Striking It Rich: A new breed of risk takers is betting on the high-technology future

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One secret of the valley's success is a well-developed business network. An informal group of experienced executives, consultants and development services has sprung up to help start new businesses and then help them manage rapid growth. With a couple of local phone calls, a budding businessman with the right ideas can round up $1 million in venture capital in a day. Says British-born Adam Osborne, 42, who has already accumulated $70 million in orders for his year-old personal computer company, Osborne Computer Corp.: "Every single thing we need is within an hour's drive for us."

Just as important as the network is the attitude of businessmen and backers toward infant enterprises. They see failure as a demonstration of an adventurous intellect, not as a shortcoming. Says Gordon Moore, 53, the chairman of Intel Corp., a major semiconductor manufacturer: "Even when someone starts a company and fails, he'll be more valuable than someone else the next time because of his business experience." The result is an effervescent creative spirit that bubbles like California's best sparkling wine. Says Dallas-based LJ. Sevin, managing partner of Sevin Rosen Partners, which invests heavily in the new firms: "Between 60% and 70% of the most interesting ideas for new companies come out of the Bay Area."

Stanford University, near Palo Alto, was the source of much of the valley's spirit and success. Two Stanford graduates, William Hewlett and David Packard, opened a small company not far from the campus in 1939. Hewlett-Packard is now the area's largest electronics employer and a leader in computer-based technologies. Moreover, many of its employees have left the company to start a host of new businesses. Among the most successful: Apple Co-Founder Stephen Wozniak and Tandem Computers' James Treybig.

Other firms were started by Stanford University professors. William Shockley, co-inventor of the transistor, taught electrical engineering at Stanford. Eight alumni of Shockley Transistor Corp., which he founded in 1956, went on to form Fairchild Camera and Instrument, which launched the microchip industry. Some 53 so-called Fairchildren who left the firm have started their own semiconductor companies.

The adventurous businessmen of Silicon Valley also created a style of management that is likely to have a strong impact on business in other parts of the U.S. Executives in the valley face a few acute problems because of their highly competitive environment: keeping workers satisfied in order to reduce job hopping, arid maintaining the small-company entrepreneurial spirit as firms grow larger. Experienced technicians are in short supply and can easily win large salary increases and hefty bonuses by changing employers. Executives are also fearful that as their firms expand, they will lose the ability to respond quickly to changing market conditions and new technology.