When did the Silicon Valley begin?
Some say it began with the semiconductors in the late sixties and early seventies. But really at that time there were no Personal computers so we must then rely on when PCs came into being.
Atari in mid seventies, at least when I came to know this highly innovative company, had started developing the Pong Game-a little ping pong ball that was paddled about on a monitor. Nolan Bushnell was a great salesman and persuaded Sears Roebuck, the pre-eminent retailer of that era to give Atari an order for 100,000 units at a cost of $84 each. Semiconductors, move away-Consumer products here we come! Is then when the Silicon Valley began?
I was 26 then, having graduated from UC Berkeley in Electronics and a 2 year stint at Singer Friden that was developing the first electronic terminals for check out tellers in the USA. At a wild party in Palo Alto one evening, Bill White the Chief Financial Officer of Atari, well imbibed, took me aside. “Do you have a few hundred thousand laying around? My cost of making a pong machine is $110 and I have to sell it to Sears for $84-ergo a loss of $26 a unit. We are done! Prabhat, I need to make this machine for $70 max. Can you help buy some of the components from the Orient for us because these American companies turn out only military grade components made out of frickin’ gold?!”
Quickly, I became Atari’s supply chain specialist and from the $2000, I had saved from my 2 years of work at Singer, I bought an airline ticket to go to Tokyo, Taiwan, Hong Kong and New Delhi. One has to remember that this was 1976 and the Silicon Valley had no experience with building consumer products.
FoxConn, Billion, Sino-American, PCI-these were mom and pop shops on the side streets of Taiwan. I met an American expat, Bill Morgan, at the US Embassy Club one afternoon and showed him the sub-assemblies required to manufacture a Pong game. A smoker, he smoked me out in his beat up car the next day, and we went to the aforementioned companies-really, stores!
A 9 ping connector and cable assembly was made by Amp, and American Military Grade supplier, for $14 per kit. This was the first item we worked on in terms of cost reduction. We were able to get the cables with 9 strands, no problem, but the pins in the connector, this confounded us all. Someone told us to go see, of course, Mr. Wong. He knows how to design ‘them’ pins! But his machines are in a shack in a paddy field. What?
Here comes the most exciting part of the story….. in my next blog.