, and he was right.

• 23:30David Senra?

  It was like picking up the phone and talking to God, Nois recalled later. He wanted Nois to work for him in California." So we obviously know, he picks up off the East Coast, moves his entire family at the, against his wife's wishes, by the way. Her family's from New England. She wanted to stay in that area. And he takes this giant risk. It's like, "Hey, this guy is the most important person in the transistor field. This is what I'm passionate about. I have to pursue this opportunity." And this is where we're really going to dig into the difference between Shockley and Nois. This is a description of Shockley's management style. "He made it clear to his young team that he would assign them to projects of his choosing to be done as he directed." Shockley's view was that unless your thoughts were better than his, you have to do it his way.

• 24:12David Senra?

  Many of the, so I didn't know this, or maybe I, I don't think I, no, I don't think I knew how close Shockley and Noyce were. Noyce was essentially Shockley's right-hand man, even though he's much older than Noyce. While they're working at Shockley Semiconductor, Noyce becomes the de facto leader. And the problem is Shockley is deficient on a trait that Noyce has an abundance, and that's charisma. And so it says, "Many of Noyce's peers felt that they learned more from him than they did from Shockley. Shockley strongly adhered to the belief that in almost every aspect of life, there should be but one winner, and he wanted to be it." So this is what they talked to us, like, "It's very bizarre that you're competing with your own team. You're going to alienate them if you do that."

• 24:55David Senra?

  This is a great way to think about Shockley's, the culture under Shockley. And again, this is going to be the exact opposite for the companies that Noyce builds. "Shockley's behavior deteriorated to the point that the lab came to resemble a big psychiatric institute." So Shockley's company lasts less than a year and a half. I covered that last week, so I'm not going to, I'm going to skip ahead to where Noyce finally makes the decision to jump. This is his financial situation at the beginning of Fairchild Semiconductor. Noyce had no savings. This proved to be a problem when Arthur Rock and Bud Coyle, these are the people helping him launch Fairchild Semiconductor, I also went into last week, told a group of eight that they needed, that they each needed to pay $500 for an ownership stake in the new company.

• 25:38David Senra?

  Noyce asked his parents to inquire if his grandmother, the only member of his family with any financial reserves, could lend him the money. He promised to repay her with interest. And think about that. So not only did they not have an abundance of money, right? But this is truly remarkable when you, when you, when you think about, I mean, you can't have a lot of experience in the transistor industry. They didn't have that, that's my point. Because it's a brand new industry. So it says, "Before joining Shockley, the group of eight had between them three years of transistor experience." And that's the part, they knew the product, what they were going to do. They were going to build transistors. They had three years of transistor experience and all that experience resided in Bob Noyce. None of them, at the time, transistors were made out of geranium, I think is how you pronounce it.

• 26:20David Senra?

  And they had the idea, hey, silicon, silicon, silicon is much, is a better route to take here. So it says, "None of them have ever, had ever worked with silicon." "After less than 18 months with Shockley, however, the eight were sufficiently competent to start a company that within the space of a decade," this is the punchline here, "that within a space of a decade sold hundreds of millions of dollars of silicon semiconductor devices." And let me quote Marc Andreessen, if you don't mind, again. One of my favorite quotes of his, "I'm a firm believer that most people who do great things are doing them for the first time." They had no money, no experience, brand new industry, and after 18 months of Shockley, they were like, hey, this is the wrong way. Within a decade, they're going to sell hundreds of millions of dollars of this brand new device."

• 27:04David Senra?

  This is actually a great summary of what happened to Shockley and why, again, I find him so disgusting of a person. "In 1963, Shockley left industry to join the faculty at Stanford, where he taught for the next two decades. As he aged, bitterness and paranoia came to dominate his once brilliant mind. He became an outspoken eugenicist who donated," this is, come on, man. Who are we dealing with here? "He became an outspoken eugenicist who donated his sperm with the stipulation it be supplied only to women who were members of Mensa." So I forgot, that's also in last week's book. There's a chapter on, there's a guy that thought similar to Shockley. It's like, we have to save the human race by only letting smart people reproduce. We need to, not euthanize, that's the wrong word.

• 27:50David Senra?

  We need to make sure that essentially dumber people can't out produce, make more children than smarter people. And so the guy, I think, that started the sperm bank wound up siring like 200 and something children. So anyway, it was just another bizarre thought by Shockley. So anyways, donating my sperm with this stipulation would only be supplied to women who were of Mensa. While his proteges achieved his goal of earning millions of dollars and seeing their names in the business press, Shockley rarely left his Stanford home, where he wrote articles on the intellectual inferiority of blacks to whites and the need to institute birth control measures, this is what I was trying to say, for people with low IQ scores. Small wonder Shockley had been called the Moses of Silicon Valley. He

• 28:33David Senra?

  brought people to the promised land, but he himself was denied entrance. Okay, so let's go back to Nois. This is another thing that's really important. So the traitorous eight, as are the people that left Semifairchild, or excuse me, that left Shockley Semiconductor and founded Semifairchild Semiconductor, were called the traitorous eight. Okay. They de facto thought of Bob, even though they were equal founders, as the leader. Now, he is unsure. He wants to do scientific work. He does not want to be a leader of people. He doesn't, he's unsure if he can manage. So this is an example of, I don't think I have the skills, I'm unsure, but I'm going to go ahead anyways, which is really important. Nois was tempted, but he feared he was ill-prepared to oversee an entire company. Moreover, the prospect of having the final say over the many employees he

• 29:18David Senra?

  could one, he could imagine one day working for Semifairchild Semiconductor frightened him. He is scared. He's insecure. He goes forward anyways. And so something Nois was also a fan of, he wasn't, he was the anti-Shockley because Shockley wanted hierarchy. You know, all the ideas come from me, genius Shockley, and you guys do the work. Nois, he didn't want any hierarchy. This is something he keeps for his entire life. And normally, when the company grows to a size where hierarchy is maybe necessary, he usually becomes disinterested or transitions or promotes somebody else that can actually enforce that and manage the people. But in the early days of Semifairchild, the hierarchy was flat. This reminded me of Microsoft. If you read the book Hard Drive, Founder's Number 140, if you haven't, it's the first 30 No, it's not the first thirty.

• 30:02David Senra?

  It's the history of Microsoft up until the IPO, which is, I thought, the most interesting part. But what I was surprised to learn when I read that book is Microsoft had a similar, flat hierarchy. For their first thirty employees, it was Bill, who was essentially the head guy and salesperson, which was surprising. Bill, a secretary, and twenty-eight programmers. We see a very similar arrangement in the early days of Fairchild Semiconductor. For their founders, it was a very egot- eagle... I can never pronounce this word. Egotarian arrangement. That's still not... you know the word. Noyce was the technical head of the lab, and that was it for organizational structure. The rest of us were pretty much on equal footing. Everybody wore as many hats as possible. And this is where many people believe the best years of their life. And we see this over and over again,

• 30:47David Senra?

  the very beginning of something, when it's small, when you know everybody. Eventually, you have a lot of success. It grows. And then, once the company grows, you know, people look back ruefully. They're like, wow, I missed the good old days. So this is them having the time of their lives. The rapport of the eight men... The rapport that the eight men shared was dynamic. They worked together ten or twelve hours a day, not counting the trips to the bar, where they liked to go for drinks in the evening. They often found themselves standing in a circle when they were together, their shoulders nearly touching. Each man holding one conversation with the man on his left and a different one with the man on his right. Noyce loved these moments, loved the buzz of talk and the smell of cigarettes many of them held between their lips. A formal photo from the founding period hints at this rapport. The eight founders sit around a table.

• 31:32David Senra?

  They are seated in a circle with Noyce, as always, front and center. Every man wears a smile big enough to be called a grin. They are clearly having the times of their lives. Okay, now, here we get to an idea. You can read between the lines of what Noyce is doing. And really, the lesson here is you should do what you're good at and outsource the rest. The brutally methodical labor of science, that is, the careful working and recording of one's way through experiment after experiment, each one only slightly different from the iteration that preceded it, interested Noyce far less than the moments when a new idea came to him. At his core, Noyce was an almost compulsive idea generator, a mental perpetual motion machine.

• 32:18David Senra?

  Thomas Edison famously declared genius to be ninety-nine percent perspiration and one percent inspiration. But Noyce preferred to spend as much time as possible in the inspiration stage, but he's also smart later on. When he leaves Fairchild Semiconductor, he decides, him and Gordon Moore, and Gordon Moore is famous in his own right, of course, not only is he co-founder of Fairchild and Intel, just like Nois, but he's also the inventor of Moore's Law. He says, "Hey, I don't want to be at the head anymore. So me and you, Gordon, are going to run the company together." And then eventually, they have to bring in Andy Grove and realize, hey, he's the one that actually is many people credit with the growth, after the founding of Intel, with the actual growth of Intel into the giant company it became. Because he's the administrator, he's the one that can manage and push the ideas.

• 33:02David Senra?

  He's the 99% perspiration guy, if you want to think about it in terms of Edison's famous quote. This is Nois's approach to inventing. His approach, Nois once told a friend, was to know the science cold and then forget about it. He did not slog or grind his way to ideas. He felt they just came to him. When he heard, this is such a great line, "When he heard Picasso's famous line about artistic creativity, 'I do not seek, I find,' Nois said that he invented the same way." Think about this next paragraph as a good prompt for your thinking. "In Nois's opinion, there were only two relevant questions in the earliest stages of scientific innovation." And I don't think that this applies to more than just scientific innovation. "One, why won't this work?

• 33:47David Senra?

  And two, what fundamental laws will it violate? If an idea seemed within the realm of physical possibility, then, I almost called him Royce, then Nois deemed it worthy of exploration. Conventional wisdom on the topic be damned." This is more on how Nois worked, and it is very similar. If you've listened to the two podcasts I've done on Edison, I have another biography of Edison that'll be coming next few weeks, maybe next few months. This echoes Edison, though. The Fairchild researchers did not understand precisely why this innovation worked. I've omitted what they're working on because it's not important. Here's the main lesson. "In an academic environment, this question would have been paramount." We want to know why it works, right?

• 34:28David Senra?

  "At Fairchild Semiconductor, why something worked was far less important than the fact that it did." In a newborn company with only one customer of any significance, this is IBM at the time, pursuing science for its own sake was an ill-afforded luxury. They don't have giant resources. They will one day, but they don't at this stage. You can't do that. Thus, early research at a Fairchild Semiconductor was almost all process-oriented, with building a sellable product the fundamental goal. If you studied Edison, you know that's exactly, he could have said that. It's exactly how he went about it. Nois believed that the only thing that's technologically exciting is something that has a need for it. Another way Edison could have easily said that. For some reason, when I read this section, it made me think of, there's a, I've told you before,

• 35:11David Senra?

  I have all these quotes in this folder on my phone that I just go through and they spur thoughts, right? And one of it was a tweet and it says, "Business is like nature. It doesn't care if you arrive at the right answer from the wrong reasoning. Evolution demands survival. It doesn't ask you to show your work."

• 35:31David Senra?

  This is more on how Nois worked. He talks about, you know, there's not like, it's not like, I don't have a eureka moment. It's all iterative. "I don't have any recollection of a boom. There it is, the light bulb going off," Nois later said of his ideas. "Instead, he conceived of the integrated circuit in an iterative method. I thought, let's see if we could do this. Okay, we can do that. If we can do that, then we can do this. It was a logical sequence. If I hit a wall, I'd back up and then find a path, conceptually, all the way through to the end. Once you have that path, you can come back and start refining. Thinking in little," this is the main point, his punchline right here, "thinking in little steps will take you there." Now, this is more on the anti-Shockley. It's funny, in my notes throughout the entire book,

• 36:17David Senra?

  I'm constantly writing down anti-Shockley, anti-Shockley, anti-Shockley. And then the, later on, the author, Leslie, actually uses that term. So I felt a little bit of vindication there. He had not changed his managerial approach since his days at Shockley. He still displayed the same tendencies to make suggestions. This is, again, how smart are you if you don't understand that if you were going to accomplish anything great, you're going to have to work with other people. So that means you have to learn the people skills, right? Go back to the very end of the book, I don't know when I did it, maybe in the 30s. Ed Catmull, co-founder of Pixar, wrote this great book, Creativity, Inc., right? He's the person that worked the longest with Steve Jobs. In, at the end of that book, he has an entire epilogue chapter called "The Steve We Knew." And it talks about this common perception that Steve was just this... This infant, I forgot what he called it, like infant dictator, something like that.

• 37:02David Senra?

  They're like, when you hear descriptions, yes, Steve could be a jerk, an ass, whatever you want to call it, of course. But a lot of the stories you hear is from when he was younger. He's like, when we saw him grow in the 26 years that I worked with Steve Jobs, he didn't have people skills when he was younger. He got kicked out of Apple because he didn't have people skills. But he learned them. He matured as he got older. And so that's why I have so much beef with Shockley. It's because like, how smart are you really if you never actually learned that you have to deal with people? Bob Noes was gifted, had a gifted way with people his entire life. Steve Jobs did not. He had to learn how to do that. All right, so it says, and this is again, more about just things I want to copy Bob about. He had not changed his managerial approach since his days at Shockley.

• 37:47David Senra?

  He still displayed the same tendency to make suggestions. So he'd say, why don't you try? Or have you considered, rather than issue commands, which is what Shockley did. He led the weekly lab meeting, but to outward appearances, the meetings ran themselves. Bob reviewed monthly progress reports for each of his half dozen research groups and determined which innovations were sufficiently novel and potentially lucrative enough to merit his attorney's fees and hours of work necessary to patent them. But he did all of this in such close consultation with his subordinates, that they felt they worked with him, not for him. There's many examples of the same thing, the same idea in the book. Noes believed that people, given enough freedom, will choose to do the right thing. This is more ideas on management and more anti-Shockley.

• 38:30David Senra?

  Noes was a very good supervisor of technical people, precisely because he was casual and didn't interfere with his researchers' work. Creative freedom and collaboration, which proved crucial to the young company's technical success, blossomed under Noes's laissez-faire management of the lab. We're still in the Fairchild semiconductor days, but he does the same thing at Intel. So as the company starts growing, it's one of the fastest companies ever in American business. And so the people that own the company, because remember, it's a small company within a larger company of Sherman Fairchild's empire.

• 39:03David Senra?

  They're like, they keep pushing Bob, like Bob come more into the management aspect. And again, he's reluctant to move into the executive side of things. It was with a great deal of a fear of inadequacy. Listen to the words that he's using there. It was with a great deal of fear of inadequacy that I got into an administrative role. So much fear, in fact, that he would agree only to a six-month trial run as a general manager. They're trying to promote him, he's like, no, stop, I don't want to do this. Okay, I'll do it, but for six months. After which he planned to return to the lab. He does not return to the lab. More anti-Shockley, and it's a powerful idea. Really, it's an illustrate, last week was an illustration of this idea you and I talked about over and over again. Learn how to do something by seeing it done the wrong way.

• 39:46David Senra?

  Study, I think it was chapter nine in that book. I think the title is a peculiar ideas of managing people or motivating people. I don't have in front of me, but if you listen to last week, you know what it is. Read that chapter and then do the opposite. And it's very powerful. Nois's top objective was to keep Fairchild from becoming Shockley's semiconductor labs, a place he called the model of what not to do. Nois explained how he loathed Shockley's mind games, his top-down approach to management, and his habit of playing one employee off another. Above all, Nois wanted to lead not through command and control methods, but by inspiring the voluntary cooperation of motivated people. So within, remember, I asked you to think about his financial situation and state of his life at 28. This is at 33.

• 40:31David Senra?

  Because Shockley had this, this, not Shockley, Sherman Fairchild had this stipulation in the contract that, hey, if things are going well, I can buy out the founders and own 100% of this company that I'm kind of incubating. And they do that. So remember, he couldn't, he had to borrow 500 bucks from his grandmother to start the company. He winds up selling partial interest to like, like $300,000. This happens within the first three years. So it says, at 33, Nois now had more money than he or anyone else in his family had ever possessed. More money than he could ever imagine spending. It's funny that he thought about that at that age. And no real failures, and no real failures to make him cautious. So again, a lot can change in five years. Just some random ideas that I thought was really interesting and something that really his main point here.

• 41:17David Senra?

  Absent the religious part is what Founders is all about. It's a celebration of unique individuals and the power that one person can have. Noes did not talk much about religion, even though he was a minister's son, though he did on one occasion point out that the—this is such a unique way—I've never heard this described, Christianity described like this—though he did on one occasion point out "the entrepreneurial and motivational messages latent in the Christmas story," which he appreciated as a reminder that one event or one man can substantially change the course of history. Going back more to this idea about being the anti-shockley—people love Noes, that's

• 41:58David Senra?

  why he was able to—because of the way he treated them, he got more out of them, right? Noes once said that "the job of a manager isn't an enabling, not a directive job." He says it's to enable them, isn't that interesting? "Coaching and not direction is the first quality of leadership." This is all quotes from Noes. "Get the barriers out of the way to let people do things they do well." He had adopted this approach when he ran the lab, and as general manager, he continued it. He wrote personal—this is the main point of why I'm telling you this section. "He wrote personal notes to researchers whose work impressed him. He poked his head into employees' offices to thank them for their work and said it

• 42:37David Senra?

  sincerely enough that one man so complimented compared the experience to a 100% raise." Yes, money motivates people, absolutely, but Noes understood humans on a fundamental level. Being valued part, realizing that what you do is valued to the people you work with is more meaningful. That doesn't mean you skimp on the pay. It just means that humans, over the long term, there's a diminishing return on finances, right? There's not a diminishing return on appreciation. Another lesson here: if you hired smart people, why are you not listening to them? This is more anti-shockley behavior. "Noes would wander through the main semiconductor building admiring aloud the family photos that employees had on their desks.

• 43:19David Senra?

  He would stop to talk to anyone about anything and knew many details of his employees' personal lives." Noes liked to gather a group of informed people in a room, listen to their opinions, and ideally get a broad acceptance on the next steps before he made a decision. He talks about, like, "the direction of your company should be directed by the people that are most knowledgeable, not just the senior people." It's not hierarchy—he says it's not an issue of hierarchy, it's an issue of knowledge.

• 43:46David Senra?

  One of my favorite quotes from Edwin Land. Obviously, I've done five podcasts on Edwin Land. I still make the argument he's one of the most important entrepreneurs in history, even though he would describe himself as a scientist, not an entrepreneur. He says optimism is a moral duty. I'm attracted to optimism and passion, and I don't think I'm alone in that. And there's an example of that. Nois had both optimism and passion. He says, well, he would start meetings or an interaction with somebody. He says, hey, what's new and exciting today? Nois forever looked to the future and its technical promise. In 1965, for example, this is crazy because in 1965, he's predicting the world that we live in now, right? In 1965, for example, he told a gathering of financial analysts that he expected one

• 44:29David Senra?

  day to see integrated circuits inside of portable telephones, personal paging systems, and palm-sized TVs. That's a smartphone. Nois's focus on the future and innovation appealed to the creative instincts of many Fairchild Semiconductor employees and permeated the company. In the mid-1960s, Fairchild Semiconductor was not a typical semiconductor company. Andy Grove's already working with them. He's obviously going to go to Intel as well. He says Andy Grove once described Fairchild as "a strange little upstart," a phrase that captures the essence of the organization. Nois's unorthodox management style was just one innovation launched at Fairchild. In the lab, informal company policy allowed PhDs to play with their ideas for about a year before expecting results.

• 45:11David Senra?

  If an idea appealed to a researcher for whatever reason, he was free to pursue it. This rather loose definition of relevance led Fairchild's researchers to develop roughly one-sixth. This is crazy. They developed one-sixth of all major integrated circuit innovations during the technology's first two decades. The best way, this is a quote from Nois, "The best way to get something done is to have enough confidence in yourself and your men to do it."

• 45:38David Senra?

  A young, and another advice, a young organization, especially in electronics industry, has to be fast-moving.

• 45:46David Senra?

  Now, this is Nois describing the time at Fairchild. "We were a hard, young, hungry group. Our attitude was, 'We don't give a damn what money you have to offer, buddy. We're gonna do it ourselves.'" And this is the result. By 1968, Fairchild employed some 4,000 people in 140,000 square feet of plant space outside the United States. Forty times more people and 11 times more building space than they had in five years. That's crazy. Forty times more people in five years, 11 times more space in five years. That's an example of the quote I always say, again quoting Marc Andreessen a lot today. "A great market pulls the product out of you." He makes the counterintuitive assertion that most people think the team is most important, the product is most important.

• 46:31David Senra?

  He says, "You can choose between product, team, or market. Which is most important for your success?" Mark is saying that market is most important. "A great market pulls the product out of you." More on the management culture that Nois created. "The management culture Nois inspired provided rich sustenance for the young, bright, self-motivated types that a Fairchild semiconductor courted. For these men, fresh out of school and eager to make their mark, the freedom to do their jobs in a way that they believed best was a fantastic reward. To have Nois to head of the company and listen carefully to their ideas was exciting in itself." One of my favorite quotes out of any book that I read was this guy named Henry Kaiser. And he wound up founding over 100 companies, helped build the Hoover Dam.

• 47:15David Senra?

  I'm currently listening to the audiobook, and it'll eventually be a podcast on the Founder's Postscript feed, that Patrick Collison of Stripe recommended. Patrick Collison's just crazy thinking, I don't know, he's just very, anytime I hear him speak, he's a really unique thinker. And so when he recommends a book, I think it's a good idea that you should read it. But anyways, I'm into this book, and there's a bunch of people that I've already done podcasts on, because it's about how did US industry, cooperation between academia, industry, and government produce all the necessary material to help win World War II? And anyways, Kaiser's in this book, that's why I was thinking of him. But he says something that's fabulous, and he says, "Problems are just opportunities in work clothes."

• 48:01David Senra?

  And so this, what I'm about to read you, I feel Nois would agree with that sentiment. So problem or just opportunities and workloads? What are you panicking for? As a manager, Nois remained calm in the face of potential disasters that had others panicking. "I remember we lost a process at the diode plant," said one employee. "We simply lost it. I mean, like, all of a sudden. It just didn't work anymore. I said to Bob, 'My God, this is terrifying. Oh, my God. Oh, my God, we're gonna die.'" He said, "Oh, no. We'll figure it out." He was completely relaxed about it. "It was wonderful and calming to me." Nois could also be brutally competitive. He repeatedly sought out Shockley, out the Shockley booth at an industry trade show so that he could tell his former boss, "We at Fairchild Semiconductor are going to bury you." But for the people on his team, this was an asset.

• 48:46David Senra?

  Nois's greatest strength as a manager was that he gave people confidence in themselves. Partly, this came from his undeniable evidence of his own success, a technical man who made it big on the strength of raw intelligence and unusual ideas. And this is one of his unusual ideas. And I would, I think many people, Gordon Moore, who's really who I'm stealing this sentiment from, would say it's one of Nois's best ideas. All right, so it says, "The selling of new ideas is really an engineering problem," Nois once said. "To him, it was obvious that despite their other purported concerns about the integrated circuit, customers' primary objective to the new technology was its costs. Had not every other issue been handled?" So we also see, as he goes through, he's like, "Why aren't these selling yet?" Okay?

• 49:31David Senra?

  And he goes through, like, these are all these other possible reasons that they're not selling. And then he eliminates them one by one, and he realizes, hey, it's the cost, and this is what he does about it. "A glitzier marketing program would not turn more customers to the integrated circuit. The buyers were extremely technically sophisticated. If their technical objections had been met, and they were still not buying, the problem had to be the price tag." Accordingly, Nois made a little disgust but absolutely critical decision. "Fairchild would sell its low-end integrated circuits for less than it would cost a customer to buy the individual components and connect them themselves. And," this is the important part, "less than it was costing Fairchild to build the device." So you're gonna sell something for less than it costs you to make. Why?

• 50:16David Senra?

  Gordon Moore calls this move, "Bob's unheralded contribution to the semiconductor industry." Notice, he did not say "to Fairchild." He said "to the entire industry."

• 50:27David Senra?

  When a Fairchild distributor asked Noyce if combining the function of several transistors on one integrated circuit and then selling that integrated circuit for less than any one of the individual transistors was a sure path to corporate suicide, Noyce simply smiled in a way that made it clear he did not think so. In effect, Noyce was betting Fairchild's bottom line against two hunches. One, he suspected that if integrated circuits could make their way into the market, customers would prefer them to discrete components and would begin designing their products around his new device. Two, he also calculated that as Fairchild built more and more, experience curves and

• 51:09David Senra?

  economies of scale would enable the company eventually to build the circuits for so little that it would be possible to make a profit even on a seemingly ridiculously low price. Gordon Moore, this is the most important part of the section. Gordon Moore has said that Noyce's decision to lower prices to stimulate demand so that the production volume could grow and the cost of production be decreased accordingly was as important an invention for the industry as the integrated circuit itself. It established a new technology for the semiconductor industry that holds true till today, Gordon explained. Whenever there's a problem, you lower the price. This was as revolutionary a concept to people within Fairchild as it was to their customers.

• 51:54David Senra?

  So at this point, Fairchild is one of the fastest growing companies in the country. And this is like the fifth time, how many times am I going to quote this guy? And another quote from Marc Andreessen that's in, I think it's in Ben Horowitz's book, The Hard Thing About Hard Things. Andreessen says what he likes the most about startups is that in a startup, you only experience two emotions, euphoria and fear. He's also telling you that it's perfectly normal if you're feeling that way. For Noyce, the energy and growth were incredibly seductive. Piloting Fairchild through its acceleration, Noyce told a friend, was a bit like riding a fast horse, the same combination of exhilaration and fear. So he's using the words exhilaration and fear. Marc Andreessen is using euphoria and fear. Same idea.

• 52:37David Senra?

  And teetering on the edge of losing control but never quite doing so.

• 52:43David Senra?

  Now, what's interesting though, again, he's a very unique person, but nobody's perfect. He's experiencing simultaneous unprecedented career success and an unhappy home life. His marriage, he's got a, he's been married almost 20 years at this point.

• 52:58David Senra?

  And he's got four kids and his marriage is falling apart. Nois was powerful, attractive and unhappy at home. He was a risk taker who believed in grabbing as much from life as he could. And he was in regular contact with other women. He had casual affairs. Nois knew that he was becoming a stranger to his own family. He said he envied people out in the machine shop who could go home at night and sleep with no concern. He was appalled to discover that the longer he stayed at Fairchild, the less he had any interest in doing anything except business. What are you as a person when that happens? He asked. Then he answered his own question. You're nothing.

• 53:30David Senra?

  And he goes through this for several years until he eventually gets divorced. He does wind up getting remarried and he stays with his second wife until he dies. But this is something that he looks at as like a personal failure in his life. And you'll see, based on the advice that he gives to other people later on. At this point in the story, I'm fast forwarding. He, he leaves Intel. And this is where another idea, it's, it's very smart to know your weaknesses. And this is why Andy Grove was so important at Intel. One thing I learned at Fairchild is that I don't run a large organization as well. I don't have the discipline to do that. I don't have the follow through. My interests and skills are in a different place. It's getting people together to do something, but that only works for me in a smaller group. So this is, not only was Andy Grove important, but really he picked the best partner. And that's a really good idea.

• 54:14David Senra?

  Him and, him and Gordon Moore were in many respects, perfect complements of one another. And so this is a little bit about that. They had worked together productively for more than a decade, thanks to their remarkably complementary skills. Where Nois saw the big picture, Moore, Moore, Moore could discern detail. When Nois had honed his abilities to construct strong connections between Fairchild and various outside constituencies, the press, the board, customers, suppliers, and so on, Moore had become an expert leader within the company itself. Nois rarely set foot in the lab after 1965, but Moore had an intensely loyal following in R and D. And Grove was loyal to Moore, not Nois. And so Moore was responsible for bringing Grove over. So you cannot understate the impact and the importance Moore was.

• 54:59David Senra?

  Nois gets all the attention, but Moore was very, very important to the success Intel had, and Fairchild. And for all their different, and all their apparent differences, excuse me. Nois and Moore shared one key trait, a burning competitive desire to do something extraordinary well, extraordinarily well. This is Andy Grove on Bob Nois at the beginning. Because again, this is, no one's perfect. And he's going to show us a lot of the traits that he felt Nois was lacking in. Grove alone, among the group planning to leave Fairchild with Nois and Moore, had serious doubts about its leadership. He did not like Bob Nois. Grove, who had attended Nois's staff meetings, was shocked to see how Nois let people bite into each other like rabid dogs. Bob just sat there at his meetings.

• 55:41David Senra?

  He wore a pained expression and a slight, somewhat appropriate smile. His looks at either, "Children, would you please behave?" Or, "I want to be anywhere but here." Nois's refusal to take charge irritated Grove, who, but this is why I think his, even if, I really feel one of the best books I've read for the podcast is Andy Grove's memoir, Memoir Swimming Across. It only talks about the first 20 years of his life. And it's just a wonderfully, it's an unbelievable story and just wonderful writing. But we get a summary here. Grove, by the time he was 20 years old, had hidden in a cellar to elude the Nazis, fled the communist takeover of Hungary, and crossed the Atlantic to the United States, where a few years later, he graduated first in engineering class despite having begun

• 56:22David Senra?

  his coursework without knowing how to say horizontal or vertical in English. Grove had little respect for a man who, in his estimation, did not argue, but just suffered. Now, here's something remarkable for you. Even after all the success, he founded and piloted one of the fastest growing companies in America, in American history, right? He's, he still has lingering doubts at the beginning of Intel. And here's what his mindset was. Several of the Fairchildren, that's what everybody, so a bunch of people left Fairchild Semiconductor and started companies, they traced like 65, something like that, companies direct, from direct descendants of that one company. Several of the Fairchildren had failed to brother spectacularly. And Hoff, this is a guy that Nois is trying to recruit, who's younger than him.

• 57:06David Senra?

  And Hoff wanted to know why this venture would not follow suit. Neuss had asked himself that same question. He had briefly wondered if he and Moore were too old. Neuss was 40 and Moore was 39 to start a company. Moreover, as much as Neuss longed to get close to advanced technology again, he was concerned that perhaps he had been away for too long to jump back in the game. After a bit of thought, however, he decided that his and Moore's age, if reconsidered as experience, was an asset. As he put it, "The semiconductor business hadn't existed longer than we had been in it. There wasn't anybody who knew the business better than we did." So he's raising money for Intel, which was relatively easy. He wanted the board, his former college, to invest. Warren Buffett's on the board as well. This was surprising. Even Warren Buffett, who joined the Grinnell board shortly before the decision to invest

• 57:51David Senra?

  in Intel was made, was willing to abandon one of his fundamental rules of investing. "Only put money into things you understand." For this particular instance, as Buffett put it, "We were betting on the jockey, not the horse." This is another example. We saw this too. Just, you know, if you have some kind of advantage, don't go blabber in your mouth. Don't tell people what your strategy is if them knowing your strategy would help them. So it says, "Intel was going to try to build semiconductors not of the types of integrated circuits now in the market, and that Intel would seek to extend a technology to higher levels of integration. The word 'memory,' which is what they were doing, never appeared in the plan. Frankly, said Neuss, 'we didn't want people to know what we were going to be doing.

• 58:36David Senra?

  We thought it would attract too many competitors too soon. Secrecy was essential for Neuss's and Moore's plan to work. Intel scientists did not give talks that would benefit competitors.'" That's essentially the main point. Don't say something. Keep your mouth shut if it's going to benefit your competitors. A way, I reduce this, I compress this into an aphorism, "Bad boys move in silence," which is not my aphorism. I'm pretty sure I stole that from Biggie Smalls, the rapper. But that's a good way to think about this. This is also something that was similar in Founder's Number 110 on Henry Singleton. Claude Shannon, who was on the board of Teledyne, was talking about the fact that Henry shut up, that we did not go around blabbing to our, giving our competitors information. Just because it strokes our ego, we get attention in the press.

• 59:21David Senra?

  He says, he always, this is Claude Shannon talking about how Henry Singleton ran his company. He always tries to work out the best moves. And maybe he doesn't like to talk too much. Because when you're playing a game, you don't tell anyone else what your strategy is. So what Claude Shannon and Henry Singleton are doing at Teledyne, you see Bob Nois and Gordon Moore doing the same thing at Intel.

• 59:41David Senra?

  And so one of the reasons they wanted to leave Fairchild too, is because they weren't, they started getting input for the people that ran the main Fairchild company, not just the semiconductor part of it. And they, it started to slow things down. And so Bob's going to give us some great advice here. But I don't think it's just about work. I think this is great life advice, actually. And he says, when Fairchild, where Fairchild had lumbered in the last few years, Nois and Moore wanted Intel to race. This is what he said. Use money to buy time because money is cheaper than time. That can be applied to many different things. And it made me think of this quote from Naval Ravikant, who's the founder of Angel List. Some of you might know who he is. And he says, guard your time. It's all you have.

• 1:00:26David Senra?

  Money has a discount rate. As you get older, that discount rate goes up. When you're about to die, the discount rate may be 100%. Most people would give up everything for one more week or one more year. And this last sentence is the most important part. Live accordingly. So I love that. Let's go back to what Nois just told us. Use money to buy time because money is cheaper than time. And this is a great metaphor by Gordon Moore that I came across. Being first to, and also indicates why they had to be, one, be quiet and two, move fast, right? Being first to market would put Intel in the position of what Gordon Moore called a rifle man who shoots at a blank wall, finds the bullet hole and then paints the target around it.

• 1:01:09David Senra?

  The first company in the market always hits the bullseye because that company can draw the target around its own shot. Doesn't mean it's obviously always going to be the winner, right? Any late arrivals find the target already in place, the market defined by someone else. More on the importance of moving quickly, and I just love this idea. After observing William Shockley's methods of using simplifying assumptions to speed up his company's research, Nois had come to believe that scientists could approach their work in two very different ways. So researchers could adopt the pretty approach, in which they devote a great deal of time and effort to developing a technique or machine that will allow them to test their ideas with exact measurements that yield final definitive answers. Or, and this is his route, a researcher could try the quick and dirty way.

• 1:01:54David Senra?

  Moving forward with an idea as soon as rather, excuse me, moving forward with an idea as soon as a rather rudimentary test indicates it will probably work. Nois believed that the quick and dirty method generated 90% of the answer in 10% of the time. Go back to that, what award did he win in high school? The person that got the, that got the best grades in the least amount of time. Okay? He disdained the pretty method as a bit like telling a soccer player, never to kick the ball until you have an idea shot, so you have an idea shot all carefully lined up, and know exactly how hard, and you know exactly how hard to kick the ball. 90 minutes may be over before you locate that opportunity. And he's going to extend this later on in the book, and I summarize this as, "Don't

• 1:02:39David Senra?

  overplan. Steer the boat a little every day." "I don't get my kicks out of seeing things run at the highest level of efficiency with the greatest degree of control," he said. "Control immediately means a loss of personal freedom for either the people in the factory or for the management." Once you've got, once you've set down the ground rules for return on investment or earnings before taxes, you're suddenly cut off from some of the choices you could have made. So he's not, again, if you take that route, you're not optimizing for optionality. I guess what I'm saying is that the venture part of management, rather than the control part of management, is more fun to me. He added another point. "This immature," what he's calling immature management, "has been much more successful for him than the mature management that tried to get into the semiconductor business."

• 1:03:24David Senra?

  Let me quote the great Henry Singleton again. This is from the book, Distinct Force, which I covered in Founder's Number 110. Once criticized for not having a business plan, Henry replied that he knew that a lot of people running companies had very definitive plans they followed assiduously. But we're subject to a great number of outside influences on our businesses and most of them can't be predicted. So my plan is to stay flexible. That's all Bob is saying. My only plan is to keep coming to work every day. I like to steer the boat each day rather than play, rather than plan way ahead into the future. Okay, so here's another great idea from Steve Jobs and it relates to Intel just had a major technological breakthrough. They're calling the 1103. It's brand new, but it's not working well.

• 1:04:09David Senra?

  So it's not a perfect problem, product. It fails from time to time, but it was a technological breakthrough. Okay, that's what you need to understand, to understand what Jobs is going to say here. And so Steve Jobs perfectly describes the expected human reaction to an imperfect new technology. Right? Even with its problems, the 1103 represented a real technological breakthrough. This is what Steve Jobs says. As Steve Jobs once said, "When the light bulb was invented, people did not complain that it was too dim." I referenced this idea earlier, that any sort of hierarchy, but especially one that placed noise at the top, made him nervous. And he wants to optimize for knowledge over hierarchy. At Intel, no spoke of hierarchy power and knowledge power and firmly believed that when

• 1:04:53David Senra?

  it came to technical decisions, the word of the person with the most knowledge ought to trump the opinions of the one with the higher title. Shockley believed the opposite, or maybe he didn't believe the opposite. He thought, okay, if I'm at the top of hierarchy, that means I have the top of the knowledge. And we know that's obviously not true. Another great idea, own up to your mistakes, accept your blame, and then fix it. Mike Markula, who ends up owning 30% of Apple or something like that, joined Intel's marketing group, recalls how noise often diffused problems. Bob was just so straightforward and didn't try to sweep things under the carpet, he'd say. So he's talking about problems with customers, right? He'd say, "We know what the problem is. We're fixing it. Here's when we'll get it fixed. We're doing everything humanly possible to meet your requirements. And yes, we goofed up."

• 1:05:35David Senra?

  You know, when you're that honest and that straightforward, it's hard for the customer to continue to be angry. I want to go back, right before his divorce, I want to go back to the, you know, this idea, things are not always as they appear. Intel's going well, Bob is admired and respected in his industry, he's richer than he ever thought possible, he just went, Intel went public in his divorce, his wife's going to get like $25 million, it gives you an idea of how substantial his net worth had grown. But even that, even though, everything is going right, his marriage is difficult and happy, and listen to what he says about it. "Staring straight ahead," Noes said almost to himself, "boy, sometimes it's simpler to get on a plane to New York than to go home." He later told his daughter that he used to sit in the Intel parking lot for five or

• 1:06:19David Senra?

  10 minutes every evening, idling the motor and wishing there was somewhere he could get, he could go that was not his house. So eventually, he's going to get to the point where Intel's growing, and this is where Moore's going to take over CRO role, Grove's going to come in, eventually Grove takes over that role as well. And you just, you know, I think one thing is you have to know who you are. And Noes understood what he loved most, and when his companies grew out of that stage where he thought he was most effective and he wasn't happy anymore, he moved on. And that's, that happens at Intel too. Noes had been an ideal founding president for Intel because he was, at his core, what Moore called "a wild expansionist." The job Noes enjoyed and excelled at were plotting new products, brainstorming new ideas, establishing a market from thin air, meshed perfectly with Intel's needs as a

• 1:07:04David Senra?

  young company. "He loved," he said, "leading a company, walking the thin line next to the cliff of disaster, his eyes always scanning for the next opportunity." And I got to draw your attention, because, I don't know if you know this, but Noes died rather young. He died unexpectedly at 62, and he smoked cigarettes since he was a kid, and he had a lifelong, two-pack-a-day habit. And this is another example that smart people are capable of doing dumb things. And this is on his inability to quit smoking. Several people, including one of Noes's daughters, have said that somewhere deep within himself, Noes thought he was immortal. "Noes never stopped at the edge of a precipice, but instead ran at full speed right over the edge and into the unknown."

• 1:07:45David Senra?

  This had been his approach with ideas, with companies, with skiing, with driving, with women, and with inventing. How on earth could something as mundane and trivial as a cigarette kill someone like him?

• 1:08:00David Senra?

  So after Intel, he starts doing a lot of investing and restocking the stream which he fished from, as he put it. And this is a summary of Bob's angel investing. He says, "That's an impossible task. Let's do it." "Nois like to say, 'You can only lose 100%, but the multiples on the upside are fantastic.'" So that's a very quick two sentences. And what he's telling you is cap your downside, right? But leave your upside uncapped. This is another example of a similar idea. This is not a unique idea by any means, but it is a very valuable idea. Jeff Bezos has his own idea about this, and he uses this at Amazon. He says, "Listen, the difference between baseball and business is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball,

• 1:08:43David Senra?

  the most runs you can get is four." So what he's saying is the upside is capped. "In business, every once in a while, when you step up to the plate, you can score 1,000 runs."

• 1:08:55David Senra?

  And this is when, as he's advising these new entrepreneurs, trying to help the community that he benefited from, we get advice from an older, wiser Bob Nois. I've read the same paragraph in so many different places, and it's very important. So I'm going to include it again here. "In 1979, Nois was invited to dinner at the home of an entrepreneur whose company his fund has supported. After the dishes had been cleared and the children were sent to bed, Nois listened as the company founder explained that someday, if the business did well, he would like to move his family into a bigger, nicer house."

• 1:09:29David Senra?

  "Nois looked up at him and said very quietly, 'You've got a nice family. I screwed up mine. Just stay where you are.'"

• 1:09:38David Senra?

  25 years later, and a successful company later, the entrepreneur had not moved.

• 1:09:46David Senra?

  And this next part, I don't know if he knew this explicitly, but I definitely think we do. This is extremely important. "His financial success directly benefited the entrepreneurs whose companies he funded. But the stories about Nois's success inspired many more." When I highlight this part, yes, exactly. "One entrepreneur put it this way, 'Why do we love this dynamic environment? I'll tell you why. Because we have seen what Steve Jobs, Bob Nois, Nolan Bushnell, and many others have done. And we know it can and will happen many times again. In other words, if they could do it, why can't we?'"

• 1:10:24David Senra?

  Such rationale functioned as a self fulfilling prophecy, propelling the region forward on a self perpetuating cycle of entrepreneurship and wealth. And so this is what he was doing. He was also working in this collaboration with the government and other semiconductor companies to try to save the semiconductor industry from foreign competition. I omitted that whole part. He was doing a job he didn't really want to do. And unfortunately, that's what he was working on when he died unexpectedly. And this is just a reminder that we don't know how much time we have. So we gotta go. We gotta do what we want to do. Two days after the photo was taken, they held like a Bob Noes Day at this company that he was working with, you know, celebrate him. Two days after the photo was taken, he laid down

• 1:11:07David Senra?

  for a rest after his regular morning swim. As he slept, he suffered a massive heart attack that took his life. The date was June 3, 1990, and Noes was 62 years old. And before I close, this is the eulogy issued from Apple. Obviously, Apple couldn't have existed without all the people that benefited, not only Noes, but a bunch of people that worked at Intel, Fairchild Semiconductor helped Apple in the early days. And this is the eulogy for Bob Noes, which I thought was a great summary of the man. And it said, "He was one of the giants in this valley who provided the model and inspiration for everything we wanted to become. He was the ultimate inventor, the ultimate rebel, the ultimate entrepreneur."

• 1:11:53David Senra?

  And this is where I'll close. "Noes's most enduring legacy cannot be measured in buildings, accolades, awards, honors, not in dollars earned or given away, not in stock price or market share. It cannot be etched in silicon or printed on microchips. There is an informal sort of generational succession in Silicon Valley that places Noes near the top of the family tree. And even when there is no such explicit tie back to Noes, even if the latest generation of entrepreneurs don't know his name, his influence endures in a set of ideals that have become an indelible part of American high tech culture. His spirit quietly urging anyone who might listen to go off and do something wonderful."

• 1:12:42David Senra?

  To get the full story, I highly recommend reading this book. If you buy the book using the link that's in your show notes, you'll be supporting the podcast at the same time. That is 166 books down, 1,000 to go. And I'll talk to you again soon.