From Startup to Goliath: 3 Factors That Influenced Intel's Culture in the Early Days
Join us in a city near you at Entrepreneur’s Accelerate Your Business event series kicking off Feb 23. View cities and dates »
In his new book, The Intel Trinity (HarperCollins Publishers, 2014), Michael S. Malone chronicles the early days of the tech giant through the lives of its founders. In this edited excerpt, Malone describes the outside factors that contributed to the culture of much of Silicon Valley, which sprung out of the early days of Intel.
New startups are notoriously bad at keeping track of their own histories. That’s a good thing: any new enterprise that has the time to catalog its own story obviously isn’t working hard enough to ensure its own success.
Young companies often behave in ways very different from their later, larger incarnations -- sometimes to the embarrassment of later employees and executives. They want to see the past as one straight upward path to triumph, not petty squabbles, questionable deals and the incompetent decisions of neophytes.
One of the least appreciated but most important achievements by Intel over its 40-plus years is its corporate personality and culture. These were largely in place early on and have changed little even as the company has grown by nearly a thousand times in the number of employees and tens of thousands of times in revenues, even as it has spread its operations around the world and incorporated diverse cultures and ethnicities.
What is that personality? In Silicon Valley, there is certainly an Intel “type”: technology-focused, competent to the point of arrogance, combative, free of artifice and proud of it, proudly unhip, ferociously competitive and almost serenely confident of ultimate victory -- and all of it wrapped in a seamless stainless-steel box.
Intel has always recruited the best technical talent it can find, then dropped them into a work environment that has little pity for human weakness, much less failure. The classic 80-hour work week that has come to define Silicon Valley professional life was codified (though unwritten) at Intel. So too was the notion inculcated into every employee that they were the best and brightest precisely because they were employed by Intel (an attitude that really wouldn’t fully be seen again until Google).
This culture, associated with the mighty Intel of the 1980s and 1990s, wasn’t fully in place during the first dozen years of the company -- that is, during the years when the company was led mostly by founders Robert Noyce and Gordon Moore. Compared to what came later, that company was more idiosyncratic, guildlike, renegade ... and fun. Though the popular notion is that this was due to the two founders, that’s only part of the story. Equally important were:
Size. Small startups, because they are heavily dominated by new hires arriving from other companies, often have trouble creating and maintaining a corporate monoculture. As late as 1975, Intel still had fewer than 5,000 employees -- fewer than in many of its current office complexes. Most employees knew each other and the founders, enabling the company to operate largely on mutual trust rather than on the kind of rules and guidelines associated with a giant company filled with mostly strangers.
This small size also amplified influences that would have had little effect in a larger company. For example, in the early 1970s, Intel grew so fast and hired so quickly that it fell behind in the assimilation of these new hires.
Many of these were former Texas Instruments employees who wanted to join in Intel’s growing success. Without a new culture to adopt, the former TI-ers fell back on their old one, creating a sizable and destructive enclave of Texas Instruments’ hierarchical and highly-politicized culture inside Intel that took years to root out. This underscores how fragile and vulnerable Intel’s culture was during those early years.
Flexibility. Organizational lines remain indistinct because young companies have flat structures and everybody assumes multiple duties as needed to make the enterprise successful. At Intel, where Noyce and Moore enforced their philosophy of equality and access, the organization chart was so flat in practice -- no executive dining room, no executive bathroom, no executive parking places, no first-class travel, and anybody could walk down the aisle to the founders’ cubicles -- that it was almost revolutionary.
By the same token, this flexibility was a key component of the adaptability that was central to the success of Intel during this era. After all, over the course of that first decade, the company completely changed its core technology, business and most of its customers. That was possible only because Intel’s employees had been equally able to change their jobs, duties and responsibilities, often multiple times, over the course of those years.
Other chip companies attempted the same shifts through a series of mass layoffs and hirings. While that sometimes worked in the short term, it did little for the intellectual capital of those companies -- and nothing for employee loyalty.
The era. The modern semiconductor industry was still little more than a decade old. Billion-dollar fabrication plants and 50,000-employee payrolls were as yet years away. The processes and procedures that enabled chip companies to run at peak production, productivity, and profitability were still being developed.
Thus even as Intel and the other chip companies were slowly systematizing the overall processes of semiconductor fabrication, the details of those processes were, for now, still as much craftsmanship and black magic as ever. It could all go sideways at any moment. And that opened the door for the kind of eccentricity and seat-of- the-pants decision-making that kept Intel from becoming as systematic and empirical as it dreamed of becoming.
There was another anarchic force defining the semiconductor industry during these years: lawlessness. In the early 1970s, the semiconductor industry was the hottest new business sector in America, and it was beginning to produce mountains of wealth. Yet because it was geographically isolated from both Washington, D.C., and Manhattan -- and because it involved an arcane technology that few yet understood -- it was also among the least watched and least regulated of industries.
The almost inevitable result was that in those early years, the semiconductor industry was characterized by a combination of deep loyalties among competitors and often brutal competition between friends. That competition often crossed the line into what would usually be considered unethical, even illegal, behavior.
Excerpted from The Intel Trinity by Michael S. Malone, Copyright © 2014 by Michael S. Malone. Reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers.
For reprints and licensing questions, click here.