Monthly Archives: August 2023

From Counterculture to Cyberculture by Fred Turner

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From Counterculture to Cyberculture is another recent reading of mine after Making Silicon Valley of a not so recent book. It is subtitled Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism.

Here is a short extract of why the book is important: By the end of the 1960s, some elements of the counterculture, and particularly that segment of it that headed back to the land, had begun to explicitly embrace the systems visions circulating in the research world of the cold war. But how did those two worlds together? How did a social movement devoting to critiquing the technological bureaucracy of the cold war come to celebrate the socio-technical visions that animated that bureaucracy? And how is it that the communitarian ideals of the counterculture should have become melded to computers and computer networks in such a way that thirty years later, the Internet could appear to so many as an emblem of a youthful revolution reborn? [Page 39]

The Whole Earth Catalog

One explanation of this strange phenomenon is Stewart Brand and the Whole Earth Catalog:

Here are some more extracts: “In late 1967 [Stewart Brand and Lois Jennings] moved to Menlo Park where Brand began working at his friend Dick Raymond’s nonprofit educational foundation, the Portola Institute. Founded a year earlier, the Portola Institute housed and helped a variety influential Bay area organizations, including the Briarpatch Society, the Ortega Park Teachers Laboratory, the Farallones Institute, the Urban House, the Simple Living Project, and Big Rock Candy Mountain publishers, as well as its most visible production, the Whole Earth Catalog. As Theodore Roszak has suggested, Portola’s efforts were all designed “to scale down, democratize and humanize our hypertrophic technological society.” When Stewart Brand joined, much of Portola’s energy was directed towards providing computer education in the schools and developing simulation games for the classroom.

[…]

The Portola Institute served as a meeting ground for counterculturalists, academics, and technologists in large part because of its location. Within four blocks of its offices, one could find the office of the Free University – a polyglot self-education project that offered all sorts of courses, ranging from mathematics to encounter groups, usually taught in neighboring homes – and two off-center bookstores (Kepler’s and East-West). A little farther away was the Stanford Research Institute, where Dirk Raymond had worked for a number of years, and not far beyond that, Stanford University. In addition, many of Portola’s members represented multiple communities. Albrecht had worked at Control Data Corporation and brought with him advanced programming skills and links to the corporate world of computing, along with a commitment to empowering schoolchildren. Brand and Raymond both had extensive experience in the Bay area psychedelic scene. And Portola’s various projects kept its members in circulation: teachers, communards, computer programmers – all came through the offices at one time or another.” [Page 70]

An additional note states: “For a fascinating account of the intermingling of countercultural and technological communities in this area see What the Dormouse Said. How the 60s Counterculture shaped the Personal Computer by John Markoff, Viking Penguin 2005.” Turner is convincing in the description of the society turbulence, with the New Left focusing on civil rights whereas the New Communalists in a less organized, more anarchist vision of the world, neither being opposed to technology, but trying to scale down the impact of capitalism and cold war, Norbert Wiener, Marshall McLuhan and Buckminster Fuller being influential thinkers.

Turner concludes his chapters with these quotes : “Once while working with him on the catalog, I asked Mr. Brand if he would not carry out any of a various number of politically oriented underground newspapers. Upon reply, he told me that three of the first restrictions he made for the catalog were no art, no religion, no politics.” … then pointed out that Catalog offered all three : the art was fined art or craft; the religion, Eastern; the politics; libertarian: “From all the 128 pages of the Whole Earth catalog there emerges an unmentioned political viewpoint, the whole feeling of escapism which the catalog conveys is to me unfortunate.”

Brand responded with a defense of local action and of his personal experience : The capitalism question is interesting: I’ve yet to figure out what capitalism is, but if it’s what we’re doing, I dig it. Oppressed peoples: all I know is that I’ve been radicalized by working on the Catalog into far more personal involvement with politics than I had as an artist. My background is pure WASP, wife is American Indian. Work I did a few years ago with Indians convinced me that any guilt-based action toward anyone (personal or institutional) can only make a situation worse. Furthermore the arrogance of Mr. Advantage telling Mr. Disadvantage what to do with his life is sufficient case for rage. I ain’t black, nor poor nor very native to anyplace, not eager any longer to pretend that I am – such identification is good education, but not particularly a good position for being useful to others. I am interested in the Catalog format being used for all manners of markets – a black catalog, a Third World one, whatever, but to succeed I believe it must be done vy people who live there, not well-meaning outsiders. I’m for power to the people and responsibility to the people: responsibility is individual stuff. [Page 99]

And a little further a tough comment by Turner : Like P. T. Barnum, he had gathered the performers of his day – the commune dwellers, the artists, the researchers, the dome builders – into a single circus. And he himself had become both master and emblem of its many linked rings. [Page 101]

Taking the Whole Earth Digital

The next chapters covers the influence of the Whole Earth Catalog, outside the more or less closed circles of the famous Augmented Research Center (ARC) of Douglas Engelbart at the Stanford Research Institute (SRI) and the Palo Also Reserach Center (PARC) of Xerox, undoubtedly materialized in the no less famous Homebrew Computer Club. The cross-influences are multiple and described in detail by Fred Turner, in his chapter Taking the Whole Earth Digital.

There is in particular the reference to an article that I did not know from Rolling Stone magazine written by Steward Brand with photographs by Annie Lebowitz: Spacewar: Fanatic Life and Symbolic Death among the Computer Bums.

1972-12-07 Rolling Stone (Excerpt) Spacewar Article V02 - lowres

Turner concludes his pages on the Rolling Stone article with this: In the pages of Rolling Stone, the local work of individual programmers and engineers became part of a global struggle for the transformation of the individual and the community. Here, as in the Whole Earth Catalog, small-scale information technologies promised to undermine bureaucracies and bring about both a more whole individual and a more flexible, playful social world. Even before minicomputers had become widely available, Steward brand had helped both their designers and their future users imagine them as “personal technologies”. [Page 118]

In the article, there is a mention of Hackers which ethics are described by Steven Levy, in his book Hackers, Heroes of the Computer Revolution (my next read ?). They include:
– All information should be free.
– Mistrust authority—promote decentralization.

Brand, not surprisingly, celebrates them : I think hackers… are the most interesting and body of intellectuals since the framers of the US constitution. No other group that I know of has set out to liberate a technology and succeeded. They nt only did so against the active disinterest of corporate America, their success forced corporate America to adopt their style in te end. In reorganizing the Information Age around the individual, via personal computers, the hackers may well have saved the Amerian economy. High tech is now something that mass consumers fo, rather than just have done to them… The quietest of the ’60s subcultures has emerged as the most innovative and most powerful – and most suspicious of power. [Page 138]

Turner does not hesitate to nuance Brand’s enthusiasm in the following lines, because once again the arrival of technology in everyday life has been a complex phenomenon in Silicon Valley. I am not even half way through Turner’s book. Maybe another post. Already a very intersting reading.

Making Silicon Valley according to Christophe Lécuyer

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I mentioned in a recent post – Birth and Death of Silicon Valley ? – the book Making Silicon Valley – Innovation and the Growth of High Tech, 1930-1970 by Christophe Lécuyer.

I had bought that book many years ago and had only read some parts of it. Because Olivier Alexandre (see my posts about his excellent book La Tech) had mentioned it as an excellent work, I finally read it. It is indeed excellent even if demanding and technical.

What is really interesting is what is not well-known about Silicon Valley:

  • there was technical activity in Silicon Valley before Fairchild. I always date the birth of Silicon Valley with the foundation of the first semiconductor startup in 1957. Lécuyer tells the history of lesser-known companies such as Litton Engineering Labs, Eimac (Eitel-McCullaugh) and Varian Associates. Strangely enough Lécuyer does not study Hewlett-Packard, probably because that company, founded in 1939, is really well-known. (Lécuyer is a historian and he focuses on publishing new knowledge);
  • most of that activity was linked to military activity, first telecommunications then guiding systems and radars. However Silicon Valley really grew when all these companies had to diversify with civilian applications in the early 60s;
  • there were as many social innovations as technical ones: in parallel to the development of klystrons, magnetrons, power tubes first and then transistors, planar transistors (“planar process, arguably the most important innovation in the twentieth-century technology” [page 297]), integrated circuits, there were a variety of management experiments, usually not hierarchic and quite egalitarian in decision making, freedom of communication to make the companies more efficient, and related to this there were financial incentives for employees (participation to profits, stock options);
  • Silicon Valley began to develop overseas very early: in 1965 already Fairchild had factories in Hong Kong and South Korea. The rationals were cost cutting and also fear of trade unions. The social innovations mentioned in the previous point were also linked to the fear of powerful trade unions…
  • as soon as 1961, Fairchild could not develop all the inventions made in-house. And in some case did not believe in their potential as Gordon Moore himself acknowledged about integrated circuits. Some of the Fairchild employees, including founders, decided to leave to explore these opportunities, sometimes also because they were not happy to be fully recognized and financially rewarded. The first startups were Rheem, Amelco and Signetics;
  • the previous point illustrates the difficulty of marketing (see my recent glossary): validating a market with only customers who do not see the value of a product is insufficient. You also have to be able to imagine what customers cannot imagine, such as advances in technology that will eventually make a new generation of products essential, which seem useless or unattractive at the time of analysis…

From an anecdotal point of view, Lécuyer mentions the “famous” Wagon Wheel Bar [Page 275]: “Bars also fostered the exchange of information among engineering groups. In the first half of the 1960s, engineers and managers at Fairchild and other Silicon corporations on the Peninsula had developed the habit of meeting after work at a local bar. (The Wagon Wheel Bar as a favorite.) At these bars, they would discuss the problems of teh day. Bars were also wheres sales and marketing men met with the manufacturing guys to discyuss order prices and delivery schedules. After leaving Farichild, many of these engineers returned to these bars and discuss the business with their former associates. A lot of information flowed over beer and hard liquor, to teh point that the management of many of the startups expressly forbid their engineers to go to the Wagon Wheel Bar and other bars. The end result of these daily interactions was that design techniques and solutions to particulary difficult process problems moved from firm to firm. As a result, teh MOS community on the Peninsula developed a repertoire of process “tricks” that were known only in the area. These tricks enabled them to solbve their won process problems and obtain good manufacturing yields. In contrast, MOS firms located outside of Northern Calfornia were not pluged into these networks and did not benefit from this shared knowledge. This put them at a distinct competitive disadvantage.”

In his conclusion, he mentions again the human side : “These men also developed a subculture characterized by its camaraderie, a strong democratic idelology, and genuine appreciation of ingenuity and innovation. […] These groups also brought their professional ideology and politicla ideals. The microwave and silicon communities both valued egalitarianism and viewed engineers as independant professionals. However the microwave and semiconductor communities differed in other ways: a substantial number of the microwave groups had socialist learnings and utopian ideals and longed for a society where the distinction between capital and labor would be abolished. In contrast, the semiconductor community was meritocratic and resolutely capitalistic.” [Page 296]

Lécuyer does not insist too much on individuals, even if he does not neglect the importance people such as Robert Noyce, Gordon Moore and others. He emphasizes more the importance of the collective. He does, however, mention lesser-known characters such as:

  • Robert Widlar : “Widlar drank and gave free rein to his irreverent and abnoxious self. Among his many pranks, he once brought a goat to mow national Semiconductor’s lawn. On another occasion, he destroyed the company’s paging system with firecrackers. He also threatened his co-workers with an axe and defied management as much as he could.” [page 269] or
  • Pierre Lamond “a tough French engineer that had made a name for himself by overseeing the production of the switching transistor for Control Data” [page 240]. Whatever that means, I can add a personal note because I met Pierre Lamond when he was a venture capitalist at Sequoia and his political positions are more in line with the world of the semiconductor than those of the microwaves!

Lécuyer thus explains a lot of what would come later. He also provides some new elements about why Silicon Valley has been so creative for years, decades, and maybe many to come. The conclusion is a masterpiece of synthesis and I could not avoid scanning it in pdf.

As a reminder:

(High resolution image here).

SiliconValleyGenealogy-All

A glossary of the startup world

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When you come from the world of research or the “normal” world, that of startups can sometimes seem mysterious. Many acronyms and specific terms are used there which can make it difficult to understand this world, which is however not so complicated. So here are some explanations, they show probably my bias but hopefully they will be useful for the curious mind.

Startup: perhaps obvious as the term is used or even overused! A young innovative company? The best definition of a startup is undoubtedly that of Steve Blank: a temporary organization in search of a repeatable and scalable business model.

Spinoff: a company (a startup in particular) created out of another entity (a team leaving another company, an intellectual property from a research laboratory)

Business model and business plan: An enterprise has (often) the goal of making money, at least in the long or middle term. Its founders must have in mind how it will make money, what they sell, to whom and how the service or product is sold. We speak of a “business model” which has given rise to a rich literature, including the “business model canvas”, a tool for building this model.

The business plan is the structured writing, among other things, of this business model and more generally of all the components of a company allowing it to find stability and growth. We speak of a “roadmap” to describe this multi-annual plan, the path that leads to prosperity, or at least to finding the means to survive. Financial projections and finance is a whole science or art in itself. The “burn rate” is, for example, what a company spends each month or each year and must be well known to entrepreneurs who do not wish to go bankrupt (find themselves without resources).

The business plan is sometimes a difficult or premature exercise. The pitch is an oral or written presentation in the form of slides (the “pitch deck”) which can last one minute (“elevator pitch”), 5 or 10 minutes, rarely more than 20 minutes. It is an exercise that has become essential for any entrepreneur and its practice makes the exercise easier over time, in particular by using all the jargon in this glossary! The pitch deck is a summary of the Business Plan with a clever dose of storytelling. The reference is Guy Kawasaki’s book, Art of Start.

In this literature, we find the concepts of lean startup, agile startup, pivot, which describe flexible, fast and frugal ways of moving forward and changing direction when the path is blocked (the “pivot”).

The term “pricing” is one of the simplest to understand but most difficult to implement: at what price to sell your service or product? Certainly not at the production cost because you have to integrate all the indirect costs of a company (R&D, G&A, S&M) and in a capitalist world, even make a profit (we talk about margins).

– R&D: Research and Development,
– G&A: General and Administration (including accounting, finance, human resources – HR),
– S&M: Sales and marketing.
All these terms speak for themselves, except perhaps the word “Marketing”.

Marketing

Marketing is not advertising, but the analysis of a company’s market, as well as all the actions taken by a company relating to this market. But what is a market? A market is made up of consumers or customers who buy a product or service, with the price paid, its size is obtained by multiplying the number of customers by the price. We talk about TAM (“Total Available Market”), some talk about the size of the universe, because the TAM is rarely accessible to a single company. We are talking more about SAM (Served Available Market), which a company can realistically address. Finally, there is the SOM (“Serviceable Obtainable Market”), the market that can realistically be captured.

Marketing is a complex discipline with its vocabulary. Strategic marketing represents the overall analysis of a company of its market and its (hoped-for) place in this market, while operational marketing includes all the techniques that will allow it to exist in this market. We talk about segmentation, to define a homogeneous set of customers, we also talk about vertical market. The “go to market” is the market entry strategy. The landing beach (“beachhead”) is an entry into a small market (“niche”) which may or may not give access to a larger market.

Finally, there is also the concept of Minimum Viable Product (“MVP”), the version of a product that allows you to obtain maximum customer feedback with minimum effort. It is more a question of analyzing the viability of hypotheses than of selling anything.

Enough for marketing! The great marketing guru for high-tech startups is Geoffrey Moore, author of Crossing the Chasm and Inside the Tornado. We will talk little about sales here, except that prospective customers are called leads or prospects. We sell in B2C (“Business to Consumer”) to individual consumers or in B2B (“Business to Business”) to companies, but also in B2B2C…

The enterprise

An enterprise is therefore a complex and structured organization (while a startup is only a temporary and often chaotic organization). It often has its hierarchy with its officers (CxO for Chief “x” Officer) and Vice-Presidents (VP). At the very top the CEO or Chief Executive Officer (PDG or DG in France) then the CTO or Chief Technical Officer (Technical Director), CSO or Chief Scientific Officer (Scientific Director), COO or Chief Operating Officer (Director of Operations), CFO or Chief Financial Officer (DAF or Director of Administration and Financz). The list of CxOs is endless. Yahoo had its Chief Yahoos. The most common VP roles are Engineering, Sales, Marketing.

In a startup, it is advisable to forget the titles. The founders do not need to give themselves misleading titles of CEO or CTO (except when facing certain somewhat rigid investors) because all the founders are doing a little of everything (otherwise the risk is the absence of transparency, a miscommunication and loss of trust).

Above the CEO, there is the Board of Directors, headed by the Chairman (the CEO often combines the functions of CEO and Chairman of the Board, the DG becomes the PDG in France). Above the board are the shareholders who hold parts of the company, generally shares (indifferently in English, Share, Stock or Equity). There are different types of shares, preferred (with privileges) or ordinary (common). These shares have a price (the value of which fluctuates). The product of the price multiplied by the number of shares is the value of the company.

The founders create a company with an initial capital (the number of shares multiplied by the nominal price). Then the capital can be increased by fundraising from acquaintances (Friends & Family), individual investors (Business Angels) or institutional investors, such as Venture Capital or VC. The succession of such fundraising is called investment rounds (financing rounds) with series A, B, C… The first rounds are called Seed and even pre-seed. In recent years, this terminology has been linked to the size of the amounts, the series A or first round has a size of a few million ($ or €) while the Seed is a few hundred thousand and at most $1M or €1M. The pre-seed is a few tens of thousands of euros or dollars.

A company can also find funds by going public through an initial public offering (IPO). As long as it is not listed, a company is said to be private (we talk of Private Company and Private Equity). The IPO is quite rare and startups are often acquired by larger players or merge with other companies (we talk about Merger and Acquisitions or M&A).

The value of a company is increased by its fundraising, but sometimes also by the increase in the price per share. During such an event, it is calculated that post-money valuation = pre-money valuation + fundraising amount, each of the three terms being equal to the number of shares multiplied by the share price at the time of the fundraising. Investors expect a return on investment (ROI). This is calculated similarly to the return of a bank account, i.e. the annual percentage increase in the share price.

Employees are compensated in Stock Options (ESOP is the Employee Stock Option Plan), the right to acquire shares in the future at a favorable price. In France, the name is BSPCE for « Bons de Souscriptions de Part de Créateurs d’Entreprises »). Warrants (in France, BSA for “bons de souscriptions d’actions”) are reserved for entities external to the company (investors, consultants, technology or service providers). Stock options have their jargon: they are generally granted at monthly or quarterly dates over a period of 4 or 5 years (the “vesting”) and the option is exercised by paying a small sum (“exercise price”) allocating the shares to the holders. There is a period without vesting, generally the first year called “cliff”.

Many entrepreneurs dream of not going to investors, in particular by developing their business with the income and profits generated by sales. If these are convincing, the banks will agree to lend money. Financial objects that do not modify the capital of a company are said to be non-dilutive (loans, debt, non-convertible bonds and also subsidies). We speak in English of “bootstrapping”.