patrick.net

PermaRenter,

Even with the link at the end, that Cut-Paste job of yours was so long that I mistook the writing for being yours. See what happens when you cut/paste as much as you do, with no introduction. Please write some intro or attribution on top when you are going to paste ANY material.

Correction: My comment is hereby directed to Alaska Miller, not PermaRenter.

Justme, point taken. I've been around long enough to have heard all the buzzwords that everyone in my field then jumps on.
You know them all as well:
6 sigma
activity based costing
JIT (I am a big believer of this one, and it is not just having no invenotry)
Crossing the Chasm

All that shit that all of it has some merit in the right application, but these clowns jump all over the latest and greatest and sacrafice just using common sense. This old buddy system where like I've said before, no one has the guts to point across the conference table as a way of reducing waste in my opinion is the underlying factor. I further agree with you because, like in my field of the study of entrepreneurship a vast number, and I mean vast, of successful entrepreneurs are tough street smart people with a real caring of creating something of value and helping society.

permarenter's excerpt:
fabless shops. companies, usually led by an engineer scion from a bigger firm or academic background, that begs for cash from ventures and angels with a pitch to develop either a cheaper copy of an existing integrated circuit design or an amalgamation of multiple designs onto systems-on-a-chip (SoC).

That is TOO KIND a way to put it. In most cases, the founder(s) are engineers who start the basic work on a parent company's dime (Cisco, Intel, Cadence, Apple, etc.). If the prospect looks like it is commercially viable, they withhold the information and STEAL it from the parent company by walking out and "starting up" a fabless shop with the help of a VC. Hire a few slaves to do the fabless grunt work in an old, damp office building on Scott or Kifer. Once engineering is done, they co-opt a senior sales-exec from the big-co, who helps the startup poach from the big company's customer list.

Their exit strategy is then to sell the company for fat-stacks to one of these same big companies, and "work" there for a couple more years before doing the same thing again.

I could post a dozen names from my own linkedIn list that are repeat offenders in this space, but the risk of a libel suit is too high. These bastards are a cut-throat bunch.

So why people join these kind of sweat shop startups ... they will not get admission to stable big companies? On top of this I think they take huge debt for homebuying. For example this lead test engineer owned a home.
The mix of startup and debt stress becomes too much to handle I guess .... unfortunate!

@SP - LOL. Did you work at Greenfield Networks?

Two words....stock options.

Cisco Completes Acquisition of Greenfield Networks
SAN JOSE, Calif., December 7, 2006 - Cisco (NASDAQ: CSCO) - Cisco Systems® today announced it has completed the acquisition of privately-held Greenfield Networks Inc. of Sunnyvale, California. Greenfield Networks provides integrated circuits, hardware and software optimized for Ethernet packet processing that enables next-generation Metro Ethernet services

Greenfield has a proven track record in developing and deploying semiconductors for the Metro Ethernet market. This technology is highly complementary to Cisco's existing line of Metro Ethernet products.

With the close of the transaction, the Greenfield team and product portfolio are now integrated into Cisco's Ethernet and Wireless Technology Group (EWTG) led by senior vice president, Kathy Hill.

Qualcomm's success has really done a disservice to how tech is financed. I know I'll catch flack, and those who know me know that I never mean to be disrespectful of anyone but tech guys like engineers and writers are so mesmerized by 'get super rich through a short amount of hard work' schemes that they only need one Qualcomm success story and then the next thing you know you have incredibly skilled people working for $50,000 a year and a pile of stock options that way more often than not have more value as toilet paper rather than as financial instruments.

>> justme, Permarenter is hyperlink challenged.

That is correct.

>> a year and a pile of stock options that way more often than not have more value as toilet paper rather than as financial instruments.

I have had my share of toilet paper with Atoga Systems .....

At Metallic Power I received a promotion and a bonus, which was stock options. I'm like, "Wow, thanks a lot you guys." :)

In all fairness, at least I saw the writing on the wall. I actually saw some people write checks to exercise them. Talk about getting kicked in the nuts twice. They opened their legs to take it a second time.

wow three people die and one gets put away for life…

Hopefully, the DA will push for the death penalty.

Malcolm,

I think we're on the same page. There are clowns both in business and in science+engineering.

On the business side of things, I am especially weary of those that use the expression "on the business side of things".

:-)

>> justme, Permarenter is hyperlink challenged.

>That is correct.

But perhaps we can start the post with a simple attribution, even if the hyperlink does not quite make it?

I call "stock options" as "options stock". You exercise your option to stock them at your bathroom (and write the check) :-)

Malcolm,

Also good points about the various fads that are out there. Allow me some translation:

6-sigma quality: We, the manufacturing people, are the most important ones in the company.

Market Driven Quality: Hey, what about us in the marketing department, WE are the important ones. Everyone knows that.

Activities Based Costing: Hey, what about us in finance and data-mining? We are important, too, and we will save you BIG money.

....and so on and so forth. Scott Adams, if you ever read this, you have my permission to use.

SP,

Good points, but many times startups also happen because certain employees absolutely cannot get Big Company X to support their idea for a new product.

No swindle involved, necessarily.

TOB,

>>justme, you forgot the lawyers! dont ferget about them!

Do they have a trade-marked program? Or does Lawsuit-driven Quality (TM) just come naturally? :-)

TOB, right on. Wow, you guys have a good memory. I remember something along those lines. I had started at the company in 2000. I vaguely remember something along the lines of "If you do it this way you have to recognize the gains right away. If you do it this other way you recognize the gains at the time you exercise or sell them." My memory is a little fuzzy on that but I think you are talking about that same tax ramification. It might also explain how they did all of a sudden start treating them like Monopoly money.

Judicial Activisim? The thought that sticking it to the man somehow makes the world a better place.

Again, in the right circumstances, a perfectly valid point of view.

Malcolm,

Perhaps you are thinking about what is known as an "83(b) election" in tax law parlance.

http://financial-dictionary.thefreedictionary.com/Section+83(b)+Election

Justme, that's the one.

TOB, ain't that the truth. I have very specific accurate memories. I'm amazed at the detail of things I remember from so long ago. I remember incredible detail having to deal with these types of prick-fucks that we all seem to have had to endure in our careers. Some things I would rather just forget but I can't.

Funny, on the History Channel I'm watching some guy who can draw a city just from seeing it from a good vantage point for a few minutes. Very interesting.

He is a sevant. He is technically autistic.

The Indian CEO at SiPort fired the gunman.

That was a bit too mean, while I am not going to say he deserves what he got, but he obviously didn't have very high EQ. As a small startup, you never fire anyone even if that person has a poor performance. Especially when the economy is teetering on depression, if you are not providing good reference for your employee, he will most likely have a very hard time finding the next job, and on top of this, he is not eligible for unemployment benefits.

Everyone I know who has to "fire" a employee always ends up convincing him to "resign" within a couple of weeks, and promised to provide good job reference, hey no skin off our back.

Well, as a grown up you will just have to bear the consequence of cornering people. If you are mean, you are just subjecting yourself to a higher risk of getting screwed over some time down the road, it just seems the retribution of the Siport CEO is a bit too harsh.

# justme Says:
many times startups also happen because certain employees absolutely cannot get Big Company X to support their idea for a new product. No swindle involved, necessarily.

In those cases, the exit strategy is not simply "we will get bought out by Cadence/Cisco/Intel/etc." The ones I am talking about are where the pattern is very consistent. Here is the business plan in a nutshell:

Step 1. Big Company X identifies a new market, or more often an incremental improvement of existing product.

Step 2. A few people then ditch the big company and get VC funding, leaving a crater behind which Big Company has to fill again.

Step 3. Startup rushes the product to development, working their slaves to the bone.

Step 4. Startup hires a senior manager or exec from parent company, who helps with "business development".

Step 5. Startup gets acquired either by Big Company X or their competitor, Big Company Y. Founders and VC's make out big, a couple of early engineers do okay, the rest of the burnt-out employees are thankful to be now part of the big company.

Step 6. The founders of the startup poke around for the next big opportunity to go back to step 1 and steal stuff.

Somehow, this seems more common in the semiconductor and networking industries. Not so much in application software (like Oracle) or in the internet space (like Google). Acquisitions by ORCL and GOOG have a different sort of history.

I think SP is talking about someone we both know :-)

I am also perplexed by the fact that they could get away with this repetitively (the "serial" entrepreneurs), why didn't their old employer sue them for IP issues?

>> OO Says:

>> The Indian CEO at SiPort fired the gunman.

>> That was a bit too mean, while I am not going to say he deserves what he got, but he obviously didn’t have very high EQ.

OO, you got that right! Now is the time to answers Peter P survey:

====================
I want to know… IF you get laid off, what upsets you the most?

1) your finance is threatened
2) you honor is violated
3) you feel mistreated after putting in so much for the company

(2) and (3) are EQ issues.

I do blame the system for pushing people so hard on people’s finance. People should not feel that they must overpay for homes and other toys. Perhaps this is a flaw of the credit-based society.
====================

Wreckless Eric -- Take the Cash

Wreckless Eric — Take the Cash -- Well, it was a You Tube link...

PermaRenter,

I am not saying the gunman has high EQ, he obviously has some serious psycho problems.

But as a CEO, you should make allowance that among lots of people you interact with, some of them have erratically low EQ and they may go non-linear if you push them a bit hard. Who is to lose more? The gunman who is a loser to begin with, or a serial entrepreneur with a better life to enjoy?

SP,

You got the business plan right. Many 2nd tier Chindian engineers join these kind of startups to gain entry in Cadence/Cisco/Intel.....

Yes I disagree and that is why I say people do not understand ABC and then they blame it. you have given a perfect example how people use it incorrectly.

In youe example you have given how to collect the cost information for the department. First of all once this cost has been calcualted the capacity of the departments as 'total # of cheks writtne' has to be decided. This can be done putting a process on paper and the time perform the activities. Then total capcity is the total time available i.e. total time of all the people who take part in any of the activities mentioned. the supervisor's time is not taken here bu the cost is. This gives two things cost of writing the check and capacity used and unused.

Then the cost of writing chek has to be varified why it is so high or low... The price quoted by the vendor has to be addded with the costs of the activities that are still going to be there or being added due to outsourcing. If this is less than the cost of writing check inhouse then only you can think of outsourcing.

Tell me now.

Rajen

SP,

Among those companies that are started for the explicit purpose of being bought back in again, I do not disagree at all.

Rajen, thanks for replying. I think you were a little quick to accuse me of not understanding ABC, which is why I gave that classic example of how it is misused. It obviously isn't a tool designed to mislead anyone, infact it has a very specific purpose.
The problem comes when like I pointed out you outsource the direct costs but omit to eliminate the overhead components. Getting rid of of the clerks doesn't get rid of the lights or the floor space, and like I pointed out the supervisor who always seems to stay on. When a decision-maker is shown the numbers most of the time they are too lazy to dissect it in depth, so they think they are making a good business decision when, as you so beautifully concluded, they look at the cost of writing a check and compare it to the outside vendor's quote, sees that it is less and then makes the decision purely on the gross figure of the total cost of writing a check. You have not only confirmed what I said, you supported my conclusion, and then on top of it you show exactly how it is misused, so where are we in disagreement?

New thread:

High Interest Rates Fix Everything

PIPE DREAM!!

No disrespect, but you and I both know that these cost accounting methods are a way of overhead salaried people trying to tie themselves to value-add activities because of 'lean' principles. I am sick and tired of seeing situations over and over again where some $100,000+ a year turd tries to make a company profitable by using these types of methods to attack the direct labor of a company, which you and I both know normally comes out to about 10% of the total expenses associated with a product. It is not that ABC isn't understood, it is purposely misused, and that final step you describe is nonsense. The process stops at the comparison stage because there is always the excuse given, oh we'll find something else for that person to be in charge of, or we'll utilize this resource, machine, or floor space some other way. My only point was that using ABC incorrectly (You of course describe the ideal) causes bad decisions. I'm still not sure what your point is, anything can be misused.

"once this cost has been calcualted the capacity of the departments as ‘total # of cheks written’ has to be decided."

This is a detail I may concede but I was taught you want to know the actual cost of the checks you are writing. What you are describing to me sounds useful if you want to know the theoretical minimum cost that your current processes can deliver.

If we switch back to a production model, I would be inclined to outsource a function if as you are hinting my utilization of a station falls below a threshold where I could gain a better economy of scale letting someone better at that function take it over, but that will lead us to a much more interesting strategic discussion. Before we know it, we'll have a whole factory simulated right here :)

"Then total capcity is the total time available i.e. total time of all the people who take part in any of the activities mentioned. the supervisor’s time is not taken here bu the cost is."

Sorry, I have to retract my concession because you came back to my assumption. I was assuming normal efficiency in my example, and for argument's sake the clerks are direct labor so they go home when they aren't writing checks. The supervisor is fixed factory overhead in this example which is why you correctly say it is not her time, but her cost because it is fixed. The lights staying on and extra capacity in my opinion is simply considered waste.

OK I'll stop myself now, please understand I am anal about this stuff. Sorry everyone.