As mentioned previously, one thing Alex suggested I could write about was the idea of Power Jets as a start-up company. Though it was in some sense Metrovick’s competitor, I’ve not done huge amounts of primary research on Power Jets, (the go-to people for that would be Andrew Nahum and Hermione Giffard). I’m also not a startup scene expert, so this is not the post for detail on that side of things.
So what are the parallels between Power Jets and Silicon Valley startups, and why might it be helpful to think of the company in this way? Power Jets started on a very small scale, and was based around the ideas and patents of a single person: the aeronautical engineer and RAF officer Frank Whittle. As a result, the history of Power Jets is often framed in personalised terms around Whittle. In a similar fashion, tech startups are usually described in terms of their founders: Sergey Brin and Larry Page, Steves Jobs and Wozniak, Mark Zuckerberg, and so on. A narrow focus on the primacy of personalities, inventive genius, and ‘first’ inventions is a continuing bugbear of historians of science technology – not least because it is so easy to slip into – but this framing is perhaps particularly seductive for start-ups. I’d argue that this is because of the importance of patents and other intellectual property to start-ups, which typically have few other assets at first; their own histories and personal accounts therefore place great emphasis on the small number of individuals present at the founding and on their ideas.
However, the environment in which technologies are created and developed is of crucial importance; Silicon Valley startups are in Silicon Valley precisely because of the skills base built up in this economic cluster. This makes turning new ideas into workable products possible, as well as providing a pool of potential customers for new technologies. In Whittle’s case, however, various the elements were somewhat more diffuse: the venture capital was initially raised in the City of London and then backed up by the Air Ministry; the manufacturing expertise came from the Midlands; and the engineering recruits came from Cambridge and London, with support from the RAE.
Whittle’s position as a serving RAF officer made his founding of a start-up company based around the development of his ideas and patents difficult. Contrary to much of what has been written about Whittle, he was given a fair degree of official – albeit indirect – support for his ideas. Apart from anything else, his potential had been recognised and supported throughout his air force career: first as one of a handful of RAF apprentices put forward for pilot training, then when he was sent to do a Cambridge engineering degree and allowed to develop his ideas in a year of postgraduate research; finally he was placed on the Special Duty List and allowed to act as Power Jets’ chief engineer. 
What is often overlooked about Power Jets story is quite how quickly the company expanded once it gained development and production contracts from the Air Ministry. Initially Whittle was the company’s only employee, and it remained very small through its initial; in 1938 it had 5 staff, and the following year it still only had 15. As a result, Whittle had to subcontract the manufacture of almost all the components of his W.1 unit; initially most of the work was done by the British Thomson-Houston Company (in whose works Power Jets had rented space), but they could draw on the broader skills of the Midlands engineering cluster. (The choice of a turbine manufacturer is interesting, given the parallel Metrovick project, but Whittle had unsuccessfully tried to interest aero-engine manufacturers in his schemes in the past.) However, once the company got the go-ahead for the manufacture of a flight engine it began to hire large numbers of staff, including lots of top engineering graduates straight out of university (mostly Cambridge and London). The growth was exponential; by the end of 1943, Power Jets had almost 1,000 employees.
Despite this massive expansion, Whittle failed to realise that Power Jets’ influence over the course of Jet R&D was fading as his designs were turned into production engines. Apart from the need for a production partner (initially the Rover company), the development of the various engine systems required outside expertise. The Royal Aircraft Establishment seconded staff to Power Jets as well as providing assistance on tap; among industrial partners, for instance, Lucas and Shell Lubbock were instrumental in the development of the combustion system, and Harry Ricardo invented a barostat that allowed the fuel system to function at altitude. Whittle’s W.2 design also suffered from all kinds of teething troubles and development glitches; producing a reliable production engine required the intervention of Rolls-Royce and their proven development expertise (though Rover and Power Jets had arguably fixed the most severe problems just as R-R took over).
In this sense, the jet engine was being drawn into an innovation ecosystem similar to the existing one around the piston aero-engine. That De Havilland and Rolls-Royce were the only British companies to develop production jets during the Second World War underlines the importance of good links to these networks, as does the wartime creation of the Gas Turbine Collaboration Committee. Intended to share common problems and to discuss solutions, the committee comprised all the UK institutions working on gas turbines, and was remarkably successful; it explicitly set aside issues of patenting so that technical problems could be thrashed out without reference to commercial secrecy. This approach seems to have been was typical of the wider aviation industry, where on the whole know-how was far more important than patenting. However, Whittle does not seem to have appreciated how much this industrial know-how contributed to his designs’ success, and clung to his moral rights as the jet’s inventor, insisting that Power Jets should be allowed to design and manufacture further engines. Unfortunately for Whittle, by 1944 Stafford Cripps, Minister of Aircraft Production (and former patent lawyer), had decided to nationalise the company. Power Jets had been reliant on government finance since its inception, but the Ministry had limited formal control over the company; Cripps decided that straight nationalisation would solve this issue, as well as preventing any dispute over the validity of Power Jets’ patents. As part of the nationalisation, the company was merged with the RAE’s turbine section as Power Jets (R&D) Ltd; it continued to develop its own gas turbine designs and put them into low-rate production.
The whole scheme was an experiment on Cripps’s part; no precedent existed for such a company, and indeed the Treasury was not particularly enthusiastic. In the event it proved unsuccessful; Whittle was frustrated by the company’s lack of major production facilities, and the aero-engine companies were unhappy about a government-funded competitor that had taken over the state’s research role. In 1946, the matter was resolved by the creation of the National Gas Turbine Establishment, which absorbed most of Power Jets’ staff and facilities; Whittle and a few others left for pastures new. He received an ex gratia award from the post-war Royal Commission on Awards to Inventors for his work on the jet, yet remained somewhat bitter about Power Jets’ fate for the rest of his life.
Essentially Whittle’s problem had been that despite his possession of the idea for a jet, the costs of development were such that he would need investment on a large scale; having failed to interest the aero-engine industry in development, the only practical investor was the state. Turning the jet engine into a practical powerplant required the know-how of the aero-engine industry, but Whittle’s insistence on total control over ‘his’ invention (which he justified on the basis of his patents and intellectual property) meant that he minimised the importance of this assistance. However, when conflict arose with aero-engine manufacturers, the Ministry of Aircraft Production’s dissatisfaction about its lack of control over a company for which it provided all the capital led to Power Jets’ nationalisation. Could this have been avoided? I suspect not; given Whittle’s (understandable) possessiveness about the jet, he was unlikely to cede control over his invention by accepting a buy-out from an aero-engine manufacturer. Yet by the time the jet engine was a workable proposition, the Ministry of Aircraft Production had invested too much money in the idea to leave its development to Power Jets.
Financially, Power Jets was a qualified success for its early investors, who each received £3.25 for their £1 shares. However, the major spoils of the jet engine went to the existing aero-engine manufacturers; in a future post I’ll look at how finance, diplomacy and politics interacted in the sale of Rolls-Royce jets to Soviet Russia.
 This is not least because it’s easier to find the first patent application for an idea than it is to trace its diffusion and influence through wider realms.
 An environment, it should be noted, pretty much entirely created through the US Air Force’s need for electronic components for their ICBM programmes.
 There was some sleight of hand involved here, as there was no existing mechanism by which a serving officer could act as an employee of a private company. Formally Whittle was not supposed to spend more than 8 hours per week on Power Jets, but in practice he worked on the jet full-time.
 I vaguely recall a piece on patenting in the US (?) aero-industry, which argued that patent pools were used as defensive tools but never really enforced in a predatory fashion; absent exceptions like the leading-edge slat, this seems to have been the UK pattern as well. (Erik may disagree with me here)
 I can’t think of any neat precedents; state companies tended to be set up from scratch (I’m thinking here of things like the British Metal Corporation, which was anyhow arms-length from the state). I’d welcome counter-examples.