He had the vision of encouraging people at Stanford to start companies and stay in the area, and he helped get them government contracts and research grants . ( Terman persuaded two of his top graduate students, Bill Hewlett and William Packard, to stay in Palo Alto and commercialize the audio oscillator they developed at Stanford .)
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Of the many projects they worked on, their very first financially successful product was a precision audio oscillator, the Model HP200A . Their innovation was the use of a small incandescent light bulb ( known as a " pilot light " ) as a temperature dependent resistor in a critical portion of the circuit, the negative feedback loop which stabilized the amplitude of the output sinusoidal waveform.
