Intel Case Study - Networking

In 1968 Noyce was a founder and general manager at the innovative Fairchild Semiconductor company, where Moore was also Head of R&D. Fairchild Camera and Instrument, who owned the Semiconductor branch had passed Noyce over for promotion to CEO of the Group three times even though only his branch, Fairchild Semiconductor, was prospering significantly. Observing that numerous staff had already broken away from Fairchild to form their own companies and triggered by Fairchild’s decision to bring in an outsider CEO, the pair decided to do the same.

Both Noyce and Moore had a history of breaking away and starting-up when they disagreed with a company’s vision: they were two of the “traitorous eight” who had left Shockley Semiconductor to found Fairchild in 1957. This time Noyce and Moore chose to form a company called Intel creating semiconductor memory products.

Investors were drawn to Noyce and Moore’s new company, Intel, in large part because of the personalities behind it. The pair’s industry experience was extensive and so was their academic know-how; both Noyce and Moore held PhDs and each had a successful history of innovation, with the patents and commercial applications to prove it. Furthermore, the two made great partners, with complementary attitudes and skill sets. Noyce later became the public face while Moore oversaw the technical vision.

Noyce and Moore were also willing to put their money where their mouths were, investing $490k between them. Noyce’s connections meant he was on good terms with Arthur Rock, an early venture capitalist who helped them draw up a list of potential backers to raise the additional £2m they needed and bring expertise into the business. By the close of that afternoon, their investors were agreed. The pair’s reputation was such that when the local press ran a subsequent article about their new start-up a few days later, they were inundated with the CVs of people who wanted to work with them. Within a week their idea had become a reality.

Bright personalities were not all that was on offer - behind this pair sat their innovation: semiconductor memory products. Moore later observed: “Semiconductor memory was one thing where it looked as if you could build the same product in large volumes even though it was complex.” The pair was sure that electronics and computing had a growing future, which, together with their experience and the strength of their innovation, should propel the company’s growth. Intel’s continuous innovation meant by 1971 the company led the industry with its first microprocessor and the world’s first erasable programmable memory.

Lessons on Network

• Through their careers – which in turn had given Noyce and Moore expert academic and commercial understanding – this team had built up a strong network, which could then put them in contact with like-minded investors for funding.
• The pair had known each other throughout as a result of their working careers. The partners had already achieved a lot before Intel and as such were a strong team in the eyes of investors.

Related Lessons

• Noyce and Moore had histories of innovation and a strong product with which they were further able to develop interest.
• Catching the beginning of a growth industry was an appetiser for investors.
• With investment in place, a little PR and the strength of their reputations, the team was then able to attract the best staff to launch a successful business.