The Mafia Companies

The Fairchild Mafia (“The Fairchildren”)

In early 1955, William Shockley, the co-inventor of the transistor at Bell Labs and later a Nobel Prize winner in Physics, established a company with Shockley Diodes and Semiconductors. Following his fame, the company welcomed some intelligent people, growing to 32 employees by September 1956, comprised of many Ph. D.s and physicists.

However, Shockley was a terrible person to work with due to his intense paranoia about his employees breaking confidentiality or betraying him altogether (which later proved to be a self-fulfilling prophecy). He recorded all phone calls and limited staff conversations outside his supervision, circled research to Bell Labs, and demanded that his employees undergo a lie detector test.

Subsequently, a few employees surreptitiously organized a coup and later ultimatumed the investor Arnold Beckman to evict Shockley. Beckman rejected upfront. Although Beckman had placed a manager before Shockley later on, the eight renegades defected in September 1957 and formed the company Fairchild Semiconductor under the investment of Sherman Fairchild.

These eight, later known as the Traitorous Eight, built an impressive portfolio. Continuing the momentum, Fairchild Semiconductor became the first well-documented Mafia Company.