William H. Davidow (MS '59), Trustee, Silicon Valley Pioneer, and Technology Writer

Having spent his undergraduate years at Dartmouth, and going on to complete a doctorate at Stanford, Bill Davidow's Master's degree at Caltech could have been an afterthought - an "in-between" experience after the formative years of college, and the graduate research that would launch his professional career. Instead, as Davidow recalls in the discussions below, his time as a Caltech student were profoundly influential in his development as an engineer and, more broadly, in his development as a leading figure in technology and executive management. Those years also explain the depth of his service to Caltech as a Trustee, and his devotion to incubating great ideas at the Institute through the Sonja and William Davidow Presidential Chair.

As a pioneer during the early years of Silicon Valley, Davidow excelled in the areas of microprocessing and marketing. He gained his expertise in the former during graduate school, and for the latter, he drew on a bit of family history. During the Great Depression, Davidow's father realized that many people had extra time on their hands, and he sensed a business opportunity in publishing literary classics and selling them in supermarket checkout aisles. Thus was born Consolidated Book Publishers, which sold tens of millions of books at its height. As Davidow understood during the formative years of Silicon Valley, even the most impressive gains in technology needed a strategic marketing plan to get the winning message to would-be customers. Coupled with his technical knowledge of computing and microprocessing, Davidow possessed a formative combination of skills that helped to make high technology a central and even transformative component of American society.

Davidow began his career at General Electric, where he managed the Advanced Peripheral Equipment Lab. He then moved to Hewlett-Packard where he worked at the vanguard of HP's launch of minicomputers. After his appointment at Signetics Memory Systems and his leading role developing the first bipolar microprocessor, Davidow joined Intel, where he was responsible for the company's marketing efforts and where he was Vice President of both the Microcomputer Systems and Microcomputer Divisions. Upon retiring from Intel in 1985, Davidow launched a new career in venture capital as cofounder of Mohr-Davidow Ventures.

Davidow's shift to high technology investing after his decades of experience at the great companies of Silicon Valley was an obvious next step in a decorated career. What came more as a surprise was Davidow's love of writing, and in thinking deeply about the complex ways technology influences society. With his body of work, which includes Marketing High Technology: An Insider's View; Total Customer Service: The Ultimate Weapon; The Virtual Corporation: Structuring and Revitalizing the Corporation for the 21st Century; Overconnected—The Promise and Threat of the Internet, and The Autonomous Revolution—Reclaiming the Future We've Sold to Machines, and dozens of articles, interviews, and speaking engagements, Davidow is one of the countries distinguished public intellectuals in the fields of technology and corporate strategy.

In reflecting on all of his commitment and interests, and why he devotes such care and energy to Caltech, Davidow offers an easy answer: Caltech is "a pinnacle of excellence. I like to be associated with pinnacles of excellence!"

DAVID ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Monday, November 20, 2023. It is my great pleasure to be here with Dr. William H. Davidow. Bill, it's wonderful to be with you. Thank you so much for joining me.

WILLIAM H. DAVIDOW: It's great having you here in Woodside.

ZIERLER: I love being here. Thank you for having me in your beautiful home. I appreciate it. To start, would you please tell me—we'll get to Caltech eventually—but other titles and affiliations that you currently have?

DAVIDOW: I am on the Board of Trustees at Caltech. At UCSF, I am on the philanthropic board there. I'm on a board at the Nature Conservancy. I'm on an advisory board at Stanford to an economics group.

ZIERLER: What about in the world of business and finance? Are you still active there?

DAVIDOW: I am not active in business and finance. I'm really not active in business anymore. I stepped back from venture capital in 1985, I didn't go ahead with the next fund, and then it took a number of years, where you were on the boards of companies, and so you don't just say, "I'm leaving." You could, I guess, but I—I stepped back from that, and attempted to become a world-famous author. [laughs]

ZIERLER: [laughs] You have a master's degree from Caltech?

DAVIDOW: Yes.

ZIERLER: Undergrad at Dartmouth.

DAVIDOW: Yes.

ZIERLER: PhD at Stanford.

DAVIDOW: That's correct.

ZIERLER: Your longstanding commitment to Caltech as a member of the Board of Trustees—the master's is perhaps the sandwich degree between the more significant bachelor's and PhD. What explains your close connection to Caltech over the years?

DAVIDOW: Caltech, in the years I was there, had a tremendous influence on me. It is a pinnacle of excellence. I like to be associated with pinnacles of excellence! UCSF is a pinnacle of excellence.

ZIERLER: It's a relatively short amount of your academic trajectory that you spent at Caltech.

DAVIDOW: Yes. After I left Intel, I scheduled a lunch with Ben Rosen and Gordon Moore. I think Ben was the chairman of the board at Caltech at that time. I said, "I'd like to become involved in some way with Caltech." I expected them to suggest an advisory board or what-have-you. They said, "Why don't you join the Board of Trustees?" I was sort of blown away by that. I said, "Yes," so that's what I did.

ZIERLER: We see your name, with your wife Sonja, attached to our esteemed president, Tom Rosenbaum.

DAVIDOW: Yes.

ZIERLER: Is the chair that you made possible attached to Tom, or is it attached to the presidency?

DAVIDOW: The presidency. I started the development committee at Caltech, and I felt we should be naming department chairs and things like that. There wasn't a price on them, so I think we made probably an initial $10 million gift and it has grown substantially. I think the endowed chair now is endowed at around $38 million or something like that. Maybe we'll get up to 50. That gift is discretionary money for the president of Caltech to spend on things. It is endowed with the idea that it not long-term fund anything, but that it be used as a way to getting projects started, and then after a couple years, if they can't get financing elsewhere, they should die.

ZIERLER: Kind of like the market, within the Institute?

DAVIDOW: Yes.

ZIERLER: When did you decide to endow the presidency? Did that begin with Jean-Lou Chameau, or did it begin with Tom coming in, in 2014?

DAVIDOW: No, it was before that. I don't know when we did it. We could look it up, but it has been around for a while.

ZIERLER: And it will continue. Sad to think about, but at some point. Tom will step down, and the next president will have this chair.

DAVIDOW: Yes.

ZIERLER: Tell me about becoming a public intellectual, writing all of these books. There are some full professors that don't have an author list like you do!

DAVIDOW: [laughs]

Second Career as a Public Intellectual

ZIERLER: When did you figure out you were so effective as an author?

DAVIDOW: When I got into venture capital—I'm basically a marketing guy, and I figured that I had to do something to create an image and give entrepreneurs a reason to talk to me. A lot of venture capitalists tell entrepreneurs they're going to help them become better managers and things like that, and I thought, well, I could be different. Every one of them seems to want help in marketing. I just said, "I'm going to position myself as the venture capitalist who can help you with your marketing problems. I'm not trying to make you a better manager," or this, or that, or the other thing. I decided I would create my own image by writing a book about marketing.

ZIERLER: This is Marketing High Technology, 1988.

DAVIDOW: Yeah. I think it was published in 1986, if I'm not mistaken. I sat down, and I did a very detailed outline of the overall book. I think I did that in January. Then each week I'd sit down and I'd spend two or three days doing an extremely detailed outline of a chapter. Then I'd spend three days writing the chapter. In 13 weeks, the book was done. Then I happened to be at a meeting with Ted Levitt, who was the marketing guru of industrial marketing from Harvard, and I told him I had this book. He said, "You should go talk to my editor." I went back to New York and met with Bob Wallace, who looked at the book and said, "I want to publish it." So, I thought publishing books was easy! Right? It sold very well. I kept looking for titles, and Wallace said, "It's about high technology. We're going to call it Marketing High Technology." I thought it was a horrible title, but that's what—

ZIERLER: It worked!

DAVIDOW: I said, "Why do you want to do it?" He says, "Because that's what the book is about." It sold very well in the Bay Area; Austin, Texas; Route 128 in Boston, which was—

ZIERLER: The tech hubs.

DAVIDOW: The tech hubs. So, I did that, and I found out that I really enjoyed writing. I was really a C English major, but I organize thoughts very well. Then I wrote Marketing High Technology, and Mike Malone said, "I'll make it a quick read." I said, "What's that?" He said, "You know, it will read—quickly." I was just amazed, but people came up to me afterwards and said, "This is really a fast read." [laughs] So, that was how I did it. Then I had other ideas, and wrote the books. None of them have sold particularly well. I mean, they're just there. I think this most recent book I did was probably the best and most profound book.

ZIERLER: This is The Autonomous Revolution?

DAVIDOW: Yeah. I thought it would catch on with the academic community, because nobody had ever talked about cultural phase change, and I thought that this was a wonderful concept. What I said is that twice before in the history of humanity, civilization has gone through phase change. Once was the Agricultural Revolution, and once was the Industrial Revolution. Now—

ZIERLER: The Autonomous Revolution.

DAVIDOW: The Autonomous Revolution. What happens when things go through phase change is they change form and function, and your intuition about the future is based on the past, which is always wrong. I thought this was a wonderful paradigm for thinking about the way civilization worked. I'm sure a thousand academics have thought stuff like that before, but few of us are Adam Smith.

ZIERLER: [laughs] Bill, all of your degrees are in electrical engineering, correct?

DAVIDOW: Yeah, or engineering.

ZIERLER: The books that you have written, they touch on sociology, history, philosophy, economics. They run the gamut of the human condition. As you can well appreciate, so many engineers and electrical engineers would never touch those subjects.

DAVIDOW: Yeah.

ZIERLER: Have you always been widely read? Have you always considered yourself sort of a humanist?

DAVIDOW: No, but I guess I read a lot of stuff. I just enjoy reading things, and you get ideas when you do.

ZIERLER: What impact did entering the world of venture capital have on your life as an author? Was that formative in terms of thinking about things in a different way?

DAVIDOW: No.

ZIERLER: You were always on that track? You always thought along those lines?

DAVIDOW: Yeah, I think so.

A PhD Business Executive

ZIERLER: Hmm! Now, in your career—again, with all of your degrees in engineering and electrical engineering, when did you assume the role of expertise in marketing and in business operations? You don't have an MBA.

DAVIDOW: No. I was at Intel, and this was 1985.

ZIERLER: You were at Intel, I believe, from 1973 to 1985.

DAVIDOW: It wasn't 1985—it was like 1982 or something—I went into Andy Grove and said, "I'm going to leave Intel and go into venture capital." Andy made some comment—I can always remember what he said, and now I can't, but it was something—oh, he made some comment to me—"Why?" I said because I wanted to run something. I didn't say venture capital at that time; you know, a company or something like that. He said, "What do you want to do that for? You're an average general manager."

ZIERLER: [laughs]

DAVIDOW: [laughs] He said, "But you're the best marketing person in the company, and so why don't you start at Intel and run corporate marketing?" That was when I became the head of marketing for Intel.

ZIERLER: That's how they retained you?

DAVIDOW: Yeah. I was already reporting to Andy. It was just a different charter.

ZIERLER: If this conversation happened in 1982, you were in that role for three years?

DAVIDOW: Three or four years, yeah.

ZIERLER: The bug never left you? Ultimately you did move on.

DAVIDOW: I did. I'd have to get out a pencil and paper and write all this down, but I reached the age of 50, and I knew I wasn't going to be president of Intel. My reasoning went, what am I going to do? I can't stay in my current job forever, so what do I end up doing if I stay at Intel? I become some kind of senior—dignitary or something.

ZIERLER: You had a lot of fire in your belly, still, at age 50.

DAVIDOW: Mmhmm.

ZIERLER: What about financially? Could you have retired at that point?

DAVIDOW: Yes, we owned our house, and I had adequate net worth, and I could retire. Sonja and I—I realize we live on this magnificent piece of property now, but we were quite happy with our other house. I could have retired then, yeah.

ZIERLER: You started at General Electric in 1961, straight out of Stanford.

DAVIDOW: Yes.

ZIERLER: You got to see American corporate culture at its height, right? The American Century.

DAVIDOW: Yes.

ZIERLER: How would you compare those days—the General Electrics, the Hewlett Packards, the General Motors—to what we see today, the Googles, the IBMs, the Amazons? What's different? What has changed?

DAVIDOW: IBM was there, then. The thing that has changed is that we—when I went to work for GE, people were planning to work for GE for their entire careers and retire. The thought that institutions would exist, and you'd be loyal to an institution, and the institution would be loyal to you, and it would take care of you. There was a retirement plan at General Electric or General Motors, or this, or that, or the other thing. There was a long-term commitment between the place where you worked and you. I remember my parents were concerned because I might have three or four different jobs in my career. Today, everything is very transactional, and there isn't a lot of institutional commitment, and there's I think a lot more mental illness today because everything is so transactional.

There are institutions of our genes, and there are institutions of our minds, and we are adapted to institutions of our genes, which are family, and our tribe. When you went to work for General Electric for a long time, that became your tribe. Now, people are spending less and less time in institutions of their genes, and more and more time in institutions of the mind, where—whether that be a city, or—communities are institutions of your genes, but institutions of our mind all have purposes, and their goal is to get you to serve them, and so you're maladapted to them. People are spending more and more time in environments to which they are maladapted, and it's going to have consequences. It's unfortunate.

Competitiveness and Interconnectedness

ZIERLER: What about the idea of American competitiveness? When you started your career, there was nobody in any other country that was doing what American corporations were doing. How do you compare that to the landscape today?

DAVIDOW: I think the world has become extremely competitive. I wrote this book Overconnected. When you interconnect everything, it's either go to the average—like you interconnect a lot of water tanks, and they seek an average level—or they go to extreme. So, you create extremes. The world has become interconnected, so that there's a tendency for things to get pushed towards the average. Like wages—if somebody overseas can do something for 50 cents, it's hard to see that we can continue to pay a dollar for the same function here. We're living in this interconnected world, and part of the problem right now is that there are pressures on us to become average. Or—we can Make America Great Again.

ZIERLER: [laughs]

DAVIDOW: Part of it was to become disconnected from things, right?

ZIERLER: Is it good for the United States to live in a more competitive world? Does that make us better?

DAVIDOW: I suspect it makes humanity on the average better. I don't know if it makes the United States better. We were living on an island, and what could have been better than living in the United States after the Second World War until—recently?

ZIERLER: When does this change? What are some inflection points for you? Is it the end of the Cold War?

DAVIDOW: I'm not sure I know.

ZIERLER: Is it the embrace of capitalism in China?

DAVIDOW: I just think that the world is catching up. At first, it was Japan, and then it was Korea, and now it's China, and things like that. India. The population becomes more educated, and they develop their own technology infrastructure, and they're very good. In the meantime, we've undergone the greatest short-term genetic transformation in the history of humanity. I remember going to my daughter's—one of Becky's meetings at her school when she was in high school, and somebody asked a question of how many kids were thinking about becoming engineers or something. Nobody held up their hand. They said it was too hard. I think—so.

ZIERLER: What's the corrective to that?

DAVIDOW: I don't know.

Silicon Valley Before Money

ZIERLER: I want to ask about Silicon Valley, both as a state of mind and a geographic place. When do you recall Silicon Valley first coming into use as a term?

DAVIDOW: We would have had to have the first silicon transistor. I don't know when that was. I don't know when it came into use. I'm sure we can look it up. It certainly wasn't there when I graduated from Stanford. I wanted to go work in the computer industry, and there was no computer industry in Silicon Valley or in the Bay Area. There was IBM in San Jose, and they made disk drives, but there was no—yeah. I ultimately went to work for Hewlett Packard because they decided they wanted to build a computer. They wanted to build a computer that integrated with their instrumentation system. The original idea was not to be in the general-purpose computer business, but they needed a computer that enabled them to tie instruments together and create computerized instrumentation systems.

ZIERLER: Personal computing was not even a concept yet?

DAVIDOW: No. I guess that happened with Jobs, right?

ZIERLER: Of course today there is no silicon in Silicon Valley. What does Silicon Valley mean today?

DAVIDOW: This may sound strange, but I don't think any of us were in it to make money. We obviously wanted to make money, but I think we were much more interested in changing the world for the better. Today I think greed is a much more important motivating factor. I understand greed, somewhat, but I wanted to start a company like Hewlett Packard. I still have the business plan I wrote. I was going to build an inexpensive computer.

ZIERLER: How did you see technology as changing the world and even improving the world in those early days?

DAVIDOW: I think we were mostly thinking about making it more efficient. I don't think we were into transforming society. We were out to make a cash register work better so that there would be faster checkout lines at a supermarket and things like that. I don't think we had this—I'm sure some people did, maybe, but—

ZIERLER: An inkling of just how transformative it would be?

DAVIDOW: I think we thought more about making existing things work better. I don't think we thought in terms of cultural transformation. The internet—we were an extension of the Industrial Revolution.

ZIERLER: To return to an earlier point, we're now in a phase transition, the third one.

DAVIDOW: Yes.

ZIERLER: You just said that the internet is an extension of the Industrial Revolution. To follow the logic, where is autonomy?

DAVIDOW: I think the internet—maybe it—no, I think the internet is the dawning of the phase change.

ZIERLER: Maybe it's a connecting point from the Industrial Revolution to the Autonomous Revolution?

DAVIDOW: Yeah. It changed things.

ZIERLER: Anecdotally, just driving up here, all of the billboards—AI this, and AI that—it is everywhere now.

DAVIDOW: Yeah. I must admit that I—everybody says AI is going to change everything, and I—

ZIERLER: Have you played around with ChatGPT?

DAVIDOW: No, no. I haven't thought this through well enough, but today, people spend a tremendous amount of time entertaining themselves. There's nothing wrong with entertainment; it's the amount of entertainment. And, entertainment is purposeless. If you're spending 12 to 14 hours a day being entertained and eight hours sleeping—you're living a purposeless life for a large portion of that time. And, people are living purposeless lives. The thing that gives live meaning is purpose, so—

ZIERLER: Does this equate to the question about labor, and artificial intelligence?

DAVIDOW: I think that the more and more stuff that gets done for us, that we don't have to do, the less and less purpose we have in life. It's great to live a life of leisure and things like that, but without some purpose, life doesn't have a meaning. It's like, what am I going to do, get up in the morning and play games all day? That's what a lot of people are doing.

ZIERLER: A lot of people are working very hard now, too. But is it less purposeful hard work, do you think? Are we busying ourselves?

DAVIDOW: Well, like, working hard at what?

ZIERLER: At the various jobs that people have.

DAVIDOW: Those jobs being—?

ZIERLER: Any knowledge production job. People are busy—lawyers, accountants, professors.

DAVIDOW: Yeah, they are.

ZIERLER: People seem busy. Are they busying themselves with work that's not as purposeful as it could be? Or are there fewer people doing those jobs?

DAVIDOW: I think those people are doing what I would call, at least for them, purposeful work.

ZIERLER: Is it that society now produces a level of wealth that a segment of society need not work very hard?

DAVIDOW: If you look at it, I suspect we don't need very many people working anymore. The reality is that productivity keeps increasing faster than the population is growing.

ZIERLER: This is because of technology?

DAVIDOW: Yeah. Look at what is going away. Retail used to employ a lot of people, and effectively retail is going away. Construction will still be there, but a lot of it is getting automated. Manufacturing, a lot of it gets automated. So, I think there's going to be a shortage of work.

ZIERLER: There's so much discussion right now, particularly in government policy, about establishing guardrails for artificial intelligence. How do you understand that? What are the necessary guardrails?

DAVIDOW: I don't know. I don't understand much about artificial intelligence.

ZIERLER: You understand autonomy and artificial intelligence as different things?

DAVIDOW: What I worry about is, here I am, and I think about now people saying—they don't have to come to work anymore. We could have never built Intel if we hadn't all gone to work and been friends. But there are these companies where everybody is working at home.

ZIERLER: Is that not the virtual corporation that you wrote about?

DAVIDOW: Yeah, but the problem is, if I'm sitting out there, and I'm working over the internet, remotely, I'm an algorithm. I'm just an automaton, a robot out there, that's just doing stuff. I don't know, I'm very confused about all this stuff. I like doing things. I like writing. I like creating. I like doing things with my hands. We evolved—I was thinking about this—but the Agricultural Revolution occurred 12,000 years ago, and before that, there were no institutions.

ZIERLER: We couldn't sit still long enough to build an institution.

DAVIDOW: There was no reason for them. There was no commerce. You didn't have stuff you could trade and make and things like that. [to dog] Hello there, Bailey!

ZIERLER: [to dog] Hi!

DAVIDOW: This is—one of man's greatest creations.

ZIERLER: Oh, yeah. Hi! Golden retriever?

DAVIDOW: Yeah.

ZIERLER: You were saying there were no institutions. There was no commerce.

DAVIDOW: Yeah. All these things have happened in the past 12,000 years, so we ought to be maladapted to all of them, because—

ZIERLER: [laughs]

DAVIDOW: Well, no, think of that! We created all these institutions. We created a technological environment. We created cities. We created all this stuff. There's no reason to believe—we evolved without it. We didn't evolve to ride around in cars; we evolved to walk. So, we're living in a completely artificial environment.

Governance and Information Overload

ZIERLER: What about the impact of information technology on democracy? How concerned are you in that regard, the rise of misinformation and disinformation?

DAVIDOW: What happened was the following: we reduced the cost of one-to-many communication to zero. One-to-many communication is an extremely valuable commodity. When you reduce the price of a very valuable commodity below its real value, there are all kinds of opportunities to make money. Spreading fake news became a wonderful opportunity to make money or to advance an institution. So, part of the problem was that the internet reduced the cost of one-to-many communication to zero. In the past, we had free speech, but we didn't have free communication. Now, we've got free speech, coupled with free communication. In the past, communication was controlled. We had editors. We had newspapers.

ZIERLER: Gatekeepers.

DAVIDOW: Gatekeepers. I mean, humanity isn't going to vanish; it's just I think going to become an uglier place, because we're facilitating a lot of ugliness.

ZIERLER: What about the size of these companies, the monopoly that the government is now alleging, for example, that Google has? What's your feeling on that? Are these companies too big? Are they different than Bell Labs, for example?

DAVIDOW: I mean, I hate Google.

ZIERLER: How come?

DAVIDOW: I just don't like them. They're always in my face about something. But I'm not so sure that the problem is the companies. Even if you broke them up into thousands of pieces, I think you'd still have the fundamental problem that—example—we could solve a lot of these problems if we made communication more expensive. It would be expensive to be on social networks. It would be expensive to do this stuff. We're going to live with it either way. I think the fundamental issue is zero-cost communication. What we're trying to do is not eliminate the plague; we're trying to cure the diseases it causes. It's going to continue to cause lots of diseases, and we're going to run around and try and do that, because nobody is willing to—or I don't think people feel the same way I do, that the cost is—I don't see many people talking about the cost of communication being too low. People talk about it like it's a wonderful thing.

ZIERLER: One of those diseases—do you see political polarization as an outcome of this?

DAVIDOW: Sure it is. I'm sure that it would happen, as well, but people want to be with small groups that they identify with. They want to be with their own little communities. We don't want to live with a million neighbors; we want to live with a hundred friends.

ZIERLER: That has always been around, but now technology facilitates it in a way that was never possible before.

DAVIDOW: Oh, yeah. And, boy, it does it with—you create your own little hate group, or your own little fake news, or whatever.

ZIERLER: When you entered the world of venture capital, what did it look like then, and why was it attractive to you?

DAVIDOW: We did it with a $25 million fund, which is what people do with one investment today.

ZIERLER: "We" is you and Mohr?

DAVIDOW: Yeah.

ZIERLER: Tell me about Mohr.

DAVIDOW: He was with Hambrecht & Quist and left. Hambrecht said, "I'll back you." Larry is a very smart and motivated guy.

ZIERLER: Larry is still with us?

DAVIDOW: Yes. He's not doing too well. We put $500,000 into something and not $25 million into things. My closest friend was Tom Perkins, and Tom's attitude was, you put a little money in upfront, you get the risk out, and then you pile in. The reason you did that was that in most cases, the companies I started by putting a little bit of money in ended up completely changing their strategies during the initial phase, and then they found out what they really should be doing. If you put a lot of money in, you commit to the wrong strategy. You know what the answer is, so you pursue it. Today, I think what venture capital is, they put $25 million or $50 million into something, and people come up with these great visions, and people back a vision. We've always backed visions, but it didn't mean that the visions were right. We frequently changed the vision or redirected it to something different. Today you don't have the option of doing that because you make these big investments in going this way, and you're on your way to Mars and then you say, "Gee, we really think we should go to Saturn," and that doesn't work.

ZIERLER: In the mid 1980s, when you got involved in this world, was startup culture already well developed?

DAVIDOW: I think so.

ZIERLER: People were leaving big companies to start small ventures on their own? That was already entrained?

DAVIDOW: Yeah, I think so.

ZIERLER: Was that the kind of company that you entered VC to support? Was that your business plan?

DAVIDOW: Yes.

ZIERLER: What kinds of companies were attractive to you? What did you learn about being able to sniff out a successful company?

DAVIDOW: So much of it depended on the people. For example, we did this company, FormFactor. Originally, the idea was to put springs on superconductors so we could interconnect them to flexible substrates more easily.

ZIERLER: For what purpose? What was the application?

DAVIDOW: The application was to enable you to melt superconductor chips to build multichip things. FormFactor ended up becoming a company that made probe cards to test superconductors. So, we changed a lot of things. I don't remember all of this that well. My memory has gotten so shot.

Patience and Assessment in Venture Capital

ZIERLER: What about the timescale for patience when you started versus today? If you didn't put a lot of money in, as opposed to what's happening nowadays, were you more patient? Was the VC world more patient to let companies fail, at least initially?

DAVIDOW: The idea was you put $500,000 into something, and then it might die. After that, you might put in $3 million or $4 million or something. It was a process like that. $500,000 might last for a year, and if nothing good happened—

ZIERLER: What did you learn about what seemed to be a promising company, both in terms of the vision and the people?

DAVIDOW: It was all part of an exploration. Could you find customers for the idea? What was the real market? It was all just a discovery process. You'd start off believing one thing and end up doing something else.

ZIERLER: All of your background in marketing in a big company environment, how did you apply that knowledge, those skills, to venture capital decisions?

DAVIDOW: Marketing is one of the most important things that a company can do, and it's still not appreciated. It's a very simple concept. You find a market segment that you can dominate, and then you develop a product and a marketing approach to dominate that market segment. People turn it around and say, "Oh, I've got a product. I'll go out and start selling it," rather than saying, "Hey, here's a market, and I want to dominate the market. If my technology isn't right for that, then I better either get a different technology or pick a different market."

ZIERLER: Are there some products that have been such gamechangers that they've created a market where none existed?

DAVIDOW: I think that's true.

ZIERLER: But that's a rarity?

DAVIDOW: They've got to be pretty important products like an iPhone or something like this. General Electric—"find a need and fill it" was the answer. One of the great industrial marketing minds said, "People do things for their reasons, not ours."

ZIERLER: [laughs] Bill, how do you understand the distinctions from marketing and advertisement? Where is the overlap? Where are they separate?

DAVIDOW: Advertising is a tool, like a hammer. It's one component of marketing. It can be a very dominant one in certain fields. For example, today, distribution you get through Amazon, and so marketing and advertising is a very powerful thing there.

ZIERLER: Did you deal directly with the Madison Avenue executives?

DAVIDOW: No, not really.

ZIERLER: Who would do that, at the companies you worked for?

DAVIDOW: We didn't deal with Madison Avenue people in general at all. We were marketing in tech publications. Madison Avenue had no interest in them.

ZIERLER: At Intel, for example, it was still too technical, it was still too niche, for that level of advertising?

DAVIDOW: Intel did take ads in The Wall Street Journal, but I think it was probably more to promote their stock than to promote their product.

Intel Leadership and Carver Mead

ZIERLER: Did you get a first-row view of the dynamic between Gordon Moore and Andy Grove?

DAVIDOW: Yeah.

ZIERLER: What was that like? How did they work together?

DAVIDOW: Andy ran Intel, and Gordon provided a vision. I think he provided a lot of advice to Andy that Andy took, or respected, but Andy did the operational thing. Andy was running the company. Andy always ran the company, even when Bob was there.

ZIERLER: Would Andy and Gordon have considered one another peers? Was Gordon the senior partner among the two of them?

DAVIDOW: I think Andy respected Gordon, but I think Andy thought, "I'm running things. Gordon is sort of a philosophical advisor, but I'm in charge."

ZIERLER: You worked more closely with Andy, of course.

DAVIDOW: I worked for Andy. I didn't work for Gordon.

ZIERLER: But Gordon was around?

DAVIDOW: Oh, yeah.

ZIERLER: Would you spend time with him? What was his function when you were there?

DAVIDOW: He was the company philosopher. He didn't manage anything.

ZIERLER: What was his philosophy?

DAVIDOW: He wanted to make sure that we were doing the right things technologically, and this, that, and the other thing, from a very high-level point of view, I think, but as far as operational things, I think he pretty much left it to Andy. I had a lot of freedom there. It was amazing. I was running the microprocessor division, and I decided I wanted to do the design tools. I was in the executive staff meeting. I was part of the executive staff, and I presented the idea, and everybody sat around and looked at one another, and Ed Gelbach said, "Does anyone have a better idea?" Nobody had a better idea, and they said, "Go do it." So, I built the whole design aid business. And I think the design aids were integral to making—and the software—was the thing that made the 8080 a success. It was a lousy microprocessor. It was horrible.

ZIERLER: Did you have direct overlap with Ted Jenkins?

DAVIDOW: Yeah.

ZIERLER: How did you work with Ted?

DAVIDOW: I just saw him the other night. He was the engineering consultant on everything. I sort of laugh; Intel got credit for inventing the microprocessor, and I was with Signetics Memory System and we were building a microprocessor at the same time Intel was, and they announced it, and—I never thought that a microprocessor was an invention. It was just something that was obvious that you did. But Intel marketed it, and I—there were calculator chips. Those were microprocessors. We were just—making general-purpose calculator chips.

ZIERLER: Were you aware of Carver Mead's partnership with Intel?

DAVIDOW: Oh, yeah.

ZIERLER: What did his research mean for Intel? What did he make possible?

DAVIDOW: Carver came up with the idea of these building blocks out of which you'd synthesize circuits. If I remember things correctly, it used to be that you'd go and design a special-purpose device, and Carver's idea was that we had all these little building blocks that you'd glue together to make a special-purpose device. I don't know if I'm describing it properly.

ZIERLER: It changed Intel? It changed the industry?

DAVIDOW: It changed the industry, yeah.

ZIERLER: How so?

DAVIDOW: I think it reduced the cost of building special-purpose circuits, so everything could have its own special-purpose implementation.

ZIERLER: How proprietary was that idea for Intel? Was this an idea that could exist in any company?

DAVIDOW: I think so, yeah. The question was, what tools did you have to make it happen?

ZIERLER: Did you always consider yourself a technologist first who had interests in marketing and business, or at certain point in your career did you let go of staying on the cutting edge of technology to focus on finance and marketing?

DAVIDOW: I don't think I ever really focused that much on finance.

ZIERLER: Except when you entered venture capital?

DAVIDOW: Yeah, but—

Marketing Expertise in the Genes

ZIERLER: In other words, when you started your career at General Electric, was marketing on your agenda at that point, or that developed later on?

DAVIDOW: It happened. It wasn't—I don't even know—well, my father was a great promoter.

ZIERLER: Of what?

DAVIDOW: Books. He sold more books—he came up with the idea of publishing the world's greatest books historically and selling them through supermarkets, during the Depression, as a way of—and he sold 23 million books in one year.

ZIERLER: What was the publisher?

DAVIDOW: Consolidated Book Publishers, and it was basically a marketing operation. He did a book club with Sears. I guess what happened is that if you brought in a clipping from the newspaper, you could buy the book at the supermarket for whatever it was. He owned a news agency in Reading, Pennsylvania, and he also owned a bookstore. The news agency brought in all the Philadelphia newspapers and distributed them in the area. The thing that he discovered was that in the Depression, readership went up because people had nothing else to do. That was their entertainment. He decided that if he made the world's greatest books available, then people would buy them to entertain themselves.

ZIERLER: You learned the power of marketing from your dad.

DAVIDOW: My dad was a promoter. He was a promoter.

ZIERLER: Did you ever consider going into publishing?

DAVIDOW: When I was growing up, I know I thought, "I should go to work for Consolidated Book Publishers with my father." He never offered me a job, and I was kind of angry about that, I remember, but I think he did the right thing. I don't think it would have been a good thing for me to do.

ZIERLER: Maybe he specifically didn't want you to go into that.

DAVIDOW: I don't know, but he sure didn't make it easy!

ZIERLER: [laughs] When you graduate from Stanford in 1961 with a PhD in electrical engineering, what did that mean at the time? What were the opportunities that were available to you? Did it always mean computers for you? Could it have meant, for example, defense contracting?

DAVIDOW: I guess it could have, but—it's hard to believe—if you look at the computer industry in 1961—there wasn't a computer industry in 1961.

ZIERLER: There was punch cards. There was Fortran.

DAVIDOW: And there were—the IBM 650. I went to work for General Electric, and General Electric had a computer, the GE-235, and General Electric had a computer department. But the computer industry wasn't much of an industry at all. The general-purpose computer was just starting. There wasn't a lot of software written for them and things like this. I don't know what people did with computers at that time. I know we had a small timesharing system that Dartmouth put on the GE system, which was fun to play with. People were using them in accounting applications. They were making some scientific calculations on them. But there weren't many of them around.

ZIERLER: Did GE have a well-developed marketing department when you joined, or did you see that this was something that needed to be developed?

DAVIDOW: I'm sure GE had good marketing. I don't know how to answer that question.

ZIERLER: But the philosophy of, "Find a need and fill it," that was already part of the ethos of the company?

DAVIDOW: Oh, yeah, but that goes back—I don't know when that was—I don't even know whether it was GE who said that. We could look that up.

ZIERLER: But they lived that mantra.

DAVIDOW: Let's look it up!

ZIERLER: [laughs] Please! [pause] I'll see if I can beat you to it.

DAVIDOW: Oh, I'm sure you can. [pause] Find a need and fill it. [pause] "Robert H. Schuller quotes that will inspire you." [pause] Well, I don't know.

ZIERLER: Maybe it was so fundamental, it didn't need to be an official company policy.

DAVIDOW: "More than 50 years have passed since Corning launched CorningWare in 1958. Its most important"—[pause]—originated with Ruth Stafford Peale, the wife of Reverend Norman Vincent Peale and the author of The Power of Positive Thinking. All right!

ZIERLER: Okay, there you have it! Bill, nowadays, you're still active on Twitter. You're still actively writing articles.

DAVIDOW: I haven't for quite a while now. I was playing around with one thing, and I just haven't gotten around to it of late.

ZIERLER: What's interesting to you? What are you following in the news these days?

DAVIDOW: I'm just trying to stay current. I find all this stuff about the October 7th—

ZIERLER: The horrible violence in Israel and Gaza?

DAVIDOW: Yeah. I've almost gotten bored with it. I'm very concerned about the rise of anti-Semitism. It's just—going to be that way. I think the world is—there are just so many people who are unsure of themselves and insecure, and that's the problem. Trump is going to leverage it.

ZIERLER: You're concerned?

DAVIDOW: Well, I think he's going to be the next president.

ZIERLER: You do?

DAVIDOW: I'm pretty sure of it, yeah.

ZIERLER: You think he'll beat all of these felony charges?

DAVIDOW: No.

ZIERLER: But it won't matter?

DAVIDOW: Well, it might. It might. But [laughs] I don't know. I've been watching Fox News when I exercise. I was for a long time watching CNN, and then I decided I'd get a different opinion, and you know, what they say about Biden is so true. We just don't have a leader, and it's unfortunate.

ZIERLER: Who is your ideal president?

DAVIDOW: I don't—

ZIERLER: Who did the best job in your life?

DAVIDOW: Probably Truman.

ZIERLER: That's going way back.

DAVIDOW: Yeah, yeah. But probably Truman.

ZIERLER: You're registered to vote as what? A Republican or a Democrat?

DAVIDOW: Neither. I do not declare, and then I get the Democratic primary ballot because the Republicans won't let me get it. I don't really see anybody I'd vote for in the Republican primary anyhow.

ZIERLER: The Republican Party is much different these days than it used to be.

DAVIDOW: Oh, yeah, yeah, yeah.

ZIERLER: To go back to our theme of technology, this has made an impact?

DAVIDOW: The Republican Party is just—it has gotten captured by the rad…well, and probably the Democratic Party has gotten captured by the radicals, too. I think maybe a parliamentary system is a better system than the two-party system, but I'm sure that if I lived under it, I might like the two-party system better.

Professionalizing Fundraising

ZIERLER: Bill, for the last part of our talk today, let's focus in on Caltech. You've been a board member since 1996. What are some of the big initiatives that you've been a part of that you're proud of?

DAVIDOW: I think I convinced Caltech that they had the ability to raise more money and they had to get serious about fundraising. I remember Tom Everhart telling me that he had the best development director ever, and the guy couldn't find his way to the bathroom. I think I helped Caltech realize that they needed to do development. I think I convinced them that raising $100 million a year was not ambitious enough. I think I helped to create a development mentality at Caltech and got them to put in place these advisory groups to academic divisions and things like that. I think my contribution to Caltech is, now we raise $300 million a year, and I suspect that we would not be anywhere near that if I hadn't been on the board. There were a lot of people who contributed to that along the way.

ZIERLER: How did you ascertain that $100 million was not enough?

DAVIDOW: That's what they were doing with an incompetent development effort. I'm now an Emeritus Trustee and don't have as much influence and responsibility as I possibly once had, but I think non-profit organizations are not very imaginative about their fundraising opportunities. People say, "Oh, Caltech has got a small alumni base." I look at it and I say, "There are eight billion people in the world. We've got a big market." In point of fact, if you look at what we have to sell, and if we packaged it properly—and part of it is getting people to package it properly—there are a lot of people out there that have no affiliation with Caltech that are very interested in the kinds of things we're doing. Dexter Bailey is doing a good job. He's raising $300 million a year now, which is a substantial improvement over what it was. I have not been particularly vocal about the fact that I don't feel like Caltech does a good job of marketing itself, because as long as Dexter is able to find $100 million donors, that's fine. He has been very good at that, but—

ZIERLER: You're saying there's a different model where there's more smaller donors?

DAVIDOW: No, I'm saying that there's a model where there are some very large donors who—for example, if we create an Institute for Quantum Information, there ought to be $100 million donors who want to write $100 million checks to the Institute for Quantum Information and things like that. I see they got a nice contribution from somebody the other day. I just think there are all kinds of ways to better package what Caltech does from a marketing point of view.

ZIERLER: What is it that Caltech does? What does it have to sell to this 8-billion-person market?

DAVIDOW: Caltech essentially invented geobiology. Dianne Newman. There was no oxygen in the world's atmosphere until a particular bacteria got free in the ocean and freed up oxygen. That's geobiology, and humanity would not exist without that. I've often wondered what happens if a bacteria got around and got loose and decided to take the oxygen away. We ought to be studying geobiology. That simple story is enough to raise a lot of money! [laughs] We exist today because of bacteria! Not only in our gut, but that they created this environment.

ZIERLER: The idea that Caltech possesses unique capabilities in fundamental research that have direct application to how we live and if we live.

DAVIDOW: Yeah. It's partly organizing the faculty to market that, which they haven't done.

ZIERLER: Now you're running up against the ivory tower.

DAVIDOW: That's right. But if there was some faculty member who was interested in that, that's an area that—there are all these opportunities that I see to do these kinds of things, but it requires Tom Rosenbaum wanting to do them or getting a faculty group organized to do them.

ZIERLER: The idea or even the joke that the endowment, whatever the number, is never enough—is there a number where the endowment is enough? Do you have an idea of what the endowment would need to be for it to accomplish what an endowment is supposed to do?

DAVIDOW: I originally suggested to Ed Stolper that we should be looking for a $5 billion endowment. I at one point worked out a formula to suggest what the endowment should be. The endowment has a payout, then you've got inflation, then you've got the growth rate of the university. You add those percentages together, and if you take that off the endowment—just to stay even, you should do that. I think I worked out that $5 billion as a first step sounded about right.

ZIERLER: We're gearing up for the next campaign. What do you hope it will accomplish?

DAVIDOW: I have problems with campaigns. I believe you should always—

ZIERLER: A campaign shouldn't be an event; it should be a way of life?

DAVIDOW: Of life. What we should do is have well-articulated projects that we want to get funded, like geobiology, or an Institute for Quantum Information, and this and that and the other thing. We should be talking about raising money for those things.

ZIERLER: Whereas a campaign is general? It's for the entire Institute?

DAVIDOW: If you want to say, "I'm going to have a campaign because I want to raise $300 million for geobiology and $200 million for this," that's fine, too, but I think what we should do is put in place the fundamental needs, and I don't think we have. I think we've said, "We want to have a campaign." [laughs] We haven't done the job of putting the building blocks in place.

ZIERLER: What would it look like if we do put the building blocks in place?

DAVIDOW: We'd say, "Hey, one building block is what Harry Atwater wants to do. There's another building block for geobiology. There's another building block for quantum information. There's this, that." We collect the 20 or 30 projects and go from there.

ZIERLER: What about where the money is coming from? What's the right mix of from individuals, from foundations, and even now from corporations? We see, for example, Amazon's partnership with Caltech. What's the right mix of where this money should come from?

DAVIDOW: I haven't thought about that. I think you create these gift opportunities or gift goals, and then you're asking, "Who do they interest?" I'm sure that Amazon might have interest in quantum information, and something else, and then that's what you talk to Amazon about.

ZIERLER: Has Caltech tried this approach?

DAVIDOW: No, not to my knowledge.

ZIERLER: But you think this is the way forward?

DAVIDOW: I do. I don't think that we're organized to pull it off, quite honestly. I was going to beat on Dexter about it, but he's raising $300 million a year, so—

ZIERLER: He's doing it.

DAVIDOW: —let him do it his way.

ZIERLER: It's a pleasant surprise that it's working, you're saying?

DAVIDOW: No. There are lots of approaches that will work, but you'd have to organize development to do this type of thing, and development isn't organized that way at the present time. I don't quite understand how development is organized, but—like development should have divisional interfaces. It isn't organized like an industrial marketing department, where—like we had so many divisions at Intel, and each one had a marketing department that was marketing their products. Then we had a sales force that went out and talked to the customers. We aren't organized like that. Development doesn't have groups assigned to each division at this point, I don't think. At least it didn't. And it should.

ZIERLER: What about Caltech's insistence on staying small? Where is that an asset and where is that a challenge, in terms of development?

DAVIDOW: I think it's precisely what they should be doing, and I think it's precisely the way we should differentiate ourselves.

ZIERLER: Lean into being small?

DAVIDOW: Yeah, that we're small, focused, and excellent, and that that's the reason why we're so interdisciplinary. If we get large, we'll end up having a physics department that doesn't talk to the chemistry department.

ZIERLER: That has always been Caltech's secret?

DAVIDOW: I think having a small faculty that gets together at the Athenaeum and still pulls people together—there's a real advantage to small size.

ZIERLER: Last question for today, if I may. What's exciting to you currently at Caltech? What's happening on campus and around campus that's most interesting to you?

DAVIDOW: I love going off and just finding out interesting things that people are doing, whether it's Harry Atwater or Dave Anderson or somebody. It's just fun hanging out there and seeing—

ZIERLER: All this great innovation.

DAVIDOW: Yeah.

ZIERLER: So that's still strong.

DAVIDOW: Yes, I think so.

ZIERLER: You're optimistic about that?

DAVIDOW: Yes.

ZIERLER: That's great to hear.

DAVIDOW: Okay!

ZIERLER: Bill, this has been a wonderful initial conversation. Next time, we'll go back. I want to hear more about your dad, your family background, and we'll take the story from there.

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Monday, December 11, 2023. It is my great pleasure to be back with Dr. William H. Davidow. Bill, it's wonderful to be with you. Thank you so much for joining me.

DAVIDOW: I am delighted to be here with you, David.

ZIERLER: In our first conversation, we took a wonderful tour of your interests in technology, in artificial intelligence, of course your devotion to Caltech, all of your writings and your career. Today let's go back and establish some personal history for you. I want to do some deep family background. Did you know any of your grandparents or even your great grandparents, and where did they come from?

DAVIDOW: I knew my grandparents on my mother's side, and I knew my grandmother on my father's side. My father's father died when he was very young.

ZIERLER: Where did they come from?

DAVIDOW: They came from basically Lithuania.

ZIERLER: On both sides?

DAVIDOW: I think so, yeah. I've got a fairly good family tree of one side of the family. Basically it was Lithuanian Jews.

ZIERLER: When did they come here? Were they part of the Ellis Island wave in the late nineteenth century?

DAVIDOW: I'm not quite sure when all of them came. I don't know that. If I looked at the family trees, I could probably figure some of that out.

ZIERLER: Did they land in New York? Was that the first stop?

DAVIDOW: Yes—well, New York—I had an uncle or a—there was somebody named Myer Davidow, who lived in I guess it was Roxborough, Pennsylvania, and he had very strong connections in Lithuania, and he facilitated the migration of a lot of the family to the United States and helped them get started.

ZIERLER: Your family in Lithuania, were they mostly secular Jews? Was that their background?

DAVIDOW: I'm not sure. I don't know much about them. I know my mother's parents lived in Reading, Pennsylvania, where she was born, and I would go back to Reading occasionally, and I worked in Reading one summer, so I knew a little bit more of the family there.

The Influence of the Great Depression

ZIERLER: Where did your parents grow up?

DAVIDOW: My mother grew up in Reading, Pennsylvania, and my father grew up in New York. When he was 13, he went to work selling candy, and he ended up somehow in Reading, and ended up buying a news agency in Reading, the Berkshire News Company, which had a bookstore. The news agency distributed New York newspapers to the community around Reading. He was in the business of stocking all the newsstands with newspapers and I'm sure candy and other things that they needed.

ZIERLER: What was Reading's industrial base?

DAVIDOW: It was knitting mills at one point, and then they all moved out, so there wasn't much of an industrial base in Reading.

ZIERLER: Of course when your father got started, this was during the Great Depression?

DAVIDOW: That's right.

ZIERLER: How did he find success in the Great Depression? What was his secret?

DAVIDOW: My father was a great promotor and sort of hustler [laughs], and he realized, owning the newspaper agency, that during the Depression people read more, because they didn't have anything else to do! He somehow met John Cuneo. Cuneo owned a large printing company in Chicago, the Cuneo Press, which I think possibly still exists today. He and my father were talking, and my father somehow got into the idea that he could—if people read, they would like to read the great works of literature. He ended up creating them and selling them I believe through the grocery stores as promotional items in conjunction with the newspapers. He met Cuneo, and—if I remember it correctly, the printer that he was using wasn't capable of printing the books in the volume that he needed, and he was introduced to Cuneo, and Cuneo said, "I've always wanted to be a publisher," and my father said, "I'll make you one." So, my father ended up publishing—I don't know whether it was 40—of the classics that would be sold. They were bound very nicely. These were bound books. I remember looking them in our house at home, and we had 25 or 30 of the volumes up in one of the bookcases, and they looked very nice in the bookcases.

He got started with Cuneo selling those books. I think he then ended up selling books through Sears, if I'm not mistaken, and Sears created a book-of-the-month club and things like that. That became the basis for what was called Consolidated Book Publishers, which my father founded and ran. It published the classics. Then my father decided that the world needed a better encyclopedia, and so he created the American Peoples Encyclopedia, which Sears merchandized. I remember having a copy of the Encyclopedia at home—I was thinking about this the other day—when I was in high school. We had to do research and things like that, and you went to the Britannica, which was 20 years old, to find out what was going on. Those were the reference books we had!

ZIERLER: How did your dad position the new encyclopedia against the established heavyweights like Britannica?

DAVIDOW: Probably based on pricing.

ZIERLER: Was your mom involved at all in publishing? Did she help your dad's business?

DAVIDOW: No. My dad got involved in publishing—he was living in Reading, and there were all these Pennsylvania Dutch recipes, and people were always borrowing recipes from one another, so he published the Pennsylvania Dutch Cook Book, and that then became the basis for the cookbook publishing, where he then added other kinds of cookbooks on top of it. I'm sure I can reconstruct some of this history more than I can from memory.

ZIERLER: Roughly speaking, how successful did your dad's business become? How financially successful did he become?

DAVIDOW: We were certainly well-off and we had a nice lifestyle, so he was financially successful enough to enable us to have a comfortable living in the Chicago area.

ZIERLER: When did the family make the move from Reading to Chicago?

DAVIDOW: I'm guessing in the late 1930s.

ZIERLER: When do you arrive on the scene? What year were you born?

DAVIDOW: I was born in 1935.

ZIERLER: Do you remember Reading at all?

DAVIDOW: Not from birth. I do remember Reading because my grandparents lived there, and I used to go back and visit them. I worked there one summer. My father still owned the bookstore and the news agency, and so I went back and worked in the news agency.

ZIERLER: What neighborhood in Chicago did your family settle in?

DAVIDOW: We ended up living in Highland Park, which was about 25, 30 miles north of downtown Chicago.

ZIERLER: Was Highland Park already heavily a Jewish area?

DAVIDOW: No, it was not. As a matter of fact [laughs], you ask about that, but when we moved to Highland Park, we lived on Lakeview Terrace, and North Deere Park, which was the street next to us, Jews couldn't buy property on, supposedly. My recollection of the area then was that it was not very Jewish at all. It became obviously heavily Jewish, but at the time there was a fair amount of anti-Semitism.

ZIERLER: Was your family Jewishly connected at all? Did they belong to a synagogue?

DAVIDOW: We belonged to a synagogue—or, we paid dues at one—but they were not religious at all. I decided I wanted to go to Sunday school on my own, but my parents never encouraged that. The secular Jews were really trying to become integrated into the whole community and not—be Jews.

ZIERLER: Tell me about the schools you went to. Public schooling?

DAVIDOW: Public schooling. I went through Braeside grade school and then to Highland Park High School and then to Dartmouth.

ZIERLER: When you were really young, what memories do you have of World War II?

DAVIDOW: I have some. I definitely remember the day we dropped the atom bomb. I don't remember if I remember Pearl Harbor specifically, because I would have been six years old at the time. I do remember listening to the newscasts about the battles and what-have-you, and I remember following the War in the newspaper. There was always a map of this was happening or that was going on.

ZIERLER: Do you know if your parents were aware of what was happening in Europe? Were they aware of the Holocaust during the War?

DAVIDOW: I'm not sure what people were aware of, quite honestly. I don't know what was understood about the Holocaust, quite honestly. I've read various things about it. There was a lot of pressure in the United States not to want Jewish people to immigrate here; people forget about that. That happened during the 1930s.

ZIERLER: When you were a kid, were you always interested in math and science? Did you like to tinker?

DAVIDOW: I was never that much of a tinkerer, but I was always interested in math and science. I wasn't a great tinkerer, although in high school I had two friends and we bought an old—the convertibles that had the rumble seats in them. We restored that, and we used to drive around in that. One time we painted it with watercolors, and then it rained, and everything ran, and so it became known as the Vomit Comet.

From Chicago to Dartmouth

ZIERLER: [laughs] Did your school, Highland Park, have a strong curriculum in math and science?

DAVIDOW: There were two schools between Waukegan and Chicago; there was Highland Park High School and New Trier. New Trier was closer to Chicago, in Winnetka, and it was a better high school than Highland Park High School, but both of them were good public schools.

ZIERLER: What kinds of interests did you have as a kid? Did you play musical instruments? Did you do drama? What kind of extracurriculars did you have?

DAVIDOW: I used to play chess with my next-door neighbor. I used to like to play chess. I was never particularly into drama. I had a couple friends—there were four of us—John Gould Woody Hansman, myself, and Pete Husting, and we used to hang out together. Then there were a group of girls that we kind of hung out with. That was our clique in high school.

ZIERLER: When it was time to start thinking about college, how were the Ivies in range for you? Did you graduate near the top of your class?

DAVIDOW: Yeah, I did. I was the salutatorian or something like that. My father didn't go to college. My mother did, and I didn't realize how remarkable that was. She was born in 1908, so that would have been 1926. For a woman to go to college was—there were not that many women that went to college at that time. She and my aunt both went to Goucher College. I don't know how they ended up selecting Goucher, but they did.

ZIERLER: Why Dartmouth? How did you end up there?

DAVIDOW: [laughs] I know I applied to Dartmouth, Yale, Amherst, and the Colorado School of Mines was my backup school. I got into all of them. I had two friends in Highland Park High School who had gone to Dartmouth the year before me, and my father and mother had a lot of friends who went to Dartmouth. They also had friends that went to other Ivy League schools. I remember I decided to go to Dartmouth, and one of my father's friends who went to Yale was just so disgusted that I had made that decision, because it wasn't of the same caliber as Yale. And he let me know that.

ZIERLER: [laughs] Why the Colorado School of Mines? What would you have done there?

DAVIDOW: Actually I was interested in mining and things like that. I spent—it might have been the summer of my senior year, but I think it was the summer of my junior year, prospecting for oil in South Dakota. A friend of ours was deeply involved with the Kerr-McGee Oil Company, which was basically an oil prospecting company and then they developed oil fields. He got me a job with them, and he got this friend of mine a job with them in a different area. So, John Gould and myself, in his older Chevrolet—I don't know what year it was; it was not that old—drove out, and I spent the summer in Faith, South Dakota, which at that time had a population of 500 people. The town's source of revenue was that it owned the power station, and it also owned the bar. I think the drinking age in South Dakota was 21, but I don't think it mattered too much in Faith, so we used to go down to the bar and hang out there and talk to the local people. I remember one time, a group of Mexicans came through Faith and ended up in the bar, and they were not viewed particularly welcomely. There was a little Mexican, and he ended up getting in a fight with the toughest guy in town and knocked him out. What was unknown at the time was that these were touring prizefighters [laughs]. Anyhow, I rented a room in a house from a couple who lived in Faith. It was a good experience.

ZIERLER: You started at Dartmouth in 1953?

DAVIDOW: 1953, yes.

ZIERLER: Was it a men's-only college at that point?

DAVIDOW: Absolutely.

ZIERLER: Did you know that electrical engineering was even a field of study before you got to college?

DAVIDOW: Yes, I guess. The thing that amazed me was when I think back on it—even when I got to Stanford and was working on my PhD, there was no computer science at that time. I look at it, and when I look at the state of the computer industry, it's hard to imagine how primitive things were. The first computer I programmed was the LGP-30, which was made by Librascope. It was about the size of a desk, and it had a paper tape reader input, and it had a drum memory which I think had 4,096 words of memory. It didn't really have an assembler, even. You actually ended up writing out physical addresses and things like that. It was a very primitive machine, couldn't do much.

ZIERLER: When you entered Dartmouth, did you declare the major in electrical engineering right away, or you did a more general course of study first?

DAVIDOW: At Dartmouth, I don't know when you declared a major, but I decided to go to the Thayer School, which was the engineering school, where you got a bachelor of arts after four years and a master of science after five.

ZIERLER: To foreshadow to all of your success as a writer and as a public intellectual, in college did you know that you were a good writer? Did you like to write essays in college?

DAVIDOW: I was a C English student.

ZIERLER: [laughs]

DAVIDOW: I was definitely not a writer.

ZIERLER: What did you do during the summers?

DAVIDOW: I would have various summer jobs. One was with Kerr-McGee. I went to a camp and I worked there as a counselor some summers. It was a great camp. It doesn't exist today. My mother was a counselor at the camp. It was run by a fellow named Fay Welch, who was the dean of Forestry at Syracuse. It was a little camp on Lake Chateaugay, and it was a great experience. There were 50 or 60 campers. There was a girls' side and a boys' side. We lived in tents that had floors on them. There was no running water. There was no electricity. In the morning, we used to get up and go in the lake and wash off with soap, and that was how we got clean. We spent our time hiking, canoeing, and doing all kinds of outdoor things. I learned how to make fire by friction and can still do that. We learned a lot of Indian lore.

ZIERLER: What did an electrical engineering degree in the 1950s look like? What did you learn? What was emphasized?

DAVIDOW: Dartmouth was so far behind technologically at that time, but at Dartmouth, electrical engineering was studying things like electric motors and a little bit about vacuum tubes. When I got to Caltech, I was interested in computers and the way they worked, but the guy who ran the computer department was a fellow named McCann—I keep wanting to say George—but the computing that he did was with analog computers. I learned a lot about analog computers, but they were used to solve linear differential equations. They were simulators. You'd simulate the equation. The digital computer Caltech had was an LGP-30, and one of the reasons it had it was that a Caltech graduate, Stan Frankel, had invented the LGP-30. At Stanford we had a Burroughs computer, and I think we had a Burroughs 205 at Caltech as well, which was a mainframe with a—boy, I don't know that it had a core memory; I think it might have had a drum memory. Drum memory, the drum spun at 3,600 RPM; that's 60 times a second. Then there were short loops on the drum so that you could get off maybe, if you wrote in a short loop, five or six hundred instructions a second. That was the state of computing.

ZIERLER: As you became an upperclassman and it was time to think about next moves after college, did you ever consider going into industry and not pursuing graduate degrees?

DAVIDOW: I was at Dartmouth. I went to work for RCA. I thought at one point I might like to teach but then I went up to Stanford, and there was a fellow at Stanford—well, he wasn't at Stanford—the Bank of America had contracted GE to design a transistorized computer for them called ERMA that ran accounting, basically. The Bank of America had a transistorized computer, and the group at GE that did the work was located in the Bay Area. GE then decided they wanted to get in the computer business. They decided that they would set up their computer operation in Phoenix. People from the Bay Area, a lot of them didn't want to move there, so they said they weren't going to move. GE set up a computer lab in Sunnyvale which was to do research in computing, and Joe Weizenbaum, who went on to computer fame, was one of the people who ran the computer portion of that lab. I met Joe, and Joe hired me, so I worked for Joe Weizenbaum. Then he went back to MIT and on to computer fame from there.

The Caltech Crucible

ZIERLER: This is the question I've been looking forward to asking you—as a Dartmouth undergraduate, how did you hear about Caltech? What attracted you to go to Caltech?

DAVIDOW: I gave a talk the other day on chance and luck, and—I walked downstairs from the second floor of the Thayer School and there was a bulletin board, and on the bulletin board was an 8.5 x 11-inch sheet of paper that talked about Caltech and wanted graduate students. I thought that sounded pretty neat, so I applied to Caltech. I had a professor, Al Heckbert, who told me that Caltech was extremely difficult and I wouldn't really enjoy it very much, but I decided I wanted to go to California, so I applied to Caltech and got accepted. I was horribly prepared for Caltech. Dartmouth didn't prepare me for Caltech at all. I was a B student at Caltech and thought I was a failure because I didn't know what a B looked like! I developed all kinds of psychosomatic illnesses and things like that because—I was a failure. I ended up then deciding to go to Stanford because Stanford was a lot easier. In fact—

ZIERLER: [laughs]

DAVIDOW: —when I went to Stanford, I taught some classes, and I remember having one student in the class, whose name I won't name, but he was always asking me these questions, and I was thinking that nobody at Caltech would have asked a question like that because it was so stupid, and he was asking the questions to show off that he was smart, at Stanford!

ZIERLER: [laughs]

DAVIDOW: So, there was a difference. There was a difference in the quality of students between Caltech and Stanford.

ZIERLER: Tell me about the electrical engineering program at Caltech. Who were some of the professors that you remember? What were the big ideas at the time?

DAVIDOW: The one I remember the most was McCann, and then there was somebody else who did control systems, and I forget his name.

ZIERLER: What were the big ideas? You talked about control systems. What was going on in control systems at that point?

DAVIDOW: It was all feedback control systems. These were not very sophisticated control systems at that time.

ZIERLER: Was it at Caltech that you got your first hands-on experience with what we might call modern computers?

DAVIDOW: Yeah.

ZIERLER: Were they tools? Were they used for experiments? Were they used for data analysis?

DAVIDOW: I'm trying to think, because I don't know whether I ever used BASIC at Dartmouth, and I forget when BASIC—I don't think I ever used BASIC at Dartmouth.

ZIERLER: What is BASIC?

DAVIDOW: BASIC was a very simple programming language that enabled you to solve mathematical problems. It was a way of doing programming for mathematical problems.

ZIERLER: Did you interact with Carver Mead at all when you were at Caltech?

DAVIDOW: I knew Carver, I had interactions with Carver. He was around the Electrical Engineering Department when I was at Caltech. He was a year or two ahead of me. I remember him being viewed as kind of an icon or a god or something.

ZIERLER: He was already on that track when you knew him then?

DAVIDOW: He was always on track, to become a god.

ZIERLER: What was so transformative about his work even at that early stage? What do you remember?

DAVIDOW: He was giving people building blocks to build integrated circuits with. I don't remember everything that Carver was doing at that time, but it was—well, the integrated circuit. Anyhow, he was giving people building blocks for integrated circuits. I should be able to sort through all this stuff, but at my age my recall isn't as good as it used to be. I remember I got very interested in microprogramming, and I still have some of the application notes that I wrote on microprogramming then. It always—and Ted Hoff is a friend, but I always thought that the microcomputer was so obvious that it wasn't really much of an invention at all. Ted obviously became famous because he invented it, but I invented it too, and about 50 other people invented it. But Ted did a very visible invention.

Escape to Stanford

ZIERLER: What was your plan at Caltech? What did you want to accomplish upon enrolling?

DAVIDOW: I went there to become a PhD and it became clear to me that getting a PhD would have been at least a six-year project. As it was explained to me, they accepted me back in the PhD program, but they thought there was only about a 50/50 chance that I'd be able to complete the work. That was when I decided I had to go to an easier school.

ZIERLER: Did you complete a thesis project? Did you do research at Caltech?

DAVIDOW: No, not really. I did a thesis at Stanford. I don't think that my thesis was particularly ground-shaking or great. I just wanted to get it done.

ZIERLER: The idea of going to Stanford because it was so much easier than Caltech, I wonder what that tells us about of course how far Stanford has come, how it might have been a much different school in the late 1950s and early 1960s.

DAVIDOW: I do not think that Stanford was a great technological school at that time. Packard and Hewlett went there, but I don't think Stanford was a strong technology school. It developed obviously into a very strong one, but I don't think you would have picked it as a bastion of science. I remember talking to one of the presidents of Stanford who told me that, at the time, 1953, Stanford accepted half the applicants that applied or something like that. It was not the Stanford that it is today.

ZIERLER: Was Silicon Valley already in motion when you got to Stanford? Did that register even in the very earliest years what was happening?

DAVIDOW: No, Silicon Valley happened as a result of developing the silicon transistor.

ZIERLER: Tell me about developing your thesis topic at Stanford. What did you work on?

DAVIDOW: I was working on how to design efficient computers using microprogramming. I've got a copy of my thesis—I could probably pull it off the shelf and read you the title—but it was not a great piece of intellectual work. The books were better.

ZIERLER: [laughs] You were still developing as a writer at that stage, perhaps! Were there any professors that you became close with at Stanford?

DAVIDOW: Not really. I was interested in computers, and my thesis advisor was interested in radio astronomy. There was no computer science at Stanford. The Computer Science Department and the people who understood programming at Stanford were mathematicians who wanted to program the computers so that they could do numerical analysis. The world was so different.

ZIERLER: Coming out of the program, what would you say your expertise was? What kind of electrical engineer did you see yourself as?

DAVIDOW: I saw myself as a computer designer. I remember spending a lot of time trying to figure out how to make arithmetic units on the computer work better and faster. Trying to figure out how to make a computer add more efficiently and better was really important because that's the way computers multiplied.

ZIERLER: Did you ever think about going the academic route, becoming a professor?

DAVIDOW: Yes I did, but I guess not for too long.

ZIERLER: Ultimately it was industry that was most interesting to you?

Career Launch at General Electric

DAVIDOW: I took a job doing computer research in industry, yes.

ZIERLER: This was your first job? This was at GE?

DAVIDOW: That's right.

ZIERLER: What was the state of play of computers at GE? How was GE using computers in the early 1960s?

DAVIDOW: As I sad earlier, they had designed the first transistorized computer for the Bank of America, and then they had a computer department in Phoenix. They were going up against IBM. IBM wasn't an important factor in the computer industry at that time. It became one, but in the 1950s, the industry was very much in flux and unsettled. Burroughs was in the industry, IBM was in the industry, GE was in the industry, Remington Rand UNIVAC was in the industry, and they all were fighting it out to become leaders in digital computers.

ZIERLER: At this point, GE saw itself really as a high-technology company?

DAVIDOW: Oh, yeah, or at least it was attempting to do so. It failed at it, but there was a computer that it—John Weil, I forget where he was within GE, had developed a computer architecture called the 600 which was a very advanced computer architecture. There was a big battle as to what architecture GE would market. The architecture that it really chose to market was very archaic and not very good. The 600 was a scientific computing architecture which actually could solve business problems. It was just a programmable computer. It used binary arithmetic rather than decimal arithmetic. People felt that it was a problem trying to solve business problems using binary arithmetic.

ZIERLER: Tell me about your early work at GE. What were you hired to do?

DAVIDOW: I was doing computer research. Basically GE had gotten into business with Bank of America by building an electronic check sorter. The electronic check sorter read the magnetic ink on the checks. If you look at the magnetic ink on the bottom of a check, basically it was magnetized, and each one of those characters generates a unique electronic wave. The check sorter read those waves, and it used to make errors, and I started working on trying to make the check sorter read the checks more accurately.

ZIERLER: Did you enjoy the work? Was it exciting being at GE?

DAVIDOW: Oh, yeah, it was a lot of fun.

ZIERLER: Was any of this work at all related to the Cold War? Was GE doing things in support of U.S. national defense?

DAVIDOW: I'm sure it was, but that was not an issue with the computer department.

ZIERLER: Computers were not yet seen by the government as part of their defense posture?

DAVIDOW: I'm sure they may have been, but GE's efforts were basically commercial efforts.

ZIERLER: Where was the office located? Where were you at this point?

DAVIDOW: The office was in Sunnyvale, off Middlefield Road.

ZIERLER: Was there any aspect of the job that you considered strictly research, that wasn't designed to be applied to anything in particular, just understanding computers and how they work?

DAVIDOW: I think it was more applied.

ZIERLER: What was the idea? How did GE see computers as aiding their overall business model?

DAVIDOW: I don't think anybody knew! It was just all so early. We saw we could do better accounting with them. But you're going from 600 instructions a minute to six billion a minute. Six billion would be six times 1012. You're going through a speed increase of 1010. What is so obvious now would have been so beyond our imagination then. Think of a 1010 improvement in things. Incredible.

ZIERLER: You're emphasizing the value of it for accounting, to keep the books in order. Was anyone at GE talking about the use of computers to help facilitate the things that GE did, its manufacturing, its marketing, its product design?

DAVIDOW: I'm sure they were, but I was off in a little corner of GE. GE was a big company. After I left GE, I went to work for Hewlett Packard, because Hewlett Packard wanted to get into the computer business. What did Hewlett Packard want to do with computers? It wanted to use the computers to build automated instrumentation systems. There was a big argument at Hewlett Packard when I was there as to whether we should sell the computer as a freestanding device and not part of a system. The world was so different. What were people going to do with a freestanding computer? Because you didn't have all these computer languages or applications that ran on it. You got a computer, and it was like giving you an automotive engine without giving you a car. You had to integrate it into something and make it useful.

ZIERLER: What was your thinking in leaving GE to join Hewlett Packard? Was your assessment that five years in, GE was not going to be a player in this space?

DAVIDOW: Or that they were going to move me to Phoenix!

ZIERLER: [laughs] Is that where they moved their computer operations?

DAVIDOW: Yeah.

ZIERLER: That was not attractive to you?

DAVIDOW: That's right.

Joining Hewlett Packard

ZIERLER: [laughs] Were you tracking Hewlett Packard during this time? Did you see how they were really on their way to becoming the premiere player?

DAVIDOW: Hewlett Packard—basically, Dave Packard did not want to sell the computer as a freestanding device. He was opposed to it. We hired some people from DEC. One of them was a fellow named John Cadella, and he wanted to sell a computer against DEC. DEC was selling a freestanding computer at the time.

ZIERLER: What was your job at Hewlett Packard? What were you hired in to do?

DAVIDOW: I was basically hired in to do computer engineering. I got interested in marketing, and there was nobody in the marketing department or the division that had the computer that understood anything about computers, so I moved into the marketing department to run the computer marketing.

ZIERLER: It was at Hewlett Packard that you first got involved in marketing?

DAVIDOW: Yeah. I had always been interested in marketing. I don't even know whether it would have been called marketing at that time, but that was where I became interested in it, yes.

ZIERLER: It's such an important point in your career that it deserves going into a little deeper. What was the actual opportunity? Did you see it yourself? Did you see that you had a specific insight that would be good for marketing? Was there a boss who saw it in you? How did that work?

DAVIDOW: I remember the tipping point in my career where I was with Intel, and I was running the Microcomputer Division, and I decided that I wanted to leave Intel to go into venture capital. I went to see Andy Grove, and I said to Andy that I was going to leave Intel. He asked me what I was going to do, and he looked at me and he said—and I was a general manager at Intel—and he said, "Why would you want to do that when you're an average general manager at Intel?" I said, "Andy, what does that mean?" He said, "Well, if you're an average general manager, you're good enough so you can keep your job for a long time." He said, "But, you're really good at marketing, and you're the best marketing person in the company, so why don't you run marketing for the company?" That was how I ended up running marketing for Intel.

ZIERLER: Of course this all got started at Hewlett Packard.

DAVIDOW: Well, I guess sort of. I haven't drawn a flow chart of this all.

ZIERLER: Did Hewlett Packard have a formal marketing department, or whatever they would have called it back then?

DAVIDOW: Hewlett Packard divisions had marketing, and there was corporate marketing, which was run by a fellow named Noel Eldred, but that consisted of the sales force and public relations for the company. GE had I don't know how many divisions—maybe 20 divisions—we had 20 marketing departments, and one sales organization.

ZIERLER: You already talked about the importance of minicomputers which you recognized even as a Caltech masters student. What was the state of play for minicomputers at Hewlett Packard by the time you joined?

DAVIDOW: Hewlett Packard didn't have one. They were going to get into that business, to build computerized instrumentation systems.

ZIERLER: How did Hewlett Packard embrace minicomputers? What did they recognize?

DAVIDOW: Hewlett Packard didn't embrace them. This one division sort of got out of control [laughs] and started marketing them. After that, Hewlett Packard embraced them.

ZIERLER: How did you merge your expertise at this point? How did these things converge for you, marketing and minicomputers?

DAVIDOW: As I said, I went into the marketing department at that division to help them market computers.

ZIERLER: What was the message? How did you market them?

DAVIDOW: I remember that the HP 2116 was the largest, heaviest, most expensive and slowest minicomputer on the market. It was also extremely reliable. I remember it was in the back of a truck or something and got involved in an automobile accident, and we were able to pull the computer out of the truck and it still ran. So, we were marketing it as a reliable, dependable thing that you could count on to always work. And, we had maintenance, and we had application engineers, and so if you bought a computer from HP, we could help you make it work in your system.

ZIERLER: When you talk about systems, who is the customer base for HP's minicomputers?

DAVIDOW: At that point it was the people that bought instrumentation, but then it evolved as other applications got written for it.

ZIERLER: When you say "people," these are individuals, or these are companies that buy the minicomputers?

DAVIDOW: Companies.

ZIERLER: What kinds of companies?

DAVIDOW: I remember one of them was buying them to put them in control systems and things like that. I think one of our customers at one point was the TVA who was using them to control water flow.

ZIERLER: What about the government? Was the United States government becoming a consumer of minicomputers?

DAVIDOW: I'm sure they were. I just—I wish I had about three or four other people with me who were going through this at the time who would remember what was going on.

ZIERLER: That's all right! What level of promotion did you have at HP by the time you left? Were you a vice president? Were you a director?

DAVIDOW: I was not a vice president of HP. What happened was that I had been at one of the national computer conferences in Las Vegas and ran into Bob Noyce at a bar down there. I was telling Bob about how I wanted to design a microcomputer. I went back to my office, and the phone rang, and it was Ed Gelbach from Intel calling me and asking me if I would be interested in coming to work at Intel to help them with their microcomputer effort. The fellow who had been running it was a fellow named Hank Smith who had decided he wanted to move back East, so they hired me to run the microcomputer effort at Intel.

The Path to Executive Marketing at Intel

ZIERLER: This was an exciting opportunity for you? Intel was a really hot place to be at that point?

DAVIDOW: Oh, yeah. There were only a few places. We don't realize this, but at that time there weren't that many places to work in Silicon Valley. There was Hewlett Packard and Intel and Varian. There weren't 500 startups. All of that has happened in recent years. There weren't that many choices. The companies that I would consider working for in Silicon Valley at that time were Measurex, Hewlett Packard, places like this. There has been this explosion in Silicon Valley. I go back East or to Chicago—and I'm sure that Chicago has changed a lot since I graduated from high school, but it's still recognizable. I don't think that Silicon Valley today is recognizable in terms of what it was 50 years ago. It's just a totally different place!

ZIERLER: Before we get to Intel, there's a place you were in between—Signetics Memory Systems. That's where you went after HP. Tell me about Signetics Memory Systems.

DAVIDOW: I went to Signetics Memory Systems because I was going to be able to design a microcomputer and sell a microcomputer using Signetics technology. Unfortunately, Signetics technology was not capable of building something that complex. The guy who hired me there was a fellow, Orville Baker, and he got replaced by a fellow named Hugh Kern, and the two of us hated one another. I walked into his office and told him I was leaving the company, and I think I really disappointed him because he wanted to fire me, and he didn't get the chance to! [laughs]

ZIERLER: [laughs] What was their business? What did Signetics Memory do?

DAVIDOW: It was going to take Signetics memory chips and build systems with them. At that time, there was another company that built IBM add-ons. I think it was Memorex that did that. IBM had all these massive computers and then you could order cabinets of extra memory, and Signetics Memory Systems was going to be in the business of building those cabinets of extra memory that could be added on to IBM computers.

ZIERLER: What was your role there? What were you hired in to do?

DAVIDOW: I was hired there because Orville Baker wanted to get into the microcomputer business, and it just—didn't happen.

ZIERLER: Was that a tough decision, leaving HP? Did you see that as risky at all?

DAVIDOW: I don't know. I guess I was more enamored with the future than worried about the risk.

ZIERLER: What was enamoring for you at that point? What did the future look like?

DAVIDOW: To do something new. We had all this technology, and microcomputers weren't around, and I was going to be part of creating a world of microcomputers.

ZIERLER: Why didn't it work out at Signetics? What were they missing?

DAVIDOW: They couldn't build stuff that complicated. The processes in our factory produced too many defects and so we couldn't build the chips.

ZIERLER: Was Signetics a startup? Was it a breakaway from a different company?

DAVIDOW: Signetics existed as an integrated system company, and it was capable of doing it. We were going to be using a more sophisticated, more complex process, and the defect levels in our factory were such that we couldn't make it yield.

ZIERLER: This is when you decided to look for opportunities, which ultimately landed you at Intel?

DAVIDOW: A crewman on a sinking ship doesn't have a lot of future.

ZIERLER: Tell me about joining Intel in 1973. What was it like at that point? How developed was the company?

DAVIDOW: I forget the size of Intel in 1973, but it—

ZIERLER: Do you remember what employee number you were?

DAVIDOW: Oh, I was way late, because Intel had been around for five years. I think Intel was a $60 million company at that time. It was a substantial company.

Breaking in to Microcomputing

ZIERLER: Were you brought in, in light of your dual expertise in microcomputers and marketing, or did you focus on one or the other at first?

DAVIDOW: I was brought in to get the company into the microcomputer business.

ZIERLER: Intel was really not involved in microcomputers prior to your hire?

DAVIDOW: No, and I got them into the design aid business. The problem was, how do you put these chips in systems and program them and debug them? I built design aids and software that facilitated that process. The idea was that somebody would decide to use a microcomputer and they would buy a $25,000 design aid system so that they could program it and get it working, and then a few years later they'd buy thousands of dollars' worth of chips. I ended up running quite a substantial business selling these design aids at $25,000 a piece.

ZIERLER: I wonder if you can explain what the design aid is. What is its relationship to the hardware, the microcomputer?

DAVIDOW: We had a plug on the design aid that you could plug into where the microcomputer ran, and the design aid in effect simulated the microcomputer. It had all kinds of sophisticated ways of enabling you to program it and see what was going on and to do the programming process. It made it possible to debug the microcomputer in its system the way you would debug a computer program running on a mainframe.

ZIERLER: Why was Intel not involved with this early? Why were they not an earlier adopter to microcomputers and design aids?

DAVIDOW: I don't know who was earlier.

ZIERLER: HP, for example.

DAVIDOW: HP wasn't in the chip business.

ZIERLER: I see. So this is all new, essentially?

DAVIDOW: I think so, yeah.

ZIERLER: Was Intel exciting? Did you get a sense of where it was headed?

DAVIDOW: Intel was sure exciting for me. There were a team of us at Intel, and we were out to make the world a better place through the application of our technology. I look at it today, and I think people start companies to make money and they could care less whether they make the world a better place, and so you get Facebook. I think at Intel, we were out to make the world a better place. Also you've got to realize that our vision was probably a stupid, nearsighted vision. We saw making existing processes more efficient and cost-effective. Instead of having a mechanical cash register, you had an electronic cash register that could add and subtract and multiply and compute tax. We were automating existing phenomena; we weren't creating new virtual worlds.

ZIERLER: This was not techno-utopianism; this was simply finding inefficiencies in society and achieving technological solutions.

DAVIDOW: Well, let me put it this way—that could be techno-utopianism!

ZIERLER: Fair point. [laughs]

DAVIDOW: The techno-utopianism that people talk about today—I am amazed at technologists who say, "I am inventing this technology and it is going to make the world a better place," and they have grand visions of reforming democracy, this, that, and the other thing. Here are people who understand technology and don't understand anything about psychology, sociology, or history. They are projecting based on their understanding of technology what the social effects are going to be. I think that if you understand technology, you're in a position to say this is how it will affect various processes, but that doesn't qualify you to understand what the implications of those effects will be. I look at all the stuff that has gone on with the internet and social networking, and what happened with social networking is that we reduced the cost of one-to-many communication to zero. We took an extremely valuable commodity, which was one-to-many communication, which used to be controlled by editors and things like this—mass media controlled it—and we reduced the cost to zero, and what we got was fake news and all of this stuff. We took a very valuable commodity and made it free, and for some reason we were naïve enough to expect that people would only use it for good. If you make a very valuable commodity free, out of the eight billion people, there only have to be about 100,000 who decide they're going to use it for evil to cause a hell of a lot of problems.

ZIERLER: When you joined Intel, was Andy Grove already running things? Was he ultimately who you reported to?

DAVIDOW: I basically worked for Andy, yeah. Nominally Bob Noyce was, but Andy was always running everything.

ZIERLER: When would you interact with Gordon Moore? Would you see him frequently? Was he around?

DAVIDOW: Oh, yeah. I gave a little talk about Gordon the other day. Gordon was a visionary. He created a vision and sold everybody on the vision, and Andy implemented it.

ZIERLER: What was the state of play for integrated circuits at Intel at this point? Were they already central to Intel products?

DAVIDOW: Yeah. They'd been around for quite a while.

ZIERLER: What did they make possible?

DAVIDOW: Integrated circuits? Computers. You have all these things that if you look at it, technologically you might not have been able to do them at all, but even if you could do them, they would have been so expensive and so big that they weren't practical. What integrated circuits did was reduced the size and the cost and increase the speed of doing these things. Integrated circuits made all this stuff possible.

ZIERLER: What were some of your big successes in marketing for Intel? How did you get across that Intel was really important for microcomputers?

ZIERLER: The 8080 was the worst, the slowest, and the most difficult to program microcomputer architecture available. The Motorola 68000 was there, which I'm sure you're well aware of, and everybody should have used it. The only difference was that we marketed, and knew how to market the 8080, and drove the Motorola 68000 into the dustbin. The success of the 8080, in my humble opinion, is a marketing success.

ZIERLER: As opposed to a technological success?

ZIERLER: It was not a technological success. I mean, it worked—it worked well enough—but what happened was that we made it easy to use. We told engineers, "If you use our stuff, your project will be successful, and we'll help you make it successful." Motorola said, "We've got beautiful technology." We sold the engineer on him becoming a success, and Motorola sold architecture.

ZIERLER: Did the marketing work require a lot of travel for you? Would you meet with potential clients onsite?

DAVIDOW: Yes.

ZIERLER: Where would you go? Who were some of the most important or biggest clients that you won?

DAVIDOW: We traveled all over. I spent a lot of time in Japan, too, where people second-sourced our products, but they were also part of helping us make it successful in world markets.

ZIERLER: Did this include overseas manufacturing? Were you involved at all in the way that Intel globalized its manufacturing?

DAVIDOW: No, no.

Becoming a Venture Capitalist

ZIERLER: For the last part of our discussion today, we'll go to a very important transition point in your life, when you decide to retire from Intel. By the early 1980s, what was your sense of satisfaction that you had accomplished all that you wanted to, at Intel?

DAVIDOW: I reached the age of 50, and I looked and I said, "I'm running marketing at Intel, and I can retire from Intel at age 65. I'm not going to be president of anything, and there's not another high-level job that they can put me in. And if I stay head of marketing the next 15 years, there are 25 young people who will leave the company." I could have stayed at Intel and ultimately occupied some kind of emeritus position or something, but it just was the right time.

ZIERLER: What about the risk of leaving Intel certainly nowhere near the end of your career? Were you financially secure at that point? You didn't have to worry about that?

DAVIDOW: I was secure enough. I had enough money that Sonja and I could have lived at some level for the rest of our lives comfortably.

ZIERLER: Is that simply because of compensation or was that because of stocks as well?

DAVIDOW: I had made money doing other things. I had invested in small companies, and I had had some other financial successes. I had been a startup investor for a long time.

ZIERLER: Tell me about your last day at Intel. Was there a party? Did people talk about what you had done?

DAVIDOW: I just remember that we had a good party and had a lot of fun, and people wished me well, and it was a friendly party. It was good.

ZIERLER: When you retired from Intel, did you have a good idea of what you wanted to accomplish next? Did you have that all laid out or it was one day at a time for you?

DAVIDOW: I had been a venture investor for years before I got into venture capital and I had a good record, so it was just a natural extension of what I had been doing when I hadn't been working for Intel.

ZIERLER: On that note, we'll pick up next time in 1985. We'll see where your career goes in venture capital, in writing, and in becoming a Caltech trustee. We'll continue the story from there.

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Tuesday, December 26, 2023. It is my great pleasure to be back once again with Dr. William H. Davidow. Bill, as always, it is great to be with you. Thank you so much for joining again.

DAVIDOW: I'm happy to be here, David.

ZIERLER: Today we're going to pick up in 1985 when you retired from Intel. We left last time covering what your plans were at that time, what you wanted to accomplish. Let's start first with the Mohr Davidow Venture. How did that get started?

DAVIDOW: Larry Mohr had a $25 million venture fund and he was the sole partner. Bill Hambrecht of Hambrecht & Quist helped him raise it, and he needed a partner, so I joined him in this $25 million venture fund.

ZIERLER: What did you want to accomplish with Larry?

DAVIDOW: I wanted to get into venture capital. There weren't that many venture capital firms. Kleiner Perkins was around. Tom Perkins was a friend of mine. I talked with them about joining them, and they wouldn't take me in as a full partner, so I decided that I didn't want to do that. I could be sort of a resource for them, and that didn't sound good to me. Larry needed a partner, so we formed Mohr Davidow Ventures.

Betting on Semiconductors

ZIERLER: In the mid 1980s, what was exciting in the world of venture capital and technology? Where did you want to make your mark?

DAVIDOW: I thought I would go with semiconductors because that was where my background was, but I think the first deal I did was with Igor Khandros, probably, and he came to me with an idea for putting little springs on silicon as a way of packaging silicon. The problem was that you wanted to almost mount silicon on a surface that didn't expand at the same rate the silicon did, so the springs would serve to take care of the problem. It turns out that the springs also were a great way to build probe cards, and so we ended up building probe cards to probe semiconductors. That company was I think called FormFactor at the time. We became a probe card vendor, and we used to sell these very sophisticated probe cards for doing semiconductor tests.

ZIERLER: What were the probe cards? What were they doing?

DAVIDOW: If you had a silicon wafer and you wanted to test the chips on the wafer, the probe cards were a way of testing and finding out which chips on the wafer were good. The chips had pads on them, so you could probe the wafer and test the chips on the wafer. Then you could mark the good chips or the bad chips; I forget which one. Then you diced the wafer and you picked out the good chips and put them in packages, tested them in the packages, and sold them to customers.

ZIERLER: What aspects of this technology were you looking to directly compete with Intel and some of the legacy companies, and where was there flexibility in a startup where these smaller companies could do things and could have innovations that Intel or the larger companies might not have been able to do?

DAVIDOW: Intel was building microprocessors and memory chips. We weren't competing with Intel, particularly. We were helping to package chips, and some of those chips might have in fact been Intel chips that needed to be mounted on a substrate or something.

ZIERLER: Who were the end users of this technology? Where would we see it applied in industry?

DAVIDOW: This got used in all kinds of products that had semiconductor intelligence built into them. It could be found in a number of areas.

ZIERLER: In your retirement from Intel, this is when you took up your remarkable writing career with a string of books. Did you do any writing during your career at Intel? Where did you discover this talent that you had for book writing?

DAVIDOW: When I got into venture capital, I figured there were a lot of venture capitalists out there and that I had to differentiate myself and have some reason for people wanting to talk with me. A lot of the venture capitalists positioned themselves as management coaches and consultants that would help entrepreneurs who weren't capable of managing anything to manage their operations. I felt that I could turn that into an insult. Most entrepreneurs accepted the fact that they didn't understand marketing very well, so I said, "I can help you with marketing." As part of that I said, well, gee, what I'll do is write a book and use that to position myself in the venture industry. I wrote the book, and lo and behold, the first venture I backed, the entrepreneur walked into my office with a copy of the book saying he wanted me to help him. So I guess the idea of writing the book worked!

ZIERLER: Was the beginning idea writing a book, or was this a presentation or an article and you realized you had more to say that would require the longform nature of a book?

DAVIDOW: What happened was I was in a meeting, and Ted Levitt, who was sort of the industrial marketing genius at Harvard, was in the meeting, and I was telling him about my ideas, and he encouraged me to write a book. I didn't know very much about doing that, and he said, "Oh, I'll introduce you to my editor," who was Bob Wallace at the Free Press. Bob Wallace was a great editor. I went back and told Bob Wallace my idea, and he liked it. I told him about the plan for the book, and he looked at the outline, and he said, "Make the last chapter the first chapter." [laughs]

ZIERLER: [laughs]

DAVIDOW: So I did. It all went very smoothly. I somehow got the impression that writing a book and getting it published was not that difficult. Nothing could be further from the truth! Then after I had written this book, which was a very successful book in the sense that—not selling millions of copies, but for a technology-type book, it sold extremely well—so it should have been easy for me to find a publisher for my next book, but I talked to 40 publishers and nobody wanted to publish anything. That was how my career in publishing started.

Autobiography and Marketing Insight

ZIERLER: How much of Marketing High Technology was autobiographical, would you say? How much did you rely directly on your own experiences, and how much was it just you being in the industry for as long as you were and being at the forefront of these things?

DAVIDOW: I think that people liked was that it was somewhat autobiographical—or autobiographical, not quite—I mean, the first story in the book was autobiographical, but after that it was about marketing principles. It's a good, solid marketing book. It was written before the internet but a lot of the principles still apply in the internet world. You just have to bring them to the virtual world.

ZIERLER: What aspects of Marketing High Technology were really unique to the high-tech industry, and what aspects are simply universals truisms in industry no matter the industry?

DAVIDOW: I started off Marketing High Technology with talking about a presentation I gave at Intel titled, "Selling A Dog." What I explained to the Intel management was that the Intel 8080 was by far the worst microprocessor on the market. The 68000 should have driven us right out of business. But we understood something that Motorola didn't, which was that engineers didn't know how to use microprocessors. So, we made it easy for the engineer to be successful using the Intel microprocessor. Motorola was selling its architecture and we said, "Well, gee, that's fine, but if you can't design a system that works with it, what difference does it make if you use something with a nice architecture?" We came up with the idea of all the support infrastructure that we put around the microprocessor. We said, "In order to use the microprocessor effectively, you need design aids. You need tools. You need software. You have to be able to program it." We built all the infrastructure around the microprocessor that was required to enable you to use it successfully, and that's why the Intel architecture became successful.

ZIERLER: In your experiences at Intel, marketing Intel products—the idea with marketing is customers have a choice. They can choose Intel or they can choose the products of another company. What would be the winning case to choose Intel products? How did you convey those lessons in the book?

DAVIDOW: The story of the book was basically, you're sitting there in marketing, and your job in marketing is to make the products of the company successful, no matter—and it turns out that the engineers didn't design the best product on the market, but it was still the job of marketing to turn it into the best alternative for the customer. It was the understanding that in the case of a microprocessor, the customer experience involved a lot more than just a slick architecture. We sold customers on the fact that they needed a lot more than just something with a great architecture. We had an array of peripheral circuits that worked with the microprocessor, we had software, we had design aids that enabled you to debug the system. We had a total solution for the customer. Motorola just had an architecture. So, we made them pay the price.

ZIERLER: Did you do any interviews, did you discuss your experiences with any of your peers to get their perspectives captured in the book?

DAVIDOW: I don't think so. I just sat down, and I outlined that book, and then I wrote a chapter a week, and in 13 weeks it was all over, or however many weeks it was. It was an easy book to write because it was a personal experience book. I didn't have to do a lot of research to write the book. Other books, I've had to really dig in and learn things. Other books, I learned a lot while I was writing them. This one, Marketing High Technology, I didn't learn anything from writing it. That's an exaggeration, but I was writing about something I knew.

ZIERLER: Given the success of the book, did you go on a speaking tour? Were you all of a sudden in demand to give speaking engagements?

DAVIDOW: Well, yes, but it wasn't like—Hollywood. Various IEEE chapters wanted me to come and talk, and—it was fun.

ZIERLER: What about in business schools? Did it start to become a standard textbook for students learning the craft of marketing?

DAVIDOW: I think it has been used in business schools. I know it has been. I think it got used as a reference more than a textbook anywhere. I remember giving a lecture at Stanford Business School and things like that. It's a long time ago.

ZIERLER: What did the book do in terms of your profile, in terms of your presence in the VC world? Was it helpful, do you think?

DAVIDOW: Oh, yeah, because basically there were the high-tech marketing gurus in Silicon Valley, and that consisted of myself, Regis McKenna, and a couple of other people. That's what we positioned ourselves as sort of professionally. Regis did it more from an advertising and public relations point of view.

ZIERLER: Back to the VC world, was there a new skill set that you had to learn? Did you feel like a newcomer to the field, coming from Intel, coming from the legacy world?

DAVIDOW: I think that one of my strengths is that I'm a very good business strategist, and what I did was help people work out and implement the strategies for their companies and think through who the customers were and how you got the product sold to them and things like that.

ZIERLER: Let's move on to the next book in your literary canon, Total Customer Service. How did you come to that idea? How long had you been thinking about customer service, and what is the overlap with marketing?

DAVIDOW: In Marketing High Technology, there was a chapter on customer service. I forget the title of the chapter. After the book came out, there were a whole set of books on customer service, so I thought, well, I just may as well take advantage of the fact that everybody is writing a book on customer service. I thought those books were missing a very fundamental concept, which was that what you had to do was figure out what market segment you were going to serve and then design the services to match the market segment. That was the strategic insight in the book, that customer service has to be designed to match a market segment.

The Centrality of Customer Service

ZIERLER: You say around this time there were a lot of people thinking about customer service. More broadly in business, what was happening at that point that made customer service a focal point?

DAVIDOW: I don't remember, but Tom Peters wrote a book, and there were a lot of other books out there at the time that were really major sellers, and I thought this created an opportunity in the market for me to do something.

ZIERLER: What was your angle? What did you want to add that wasn't already out there?

DAVIDOW: I wanted to tell people that the key to giving good customer service was to match the service very precisely to the market segment you're trying to serve.

ZIERLER: How do you do that? How do you identify what makes for a match?

DAVIDOW: You've got to go out and understand what the customer needs are, go out and listen to customers and understand what their problems are. It always starts with listening and learning what problems the customers have. Often high tech invents things, and they're very interesting things, but the question is, how do you make the interesting things useful to people?

ZIERLER: What was Intel's approach to customer service? What were you able to draw on from your experiences at Intel?

DAVIDOW: Intel became famous for the catchphrase "Intel delivers." At that time, it was the fact that we were in the semiconductor memory business and we were actually able to ship semiconductor memory. We made a big deal out of the fact that we could deliver what we were selling. That was an important part of customer service.

ZIERLER: Being in the world of venture capital for five years over the course of writing this book, is there a unique approach in venture capital to customer service that was relevant in writing this book?

DAVIDOW: Every businessman has a set of reasons why somebody should do business with him. Some are based on the fact that they're important people, and because they're important people, their aura will help the company and open the doors to finance and things like that. I was more into trying to help the companies figure out how to run successful businesses.

ZIERLER: Talking about a match between customers and the company, let's start culturally. What are the bridges that need to be built? Why are there not these natural connections given the fact that customers and the business need each other?

DAVIDOW: Frequently technologists see a technology problem and they say, "I can solve the problem." They solve the problem, and then the question is, how do you motivate somebody to need your solution to the problem? Sometimes it's obvious and people just take things out of your hands, but—like with the microprocessor, Intel invented the microprocessor, but it didn't mean that customers knew what they should do with it. Our job was to teach customers and make it possible for them to use that microprocessor to solve problems that they would have done with a logic design, with TTL logic and things like that. They didn't have to do that. What they could do is use a computer program to do the things that the logic did. The computer program was replacing a logic design.

ZIERLER: What aspects of customer service did you think about as a two-way street, in other words it was not just companies telling customers what they needed, but customers having their own ideas that actually shaped the products that the companies were making?

DAVIDOW: There were lots of customers out there that bought semiconductors and thought about doing logic design who had no idea that a microprocessor existed. Then somebody said, "Here's a microprocessor," and they said, "Gee, that's interesting. It goes into a cash register or something like that." But the idea was that you could use microprocessors to replace all logic design, and then you had to teach customers how to go about doing it.

ZIERLER: In the middle of this, you must start to think about The Virtual Corporation. You mentioned the internet before. Is the internet something that really needs to get going before the germ of this book becomes born?

DAVIDOW: The Virtual Corporation I think came before the internet. It was the idea that you could create a corporation and use a lot of services to deliver the corporate product, so that rather than owning and controlling everything yourself, you could buy this service here, and that service there, buy your manufacturing in one place, do something else for your distribution. You could assemble a number of services to create a company, and you would be the coordinator between those services.

ZIERLER: The process of assembling and coordinating these disparate services, how altogether does that make a corporation virtual? What did you mean by the word "virtual" in this context?

DAVIDOW: In the past, if you were General Electric, you engineered the product, you manufactured the product, you sold the product, and you serviced the product. In some way, we were saying, hey, you don't have to manufacture the product anymore; you could contract that out. You don't have to do this anymore; you can contract that out. You can create a corporation and contract out pieces of that corporation.

ZIERLER: Of course I can see an obvious criticism to this approach; as you mentioned, GE being involved in every step of production, all the way to servicing the products, it would seem that one advantage there is quality control, that GE has responsibility and even accountability. How do you make up for that when you have so many different players with different interests involved in the process?

DAVIDOW: I think that is a problem, and I think it has become a problem today, because today—you need, from my point of view, a certain amount of substance, and somebody who feels responsible to the customer. Today you have corporations, and I don't think there's anybody who feels responsible to the customer. When I say that, I mean that I look at these corporations, and they have people who are contractors who do online support, and this and that and the other thing. And the thought of, hey, nobody comes to the office anymore—I hate to get too philosophical, but we evolved to be dealing with people on a face-to-face basis and looking them in the eye. That's the way we evolved, and that was the only way we dealt with people until 12,000 years ago in the Agricultural Revolution. Then the Agricultural Revolution came along, and we created all these institutions. It's hard to believe, but we had no institutions before the Agricultural Revolution. There were no cities. There were no businesses. There was no economy. There were no institutions. As a result of the Agricultural Revolution, we created all these institutions. These institutions are artificial structures, and today most of our lives are spent dealing with artificial structures. It turns out that we are maladapted to dealing with artificial structures.

Virtual Corporations and Phase Shifts

ZIERLER: How do you connect institutionally this deep historical look at institutions and the agricultural revolution with the virtual corporation?

DAVIDOW: The virtual corporation is an extension of this process, where at first there were no institutions, then there became maybe blacksmith and a this and a that, and people started relying on other people for services. Institutions were created. We've just kept evolving until these institutions become, I would say, more and more synthetic; I'd have to use the word. They are less and less genetic and more creations. It was just mind-blowing to me when I—I had never thought about this, but we've only had institutions for 12,000 years. We spent 300,000 years evolving in an environment where the only thing we had were institutions of our genes. Then in the past 12,000 years we created all these other institutions, and we created this synthetic world, and we spend 80 percent of our time in this synthetic world. We, it turns out, just aren't that adapted to it.

ZIERLER: Lamenting the fact that corporations, the virtual corporation, there's little accountability to customers these days, was that something that you saw already happening in the early 1990s? Was one of your motivations in writing the book to try to prevent that detachment from corporate responsibility and customer service?

DAVIDOW: I think we were making an observation about what was happening technologically and we were observing it would have consequences. There are so many different structures. I guess a virtual corporation could become a virtual corporation by my old definition if it just subcontracted out manufacturing, but then it might subcontract out manufacturing, and then one day it might subcontract out distribution, and then it might subcontract out customer service, and ultimately you have a billion-dollar corporation with one person sitting at a computer, doing all these subcontracted services. I think that there's a real need to create institutions of substance that people are physically committed to. Look at the college experience. Presumably, you can learn everything virtually, and you can make friends virtually, but I think it's a very different thing. I graduated from Dartmouth I guess maybe 66 years ago, and I have a great deal of loyalty to Dartmouth. I went back to my sixty-fifth reunion and visited with my classmates and things like that. If I went to Virtual College ABC, I doubt whether I would have attended the sixth-fifth reunion or traveled to the East Coast to hang out with classmates. It's a qualitative thing. I think that a lot of what we're missing, the qualitative aspects of life.

ZIERLER: When you were writing The Virtual Corporation in the early 1990s, what were the models? Were there fully virtual corporations at that point, or were you more forward-thinking and seeing where the world was headed?

DAVIDOW: I think we were more talking about where the world was headed, and of course today, they're all over the place.

ZIERLER: By the standards that you applied in the early 1990s, there really weren't any true virtual corporations yet?

DAVIDOW: I think there were corporations in different stages between zero percent virtual and 100 percent virtual. I would say there were very few 100-percent-virtual corporations then and a fair number of them were zero-percent virtual.

ZIERLER: Among them, were high-technology companies more on the path toward becoming virtual than manufacturing companies, things like that?

DAVIDOW: High-tech companies contracted out manufacturing, so even they were moving in that direction.

ZIERLER: What about the idea of globalization, especially after the Cold War, and the idea that with the end of the Soviet Union, capitalism can thrive anywhere on the planet? Was that a relevant concept in thinking about where things were headed?

DAVIDOW: From my point of view, I was with Intel, and the world may have existed, but there was a big market for our products in the United States, and then lesser markets in Europe and Japan. We grew those markets over time. For example, Europe didn't have much high tech.

ZIERLER: In the world of venture capital, with companies that are really starting from scratch, was their model in the 1990s to really be as diversified as possible in contracting out a lot of their business?

DAVIDOW: I don't think so. Some of them wanted to have their own factories. A lot of these services infrastructures, you wouldn't have had a choice. There would have been no place to buy the manufacturing capability you wanted. You might have been able to buy assembly capability, but nobody was going to run sophisticated processes, for example.

ZIERLER: What about the American response to offshore production, losing American jobs to overseas production? Was there political and economic backlash to these ideas that would make the virtual corporation less appealing in some circles?

DAVIDOW: The United States was a high-cost, high-wage place. When everybody was getting all enthused about everything becoming interconnected, I used to tell people, "I've got something to tell you about everything becoming interconnected. If you interconnect everything, things either go to the average or they go to the extreme." If you interconnect everything, wages tend to go to the average, right? On the other hand, you can create some extreme situations where, because everything is interconnected, it goes to the extreme, where you have only a few delivery services, or one telephone company. We wouldn't want to have five telephone companies like they used to have in the old days. When my mother was growing up in Reading, Pennsylvania, if you had your phone service from one company, you couldn't talk to people who had phone service from another company. That doesn't make sense, so you've got to have a monopoly.

ZIERLER: With all of this interconnectedness, for better or worse, what were your views on government policies that either encouraged such interconnectedness, like NAFTA, and other policies that discouraged it, like tariffs and other trade barriers?

DAVIDOW: I personally didn't give a lot of thought to that.

ZIERLER: Isn't there an important role that governments play in how virtual corporations can become? Or you were focused more on business strategy?

DAVIDOW: Governments can put up tariffs and things like that, and import restrictions, and some do, like we aren't going to buy food from a particular area, and we protect the farmers, and we do this, and do that. We've always had all kinds of restrictions.

ZIERLER: The Virtual Corporation, unlike your two previous books, was coauthored. Tell me about Michael Malone and how he got to work with you on this project.

DAVIDOW: Mike is a very good writer, and I needed writing help. He's also very creative and he made contributions. Mike is a very smart guy. It wasn't that he just only wrote the book. He coauthored it.

ZIERLER: The idea of needing writing help, you didn't for the first two books; what changed this time? Did you have other responsibilities? Was it a time management issue?

DAVIDOW: I am very good at organizing ideas and laying them out logically. The ability to express things is a different skill. I needed help with expression, not so much with formulating ideas or logic.

ZIERLER: Let's move onto, of course, the topic that brings us together. In 1996, you are elected to the Board of Trustees at Caltech. Had you been up to that point an active alumnus at Caltech? Were you involved with Caltech before being named to the Board?

DAVIDOW: Not really. I had lunch with Ben Rosen and Gordon Moore one day, and I said, "I'd like to become involved with Caltech." They said, "Why don't you join the Board? We need marketing help." That was me.

ZIERLER: Of course I know why you would have known Gordon, but how did you know Ben Rosen?

DAVIDOW: I guess Ben worked for Morgan Stanley, but he was the financial analyst who followed Intel, so I knew Ben from that.

ZIERLER: Tell me about joining the Board of Trustees. What were some important things that were happening at Caltech at that time?

DAVIDOW: What I was interested in doing was teaching Caltech how to raise money, and helping them—I remember Tom Everhart telling me he had a great development office, and I looked at it and I thought it was the worst development office I had ever seen. I helped them recruit a new head of development. Caltech has gotten pretty good at raising money now. We raise $300 million a year. In the past, we were raising a hundred.

ZIERLER: Had you been involved in higher education development before? Was this a new world for you?

DAVIDOW: Yeah.

ZIERLER: What were some of the unique aspects of it?

DAVIDOW: Development is a marketing problem. You articulate your purpose and you find people to whom that purpose is important. Various philanthropic institutions do a better job of it than others.

ZIERLER: What do people need to know or appreciate or even be inspired by, beyond the greatness of an individual who leads a university?

DAVIDOW: I always think back on the statement, "People do things for their reasons, not ours." So, go out and find what those reasons are. I think the mistake most institutions make is they say, "This is what we want to do. Support us because that's what we want to do," rather than trying to say, "This is what we want to do. Who would that be appealing to?" That's a very different thing. If you say, "This is what we want to do, support us," you get one kind of gift. If you can make what you do important to that individual, you get a substantially larger one. You can package things to make that more tangible, like you can create institutes of neuroscience, or institutes of geobiology, things like this. Dianne Newman at Caltech I always think of as having invented the field of geobiology. I love geobiology. Caltech hasn't really gone far enough towards creating an institute of geobiology. Caltech is doing very well at raising money. I have all these ideas about how they could do it better, but they're doing a great job, and I feel that maybe keeping my mouth shut is the most important contribution I can make.

ZIERLER: [laughs] When you first started looking at the books, when you first saw the development operation under Tom Everhart, what were you seeing? Was Caltech financially sustainable but not doing as well as it could have, or was it a ship that needed to be righted?

DAVIDOW: Caltech didn't have a very big endowment. It has got a much bigger endowment now. It was getting people to think in terms of a five-billion dollar endowment of Caltech, and they never thought in terms of that. I forget what the endowment is now; it's a little bit under four, I think. I don't think that we had paid sufficient attention to development at Caltech. We're doing a much better job now.

ZIERLER: When did things start to get on the right track, from your first observations of what development looked like to where things are today, and how did you help make that happen?

DAVIDOW: It's when we hired the new director of development. I forget what his name was, but he got things started on the right track. We had a director of development who was I think one of the world's nicest people; he got people to give donations because he was personable, not because he was a great targeted development officer.

ZIERLER: The idea of thinking along the lines of customer service in development, who are Caltech's customers? Who are the various groups that it can and should reach out to?

DAVIDOW: Caltech has lots of work to do in these areas. For example, it has got this Institute for Quantum Information now, and it should have neurobiology and things like this, and it should do a better job of creating infrastructure in those areas so that it could go out and raise money. Of course that requires a faculty member committed to doing it, and that isn't necessarily something that a faculty member wants to do.

What Endowments Make Possible

ZIERLER: I wonder if you can reflect on the overall purpose of an endowment for a college. What does it make possible, as opposed to annual operating funds?

DAVIDOW: It is part of their annual operating funds. The sources of revenue for Caltech—it gets a lot of government contracts, and many institutions don't, and it has got tuition, which I think tuition is like $30 million a year. It has got a $500 million budget, so it wouldn't matter whether they charged tuition or not, from a practical point of view.

ZIERLER: What about the idea of Caltech becoming increasingly involved in industry? What are the values and the partnerships to be exploited in that regard?

DAVIDOW: I think there are some industrial engagements, something they're doing now with I want to say Amazon, somebody in the neurosciences area. You don't want Caltech doing industrial research. What you'd like is industry and government to give money to Caltech with no strings attached, and Caltech could do whatever it wanted with it. The idea is to try and find a way to get as close to that as possible.

ZIERLER: You mentioned in an earlier conversation that you have little regard for the idea—or even the excuse—that Caltech has a small alumni base so there's only so many people to go to for support, and that really the whole world can be a source of support for Caltech. What have you learned about inspiring and engaging people who have the ability to support Caltech but might not have a direct personal connection?

DAVIDOW: It's a matter of finding things that the institution wants to do and packaging them in some way that people want to support it. I take the field of quantum information, and I'm sure that there are a whole slew of Caltech alumni who are interested in quantum information, but I would bet with eight billion people in the world there are many more people outside of Caltech that are interested in quantum information than there are inside. The question is, how do you get those eight billion people to take an interest in Caltech and do things, and donate?

ZIERLER: Of course there must be a marketing aspect to that as well. What is the connection between marketing Caltech capabilities and expanding its development capabilities?

DAVIDOW: You've got to find things that are important and that you're superior at. If you can find things that you are important and superior at, then there are people to whom those things are important who have money who will support you. The question is, how do you go about finding them? Some of that can be done with just outreach in the local community.

ZIERLER: Did David Baltimore eventually come around to your ideas once he saw what development was capable of doing?

DAVIDOW: I didn't have a lot of influence with David Baltimore.

ZIERLER: What about when Jean-Lou Chameau came in?

DAVIDOW: Jean-Lou Chameau was, as far as I am concerned, the first president at Caltech who was really interested in development. He took an interest in improving the development office. Jean-Lou Chameau was good on the administrative side of things, and Caltech needed that.

ZIERLER: Caltech needed that administrative acumen?

DAVIDOW: Yes.

ZIERLER: What did he accomplish in your eyes? What was his legacy?

DAVIDOW: I think he began to focus on just a lot of the administrative issues. I can't give you a list of them, but things people should pay attention to, like whether there was adequate child care and things like this. I'm not saying that Chameau spent time on that issue, but getting people in place who did spend time on things like that was important.

ZIERLER: When the financial crash, the real estate crash, of 2008 happened, what did that mean for Caltech? What was the response?

DAVIDOW: I know we cut some expenditures, but I don't think it had that dramatic of an effect on Caltech. Caltech is an island, and it is isolated from so many things because it is so excellent and so critical in so many areas, and those needs don't go away because there's a 2008 financial crash.

ZIERLER: Is that to say that regardless of its capabilities, there was a financial basis of stability that put Caltech in a better position? In other words, when you joined the Board in 1996, if there had been a similar crash then, would Caltech have been as insulated?

DAVIDOW: I don't know.

ZIERLER: What was Jean-Lou Chameau's leadership style during this period? How did he respond?

DAVIDOW: I think Jean-Lou was very good at facilitating things, and I think he had much more effect on the administrative side of things.

ZIERLER: When you look at the Board of Trustees, all of these individuals with their expertise, all of their experience and success in the world of business, how is that an asset during a time of crisis like 2008? What are the relevant perspectives and experience that a member of the Board of Trustees can bring to Caltech during this period?

DAVIDOW: Everybody on that Board has relevant experience that gets—knowledge gets spread through committee meetings and things like that, and perspectives. I see the principal job of a board as helping Caltech make its strategy more relevant to the world in general, as opposed to just the scientific community. I see the board as helping broaden Caltech's perspective.

ZIERLER: In your own experiences, what was the impact of the 2008 crash on venture capital? What did that mean for your own company?

DAVIDOW: Business gets tougher, and I think you become more cautious about expenditures, and you tend to take less risks, but the kinds of things that I was always looking for were to accomplish something that was important, and then if you were in a financially tough time, you had to do it in a more conservative way. You didn't stop doing it.

ZIERLER: Was it effective as a weeding-out process as well?

DAVIDOW: Well, yeah, but if I look at it today, it certainly—the weeds have grown.

ZIERLER: [laughs]

DAVIDOW: What bothers me about the companies today is that I think we used to found companies to make things more efficient or to make people more productive, or to make this, thing, and the other thing. Now, we're founding companies to entertain people, and of really negative social value, and no economic value. Social networking could serve a useful purpose, and I'm sure it does to a certain degree, but you could get rid of probably 98 percent of social networking and it could still serve that purpose.

New Technologies and Old Problems

ZIERLER: We can return to your writing career. In 2011 of course you publish Overconnected. The internet obviously at this point had been well established. You had seen its rise. What were some of your early concerns as the internet became increasingly dominant in our lives?

DAVIDOW: As I said, when you interconnect everything, it either goes to extremes or it becomes average, and I just wanted people to understand that. It has gone to extremes, Facebook being one extreme. I don't think that 10 years from now or maybe even today, many people know that the book exists –

ZIERLER: It's right there in the subtitle—the promise—and the threat, of the internet. What were some positive aspects? What did you see as promising aspects of the internet?

DAVIDOW: The internet is one of the greatest inventions that humanity has ever had. It can be a source of great productivity and things like that. Everybody always says that every technology has good and bad uses. The thing that bothers me today is that one of the worst things that the internet has done, and social networks, is that they have driven the cost of one-to-many communication to zero. There's a difference between free speech and free communication. We have never had free communication in the history of humanity before. There was always editors, or you were always charged for newspaper ads, things like that. We have created free communication without controls. Free communication is an extremely valuable commodity, and, boy, is it being abused, whether it's fake news or the other things going on. That's one concern I have as a result of the internet and social networking and all the things that have happened.

ZIERLER: In thinking about the various hazards that the internet has created, I wonder in writing the book how you differentiated between problems that the internet exacerbated, versus problems in society that the internet truly created.

DAVIDOW: I don't know if when we say the internet created the problems that that's right. I'm sure it created problems, but I don't know how to differentiate between the things it exacerbated and the things it created. I was thinking when you said that about the highways. The highways created problems in the sense that it created traffic and pollution, but it also created the suburbs—which, maybe that was a problem, too. It seems to me like we just have so many problems everywhere you look. I was watching a Bing Crosby movie, White Christmas, and thinking about counting my blessings, and you know, you fall asleep counting your blessings. I thought, hey, why don't we just spend more time focused on counting our blessings and not spending all of our time agonizing over this, that, and the other thing. I'm sure there is a lot of pain out there; I'd rather count my blessings.

ZIERLER: You did write a book about the problems posed by the internet. I'll return to the idea of government policy. Is or was there a role that you saw in government policy to mitigate some of the pernicious effects of the internet?

DAVIDOW: Sure there was. One of the best things that the government could do was to make communication more expensive. Free communication is being abused, so why not make communication expensive? You can just do that by charging a nickel for everybody who you send an email to, or if somebody wanted to visit an internet site to get valuable information, why shouldn't they pay for it, or have the site pay for it? Free communication is a real problem.

ZIERLER: We'll return to Caltech. Tell me about your decision with your wife Sonja to endow the presidency. Did that happen when Tom Rosenbaum came in as president?

DAVIDOW: I'm not sure quite when we made that decision, quite honestly. I wanted to give some kind of unrestricted endowment to Caltech, and endowing quote-unquote the President's Chair was the way they recognized the gift, but really it is unrestricted money so that when somebody walks into Tom's office and says, "I've got an idea that will save the world but I need $100,000 to figure it out," Tom can say, "Here's $100,000. Go figure it out." The way the endowment is written, it's short-term support for projects. It was a way to initiate a project, and after the project got off the ground, if the world wasn't interested in it, too bad.

ZIERLER: There's some free-market principles at play here.

DAVIDOW: I guess!

ZIERLER: Tell me about meeting Tom and what sense you got from his vision for Caltech when he became president.

DAVIDOW: Tom is just a very solid guy who understands what an academic institution should be and who has the respect of the faculty. I think he has been great.

ZIERLER: Your interests in development, have they aligned with what Tom has wanted to accomplish?

DAVIDOW: I don't think Tom has been particularly focused on development, so I guess not.

ZIERLER: Yet Caltech, as you say, is successfully raising, year after year, $300 million.

DAVIDOW: I think there are all kinds of things we should do in development, but once again, Dexter has been very, very good at finding big donors, and more power to him.

ZIERLER: What about the Break Through Campaign? What role did that play in Caltech's overall financial security, and how was it a model for Caltech going forward?

DAVIDOW: I have this role, this image, of development as we should always be in a campaign about something. I just see it as we should always have something we're focused on to do something special. So, I don't see Break Through as anything particularly different or exciting.

ZIERLER: From a marketing perspective, the idea of building excitement through a campaign, that doesn't resonate with you?

DAVIDOW: This is unfair, but I think places do campaigns because they don't have good development processes. If they had good development processes, they would be always doing campaigns, but they wouldn't call them campaigns. They would say, "I want to raise $100 million to support neuroscience," and I want to do this, and I want to do that, everything. To say that I have to do a campaign—I understand why people do them, but why shouldn't that just be going on? Why shouldn't the faculty be saying, "Hey, I want $100 million to support quantum information"; "I want $200 million to support geobiology"; I want something else here and there. Why shouldn't everybody be encouraged to articulate those needs? But once they've articulated those needs, they have to put in place some kind of institutional framework so that those needs, if money is given to them, can be satisfied.

ZIERLER: I wonder, though, if one of the aspects or the perceived values of a campaign is that, as you were saying, a more targeted push in a particular area like neuroscience or quantum information or geobiology would possibly leave out potential donors who are not particularly focused in their interests but they just want to generally support Caltech. Isn't one of the potential benefits of a campaign, that people might want to give without specific ideas of where and how they might want to give?

DAVIDOW: You have a general fund. You have an endowment. There are lots of ways that anybody can give if they so choose. I know Dexter is working on a $50 million gift, and I'm sure that individual has some idea of what he wants to accomplish with the money.

Autonomy and a Brave New Future

ZIERLER: We'll return to your writing career with The Autonomous Revolution that came out in 2020. When did you start thinking about autonomy as a serious force in modern society, and how connected is that with the internet?

DAVIDOW: I really wanted that book to be about what I thought was an absolutely brilliant idea. I didn't like the title of the book, but that's something the publisher wanted.

ZIERLER: You'll have to tell me, what was the idea?

DAVIDOW: Social phase change. I wanted people to understand that society underwent phase change, and that society had done that twice in the history of humanity—the Agricultural Revolution and the Industrial Revolution—and that the Autonomous Revolution was the next social phase change. When something goes through phase change, it changes form, it obeys different rules, it uses different tools. When society goes through phase change, it changes form—like the Agricultural Revolution, we went from being hunter-gatherers to being towns and agricultural communities. The Industrial Revolution, we created industrial cities and things like this. We used different tools. We used factories for the Industrial Revolution, and we used hoes and plows for the Agricultural Revolution. Society had different rules. We created cities and things like this, and nations and things. The book was about the fact that we were going through the third phase change in human history. I thought I had encountered academics who never talked about social phase change, and I thought, this is a wonderful idea, and my hope was that maybe one or two philosophy or sociology or psychology departments at universities would pick up on it, and I'd be world famous. But I don't think anybody has, and I haven't become world famous. And I am so disappointed!

ZIERLER: [laughs] Do you see social phase change as it relates to autonomy as developing slowly, or is this something that really picked up steam in the past few years?

DAVIDOW: The rate of social change has accelerated tremendously, and I don't think we're capable of dealing with it. People can only accept a certain rate of change and then they start going off the rails, and what we're seeing now is since the internet was introduced in the year 2000, a tremendous increase in mental health problems. I think we're going through a mental health crisis at a world level. Depression is increasing. Anxiety is increasing. It's unfortunate, but people are having trouble coping with this.

ZIERLER: In identifying the phenomenon, the phase change itself, what do you hope in sharing these ideas, as part of the solution to these problems?

DAVIDOW: People will spend more time in institutions of their genes—family, friends—and they will spend less time in virtual societies and virtual space. Virtual space is not a good place—virtual space, there's a difference between an environment and a tool. Virtual space should be used as a tool, and people are using it as an environment. The analogy I like to give is a refrigerator or a meat locker can be used as a tool or an environment; many of us would not choose to live in a meat locker. Those of us who are choosing to use virtual space as an environment are living in meat lockers, and we should only be using it as a tool. That means I use virtual tools to facilitate my relationships in physical space rather than as a substitute for them. Certainly you can have some relationships in virtual space, but you're not going to be happy living in virtual space.

ZIERLER: Is this to say that the whole concept of—like Facebook's shift toward the Metaverse—are unwelcome developments, as far as you're concerned?

DAVIDOW: I think that Mark Zuckerberg's understanding of humanity—I think he has got a very low social IQ. Why should I let him organize people's lives?

ZIERLER: What's the pushback? How do we make it so that people are more involved in their genetic environments and not their synthetic environments?

DAVIDOW: The problem is that we are devoting a tremendous amount of time to making these synthetic environments more and more fascinating, so we've got industries that prosper by creating mental health disasters. During the Industrial Revolution, we had industries that prospered by polluting. This is just another form of pollution.

ZIERLER: People need to recognize this first before they start to think about solutions.

DAVIDOW: Yeah.

ZIERLER: We'll bring the conversation right up to the present to close out our discussions. Tell me what's going on right now. Are you active at all in the world of business? Are you involved in investing or consulting at all?

DAVIDOW: At a minimal level. I'm trying to do a little writing, and spending a lot of time with family. At 88, I'm not going to change the world.

ZIERLER: [laughs] It's wonderful to hear that you're still writing. What do you write about these days? When are you inspired to pick up the pen?

DAVIDOW: Well, let me read you the first words that I'm about to write. Ah, here it is: "Humanity's environmental crisis. Humanity is facing an environmental mental crisis. Our brains, minds, and senses increasingly find themselves entrapped in environments to which they are maladapted. The consequence—humanity's mental health is in decline." How's that for an optimistic view of the world?

ZIERLER: [laughs] Have you ever reflected on the irony of all of the pathbreaking work that you've done in Silicon Valley and the role of Silicon Valley in creating the world for now which you're so concerned?

DAVIDOW: I think at one point, Silicon Valley was making important social and economic contributions, and today I don't think it is, or a lot of it isn't. It's unfortunate. It would be nice if people were focused on doing things that had social value. Social networks could be designed so that they made a much larger contribution to social value and were far less destructive, but unfortunately they aren't today.

ZIERLER: Is that to say that the situation can be summed up in the joke that there's no more silicon in Silicon Valley? Is that really the heart of the issue here?

DAVIDOW: Oh, I don't think it's the heart. There are just so many important things that people could do. The question is, are they going at it and saying, "How do we accomplish something that improves the quality of life?" as opposed to "How do we accomplish something that makes money?" I think of Bill Hewlett and Dave Packard, and they would tell you to do the right thing, and profits will follow. Today it's do the thing to make money, and whether it's right or wrong, if it makes money it's okay.

ZIERLER: Do you think that that worldview is still alive and well in academia that you start with doing the right thing, and not profits per se, but the benefits of discovery will follow?

DAVIDOW: I think it's pretty much alive in academia.

ZIERLER: What are your current connections and projects at Caltech? Where are you involved these days?

DAVIDOW: I am mostly involved with their development efforts. I haven't spent as much time on the academic things, which are more fun.

ZIERLER: As you say, sometimes if the system is working, the best thing you can do is stay quiet. [laughs]

DAVIDOW: Yes. [laughs]

ZIERLER: Some retrospective questions about your career—what are you most proud of in all of your contributions in Silicon Valley?

DAVIDOW: My family. The thing I'm most proud of is with my wife, and so much of it is her work, we created a wonderful family.

ZIERLER: The work was essentially the means to help your family prosper and grow.

DAVIDOW: Yeah, and raise their families.

ZIERLER: What about your second career in consulting? What have you made possible in the world of venture capital in high technology?

DAVIDOW: It's various projects that I've worked on. The ones that have been successful have been fun.

ZIERLER: Is that to say that the ones that have not been successful have not been fun, or have you been having fun the whole time?

DAVIDOW: It's always more fun to be successful.

ZIERLER: [laughs] What about in all of your work as an author, in reaching audiences and having the privilege of sharing your ideas? What has been most meaningful to you there?

DAVIDOW: I think I had the most fun with Marketing High Technology. If I had been able to sell the concept of social phase change, it would have been great, but I haven't been able to.

ZIERLER: Is it possible that it's such a forward-thinking idea that we need to go through more of the phase change before people get onto the idea?

DAVIDOW: I don't know. Maybe it's not a very good idea at all! [laughs]

ZIERLER: [laughs] You can be your own harsh critic sometimes. Finally, Bill, looking to the future, what keeps you interested? What do you want to stay involved in? Where do you want to continue to have a voice in these trends that you've studied and written about in your career?

DAVIDOW: Going forward, I'm going to be supportive of the things that I've been involved in, whether UCSF or Caltech, and the family. The family is the most important thing to me.

ZIERLER: The genetic environment, that's what it's all about?

DAVIDOW: Right.

ZIERLER: This has been a wonderful series of conversations. I want to thank you so much first for having me over to your home, where we got to interact not in a virtual environment but in person, and of course for being able to continue over video conference. It means so much to me, and it's wonderful for Caltech. I want to thank you so much.

DAVIDOW: Thank you very much for spending time with me, David.

[END]