The Meaning of Value, The Value of Meaning—Bob Swanson at Transitron
Robert H. Swanson, Jr., built a company — a culture — that was the most profitable in the semiconductor industry, yet flew below the radar. Its employees famously ‘never left’ in Silicon Valley where job-hopping is applauded. Once called the Toughest CEO in the Valley, he attracted and retained many of the most talented and fiercely independent analog engineers. For over three decades, relentlessly vigilant to his founding strategy, Linear Technology Corporation focused on analog while the rest of the industry went digital.
There’s no simple equation for how he did it, nor did he do it alone. To understand better, you have to integrate the legendary characters he met and the forces at play throughout his career, including his early years at the star-crossed Transitron Electronic Corporation.
The Cold War
In the skies outside of Boston after World War II, you couldn’t mistake the screaming whistle of a P-51 Mustang in flight. Bob Swanson could watch military training exercises from his house near Hanscom Air Force Base and dream of flying. Some people look to the sky and see possibilities, Bob looked to the sky and saw dogfights.
Like many kids of his generation, he wanted to be a fighter pilot. American nerves were on edge in the 1950s due to the Cold War and the constant threat of a nuclear attack from the Soviet Union. In 1953, news of a Soviet rocket launch proved they were ahead in the arms race, making war more likely and intensifying the need for the nation’s best and brightest to do their part.
The most direct path to flight school was the Navy’s 18-month program that required at least two years of college. So Bob enrolled at Wentworth Institute of Technology for a two-year degree in Engineering. No one from his family had ever attended college.
While in school, the inter-continental ballistic missile program had a series of spectacular failures with Atlas rockets blowing up within seconds of lift-off. That made the news of the Sputnik satellite all the more shocking. In October of 1957, the Soviet Union succeeded in launching a beachball-sized satellite into orbit — proving nuclear warheads could reach America.
The urgency created by Sputnik highlighted the shortage of scientists and engineers; one could sense throughout the community that studying engineering was a patriotic duty. Bob’s focus was math, but he was intrigued by a course in transistor physics. The nascent transistor technology was still cutting-edge and it was quite rare for any school to offer such a course. He would go on to get a degree in Industrial Engineering from Northeastern University.
Fresh out of school in May 1960, Bob took the test to go into the Navy. Had there been an immediate slot for pilot training he would have gone down that path. But Bob would have to cool his jets until December if he wanted to be a Navy pilot. Meanwhile, he needed a job to make car payments.
Transitron Electronic Corporation
The world’s second-largest semiconductor electronics company at the time, Transitron, happened to be less than 10 miles from his home. They had just won a major contract with Lockheed to build transistors for the Polaris missile program and were hiring. Despite having a safer job offer from the more established Polaroid, he decided to apply.
He stood in line with people applying to be operators, engineers, and clerks. There was a line on the application for special skills, so he wrote “advanced statistics”. The personnel manager happened to be milling around the lobby and picked up his application. “Do you know statistics?” he asked.
“Yeah,” Bob nodded.
“Come with me,” he said as he walked away.
They took Bob to a room and brought in several people who started grilling him on statistics. Bob knew statistics, including how to do a chi-square test. Along with the heads of manufacturing and transistor development, was the chief engineer — a tall, lanky guy named Nick DeWolf. Bob had no idea who they were or why such senior folks were so interested in him. Evidently, one of the requirements from Lockheed for the Polaris germanium transistors was statistical control including the chi-square distribution. They offered Bob a job on the spot.
Bob explained that he had an offer from Polaroid but he couldn’t start for two weeks because his new boss was on vacation. So Nick said, “I’ll tell you what. You work here for two weeks and if you don’t like what you’re doing then you can go work for them.”
Let’s pause for some context. The transistor was invented at Bell Laboratories in 1947. Western Electric licensed the technology in 1951; Western Electric was the commercial arm of AT&T whereas Bell Labs was the research arm. Many people bought licenses and started companies to make transistors. One of them was David Bakalar, a Ph.D who had worked at Bell Labs, and he started Transitron with his brother. He recruited Nick DeWolf from General Electric, along with many folks from Europe. Nick had been focused on testing transistors at GE because two-thirds of every batch were trash. The technology was still in its infancy; no manufacturing or test equipment existed so you had to build your own. The biggest market was the military and there was plenty of money behind it thanks to Sputnik. So any type of engineer was in demand, but one who could implement statistical process control was particularly valuable to Transitron.
Bob figured he had nothing to lose and it could at least help with the car payments on his ’57 Ford convertible until he went into the Navy. He took the job.
He immediately started analyzing the data; eventually, his work only took a few hours a day, so the operators taught him how to take measurements using a Tektronix 575 curve tracer. Then they invited him out on the manufacturing line to see how the transistors were made. He was doing experiments and learning quickly; learning what they weren’t yet teaching in school. When the Polaris transistor was ready for production, Pierre Lamond offered him the job of production engineer.
Instead, he opted for a role they called ‘control engineer’ on their diode line. Beyond just diodes, he went to all the other departments to see if his knowledge of statistics was of value to them in any way. Obviously, he never went back to Polaroid. After three months he gave up on the Navy.
The Lesson
David Bakalar was 34 when Transitron went public in 1959. Together, he and his brother made over $34M that day. He was a prolific recruiter and attracted some amazing talent to Transitron, but he didn’t share the wealth. They were creating a brand new industry while doing meaningful work for the Cold War effort, but management didn’t value the workers.
Within a year after hiring Bob, Nick DeWolf left to start his own company, Teradyne, making semiconductor test equipment.
Nick said, “…the people who owned the company made the mistake of not sharing the stock with any of the employees… We were all working for love. Then they went public. And they got on the front cover of Fortune Magazine… So the stock shot up. The people who owned the company [the two Bakalar brothers], were suddenly possessors of a big pile of dough… And they grew to believe that it was all just their own personal efforts that had made the company work.”
People have a natural sense of fairness. They know when they aren’t being valued or respected. As Nick said, “We were all working for love,” but they weren’t treated fairly in return.
Hardly anyone remembers Transitron today. Those who do remember it, think of it as a place that had a lot of talent but couldn’t manage to retain any of it. They clearly thought of engineering talent as a commodity. Within the electronics industry, many well-known people passed through Transitron:
- Wilf Corrigan (co-founder/CEO of LSI Logic)
- Nick DeWolf (founder of Teredyne, Inc.)
- Dave Fullagar (inventor of the uA741 op-amp, co-founder of Maxim Integrated)
- Jim Diller (Fairchild engr mgr, National Semiconductor, founder of PMC-Sierra)
- Hans Camenzind (inventor of the 555 timer at Signetics)
- Pierre Lamond (Fairchild mfg exec, co-founder* of National Semi., venture capitalist)
- Tom Longo (founder of Performance Semiconductor)
- Les Vadasz (part of the founding team of Intel)
- George Wells (former CEO of Exar)
Value and Meaning
It’s not all about the money, though. Money is feedback, but meaning propels you forward. Feedback can be positive or, in these cases where the money seemed unfair, feedback can be negative. According to Jim Collins in Good to Great, if you have the right people, they will be self-motivated. That motivation or sense of meaning is personal; you have to have it already. For some, it may be patriotic duty, the creative freedom to invent something, or perfecting your craft.
“A lot of things make me angry. I’m obsessed with everybody doing the best job they can. I mean, we’re talking about survival,” Bob said in a 1991 interview.
As his career progressed, he found ways of aligning everyone to the strategy and doing the best they could. Finding the right level of pressure wasn’t always easy. Whether it was engineering, customer service, or finance, everyone needs to do their best. Respect the value and meaning in every role; that seed was planted early on.
For Bob, it wasn’t the money that caused him to leave Transitron. He could see that the company didn’t value the talented engineers around him. He could also see that the germanium technology was quickly being passed by new silicon technology developed by Fairchild Semiconductor in California. But that’s another story.
In 1963, he and his new wife moved to California.
I’ve worked for three companies that were at the top of the industry;
they all made a fatal mistake.
— Bob Swanson, Feb. 2021, referring to Transitron, Fairchild, and National Semiconductor
* National Semiconductor was initially founded in 1959, in Connecticut, but was totally reorganized in 1967 — effectively as a spin-off of Fairchild.
- “Bob Swanson: Hard-driver focuses on low-tech chips”, The Business Journal, May 13, 1991
- “CORPORATIONS: The Transistor Tycoons”, Time Magazine, Dec. 21, 1959, http://content.time.com/time/subscriber/article/0,33009,865172,00.html
- “Interview with Bob Swanson, 2006 March 11”, Stanford University, Department of Special Collections and University Archives https://exhibits.stanford.edu/silicongenesis/catalog/wn597dw7970
- “Linear Technology oral history panel: the founding years” http://archive.computerhistory.org/resources/access/text/2014/07/102746888-05-01-acc.pdf
- “Oral History of Nicholas (Nick) DeWolf” Computer History Museum, Recorded: September 24, 2005, http://archive.computerhistory.org/resources/access/text/2012/05/102746344-05-01-acc.pdf
