How Bill Hewlett And I Wound Up In A Palo Alto Garage

How Bill Hewlett And I Wound Up In A Palo Alto Garage Palo Alto Garage AUTHOR:DAVID PACKARD Date: September 05, 1988 [Ed. note: In January 1939, five years after he graduated from Stanford, David Packard cofounded Hewlett-Packard Co. with former classmate William Hewlett. The two friends’ original partnership arrangement was so informal that neither man is sure what date it was signed. And like many new companies, Hewlett-Packard teetered on the brink of financial disaster. During the first year, Hewlett paid for parts to build the firm’s first product, and Packard lived off his wife’s earnings. Both men were trained as engineers. Packard, for example, earned his master’s degree from Stanford at the same time he was trying to get his fledging company off the ground. But Hewlett did most of the actual marketing, while Packard did most of the design work for the firm’s early products. After a rocky start, the combi notion eventually proved fruitful, and the company blossomed. It became so financially self-sufficient that it didn’t have to go public until 1957. Now, Hewlett-Packard does more than $8 billion in business each year. In this story, adapted from an oral history taped by the founding pair, Packard, now 75, looks back on his company’s beginnings.] Bill Hewlett and I got acquainted when we were freshmen in college. He went out for football, and I went out for football. We were also in classes together every year at Stanford. But it was really Ed Porter’s [a high-school classmate of Hewlett’s] and my interest in radio that got the three of us together. By our junior years, Bill and Ed and I came to be quite friendly. Bill and I were also interested in fishing. On one occasion we took a trip to the Sierras, to visit the Big Creek Power System of Southern California Edison. We had a very interesting time fishing. After we graduated, Bill and I went to Colorado for a two-week pack trip. I remember that we had a mule named Gus, and that the night before we were supposed to come home, Bill had a bad toothache. He decided to hike out, while I stayed up there. It was quite a ways up in the San Juan mountains, and I had the pack and the mule. That night there was some howling. I thought it was a mountain lion, so I made sure I had the gun next to my bed. Nothing happened, of course, and Bill got his tooth fixed all right [the dentist charged $1]. I think our common interest in the outdoors had a lot to do with our developing friendship. When I went back to Schenectady [to work for General Electric after graduation, Bill came over and we went on two canoe trips. Bill also visited to go skiing with me. I wasn’t much of a skier, but he was pretty good by that time. Bill and Ed and I talked about doing something on our own during our senior year. That was during the Great Depression, and there weren’t very many jobe around. We were very concerned about whether we would be able to find a job. At that time, Bill and I knew [Stanford professor] Dr. Fred Terman, who had a great deal to do with our development of a desire to do something on our own. I got to know Terman in my junior year. I had been going up to the ham radio station there at the old engineering building. Fred Terman’s laboratory was just a few steps up from the station. He took a great interest in all the students at that time, and he stopped me in the hall one day and chatted. It turned out that he’d known a great deal about me—all about my athletic abilities, and apparently he’d checked on how I’d done in all my courses. He asked me whether I'd like to take his graduate course in radio engineering during my senior year. This was obviously something I was very much interested in doing. Bill took the same course. I left Schenectady in August 1938, because Terman had arranged for a job for me back at Stanford. I was to do some research on an idea that Russ Varian had, which was cafled a thick-grid tube. The high-frequency limit of tubes was determined, among other things, by the transit time of the electrons from the cathode to the grid. The transit time beyond the grid [to the anode] would take energy out, so eventually the tube wouldn’t amplify. Russ’ idea was to make the grid thick enough so that you get a full cycle of transit time inside the grid. The electron would come out with the proper timing to add energy in the next transit. It was a very ingenious idea, but it really didn’t turn out to be very practical. In Schenectady, I had put together a few tools in the basement I brought my drill press and some other tools to California in the back of the car. Bill found a house for my wife and mein Palo Alto. We wanted a house with a garage we could use for a shop. Lu and I had the lower flat, our landlady had The high-frequency limit of tubes was det.rmined, among other things, by the transit time of the electrons from the cathode to the grid. The transit time beyond the grid [to the anode] would take energy out, so eventually the tube wouldn’t amplify. Russ’ idea was to make the grid thick enough so that you get a full cycle of transit time inside the grid. The electron would come out with the proper timing to add energy in the next transit. It was a very ingenious idea, but it really didn’t turn out to be very practical. In Schenectady, I had put together a few tools in the basement I brought my drill press and some other tools to California in the back of the car. Bill found a house for my wife and me in Palo Alto. We wanted a house with a garage we could use for a shop. Lu and I had the lower flat., our landlady had the upper flat in the house. We all began to work an a number of projects. At the time, T.L Mosley, founder of Dalmo Victor, had this theory. All harmonicas were then made in Germany. There should be a great opportunity for someone to sell a non-German harmonica. So, the question was, how do you tune a harmonica? He asked us to help him work out a device to tune a harmonica. We couldn’t devise a system that would do it You could do it now very easily, but in those days it was difficult Another project was an electrical exercising device. The idea was to find a frequency that would make your muscles move without hurting you. During this time, Bill built a model of an audio oscillator. He took it to a meeting of the Institute of Radio Engineers in Portland. It generated a lot of interest He came home convinced that this was something we might do. It was about Christmas time, because we took pictures of this oscillator in the living room sitting on the mantle by the fireplace. We put together a set of specifications and a little sales pitch that Lu typed out for us. Then we got a list of potential customers from Fred Terman and others. We sent letters out, and in a couple of weeks we got orders hack. One order had a check enclosed. That’s what convinced us that this was going to go. We didn’t have any idea about pricing in those days. We started out at $54.40. We hadn’t understood the economics very well. Fortunately, we learned very quickly that we could raise the price. It was a very important lesson, because it made it possible for us to finance the company as we went along. Major Customer Bill and I signed our partnership agreement either shortly before or shortly after January 1,1939. We took the oscillator down south and [through friends] got Bud Hawkins of Walt Disney interested. [Disney was the first major customer the studio used eight Hewlett-Packard oscillators in the making of the movie, Fantasia.] Our financing was rather informal Bill was in a position to advance some money for some components. Lu, of course, was working and provided support for me. Somehow, we had enough money to keep going. Our total sales in 1939 were a little over $5,000. At the end of the year, we had about $500 on hand and no liabilities. We were also doing some air conditioning control work with Ed Porter. It waan’t until the end of that year that we concentrated on instrument development. In the fall of 1939, we had a little building on Page Mill Road, just back from El Camino. It was partitioned off, with an office in front and a shop in back. I remember at the time thinking that was a pretty good-sized building—by comparison with the garage. When it rained, the water used to come down Page Mill Road and we had to go out and put sand bags in front of the door to keep the water from coming in. Tirelessly lugging sand bags and plugging their products, Hewlett and Packard kept their company afloat during those difficult early years—and by the late 1940s business took off. With the exception of a three-year stint as Deputy Secretary of the US. Department of Defense, Packard has been with his corporation continuously for 49 years, serving as its chairman since 1-4. In recent years, however, he has devoted increasing amounts of time to the David and Lucile Packard Foundation. He is also chairman of the trustees of the Monterey Bay Aquarium, built largely with his donations.

How Bill Hewlett And I Wound Up In A Palo Alto Garage

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