PALO ALTO, Calif., Feb. 6 (UPI) -- Valley View will from time to time profile a Silicon Valley Ace. All such Aces will not be famous or well known, but they will be worthy of admiration.
Silicon Valley Ace No. 1 is well-known -- Thurman John Rogers. Non-Valley protocol would normally require that we refer to him as "Mr. Rogers," but since in Silicon Valley everyone calls him "TJ," we will also use "TJ."
T.J. Rogers is a renaissance man in Silicon Valley. He has excelled at everything he has done. He was a Sloan scholar at Dartmouth, where he graduated first in his class while doing a double major in physics and chemistry.
He attended Stanford University and earned a Masters and a Ph.D. (1975) in electrical engineering. At Stanford, he invented and patented a semiconductor-related technology that he sold to AMI, a major semiconductor company. He is also the founder and chief executive officer of Cypress Semiconductor, an $800 million semiconductor company.
TJ spent five years working for AMI, two years working for AMD, then in 1982 started Cypress. Cypress now employs over 3,000 people and is a leader in wide area networks, storage area networks, and wireless communications.
TJ is very interested in politics, although he does not appear to be politically ambitious. If TJ were politically ambitious, he would have picked a winning political position just as he picked a winning research field at Stanford.
The winning political position in northern California is liberal Democrat, and all congressional representatives from northern California are liberal Democrats. TJ is certainly rich enough to buy a seat in the House of Representatives, and he could even afford a U.S. Senate seat.
However, the politics that TJ has expressed in his writings champion unfashionable (for northern California) causes like free enterprise, low tax rates and personal responsibility. He even had the audacity to write an article recommending a vote against one of the sacred cows of American politics, public transportation.
TJ writes articles espousing views that are not politically acceptable in Silicon Valley because he really believes in free enterprise. TJ has studied economics enough to understand that even if government projects work as planned, they are inherently less efficient than what can be done when the profit incentive and competition are forcing managers to drive down costs.
Although TJ can generally be found on the conservative side of most issues, he routinely expresses views that are uncommon among Republicans and businessmen. TJ wrote a powerful argument against corporate welfare. He explained that the most common reason used to justify why companies need corporate welfare, "Europe and Japan do it," is wrong because the vast majority of foreign corporate welfare is extremely unproductive.
TJ described numerous wasteful forms of corporate welfare. He outlined a "ridiculous" program designed to make gallium arsenide wafers in space. The program cost taxpayers over $500 million. The wafers cost over $1 million each and the optimistic projection future costs were $10,000 per wafer. TJ finishes the wafer-in-space story with, "Back on Earth, Vitesse makes (gallium arsenide) wafers at a cost of $175 to $1,000 each. Vitesse's president, Lou Tomasetta, calls the NASA program, 'a solution looking for a problem.'"
As part of his anti-corporate welfare push, TJ created a petition urging the government to create a commission to identify and end corporate welfare.
The petition includes the following: "I would support that cut even if it meant supporting cuts to my own company." Over 100 CEOs have signed this petition, including the chairmen of Sun, Applied Materials, AMD, LSI and Seagate.
World-class free market economists Ludwig von Mises, Murray Rothbard and James Buchanan all make the case for freedom and free markets extremely well, but TJ makes the case more eloquently by relating it to his personal life. TJ not only understands economics on the macro scale, he knows how to apply economic incentives on the micro scale to make things work in his business.
Cypress organized a new manufacturing facility as an independent company with its own stock. The employees were given options, at very low prices, on stock in the new company. After three years, the stock would either be sold on the open market or purchased by Cypress at the fair-market value.
This setup gave employees the correct incentives. The incentive in a standard manufacturing environment is to grow assets to insure capacity is available to meet any potential demand. Growing assets of a separate stock-holding company would increase the debt load and lower the value of the stock.
The arrangement was a success for Cypress and the employees. Many employees made over $100,000 on the value of their stock. The company provided efficient manufacturing services for Cypress and other semiconductor companies. This arrangement allowed TJ to harness the tremendous energy and correct incentives of ownership within a large organization.
TJ's politics might put him in the minority in northern California, but his other outside interests and activities are very much in line with the area. TJ is an avid jogger, logging 4 to 6 miles a day. Shortly after arriving in Silicon Valley from the Midwest, TJ developed an interest in red wines. TJ says that he first tried red Burgundy in 1972, and was hooked for life.
In the '90s, TJ was hooked to the extent that he wanted to try to grow his own grapes and make his own wine. He bought his next-door neighbor's house and with a little bulldozer work turned it into a vineyard. He is now producing his own wine, but he has yet to reach his goal of equaling the best burgundies in the world.
Perhaps TJ could have succeeded at even that stretch wine-making goal if he wasn't too busy running $1 billion company, writing op-ed pieces, and protecting Silicon Valley from legal and racial shakedown artists.
In 1999, Jesse Jackson his took his racial shakedown show to Silicon Valley and attacked Silicon Valley companies for the low percentage of blacks in high-technology employment (4 percent) vs. the 8 percent in the local population. This was the same racial attack that won large settlements from Wall Street and Texaco, Coca-Cola, Seven-up, 7-Eleven, Coors and Boeing.
I believe Jackson would have been equally successful in Silicon Valley except for one man -- TJ.
TJ wrote a devastating article in the San Jose Mercury News telling the truth about Jackson's race-baiting tactics. The article pointed out that Cypress had 35 percent minority employees and 44 percent of the top management was from minority groups. TJ explained that the high minority percentages were not the result of affirmative action. They are the result of a policy of hiring the best.
TJ made it very clear that the policy was not going to be changed by Jackson or anyone else.
TJ compared Jackson's racial attack to the shareholder lawsuit attack of Bill Lerach. Lerach extorted millions of dollars from numerous Silicon Valley companies with meritless shareholder lawsuits. This may have caught Jackson's attention as Lerach not only failed to extort money from Cypress, he ended up facing a Cypress lawsuit for damages after Cypress had his lawsuit against it thrown out.
TJ ended his article with: "If the Rev. Jackson would like to engage me in a public debate on racism in Silicon Valley, we have been invited by the Cato Institute to do so at noon on Thursday, March 18, 1999, in Washington." In a rare show of good sense, Jackson decided not to debate TJ.
(Valley View is a periodic look at the world from the viewpoint of the tech-savvy in Silicon Valley. Joe Lonsdale has worked in Silicon Valley senior management for 25 years. Joseph Lonsdale is editor-in-chief of the Stanford Review.)