Clay's work sparked Silicon Valley's IPOs, VCs
The Silicon Valley Engineering Hall of Fame member recalls, "Kleiner Perkins Caufield and Byers, the super stars of venture capital, started Silicon Valley with my product, Tandem Computers, in 1972. Bill Hewlett threatened to fire me if I did not immediately terminate the project. Tom Perkins left HP to start KPCB. Tandem was the IPO that started Silicon Valley."
At the time, Clay was manager of research and development for Hewlett Packard, a job he had held since 1965. The St. Louis University math graduate in 1951 had broken into the industry in 1956, just after the Brown v. Board of Education decision.
In the documentary Freedom Riders of the Cutting Edge, Clay remembered his first job application with the aircraft maker McDonnell in St. Louis. With his new degree and resume, he had been given an interview.
"When I got there, they told me we have no jobs for professional Negroes," said Clay. Yet five years later Clay was programmer for the company's first computer. In 1958, he took a post as senior programmer for the Lawrence Radiation Laboratory in California.
By 1961, Control Data hired him as manager of Cobol and Fortran programming in Palo Alto. By 1965, Clay was getting much different treatment from recruiters. Hewlett-Packard wooed him to help start a computer division, an offer he rebuffed initially. After expanded offers, he decided to take the opportunity to start something new.
"David Packard had an opportunity to buy Digital Equipment Corp. for $25 million, but he decided to start his own computer division," said Clay in Freedom Riders. One of the products that Clay's division developed was HP's first computer mainframe, a system with multiple processors designed to have 99 percent uptime, something unheard of among early computers, which broke down frequently. This "fault-tolerant" system was sold to Holiday Inn for booking hotel reservations.
By then, Packard, Clay's strong advocate, had gone to Washington to serve as Deputy Defense Secretary. William Hewlett, the other co-founder, was more focused on the company's core business in test and measurement. Hewlett ordered Clay to cancel the order.
After Perkins left as head of the division, Clay became acting general manager, but also left when he was not considered for the full-time job. As a consultant to the new venture capital firm of Kleiner Perkins, Clay made technical recommendations for investing in Tandem, the semiconductor company Intel and personal computer maker Compaq.
In an irony of history, Hewlett Packard spun off its test and measurement assets into Agilent Technologies. It acquired Tandem and Compaq to become almost entirely computer focused. While at HP, Clay had participated in an initiative to create employment and jobs in nearby East Palo Alto.
In 1977, he started a company called Rod-L Electronics to make electronic test equipment for consumer electronics. The hi pot tester solved a problem of electrical shorts which bedeviled the early computers.
More than 30 years later, Clay is still chairman of Rod-L Electronics. In a divergence from the venture capital cycle he helped initiate, Clay still insists on manufacturing his products in the United States, instead of outsourcing, and hiring underrepresented workers. It is a policy position he would like to articulate to national leaders such as President Obama.
Known by many as the "godfather" of Silicon Valley, Clay still meets frequently with other technology and civic leaders on such topics as education and maintains his passion about golf. Clay was the first black member of the exclusive Olympic Club in San Francisco.
