Hewlett-Packard

A small garage in California became the birthplace of Silicon Valley

WILLIAM HEWLETT (1913-2001) DAVID PACKARD (1912-1996)

David Packard, of the electronics company Hewlett-Packard, was born in 1912 in Pueblo, Colorado. His father was a lawyer, his mother a teacher.

In his 1995 book The HP Way, he recounts how childhood Pueblo breathed the atmosphere of the Far West rather than a farming state in the Midwest.

It was a rough place with many guest workers drawn to a steel mill and foundries. It had its bars, brothels and gangsters. Street fights and shootings were part of everyday life. The Packard family lived on the edge of town, against the prairie.

Young Packard could go on endless wanderings with his friends.

'There,' he wrote, 'my love for nature was born.' He was fascinated by everything to do with physics and science and experimented with enthusiasm.

Trials of leftover gunpowder from a nearby sand quarry ended with an explosion that maimed his left hand. Another passion was radio.

By the time he was 12, his yard had an actual radio antenna. In high school, he excelled in rugby, basketball and track and field. He was big for his age.

In a school competition for the state of Colorado, he won the high jump, long jump, hurdles and discus throw in one competition: a record.

In the summer of 1929, by accident, he visited the renowned Stanford University, near San Francisco, during a vacation. The tuition was very high.

Because his father had been appointed trustee in 1929 and the Great Depression led to many bankruptcies just in those years, the family could afford the costs.

Still, during his college years, Dave would always support himself with part-time jobs.

Not without pride he later referred to his work as an assistant to an explosives expert, as a worker in a brickyard, as a road builder - there are also photos of him working with a bulldozer - and as a supplier of ice blocks in the red light district of Pueblo.

Stanford, where he arrived in 1930 for his engineering studies, had his own radio station that he couldn't avoid in his spare time. There he met the young professor Fred Terman, who invited him to follow his radio engineer courses.

He also met Bill Hewlett there. They became friends for life.

According to some sources, they got to know each other as bench seats on the rugby team. Dave himself writes that Hewlett hesitated between engineering and medicine and that they took some general courses together.

Dave : 'It is certain that the love we both had for nature, for hiking and mountaineering, strengthened our friendship and taught us to cultivate the mutual understanding and respect that have formed the basis of a fifty-year business relationship.'

Professor Terman knew everything and everyone in the area that had anything to do with radios. Some businesses have had some success. How much greater would be the possibilities for academics with a solid theoretical foundation, he told them.

During the study, the plan to do something along those lines was ripened. But when Dave graduated in 1934, he immediately landed a job at General Electric, on the East Coast.

Bill continued his studies and obtained his doctorate at the renowned Massachusetts Institute for Technology, also located in the east of the country. With a $500 scholarship, Terman lured the two friends back to California in 1938.

kitchen oven

The house that Dave and his wife rented in Palo Alto also included a "cottage" where Bill found shelter. Next to it was a small garage, which they immediately converted into a studio. Terman would later say, “When Dave's car was in the driveway, I knew they were working.

If they didn't have a job, the car would be inside.' Fifty years later, the state of California turned the garage into a protected landmark and declared it the birthplace of Silicon Valley, the area that is home to more than 5,000 computer companies today.

They started a small company with Hewlett's doctoral work, a vibration generator. Dave was 28, Bill 27. The incredible Terman gave them $538 out of his own pocket and went to a bank himself to secure another $1,000 loan.

Christmas 1938 the prototype showed off in the living room on the mantelpiece. They took pictures of it and designed a brochure in which the aircraft was numbered 200: 'To give the impression that we had been busy for a while.'

Bill was the technician, the researcher of the two. Dave took business law and accounting classes at university.

He would later become more of a manager and businessman, the man who invented the 'hp Way', a corporate philosophy that included the element of 'management by walking around', leading while walking. With his 1.93 meters you could already see him coming from afar.

They officially started on January 1, 1939. The order of the surnames was decided by tossing a coin.

Earlier, Bill had met a Walt Disney sound engineer at a radio engineer meeting. For the groundbreaking production Fantasia, he was looking for eight vibration meters. Its price in those years was 400 dollars. hp was able to deliver better quality for $71.90.

To cope with that, the painting of the frames had to be baked in the kitchen oven.

At the end of 1939, sales were $5,000. A year later they employed ten men. The attack on Pearl Harbor and the American involvement in the Second World War led to a spectacular increase in military orders. Hewlett-Packard ran day and night.

The number of employees increased to 200 men.

At that time, they already devised a system where every member of staff, from high to low, got a share of the profit. While there was a general wage freeze in the United States during the war, these bonuses allowed them to continue to motivate their employees.

At one point they even amounted to 85 % of the wages. hp would continue to implement the profit-sharing system consistently. "There's no better connection between employee efforts and a company's success," Packard said later.

industrial park

After the war, with Terman's help, HP forged closer ties with the university. Together they set up a fund that allowed young graduates from across the country to join hp and continue their studies at the university at the company's expense.

That's how they employed the best minds in the United States. The next move came again from Terman. Because he wanted to attract the best and therefore the most expensive professors for his university, he needed money.

He came up with the idea to lease large tracts of university land to young companies.

He planted, as it were, an industrial estate – the first of its kind in the world – adjacent to the university research centers. With the capital thus acquired, he took all those of name and fame to California, away from the wealthy East Coast.

Stanford University quickly became the throbbing heart of Silicon Valley. It should come as no surprise that one of the first inhabitants of this Stanford Industrial Park in 1954 was the Hewlett-Packard Company, led by two men whom Fred Terman had discovered himself.

HP went public in 1957. However, through personal share packages, the two founders would always maintain control of the company. In 1959, HP opened a branch in Geneva and an assembly plant in Germany. Today, Europe accounts for more than a third of HP sales.

As the company grew spectacularly (with 1,778 employees in 1958, 9,000 in 1965, 57,000 in 1980 and 105,000 in 1995, by 2001 this figure had fallen back to 88,500), Hewlett and Packard continued to split the company into small entities. “We definitely wanted to have a small business feel there,” Dave says in his book.

From 1972 they achieved enormous success with pocket calculators, later with company computers and inkjet laserjet printers. Most recently with the sale of home computers. They became the second largest computer manufacturer (after IBM) in the United States.

Turnover rose to $48.8 billion in 2001. The stock market value at that time was $61 billion. The two men continued to hang out a lot over the years: skiing, mountaineering, fishing, you name it.

Together they bought large cattle ranches near San Francisco and in Idaho, where they and their families could often be found during their free time.

Dave : 'All our children learned to swim in the San Felipe pool.' And when Packard contracted severe pneumonia in March 1996 at age 83, 82-year-old Bill Hewlett would visit him every day.

Packard died on March 26, 1996 in the hospital of his beloved university. Hewlett followed him five years later, on January 12, 2001. Barely a year later, HP chairman Carly Fiorina succeeded in merging HP with computer giant Compaq.

Despite a controversial legal battle with Hewlett's son Walter.

Looking ahead

Hewlett and Packard both became immensely wealthy: In 1995, Hewlett's stock was valued at $2.7 billion, Packard's at $3.7 billion, but they never paid themselves the exorbitant wages American executives have paid the world in recent years. amaze.

Their wealth arose from the dividends, the work.

By the way, they gave away their money en masse. Stanford University has supported them over the years with donations amounting to $300 million. Through a foundation, Packard gave $70 million for a children's hospital that opened in Stanford in 1991.

Packard also personally invested $45 million in establishing a submarine aquarium in Monterey Bay, which has since attracted millions of visitors. Packard designed and built the machines to create waves in his private workshop.

At his death, he left behind a charitable trust worth more than $7 billion, the largest in the US.

On that occasion, Hewlett and Packard were mainly praised in the American press for never allowing themselves to be tempted into mass layoffs during the shocking evolutions in Silicon Valley as a large company.

And that their humane and casual management style had always been a model for the thousands of young companies in the region. Precisely because of his management capabilities, the Republican Packard had been engaged as an advisor by various governments over the years.

Nevertheless, he also supported dozens of democratic politicians, at every level, if he thought their work was important.

In mid-1995, at their last joint meeting with journalists, the two 80-year-old friends agreed that a gradual merging of the fields of computer science and genetic engineering would be unstoppable. "That fusion will reduce the vaunted information highway to a detail in history," Packard said. 'You get a combination of integrated circuit technology and genetic engineering.

This creates the opportunity to program genes and build them into a computer. I can now very well imagine something like an intelligent computer.' Those were his last public words. That's how they were, the two old gentlemen. Young or old: always looking ahead.