Founded in 1970 as Xerox's R&D division, PARC was a dream factory that brought the world laser printing, Ethernet, the graphical user interface that led to Windows and the Macintosh, ubiquitous computing, and many other technologies that we now take for granted. Why made the place so damn special? Alan Kay, who pioneered networked computing while at Parc, lays out a few of the principles of the research community of which Parc was a hub:
1. Visions not goals
2. Fund people not projects — the scientists find the problems not the funders. So, for many reasons, you have to have the best researchers.
3. Problem Finding — not just Problem Solving
4. Milestones not deadlines
5. It's "baseball" not "golf" — batting .350 is very good in a high aspiration high risk area. Not getting a hit is not failure but the overhead for getting hits. (As in baseball, an "error" is failing to pull off something that is technically feasible.)
6. It's about shaping "computer stuff" to human ends per the vision. Much of the time this required the researchers to design and build pretty much everything, including much of the hardware — including a variety of mainframes — and virtually all of the software needed (including OSs and programming languages, etc.). Many of the ARPA researchers were quite fluent in both HW and SW (though usually better at one than the other). This made for a pretty homogeneous computing culture and great synergy in most projects.
7. The above goes against the commonsense idea that "computer people should not try to make their own tools (because of the infinite Turing Tarpit that results)". The ARPA idea was a second order notion: "if you can make your own tools, HW and SW, then you must!". The idea was that if you are going to take on big important and new problems then you just have to develop the chops to pull off all needed tools, partly because of what "new" really means, and partly because trying to do workarounds of vendor stuff that is in the wrong paradigm will kill the research thinking.
8. An important part of the research results are researchers. This extends the "baseball" idea to human development. The grad schools, especially, generally admitted people who "seemed interesting" and judgements weren't made until a few years down the road. Many of the researchers who ultimately solved most of the many problems of personal computing and networking were created by the ARPA community.