ISABEL RUBIO ARROYO | Tungsteno
Prompted by the animated film Fantasia, the legend of the great tech companies founded in a garage first emerged 80 years ago. In a place as modest as that, engineers Hewlett and Packard created their first electronic device —a low frequency audio oscillator, which they manufactured there so that Disney Studios could bring their emblematic work to theatres— and also launched their own company. In this way they wrote the first chapter of the history of Silicon Valley, which provides us with these four lessons for innovation.
Culture of entrepreneurship
Considered the father of Silicon Valley, Frederick Terman encouraged his students at Stanford University to create their own high-tech companies. William Hewlett and David Packard followed the advice of their professor and flipped a coin to decide the order of their surnames when they founded Hewlett-Packard (HP) on 1 January 1939, in a garage in Palo Alto (California) that today it is remembered as the birthplace of the mecca of technology. And that modest origin, now idealised, coincides with that of other tech giants like Google, Apple and Amazon.
The 1950s witnessed the take-off of both HP and Palo Alto, where the population multiplied and the orchards gave way to highways, businesses and schools. The Stanford Industrial Park, promoted by Terman, was a focus of attraction for other companies that made the city the heart of Silicon Valley.
In that area south of San Francisco Bay, a thriving culture of entrepreneurship and creativity took hold, thanks in part to the social work of Hewlett and Packard themselves. The David and Lucile Packard Foundation (1964) funded the musical talent hunt for the San Francisco Symphony and also created the best aquarium in the world in Monterey as a gift to their community. The William and Flora Hewlett Foundation (1966) gave a boost to the region with their donations to the California Institute of Technology and Stanford University, among others.
HP launched pioneering devices such as the first scientific desktop programmable calculator. Credit: Hewlett-Packard
It all started at that university where Hewlett's studies for his thesis —under Terman's tutorship— were the basis of that first HP oscillator, sold to Disney for about $70: the model HP200B, which was used in the 12 theatres in which they first ran Fantasia in 1940.
In a short time, the company diversified its business and also launched microwave signal generators, medical devices and pocket calculators. In just one year the garage had become too small, and the company moved to another building in Palo Alto. Its commitment to innovation led Hewlett-Packard to enter the computer business in 1966 with the model HP 2116A, and to launch in 1968 the first scientific desktop programmable calculator (HP 9100A). Other pioneering devices, evidence of the influence of the company in the technology sector, were the HP 150 —the first computer with a touch screen, in 1983— and the HP ThinkJet (1984), which was the first inkjet printer.
Flexibility at work
Decades before companies such as Google or Amazon included in their offices foosball tables and other spaces to relax and regain strength, HP was already looking for ways to reduce employee stress, motivate them and build loyalty, with perks during the day, gifts to their families and stock options to share in the profits.
In fact, HP was one of the first companies in the United States to set a flexible schedule as early as 1973. The goal was for employees to have more time for family, leisure or personal business. Two decades later, it was also a pioneer in promoting telecommuting to increase job satisfaction. That was the HP Way philosophy —as David Packard explains in his book: The HP Way: How Bill Hewlett and I Built Our Company— which has inspired the current corporate culture of large companies and start-ups.
Packard and Hewlett returned to the garage in 1989 to celebrate the company's 50th anniversary. Credit: HP
Adaptation to change
Hewlett and Packard did not have a hard time making drastic decisions to meet the challenges of the market, as Michael S. Malone noted in his book on the creation of HP. After the retirement of the founders, that style continued with actions like the absorption in 2001 of its great rival, Compaq. That merger resulted in thousands of layoffs and allowed it to surpass IBM and become the world's leading PC manufacturer between 2007 and 2013.
The crisis motivated by the rise of mobile devices forced the firm to announce in 2014 one of the most radical changes in its history: to separate its business in two. Since 2015, HP Inc. controls personal computers and printers, while Hewlett Packard Enterprise handles business services and equipment. Both try to compete with the new Silicon Valley giants that now dominate the sector.
HP trained and inspired many engineers who then found success in Microsoft, Amazon or Apple. Steve Wozniak himself, co-founder of the company from Cupertino (near Palo Alto), was employed by the firm. He designed its first personal computer (the Apple I) while working there, but Hewlett-Packard rejected his idea up to five times because it was not interested in the domestic market. Finally, despite his loyalty to the company, Wozniak quit his job and founded Apple with Steve Jobs, not an easy decision. "I had to make Apple my whole life, but what I wanted was to work at HP my whole life," says Wozniak, who has acknowledged that the birth of Apple in a garage is actually a myth.
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Tungsteno is a journalism laboratory to scan the essence of innovation. Devised by Materia Publicaciones Científicas for Sacyr’s blog.