$538 and a One-Car Garage: The Palo Alto Start of Hewlett-Packard
Bill Hewlett and Dave Packard started with $538, a used drill press and a rented garage on Addison Avenue. Their first product was an audio oscillator.
Silicon Valley has plenty of origin stories, but the one usually told first involves a modest house at 367 Addison Avenue in Palo Alto, California. The garage behind it is where Bill Hewlett and Dave Packard started the company that became Hewlett-Packard.
A professor who wanted graduates to stay
Hewlett and Packard met as electrical engineering students at Stanford University, where both studied under Frederick Terman. In the 1930s Terman, later Stanford's dean of engineering, encouraged students to build companies near the university rather than leave California for jobs in the East.
After graduating in 1934, Packard took a job with General Electric in New York State. Hewlett continued graduate work at Stanford and MIT and returned to Palo Alto in 1936. The two met in Palo Alto in 1937 to talk about going into business together.
Choosing an apartment for the garage
In 1938 Terman arranged a Stanford fellowship for Packard to work on vacuum tube technology. Packard took a leave from GE and moved back to Palo Alto with his wife, Lucile. According to HP's own timeline, Hewlett picked 367 Addison Avenue for them specifically because it had a garage the two could use as a workshop.
The house dated to about 1905 and had been divided into two flats in 1918. In September 1938 the Packards moved into the three-room ground floor flat, and Hewlett moved into a shed at the back of the property. Their landlady, Mrs. Spencer, lived upstairs.
$538 and a drill press
The two began part-time work in the garage with $538 in working capital. HP's timeline notes that the figure included cash and a used Sears Craftsman drill press. The National Register nomination for the property adds that Lucile Packard provided a regular income through her job in Stanford's Registrar's Office.
The partners took on whatever work they could find. The National Register document lists early projects including a diathermy machine for the Palo Alto Hospital and an indicator for a bowling alley.
Their first real product was an audio oscillator, the Model 200A, which grew out of work Terman had encouraged. Late in 1938 they produced a second model, the 200B, priced at $71.50, and sent their first sales brochure to 25 potential customers. In 1939 they formalized the partnership. A coin toss settled whose name would come first.
An early customer named Disney
One of the company's first customers was Walt Disney Studios, which bought eight oscillators to test and certify sound systems in theaters preparing to show Fantasia, the first major film released in stereophonic sound.
The garage did not hold them long. In 1940 the company moved to a larger rented building on Page Mill Road.
From workshop to landmark
The property became a Palo Alto city landmark in 1985 and California Registered Landmark No. 976 in 1987. In 1989 it was dedicated as the "Birthplace of Silicon Valley." HP bought the property in 2000 and restored the house, garage and shed to their 1939 condition, finishing in December 2005. It was added to the National Register of Historic Places in 2007. The site is not open for tours, but it can be seen from the sidewalk.
Lessons for Montana business owners
- Mentors matter. Terman's encouragement and connections shaped HP's first years as much as any product did.
- Take paying work while you build. Odd jobs like the bowling alley indicator kept the partners going while the oscillator found buyers.
- One good customer can prove a product. A sale to Disney gave a two-person company credibility it could not have bought.
Montana has its own university-linked tech companies in Bozeman and Missoula. Read more Montana business coverage at the Montana Statesman.
