Читать книгу Inside Intel - Tim Jackson - Страница 12
ОглавлениеBOB GRAHAM’S APPOINTMENT as Intel’s sales director had an unintended consequence. It led indirectly to the creation of another electronics company which for the next two decades would be at times Intel’s greatest ally, and at times its most bitter enemy.
Here’s how it happened.
Soon after Bob Noyce had left Fairchild Semiconductor to set up Intel with Gordon Moore, the management of the Fairchild parent company on the East Coast began the search for Noyce’s replacement as general manager. C. Lester Hogan, the feared and admired head of Motorola, was the man who got the job – but it was a measure of the presentiments of doom felt by company insiders that he would only accept the appointment after being offered $1m in salary over three years, plus Fairchild stock options worth over $500,000, and a loan of a further $5m to buy more stock with. Hogan also secured guarantees that he would be able to run the semiconductor operation as an independent business, free from interference by the accountants back east that had so plagued Bob Noyce.
The new general manager’s first move once he was installed at Fairchild was to fire most of the top executives left in the company, and bring in his own band of hard men, later known as Hogan’s Heroes. Only one senior manager stayed on: Jerry Sanders, the company’s sales and marketing director.
Flamboyant, clever, fast-talking and handsome, Sanders satisfied every cliché of what a businessman in California headed for the high-tech 1970s ought to look like. But behind the Italian suits and the perfectly bouffant hairstyle, the marketing chief was not what he seemed. Sanders had been born the son of a dissolute traffic-signal repairman in Chicago’s dangerous South Side, and had been brought up by his grandparents after spending his earliest years with his mother in a succession of dingy low-rent apartments while his father went on periodic drinking binges. Like many poor boys before him, Sanders had hoped to parlay his good looks into a career in the movies. But his chances were set back during his first semester into a two-year course at the University of Illinois. A gang of local toughs set on him after a football game, fractured his jaw, skull, and ribs, carved up his face with a can-opener, and dumped him, bleeding, in a trash can. A friend carried him in the trunk of a car to the local hospital, where he was rushed into the emergency room and read the last rites.
With his rearranged profile, Sanders realized he would have to give up his ambition to be a matinée idol. Instead, he resolved to put his electrical engineering training to practical use, and joined the Douglas Aircraft Company as a designer of air-conditioning systems. It took him only a few years to discover that if he wanted a company car, a good salary and an expense account, he was in the wrong job. In the electronics industry salesmen made better money than engineers.
Sanders made the switch, and rose swiftly through the ranks. He made a spectacular success of running Fairchild Semiconductor’s regional office in Los Angeles, and then landed the company’s top marketing slot back in Silicon Valley. With a large house in the Hollywood hills, an attractive young wife, a black Cadillac, and a taste for Dom Pérignon champagne, he looked more like a movie mogul than an electronics guy. Yet Sanders knew the electronics industry inside out – and behind the glitz and ostentation was a determined and hard worker.
Sanders was always something of a favourite with Bob Noyce – perhaps because he reminded the older man of the showmanship and extroversion that was part of his own character. The young marketing star was much less kindly looked on by the more conservative Gordon Moore. Moore had a full dose of the disdain that many engineers have for salesmen. He viewed them as a necessary evil, but no better than that. Moore knew that the old saying, ‘Build a better mousetrap, and the world will beat a path to your door,’ wasn’t true. But he wished it were. Perhaps this was why Bob Graham got the new sales and marketing job at Intel, while Jerry Sanders was left at Fairchild Semiconductor.
Whether this was the reason or not, Sanders knew his position at Fairchild was precarious. He felt like a courtier left over from a discredited regime after the arrival of a new king. Within a matter of weeks the agony ended. Hogan called Sanders into his office and told him point-blank that he was surplus to requirements. The only consolation was that while many other Fairchild loyalists had been fired after years of loyal service with no more than a couple of weeks’ notice, Sanders was able to extract a year’s salary in compensation – allowing him to rent a beach-house in Malibu where he could sit in the sun and ponder his next move.
Six weeks later, early in 1969, Sanders called an old pal – Ed Turney, one of Fairchild’s best salesmen. Sanders had given Turney the job of running Fairchild’s Los Angeles region, and the two men had become friends. By this time Turney had been fired too, and was snowed up in a cabin in a nearby ski resort.
‘How’d you like to start a company?’ Sanders asked.
‘What, making records?’ Turney still believed that Sanders had secret showbiz ambitions.
‘No, making semiconductors.’
Sanders explained that he had received an approach from a group of four other Fairchild employees who were looking for someone of presidential calibre to help them to raise finance. Sanders had agreed to lead them, on two conditions. He thought the future was in digital circuits like Intel was making, not the old-fashioned analog circuits they had set their heart on. So he wanted the new company to make both classes of product. Also, he wanted to nominate some of his own people. If Turney was ready to join the startup, Sanders promised, a seat would be kept warm for him.
Within a few weeks Sanders had assembled an eight-man team. To the four members of the analog group, he added himself and another former Fairchild colleague, John Carey, plus Turney, who was offered the sales and marketing job but also wanted to control purchasing. The top engineering job for the digital operation went to Sven Simonsen, a Danish-born engineer who was still on the Fairchild payroll.
Three weeks later Jerry Sanders was ready to talk to potential investors about his plans. Capital Group Companies, a leading investment firm in Los Angeles, agreed to arrange introductions – and its chairman wrote a personal cheque for $50,000 to pay the living expenses of the team members who had lost their jobs but been less successful than Sanders in securing a payoff.
Sanders’s first port of call was Arthur Rock, the man who had raised $2.3m for Bob Noyce and Gordon Moore in a single afternoon.
The diminutive venture capitalist looked up from the seventy-page document before him, and sighed. Bristling with technical terms, process details and price curves, the plan set forth a powerful case for the view that demand for integrated circuits would explode in the 1970s. It detailed which products the company would build and how, estimated the prices these products would sell for, outlined the backgrounds of all eight founders, and predicted profitability after seven quarters and positive cash flow after ten. But Rock didn’t like it.
‘It’s too late,’ he said.
Sanders began to expostulate.
Rock was polite, but firm. His belief, he said, was that with dozens of other companies already in the market, it was now too late to start up a broad-based semiconductor company. Before the master salesman could begin to put his wiles to work, Rock added a second point for good measure. Of all the financial investments he had ever made, said the venture capitalist as he looked Sanders coldly in the eye, the only ones that ever lost money had been run by marketing men.
The meeting was an omen. As Sanders continued on his roadshow, he found that potential investors fell into two categories: those who knew so little about the industry that they plagued him with ill-informed questions; and those who knew enough about it to doubt seriously whether, with all the new companies that had been set up over recent years, the semiconductor industry was still young enough for another entrant. Neither category yielded any investors.
As the weeks turned into months, Sanders found himself as far as ever from the $1.75m target that had been set for the company’s initial funding, and facing the first rumblings of discontent from his impatient team. One or two of the five members who were still on the Fairchild payroll began to wonder whether it might be wise to stay put for the moment. Meanwhile, Turney and Carey began to chafe at the idea of working full-time on the project unpaid while others were still sitting on the sidelines, hedging their bets by hanging on to their day jobs.
Sanders realized that it was time to take charge. He called a meeting of the team members at his house, and presented those who were still at Fairchild with draft resignation letters for them to submit so that they would be ready for work on 1 May 1969. He arranged to have the company formally incorporated – in Delaware, he said, so as to give investors on the East Coast a warm feeling that proper attention was being paid to minimize directors’ liabilities – on the same date. And he committed himself to raising the money they would need by the end of July.
When one member of the team asked him whether this was realistic, Sanders’s reply was immediate and confident: ‘We’re absolutely going to get the money. We’re absolutely going to get the money’. It was a mantra that he would find himself repeating again and again over the coming weeks.
Some weeks later Bob Noyce received an unexpected visitor at Intel. The man who walked into his office was Tom Skornia, a young lawyer who had recently started out in private practice.
‘I’m here to represent Jerry Sanders,’ said Skornia as he sat down.
‘I’m glad to hear it,’ replied Noyce. Sanders had asked him for advice in finding a good lawyer to serve as general counsel for his new business. On Noyce’s recommendation, Sanders and his colleagues had interviewed three different law firms, but had settled on Skornia’s in the belief that a sole practitioner who was just starting out would be likely to give them higher priority than a bigger firm with dozens of associates to delegate work to. One other point had been in Skornia’s favour: he was the only lawyer they met who could talk as fast as Ed Turney.
‘And I’m here to ask for money,’ continued Skornia.
He handed Noyce the Sanders business plan, and explained that the company, initially known as Sanders Associates, had now been incorporated in Delaware under the name of Advanced Micro Devices. Like Noyce and Moore, Sanders and his colleagues had run through a long list of possible names before they found one that was still free in the state registry.
As Noyce flipped through the business plan, a bemused expression began to play across his face. He knew the industry inside out. He knew the products that Sanders was proposing to build. Reading between the lines of the limited biographical details that the plan included, he could even identify all the people involved. If anyone could see that the proposed company was stronger in marketing and sales than in the core discipline of inventing and building new products, it was Noyce.
‘You mean they’re actually going to make the stuff?’ he asked.
The two men looked at each other and burst into laughter. Skornia knew that the ice was broken. There was no point trying to gloss over the shortcomings of the proposed business with Noyce. But equally, there was no need to explain Sanders’s qualities. Noyce had always recognized the steel inside his brash young marketing manager, and he was willing to back it. Yes, AMD could soon be in direct competition with his own company. Yes, its top management was drawn from people Noyce himself had turned down for Intel. But Bob Noyce would become one of AMD’s founding investors all the same. Why not? It was a gamble, but then Noyce loved taking risks.
The decision of Intel’s founder to back Sanders was a strong psychological boost in the struggle to raise funding for AMD as Sanders, Turney and Skornia flew down to the Capital Group’s Los Angeles offices to tally the cheques and wire transfers that had come in from investors in the new company. It was 20 June 1969, and their plan was to confirm that AMD’s investors had contributed the minimum agreed sum of $1.55m, and then fly straight back to Silicon Valley to start work. But their timing was unlucky. The New York stock market had fallen sharply that morning and the institutions were playing it safe. Instead of celebrating the successful funding of the project, the founders were forced to hang around, imprisoned in the office by the sultry summer heat, waiting for more money to come in and canvassing every potential investor they could think of in an attempt to reach the threshold before the 5 p.m. deadline.
By 4.30 p.m. the total stood at $1,480,000, and no number of recounts could make it any higher. For the next twenty minutes the three men and their two Capital Group advisers sat in sickened silence, staring at each other. At 4.55 p.m. a messenger arrived with an envelope. Inside was a cheque for $25,000 from a private investor in Bucks County, Pennsylvania. With five minutes and $5,000 to spare, AMD was in business.
