Op-Pieces

Where are Nigerian Tech’s “Traitorous Eight”?

Is Treachery bad if it is for a good cause?

As Caesar arrived at the Senate, Lucius Tillius Cimber grabbed Caesar’s shoulders and pulled down Caesar’s tunic. Caesar then cried to Cimber, “Why, this is violence!” At the same time, Casca produced his dagger and made a glancing thrust at the dictator’s neck. Caesar turned around quickly and caught Casca by the arm. He then said, “Casca, you villain, what are you doing?” Casca, frightened, shouted “Help, brother!” Within moments, the entire group of Liberators – including Brutus – was striking out at the dictator. Caesar attempted to get away, but, blinded by blood, he tripped and fell; the men continued stabbing him as he lay defenceless on the lower steps of the portico. Around 60 or more men participated in the assassination. Caesar was stabbed 23 times.

In the Nigerian (pronounced: Lagos) tech scene, we hear of people exiting relationships in order to go a different path. Most times, we see this as a form of betrayal. I do not pretend to have all the facts so this is not about me attempting a post-mortem. I know it hurts. I have left situations myself and I have been left behind on occasion. They both take a huge toll on relationships. Hugo Obi and Jason Njoku. Bankole Oluwafemi and Techloy. Dika Oha and DealDey. Raphael Afaedor/Tunde Kehinde and Rocket Internet. Michael Ugwu and iROKING. ‘Laolu Samuel-Biyi/Adeoye Ojo/Babafemi Lawal and Jumia. There must be scores more breakups which were not deemed newsworthy.

Traitors or liberators?

In the case of Caesar, the Liberators’ premise for the assassination of Caesar was the fear that he would overthrow the Senate, becoming a tyrant. Tellingly, after the assassination, the conspirators never restored the Roman Republic. This broken promise led to the Liberators’ civil war and, ultimately, to the Principate period of the Roman Empire. This outcome may have been averted if they had done as they had promised. Do you ever stop to think how much brighter the landscape would be if each and every one of these founders (and their startups) succeeded, matching or even surpassing where they started from?

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The new New-School. Could these faces be the leaders who launch a generation of startups?

 

I do.

I imagine the economic activity they could spur. The jobs and wealth they would create. The spring it would bring to everyone’s stride, akin to the effect of the good, clean and wholesome rags-to-riches narrative being woven around the $16bn WhatsApp acquisition. As everyone knows by now, both Jan Koum and Brian Acton are ex-Yahoos (is that a thing?). Previous work experience at a successful (or even unsuccessful) startup is as valuable as – or even more so than – an MBA.

Many startup veterans go on to do awesome things. They typically have very strongly held concepts about how they would like to build their own business and what they would never do. In the course of my customer development interviews for PushandStart, I have interviewed several founders. Many patterns have emerged. A phrase I frequently hear from ex-bankers turned founders is “I always make payroll on time”. They often go on to tell me of their hairy escapes, sometimes having to arrange loans or beg just to ensure there are no unpleasant surprises in store for employees on payday. Make of that what you will.

 

Cross-pollination of ideas boosts innovation

The inspiration for this post came from an insightful article The Revolving Door of Developers in Nigeria by Ajibola Aiyedogbon. Please go and read it if you have not already.

I sense that sometimes, people simply need to move on for their own development and self-actualisation. Fighting this is futile. Rather, we should accept it and [conspicuously] measure performance. Now, as part of the Startup Royalty, they are expected to do better. They now know the right VCs and angels. They understand processes and markets. The first time, they were carried to the Table of Men but now they must walk in and in so doing, shine the light for others.

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The Sign of Eight

The Traitorous Eight are a part of Silicon Valley folklore and we need to understand their story for any of this to make sense. It all began with William Shockley – an inventor of the transistor and a university professor – and the Shockley Semi-conductor Laboratory. The lab was borne out of Shockley’s decision to establish his own mass production of advanced transistors and Shockley diodes. After an initial false start, he found an investor to back him to the tune of $1m. Now, Shockley was a brilliant scientist who received a Nobel Prize in Physics but he was an atrocious manager of men. More on that later on.

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The Nobel Prize winning Shockley turned out to be a poor manager

 

Oddball Bill

He made the decision to situate his labs in out-of-the-way Mountain View, close to Palo Alto. It was a weird choice as the vast majority of semiconductor-related companies and professionals were based on the East Coast of the United States. Unable to attract experienced professionals, he decided to hire and groom fairly inexperienced but razor-sharp scientists. This was in 1956. Julius Blank, Jay Last, Gordon Moore, Robert Noyce and Sheldon Roberts started working in April/May, and Eugene Kleiner, Victor Grinich and Jean Hoerni came during the summer. Last was the youngest at 23 while Kleiner was the oldest at the ripe old age of 33. Six of them had PhDs.

Shockley was an odd man in some ways. For example, he refused to hire technical staff, believing that his scientists should be able to handle all technological processes. He also made some strategic missteps that hurt team morale such as his refusal to work on bipolar transistors, focussing instead on Shockley diodes which took too much effort and turned out to be a commercial dead end. His communication skills were also very suspect, and he went as far as setting up a secret project on Shockley diodes. Shockley had never run an enterprise but now with an empire to call his own, the less savoury aspects of his character came to light. Historians claim that he was wont to seek rivals, even within the ranks of his subordinates.

 

Round one. Fight!

Things came to a head in 1957 when the team, led by Moore, approached Beckman (Shockley’s investor) with an ultimatum. Get rid of Shockley or lose us. Beckman refused. On September 18, 1957, Blank, Grinich, Kleiner, Last, Moore, Noyce, Roberts and Hoerni resigned from Shockley Labs. They became known as “Traitorous Eight”. Shockley went ahead to retroactively patent the technology which the Traitorous Eight had developed while at Shockley Labs but that proved too little, too late.

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Fairchild Semi-Conductor

 

Building the Tower of Babel

Having already secured $1.38m in funding from Sherman Fairchild to set up a rival semi-conductor business called Fairchild Semi-Conductor, the Traitorous Eight immediately set a clear goal to produce an array of silicon diffusion mesa transistors for digital devices, using the research results of Bell Labs and Shockley Labs. Between 1960 and 1965, Fairchild was the undisputed leader of the semiconductor market, both technologically and in terms of sales.

 

Run your race

In March 1968, Moore and Noyce decided to leave Fairchild to start what would become Intel. Grinich left for a life in academia. He later co-founded and ran a several companies developing industrial RFID tags. Blank was the last of the Traitorous Eight to leave Fairchild, in 1969. He founded the financial firm Xicor, specialising in innovative start-ups, and in 2004 sold it for $529 million. Hoerni and Last went to Amelco which later became Teledyne.

In 1972, Kleiner partnered with Tom Perkins from Hewlett-Packard and they both founded the venture capital fund Kleiner Perkins Caufield & Byers, which has been involved in the creation and/or funding of Amazon.com, Compaq, Genentech, Intuit, Lotus, Macromedia, Netscape, Sun Microsystems, Symantec and dozens of other companies. All told, the Traitorous Eight’s actions gave rise to five companies (not counting Fairchild) which eventually led to the formation of 21 other companies at the last count. It was Last who said: “When you are in your late 20s you don’t know enough to be scared, we just did it. We just knew what we had to do and we did it.”

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Fruits of Labour

 

The Empire in all its glory

The illustration below what can happen when brilliant people refuse to compromise and decide to follow the road less travelled. The odds they faced were immense. Not too dissimilar from the ones we currently face in Nigeria. There were no angel investors and there was no venture capital industry to speak of. In spite of all this, they forged ahead and played a crucial role in building the Silicon Valley we all admire today.
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[Image Credit: Sourced by PushAndStart]

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Finance guy, volunteer teacher, unsigned blogger, and high functioning recluse. Interested in business strategy, new ideas and capital formation.

4 Comments

  1. It will certainly come to pass. Just take a look at Nollywood and you'll realise there's always a growth phase where we'll look back and say. Wow, I was glad I was there from the start.

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