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Investor’s Business Daily has spent years analyzing leaders and suc-
cessful people in all walks of life. Most have 10 traits that, when com-
A Gem Among Venture Capitalists
bined, can turn dreams into reality. Each day, we highlight one. Get Out Front: Arthur Rock saw early that Intel and Apple were winners
3 TAKE ACTION: Goals are nothing without action. Don’t be afraid to
get started. Just do it.
pletely different business culture,”
Rock’s Keys Ante said. “Back then if you left a

Energize The Employed Arthur Rock had his own way to

take the measure of a man.
What: Helped land the money
to start chipmakers Fairchild
Semiconductor and Intel.
company (to form a startup) it was a
sin. Arthur Rock was the first finan-
cier to appreciate the importance of

Many news stories feature tunities from stakeholders at all lev- When money-seeking startups How: “Art understood what technology, and now leaving compa-
layoffs and dismal unemploy- els and functions, inside and out- knocked on his door, Rock looked semiconductors could mean nies to innovate is viewed as a posi-
ment numbers. But more side the firm, Zaffron says. He once for “intellectual honesty” in wanna- back in the late ’50s,” said Pitch tive thing.”
than 90% of Americans are worked with Reebok when it faced be entrepreneurs, not just promis- Johnson, venture capitalist. In 1961, Rock left Hayden and
still employed. These folks falling market share. He advised the ing business plans. moved to California to form a new
are dealing with the loss of their col- CEO to sit down with departments Rock’s money smarts and guiding outfit, a venture capital partnership
leagues and the burden of extra re- to listen to their ideas. Those ideas hand turned feisty Silicon Valley compete and win. with Tommy Davis, a vice president
sponsibilities for no additional pay. led to expansion outside of shoes, startups into some of the nation’s “Art could provide capital and pro- at Kern County Land Co. in charge
Right now, a manager’s toughest into new fitness areas. biggest technology companies. vide advice and guidance. But he of its investment diversification pro-
job is energizing his staff, keeping 00 All for one. Teach employees The venture capitalist played a key also had a third role, by showing gram. Over the next seven years,
workers as productive as possible, that by doing their jobs well, they’re role in launching Fairchild Semicon- commitment — devoting yourself Davis & Rock invested $5 million
says Steve Zaffron, CEO of global helping lift the firm. “Remember, ductor, one of the first chipmakers; for success, disciplining yourself for and returned $100 million to their
consulting firm Vanto Group. In leadership isn’t a function of posi- tech conglomerate Teledyne;and in- Rock,atCalifornia’sComputerHisto- success, to make the right decisions 15 or so investors. Venture capital-
“The Three Laws of Performance,” tion,” Zaffron said. “Leadership can dustry giants Intel and Apple. ry Museum in 2007, spotted Apple’s to be successful. That helped him ists make money when startups go
which he recently co-authored, he be provided by anyone.” An investment banker before turn- wizardry at a computer show in 1977 build great companies.” public or are acquired.
shows how to achieve that goal. At the Ritz-Carlton hotel chain, ing venture capitalist, Rock didn’t and knew “we had something.” Silicon Valley, where Rock landed Davis & Rock invested in about 15
Zaffron has advised 300 firms in former President Horst Schulze have an engineering resume that in the early 1960s, was 3,000 miles firms, including Scientific Data Sys-
20 countries on this topic. San Fran- treated each employee’s job as key might’ve sparked his tech startups. tounderstand whatmost of these en- from Rochester, N.Y., where he tems, acquired by Xerox in 1969.
cisco-based Vanto’s clients include to achieving the goal — pleasing the He graduated from Harvard Busi- trepreneurs are about technically. grew up. Born in 1926, he was an Rock built trust with key Silicon
Apple, GlaxoSmithKline and Heinz customer, Rapaille told IBD. When ness School in 1951, then joined the The way I went about it was to only child. His father, Hyman, a Rus- Valley people. When Moore and
Northern Europe. He and Clotaire the Ritz opened a new hotel, corporate finance department of spend a lot of time with these would- sian immigrant, operated a candy Noyce grew tired of Fairchild, Rock
Rapaille, a medical anthropologist Schulze would work as doorman banking firm Hayden, Stone & Co. be entrepreneurs. The main thing is store, where the boy worked as a wrote up a business plan for Intel.
and psychologist, share tips. for part of the day, then wash dishes in New York City. are they honest? By honest I don’t sales clerk and stocked shelves. He “I raised the money (for Intel) just
00 Clear it up. “Share information and clean rooms alongside employ- mean taking money out of your also peddled magazines in town. on the telephone in something like
with people with whom you don’t ees. He’d talk to them about how Chipping Away pocket, but intellectually honest. Do After graduating from high school, two days,” he said.
normally share,” Zaffron said. their job performance directly im- Rock, now 82, had a knack for find- they see things the way they are and Rock served in the Army for a year
Speak to employees directly and proved customer satisfaction and ing gems in the business rough. not the way they want them to be?” as World War II wound down. He Apple In His Eye
make sure you address what’s on the entire hotel chain’s success. He “I invest in people, not in technolo- Rock’s role didn’t end with provid- attended Syracuse University on He founded San Francisco-based
their minds. Otherwise, they’ll be- taught them that each was a leader. gy,” Rock said in “Done Deals,” a ing capital, advising on strategy and the GI Bill, graduating with a bache- Arthur Rock & Co. in 1969, and in a
lieve the rumors they hear. 00 Commit to integrity. Do what book from the Harvard Business recruiting management. lor’s degree in business administra- few years faced competition from
00 Consider perceptions. When you say. It sounds easy, but many School Press. “I was always interest- As an early-stage board member at tion before earning his MBA. tech-savvy venture capitalists.
we do something, it usually makes companies don’t, says Rapaille, who ed in investing in people. So I spent a few firms, he showed startups In 1957, Rock still worked for Hay- Rock had one big deal left in him.
complete sense to us. But when oth- wrote “The Culture Code.” a lot oftime with would-be entrepre- how to build a business and aim for den when he tried to raise money to Mike Markkula, a former marketing
ers make choices that puzzle us, we Years ago, Rapaille consulted with neurs to see whether they were mo- industry leadership. With Intel, he start Fairchild Semiconductor. VP at Intel, asked Rock to hook up
might ask, “Why are they doing AT&T, where the motto was “right tivated and whether they were intel- served as its first board chairman Eight scientists left Shockley Semi- with Apple’s Jobs and Wozniak.
that? It doesn’t make any sense.” on time.” But its managers frequent- lectually honest.” and was a director for 30 years, all conductor to start the new outfit. At first, Rock was put off by the
Understand that situations appear ly started meetings 20 minutes late. Among the scientists and engi- the while attending staff meetings. Rock persuaded Sherman Fair- two computer geeks. But a 1977 visit
differently to each of us. Put your- “Do you really care about ‘right on neers Rock believed had fire in their “Art consistently tried to build child, founder of Fairchild Camera to the Homebrew Computer Show
self in employees’ shoes. Then their time’ or not?” he asked. belly: Fairchild co-founders Gor- great companies and did,” Pitch & Instrument, to bankroll the start- in San Jose convinced Rock that
responses or actions will make “The airlines are a bad example of don Moore and Robert Noyce, both Johnson, co-founder of venture up. The scientists were called the Jobs and Wozniak were for real.
more sense. Zaffron suggests asking this,” Rapaille said. “They say of whom launched Intel in 1968; and firm Draper & Johnson Investment Traitorous Eight after leaving “In this big auditorium, all these
yourself: “What processes, dia- they’re concerned with security, Apple co-founders Steve Jobs and and founder of Asset Management, Shockley, and helping unhappy companies were there showing off
logues and meetings can I arrange but then someone tests their system Steve Wozniak. told IBD. “Great venture capitalists, campers start anew was brazen, their gear,” Rock said. “Everybody
so that people can feel like co-au- by easily walking on board with a In a 2007 interview at the Comput- and Art is among those, know how says Spencer Ante, author of “Cre- at the show was around the Apple
thors of a new future, not merely re- gun. So customers know they’re not er History Museum, Rock shared to share a commitment to success. ative Capital: Georges Doriot and booth. I could not even get close to
cipients of others’ decisions?” really concerned about security.” his startup evaluation: “I’m not It’s a sports coaching type of skill, the Birth of Venture Capital.” see them. At that point, I knew, well,
00 Pay attention. Listen for oppor- Gloria Lau enough of a technologist to be able motivating and building a desire to “In the late 1950s, there was a com- maybe we had something.”

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