Tag Archives: Silicon Valley

Secret History of Silicon Valley: Steve Blank

Below is an amazing lecture from Steve Blank on the history of Silicon Valley.

As military funding was a big part of it, the majority of the talk is around the role of electronic warfare in World War II and the Cold War.

Steve’s Secret History site shares the full slide deck and more.

Some interesting highlights from the talk:

  • World War II was the first electronic war – the German air defence even had radar-guided flak guns!
  • The ground-facing radar on Allied bombers that was designed to help identify targets was used by Germany to track them (and so was the radar warning receiver on their tails)
    • This shows the cat-and-mouse game of measures and counter-measures in electronic warfare
  • Allied bomber formations would throw out a cloud of aluminium foil “chaff” to reflect German radar, which was cut to exactly half the wavelength of the signal.
  • Fred Terman of Stanford moved East during the war to run the Harvard Radio Research Lab
  • He hired 11 colleagues from the Lab to join him at Stanford when he returned. Together they made Stanford the “MIT of the West”
  • Heretically for the time, he encouraged faculty to sit on tech company boards and his graduate students to leave and start companies (for example, Hewlett and Packard)
  • The Cold War became an electronics war as well
  • The USA use the moon to pick up reflected Soviet radar signals and map out the locations of the radar bases
  • CIA and NSA would fund big radio dishes for universities like Stanford as a result
  • Shockley came back to Stanford. He was a great researcher and talent spotter but a terrible manager
  • The “Traitorous Eight” left to start Fairchild Semiconductor and a suite of companies formed in the resulting ecosystem
  • The US military “primed the pump” as the first customer for tech entrepreneurship in the Valley.
  • But in the mid-1970s, the US Government slashed capital gains tax and told pension funds they could invest up to 10% of their assets in VC firms.
    • As a result, inflows to VC firms rose by an order of magnitude and Silicon Valley became a hotbed of for-profit innovation

Protecting investors against earthquake risk in Silicon Valley

I’ve often wondered what would be the impact on companies in Silicon Valley when the inevitable earthquake hits. Turns out I’m not the only one.

Earthquakes in the Bay Area: a “ticking time bomb”

The Bay Area is subject to major earthquakes roughly every 145 ± 60 years at the current rate. Given that it is 150 years since the Great San Francisco Earthquake of 1868, the next “big one” could happen any day now.

Apparently, about 2 million people live on the Hayward Fault and 7 million are in the surrounding area. A magnitude 7 quake would cause damage in the range of $95 to $190 billion, which would be a disaster for the citizens of the area.

Impact on the tech giants

However, my curiosity centers on what would be the impact on the giant tech corporations that are based in Silicon Valley and the wider Bay Area? Companies like Google, Facebook, Oracle, and Salesforce have their HQs and major footprints in the region, so they will be adversely affected by a natural disaster.

It doesn’t seem like they are particularly well-prepared for such an event, according to this report. Although most of the companies have data centers and operations distributed around the world, an earthquake could still cause potential disruption to the main office and therefore the leadership of the business.

As listed entities, this marks a real risk for their shareholders. Could their share prices or even the whole NASDAQ take a tumble if a major earthquake hits the Bay Area? After the 9/11 terror attacks, the Dow dropped by 14%, so this is not unthinkable.

However, I think the impact goes beyond just their own businesses. The services provided by these tech titans represent critical infrastructure for many European and American businesses, so any disruption could have a huge wider impact.

Early warning: a vital tool to prevent damage

Scientists are getting better at detecting earthquakes early. In Silicon Valley, there will soon be an app called QuakeAlert that can give up to 2-20 seconds of warning of an impending earthquake.

This might not sound like much, but even 2 seconds can be long enough for Internet of Things (IoT)-enabled devices to perform vital preparations such as: opening the doors of fire stations to prevent fire engines getting stuck; isolating certain parts of the electricity, water, and gas networks; slow down trains; and tell elevators to open their doors at the closest floor.

Solution: seismic sensor network to short the NASDAQ

Could it be possible to set up a network of seismic sensors to warn when an earthquake was just about to hit the Bay Area and then send an order to a trading algorithm that could short the NASDAQ?

A similar system could be used to create an early warning for tsunamis. One candidate is the mega-tsunami that geologists once predicted could be created by a volcanic eruption in the Canary Islands which would devastate the northeastern US coast (although further review of the original study showed that this is a worst-case scenario and probably will not happen for another 10,000 years at the earliest).