Herman Fialkov: An Appreciation
Part of history’s great fascination is the interplay between capricious contingency and discernible structure, between that which looks like chance and that which resembles logic. This holds true for the history of technology as well. I am led to these ruminations on history in thinking about the story of Herman Fialkov, a remarkable high-tech entrepreneur and a real gentleman, who died earlier this year at the age of 89. I was lucky to have the opportunity to conduct an oral history interview with Mr. Fialkov — that concentrates on his experiences as a semiconductor industry pioneer and venture capitalist – as part of my work with the Chemical Heritage Foundation to document what we call the “chemical history of electronics.”
For me, a major lesson that comes through in this oral history of Mr. Fialkov’s experience is a reminder that Silicon Valley is by no means the entirety of the story of semiconductor electronics and, indeed, of recent technology. Mr. Fialkov’s activities remind us that in the 1950s, semiconductor electronics was an East Coast phenomenon. Here were entrepreneurial startups, transistor and microcircuitry innovations, and successful industrial manufacture concentrated in the Mid-Atlantic and southern New England. Similarly, it reminds us that the development of modern venture capital, intertwined and coevolving with high technology enterprises, had its origins in this very same region. The distinctive form of Silicon Valley venture capital investing – the limited term partnership – arose simultaneously on the East Coast as well. In fact, Mr. Fialkov was not only one of the first entrepreneurs to start a transistor startup, he was one of the first venture capitalists to invest their substantial wealth from semiconductor electronics into his own, and others’, venture capital partnerships.
The technological, entrepreneurial, social, economic, material, and organizational logics that gave rise to Silicon Valley also, and simultaneously, gave rise to the same form of activities in other geographic areas – especially the East Coast. While these activities persisted to the present, they became increasingly overshadowed by the activity in Silicon Valley in the 1970s. There, contingent path dependency – the unique success of semiconductor firms like Fairchild Semiconductor and Intel – led to an incredibly dense, interconnected ecology of firms and organizations devoted to high technology entrepreneurship and industrial production. This dense high-tech ecology led to successive waves of innovation built atop semiconductors in Silicon Valley: personal computers, software, and the Web.
While these are some of the broad lessons that I’ve taken from Mr. Fialkov’s oral history, his rich personal story is no less fascinating. I will share with you some of its highlights. Herman Fialkov grew up in Brooklyn during the Great Depression. The son of Jewish immigrants from Eastern Europe, the family struggled in his early years as his father had to give up his career as a watchmaker after losing sight in one eye. For young Herman Fialkov, the aptitude that he displayed in math and science in New York’s public schools offered him a route to self-realization. After graduating, Fialkov secured a position as a design engineer with Emerson Radio – a leading radio manufacturer based in downtown Manhattan – while pursuing an engineering degree at the City College of New York at night.
Married at 20 to his first wife, with whom he enjoyed a decades long marriage up to her death, Fialkov soon found himself saying goodbye to his wife, his job, and CCNY for the Battle of the Bulge as and infantryman in 1944. Earning the Bronze Star from the Army as a sign of harrowing military experiences that, later in his life, he still found emotionally effecting, Fialkov returned to New York to his wife and his job at Emerson. With the GI Bill, Fialkov completed his engineering degree at NYU, again in his evenings.
After graduating in 1951, Fialkov found a job with Brooklyn-based Radio Receptor. Like Emerson Radio, Radio Receptor was a manufacturer of military electronics. After the Bell Telephone Laboratories announcement of the strikingly new rival to the vacuum tube – the transistor – Radio Receptor became an extremely early adopter, taking one of the first licenses in 1952 when they became available from Bell Labs and Western Electric. From 1952 to 1954, Fialkov was deeply involved in Radio Receptor’s pursuit of the first form of semiconductor devices: point-contact germanium transistors and diodes. With Bell Labs’ announcement of the junction transistor – which had many advantages over the delicate point-contact structures – Radio Receptor began to explore the production of germanium alloy-junction transistors. This was the primary form of transistor employed in the creation of the first transistorized digital computer mainframes of the 1950s.
In 1954, with Radio Receptor struggling to go public and with his sense of a large opportunity in junction transistors, Fialkov decided to strike out on his own. Many, if not most, of the fundamental processes used to make transistors then (and now) are chemical in nature. Most basically, transistors are made from single crystals of semiconductor elements, like germanium or silicon. The process of growing these large single crystals from a molten pool of semiconductor material was the first of these steps. These grown single crystals were then sliced into wafers in which the transistors were formed. In his work at Radio Receptor, Fialkov had met with a Brooklyn-based manufacturer of grown quartz crystals (the major constituent in quartz is the semiconductor silicon). Fialkov and the proprietor of the grown quartz shop decided to go into the transistor business together. In 1954, the split the ownership of this new spinoff, that they named General Transistor.
Very quickly, Fialkov drove General Transistor into the manufacture of germanium alloy-junction transistors when there were just a handful of manufacturers in the industry. Fialkov quickly secured some of the leaders of the early U.S. computer industry as customers for his transistors: UNIVAC, Control Data, Raytheon, and, later, Cray. The market for germanium alloy-junction transistors was booming, and Fialkov expanded General Transistor’s capacity. The value of the stock, privately traded with the help of New York investment bank Hayden Stone, soared. The firm, both headquartered and manufacturing in Queens, was a great success.
In 1960, Fialkov merged General Transistor with a larger electronics systems manufacturer, General Instrument. The combined firm, continuing under the General Instrument mark, quickly entered into the hottest field in electronics: microcircuitry. In particular, Fialkov aggressively moved General Transistor into silicon integrated circuits: the microchip. With key hires, like Frank Wanlass, Fialkov’s move led to notable microchip firsts by General Instrument. Fialkov also was one of the first people to move semiconductor manufacturing offshore. In the 1960s, he moved General Instrument’s production of germanium diodes and transistors to Taiwan, shuttering its Rhode Island factory.
After spearheading the move of General Instrument into one of the very first cable television operations, Fialkov retired from the firm in 1968. He immediately turned his attention to venture capital investing in high-technology startups. One of the bankers from Hayden Stone, Arthur Rock, who had helped in the placement of General Transistor stock, had on the basis of this profitable experience encouraged a group of scientists and engineers in California to start their own company in 1957. It became the semiconductor industry leader, Fairchild Semiconductor, that really established Silicon Valley and made Arthur Rock extremely successful. Rock moved to San Francisco in the early 1960s and created Davis and Rock, the first venture capital partnership. Back East, Fialkov was an investor in their first fund which returned handsome profits. Leaving General Instrument in 1968, Fialkov established his own New York based venture capital partnership, Geiger and Fialkov. Both Arthur Rock and Fairchild co-founder Jay Last were investors. For the next two decades, Fialkov was very active as a venture capitalist in high technology, scoring a number of notable hits with microchip and communications companies.
After retiring from his career as a venture capitalist, Fialkov continued to support high technology through angel investing. His sense of where the new areas of opportunity and excitement in technology lay remained acute. Poignantly, the February 2012 issue of Wired magazine carried a feature article “The Trash Blaster” on a new environmentally friendly technology for using municipal and industrial waste as a fuel in a plasma oven. The article reports on important pilot plants and trials with major players, such as Waste Management. The trash-burner start-up was one of Herman Fialkov’s angel investments. It was in February, the month the article appeared, that Mr. Fialkov died.
In personal conversation, Mr. Fialkov seemed just as proud, if not prouder, of his family than any other of his life’s accomplishments. He took particular pleasure in the fact that his grandsons had both followed in his footsteps to become successful venture capitalists in high technology – based in Pennsylvania and New Jersey, it should be noted.
I will close with a story that Mr. Fialkov told in his oral history that particularly struck me. I know that it resonated for his family as well. His son – a successful lawyer for WGBH television – mentioned the story in his eulogy of his father. As a boy, Herman Fialkov — the watchmaker’s son – was a great enthusiast for Erector Sets. Building structures with them, he dreamed of designing and building a mechanical bridge that would span the Atlantic, connecting the US to Europe. He later realized, that with his involvement in electronic communication technology firms, that he had helped to build a bridge of sorts across the Atlantic, and even farther. He felt he had realized his boyhood dream.