People often ask me why I preface much of what I write with quotes from hip-hop. In part it's a hangover from my failed career as a rapper—true story. But mostly it's because the majority of my ideas about entrepreneurship, business, and culture occur to me while I'm listening to hip-hop, so it's my way of giving credit where credit is due. I always felt that early hip-hop songs like Eric B. & Rakim's "Follow the Leader" or Run-DMC's "King of Rock" were about what I was doing as an entrepreneur. They are the culture in which I work.
While the hustling part of hip-hop culture made the business go, it was the honesty that drew the fans. The great rapper Nas told me that as a kid:
The rawness was what I gravitated towards. The world was supposed to be this picture-perfect place, the Brady Bunch. We're all trying to be the Brady Bunch, but really we're the Little Rascals. Rap explained what's really going on—the crimes, the poverty, the corrupt police. Rap cleansed itself of pimp-sounding music or gospel-sounding music or a funky sound or a hippie sound. It extracted all that other stuff out of it and ripped itself raw until it was simply about honesty.
A continent away from the Bronx, a group of engineers in California established a set of cultural innovations that would end up changing how almost every business operates. In the 1960s, Bob Noyce, the co-inventor of the integrated circuit, or microchip, ran Fairchild Semiconductor, a unit of Fairchild Camera and Instrument Corporation.
Fairchild Camera, based in New York City, did business the east coast way, which had become the way big businesses across the country conducted themselves. Fairchild's owner, Sherman Fairchild, lived in a glass-and- marble town house in Manhattan. His top executives got cars and drivers and reserved parking places. As Tom Wolfe observed in his 1983 Esquire story "The Tinkerings of Robert Noyce," "Corporations in the East adopted a feudal approach to organization, without even being aware of it. There were kings and lords, and there were vassals, soldiers, yeomen, and serfs."
Bob Noyce didn't believe any of that made sense when it was his individual engineers—the yeomen—who were inventing products and driving the business. So Fairchild Semiconductor did things differently. Everyone was expected at work by 8 a.m., and whoever got in first got the best parking space. The company's building in San Jose was a warehouse filled with cubicles, and nobody wore a suit.
Noyce didn't hire professional managers. He said, "Coaching, and not direction, is the first quality of leadership now. Get the barriers out of the way to let people do the things they do well." This created a new culture, a culture of empowerment: everyone was in charge and Noyce was there to help. If a researcher had an idea, he could pursue it for a year before anyone would start inquiring about results.
Employees who got a taste of Noyce's culture of independence split off to start their own companies, including Raytheon Semiconductor, Signetics, General Microelectronics, Intersil, Advanced Micro Devices (AMD), and Qualidyne. Without exactly meaning to, Noyce had created the culture of Silicon Valley.
In 1968, Noyce himself split off to start a new company, resigning from Fairchild Semiconductor after being passed over for CEO of Fairchild Camera. He and his colleague Gordon Moore—the coiner of Moore's law, which holds that microchip capacity doubles every eighteen months while its price falls in half—and a young physicist named Andy Grove founded Intel to tackle the nascent field of data storage.
At Intel, Noyce took his egalitarian ideas to a new level. Everyone worked in one big room with partitions separating them; Noyce himself sat at a secondhand metal desk. Lunch was deli sandwiches and soda. There was no layer of vice presidents; Noyce and Moore oversaw business segments run by middle managers who had enormous decision-making power. In meetings, the leader set the agenda, but everyone else was equal.
And, crucially, Noyce gave the engineers and most of the office workers substantial stock options. He believed that in a business driven by research and products, the engineers would behave more like owners if they actually owned the company.