A History of Silicon Valley (Chapter 19 & 22 Summary)

During the course The Energy of Silicon Valley, we are reading the book; "A History of Silicon Valley" written by Arun Rao. We are assigned different readings from the chapters within the book. We were asked to read chapter 19, which Early Failures: A Case on Good Ideas which Arrived Too Early (1980 – 94.) During the my readings of chapter 19 and 22, I happen upon that venture capitalism really didn't begin to take place until 1981 to 1987. (Pg. 221) As I continue to read the chapter, I read about three inventions that helped shape pathways for technology today. The invention of the Commodore Amiga, Apple Newton and the GO PenPoint OS are excellent examples of showing how such extreme success can be equal to bankruptcy in a matter of years.

The Commodore Amiga, was product that went from having great success to an ultimate failure. Jay Miner, who want to change the 8bit console Atari to 16bit. In 1982, after $7 million dollars was raised and Larry Kaplan joined in as a partner, the Atari 2600 was born. Problem was as the funding in the end was coming to around $500,000; it was clear that the company was facing major issues. (Pg. 221) Eventually Commodore bought out Miner's concept and paid off the loans and debt to help create the most advance OS (operating system,) at the time. Eventually the company's downfall was due to that they weren't attracting new customers with a 32bit. As a result, Commodore ended up going bankrupt in 1994. Newer companies like Compaq, HP, Dell and Gateway took over much of the market (Pg. 222)

Next we see Apple come out with the Apple Newton. The Newton would be the forerunner of tablets, PDAs, and smartphones but ended in a total grand failure. (Pg. 222) The Newton lead Apple to develop Figaro in  1992. The Figaro was really developed towards a specific group of people, which made it unsuccessful. John Sculley, who was in charge of the company during this time as Steve Jobs was fired a few years prior. In 1997, Jobs returns to the company and shutdowns all projects related to the Newton. Why and what made the Newton fail so quickly? Well, lets see. First Apple pre announced its arrival more than 2 years ahead of time, unrealistic expectations, physically too large, operated slowly and dictation of cursive caused headaches. Eventually, Jobs turned Apple around when he launched the new line we know as iPod Classic to iPhone 6 Plus. (Pg. 223)

Lastly, we see the GO Corporation's PenPoint Operating System. The company was started in 1987 with 1.5 million dollar investment from Kleiner Perkins, who owned 33% of the company. GO faced many hardships from the beginning to the end. Bill Gates even took information he learned about GO and applied it to making his own pen. On page, 223 we see that GO had to make a key strategic decision on who the vender would be to who will help with the hardware and even financing issues as well. GO decides to go with IBM in partner agreement in 1990. (Pg.223) Eventually GO fails due to the fact that took much work was needed to be done in a scope of small company. IBM also seemed to be more predatory partner and competitor rather than be a supporter. GO's PenPoint operating System was three to five years too early.

Overall, even though most of these companies have been failures; they have helped lead to many successful technology advances we have made today.

Source: 

Rao, A., & Scaruffi, P. (2013). A Case on Good Ideas which Arrived Too Early (1980 – 94.). In A history of the Silicon Valley the greatest creation of wealth in the history of the planet : 1900-2013 (2nd ed., pp. 158-165). Palo Alto, California: Omniware group.