Better before bigger: How Linear Tech was built

July 24, 2015 // By Steve Taranovich, EDN
I [Steve Taranovich writes] recently visited the 2015 UBM ACE Awards Lifetime Achievement Award recipients, Linear Technology’s Bob Swanson, chairman of the board, and Bob Dobkin, CTO. These men are an important part of the early days of electronics in Silicon Valley and have seen the transition from Germanium transistor designs in electronic circuits, on through to the early days of the Integrated Circuit (IC) and finally, culminating in the co-founding of Linear Technology, deemed one of the most profitable and successful companies in Silicon Valley today.

During my interview I was very intrigued as to how these two different personalities with two different skill sets would seamlessly complement one another’s answers to my questions in an alternating manner that painted a picture of who they are and how they have grown up in Silicon Valley acquiring skills and insights into how to start a company and bring it to such a prominent position in the electronics industry.

Pictured above are Bob Swanson, chairman of the board (left) and Bob Dobkin, CTO (right) who have been in the electronics industry since the early days of germanium transistor technology.

The talents and experiences of these two leaders, in my estimation, has brought about a corporate culture unlike most of the companies in the electronics business today. This culture encourages innovation and strongly values and recognises the company’s engineering talent so that when a good idea emerges, management recognises it and “gets out of the way” to allow the engineer to bring it to fruition.

Read on and prepare to witness unique insights into early Silicon Valley, a tutorial in how to start a company and create a successful corporate culture that lasts for decades, and a lesson regarding management-level cooperation and success.

EDN: I am so impressed with Linear Technology’s longevity, but in particular the fact that the same two men who started this company 34 years ago still guide the company and have created such an employee-friendly environment from day one in which to thrive and especially value their engineering talent. That philosophy is still in effect at your company and you guys are still influencing this company both in business and technical advances.

During my 42 years as an engineer, I had some experiences at some of the companies at which I was employed where engineers were really undervalued and under-appreciated. At one company, the engineering department was told by a manager there that, “You are all overhead.”

Swanson: About three or four years ago we invited all the sales people to come in to headquarters for a sales meeting. The area sales managers come in every six months, but it was some time since all the sales folks were out here. So I was asked to give a talk to the guys and tell them about the beginning of the company. And they wanted it to be motivational. So I was thinking about ‘What is it about Linear 30 years later that enabled us to avoid mistakes that other companies that I worked for made?’

So I told the story about three other companies that I worked for that weren’t just other companies; I worked for them when they were at the zenith of their success—but it didn’t last. One was Transitron; and what happened to Transitron? During the first recession their sales went from $60M to $38M, but the one thing they weren’t worried about was engineers. Engineers were a commodity; they could get in a plane and go to London; they could go to Holland; they can go to France and get all the engineers they wanted and by the way, pay them half the wages that US engineers make. So that was my first appreciation for my thinking that when you run a high-tech company, you had better appreciate your engineers—especially the exceptionally good ones. They are not overhead, but a special, special asset.

Then I went to Fairchild Semiconductor during the “glory days” with Bob Noyce and all those guys when Andy Grove’s business card said that he was a Device Engineer. So this was really the ‘glory days.' They innovated everything—this was magic and I was a young guy there. And then that thing fell apart in a little over 10 years. I was too junior to really know what was going on but the rumors were that Sherman Fairchild, who was a great entrepreneur in his own right, didn’t understand the chip business, didn’t understand the investment, just didn’t understand how fast-moving it was and how you had to fund it. The whole thing imploded.

So I went with the guys that went to National at the same time that Andy Grove and company started Intel. What was the lesson there? The lesson was that top management had better understand that this is a fast moving business and there are investments to be made. And if you don’t make them —you’re history. But you can’t overspend either, so there’s a balance.

So then I went to National and that’s when I first met Bob Dobkin. It was just like being in the Marine Corps, as people said it would be—it was so ‘gung ho’ there, everything was great and when it came to analog we were clearly the leader. Then, about two years before we left, they went to matrix management and all of a sudden there was all kinds of bureaucracy and politics and people like Bob and I got demotivated. It was way more than the fact that they didn’t know where analog was going as a future. So when we started Linear, we said that we were not going to make those same mistakes.

Dobkin: And analog is unlike digital systems. When you make an analog product it takes 6 months to get it out to the customers, another 6 months for them to design it in, and another year for their product to get out. So you really don’t see any business for 2 years or maybe three years on a new product. You have to understand that in this business and be able to handle that. You have to think a couple of years ahead and have them ready when they are needed. Management has to understand that these products are not going to sell in 3 months.

Swanson: Especially hard when the design cycles become 18 months or more.