Decommoditizing Your Technology Career

I was the CTO of a software subsidiary of a large investment bank during the stock market crash of 2007-2008. Before that time, the company had been using a small number of outsourced and offshore technical resources to augment the software development staff. The parent company had established an offshore technology center in Hangzhou, China and I had done preliminary reconnaissance for obtaining staff from there. We also used resources from a second tier Indian outsourcing company to support software testing. Up until the market crash, our use of outsourced and offshore resources was targeted and fairly modest. The market crash changed all that.

Market forces changed the focus to cost cutting which included staff reductions at all levels. A mandate from on-high regarding new staff requests followed the reductions. The new staffing request policy required an explicit justification for the hiring of onshore staff. The message was clear: If we wanted to hire new technical staff, getting them via offshore or outsourced means was the path of least resistance. The theory was that offshore/outsourced staff was 30-50% as expensive as similar onshore staff and that costs had to be reduced. Management viewed some technical roles as fungible commodities that could be easily replaced with cheaper staff in lower-cost locales. Debating the wisdom and economics of this argument is beyond the scope of this article. Suffice it to say that I was a good lieutenant and knew how to pick my battles. After five years time, over 70% of the software development shop was split between China and India.

Throughout that period, I had to ascertain which roles needed to be kept in-house and which roles were commodities that could be externally sourced. Employees continually expressed concerned that their jobs might be moved offshore and were looking for career advice on how to avoid being displaced.  The answer was fairly simple. We could not risk offshoring/outsourcing key roles that added unique value to the business, and I frequently advised the staff on this point. Those roles fell into a few buckets as follows:

Customer-Facing

We had a small group of technologists who did exceedingly well at facing off with customers. They could both evangelize our technical solutions to customers and communicate customer technology needs back to the business. In my experience, this is a rare skill for a technologist and is a key differentiator in supporting the sales organization. Further, the industry had changed over the preceding ten years to a point where the technologists representing the customer had an almost equal say at the negotiating table to those representing that customer’s business needs. Having our technologists facing off with the customer had become critical to the success of the deal.

Solution and Product Architecture

As a financial software company, our products and solutions were the “secret sauce” to ensuring future business success. Offshoring/outsourcing any role supporting the formulation and evangelism of either solution (products + services) or product (technical) architecture represented a risk to the business. People in these roles required a deep understanding of the business domain, knowledge of the capabilities of the company, and the skills to synthesize that knowledge and understanding into value-added solutions and product features. These skills take a long time to cultivate, and we needed to keep these roles close to home if the business was to thrive.

Project Management

Managing complex projects is a skill requiring attention to detail, a focus on the goals, and the ability to collaborate with a diverse set of personalities. Globally distributed resources created by the increased use of offshore/outsourced staff added a new layer of complexity to this job. We prized people who could manage projects in this environment. The best of these folks understood our corporate strategy and goals. They also understood the dynamics of the organization knowing where the pools of expertise existed and how to maneuver inevitable political and cultural obstacles. In short, they knew how to exert organizational influence to align project resources with execution to achieve corporate objectives. It was imperative that these people remained in-house and that we retained them.

In Hindsight

The years surrounding the stock market crash of 2007-2008 were challenging. We made a lot of tough decisions that displaced good people. The times forced us to take a cold, hard look at the many roles that made up a successful software development business and make choices. In the end, the remaining technology staff positioned themselves and the business for success by gaining a new understanding of what constituted value to the business. While the lessons were hard, I think many technologists emerged with a new appreciation of their role within the business and what was needed to achieve superior results while avoiding becoming commodities.

Best,

Charlie

Aha Moments: A Love Story

After much soul-searching and reflection, I changed jobs a little over three years ago. I had been at my previous gig for over nineteen years and had almost grown up there in a professional sense. I moved to my new job and found myself surrounded by really bright and eager managers and technologists. Many were at a similar point in their careers now to where I had been those many years ago when I started my last job. They were good at their jobs and eager to grow their careers. I found myself in the role of mentor to some of these folks.

I spent much time thinking about what advice might be useful to help them drive their careers forward. In doing so, I reflected on my experiences with the various people whom I considered my mentors. I realized that my professional development was influenced by a series of mentorship encounters that led to “Aha” moments that shaped my perspective. In 20/20 hindsight, I did not recognize some of those encounters as mentorship at the time since some were uncomfortable while others were chance encounters, but the insights gained at the time were just the same.

Let me share a few of my own Aha moments:

You will not get ahead if people do not want to work with you

I admit that when I came out of college, I was full of myself. I had done pretty well in my undergraduate education, and I thought of myself as a pretty talented software developer. While I was good at my job, I was also cocky and just a bit impatient with others. My manager was very complimentary of my technical skills but at one point had a pointed conversation with me about my ability to collaborate. She pulled me aside one day and said, “I know that you are a good developer, but rumor has it that some people get annoyed when working with you. It seems that you are sometimes impatient to get an answer and sometimes don’t want to listen to other views. I am concerned that people might not want to work with you if this keeps up.” This was an uncomfortable moment for me since I had never had one of “those” conversations at a job. After I had gotten over the initial discomfort, I realized that she was trying to help me succeed. I knew intuitively at the time that I was sometimes impatient in my desire to get results. She identified a blind spot with me that I needed to address. I worked to become a better listener and team player, and her message has stayed with me. Fast forward and I find myself in similar situations with own eager, talented staff. I know how uncomfortable it was for her to have that conversation with me. I realize she acted out of a commitment to me and my career development. I admire her for her willingness to point this out, and she continues to be a role model for my own difficult conversations with staff.

Beauty in technical design elegance

I was five years out of college working as a software engineer. I was in graduate school evenings working toward a Masters in Computer Science. One of my first classes was Data Structures and Algorithms, which I greatly enjoyed when I took it at the undergraduate level. I loved the elegance of solutions afforded by the practical use of data structures and their accompanying algorithms, but the “nerd” in me was too embarrassed to say it out loud. I had a professor for the class who was passionate about this topic. He would get enraptured when explaining the intricacies of subjects like digraphs and height balanced AVL trees. I could tell that this guy loved this topic, and his enthusiasm was infectious. I mentioned after class that I enjoyed his lecture and commented about his passion for this. He and I had a long talk about the aesthetics of data structures and the elegance of the solutions they spawn. My professor exemplified what I had been afraid to show. I ended up asking him to be my graduate advisor and was fortunate enough to have him as my teacher for numerous classes. Since that experience, I have never been bashful about commenting on the beauty and elegance of technical solutions. In fact, I have found make kindred spirits among those who identify themselves as software craftsman.

Coming to grips with self-imposed limitations

I have stuttered since I was about four years old. The only times it got in the way was when I had to do public speaking in school. I became a master of wiggling out of these requirements sometimes playing the sympathy card. I did learn to “hyper-prepare” when I had to present so, at least, my grasp of the materials was not adding to my source of dread and learning to prepare in this manner certainly helped my grades. In one of my early jobs, I worked with some very senior software developers who at the time appeared to me as “grizzled veterans” of the early days of software. One of these guys “adopted” me for some reason that I could not fathom at the time. One day while we were chewing the fat, he said to me, “Charlie, I know that you struggle with your stuttering. But sooner or later, you’re going to have to come to grips with it if you want to advance in your career. Managers expect you to present to teams, and you seem to avoid it.” No one had ever had such a pointed and frank conversation with me about my stuttering. In fact, most people politely ignored it “like the plague” tacitly indicating that it made them as uncomfortable as it made me! I knew that he was right, and his words stayed with me for years until one day at another job they needed someone to go out on sales visits to explain technical interfaces to clients. I heard about the opportunity and remembered my former mentor’s comments. I raised my hand and volunteered for the role. I was scared to death, but the opportunity got me over my fear of public speaking and helped pave the way for advancing my career.

Lessons learned

In each anecdote above, I learned something about myself that helped shaped my career direction. I realize that these conversations were sometimes as hard for my “mentor” to deliver as they were for me to hear. However, I realize that mentorship is as much an act of love (maybe tough love) as it is a chance to share wisdom and learn from it.

For those on the mentoring side of such a conversation, don’t be bashful about being frank and honest. People are often blind to their weaknesses or even embarrassed about expressing passion for their craft. Mentoring is at the same time about acknowledgment and exploration. You may be that “grizzled veteran” or seasoned manager that is looked backed upon fondly for providing an uncomfortable insight that helped a bright, eager rising star to shine.

For those seeking mentorship, don’t limit your exploration to just kind words and gentle encouragement. Seek out those who are willing to risk the relationship and be candid with you. Often others see our blind spots and weaknesses much more clearly that we do. It is out of concern for your well-being and career advancement that true mentorship happens. Realize that it is often as hard for mentors to deliver tough news as it is for you to hear it! Look for these encounters and take them for the acts of love that they are!

Best,

Charlie

Considering Your Technology Career. Part 4 of 4: The Mature Company

In Part 1 of “Considering Your Technology Career,” I described a model for assessing satisfaction with your current employment situation, and I urged the reader to consider what is truly satisfying in their career. Remember that the four dimensions that I chose (Interest, Compensation, Bureaucracy, Prospects) were of special meaning to me. There may be other dimensions that you wish to consider that have special meaning to you. In this article, I will describe the mature company and provide some anecdotes based upon my experience. I will then apply the satisfaction model to the mature company. Along the way, I will discuss some more subjective elements of a mature company that you may want to factor in when considering if joining a mature company is right for you.

Let’s go.

matureIf you’ve read parts 2 and 3 of this series, you have probably noticed that there are different business forces at work driving the company. In a start-up, those forces are driving innovation to develop a compelling product. In a take-off, the business forces are driving sales to build the book of business to increase the value of the company in advance of either selling the company or taking the company public. The business forces driving a mature company are more complex and are in relation to the type of company. Keeping matters simple, there are two types of mature companies, publically held and privately held. Publically held companies distribute stock and are owned by shareholders. Privately held companies owned by private entities including individuals, foundations, or trusts. They have much in common. Both are driven by competitive market forces to grow revenue and margins. Both can have similar management structures governed by a board of directors and run by executive management.

They also are different in key ways. Industry analysts typically judge the performance of public companies against stated company goals and competitor performance.  Their judgments frequently drive investor behavior that in turn drives the stock price of the company. Frequently, the board or directors and executive management strive to manage the company to analyst expectations that can be a mixed blessing. In an up economy, public companies will heavily invest in innovation to grow top line revenue. In a down economy, the same companies will frequently cut expenses to maintain margins. Cost cutting can mean shedding employees or finding cheaper sources of labor as was the aim of outsourcing boom of the last decade. Often, executive management will see-saw between revenue generation and margin optimization over the course of years all to manage analyst expectations. Responding to these expectations frequently drives changes in executive management and even in the corporate structure should the company consistently fail to meet expectations. In short, public companies are driven to excel through shareholder and analyst pressures that manifest themselves in response to quarterly earnings reports and annual statements. When public companies are at their best, the use their resources to drive change and innovation according to a strategic plan. When they are at their worst, those same pressures drive tactical and severe cost cutting measures that are often painful to employees.

Private companies are a different animal. Because they are not subject to the scrutiny of shareholders and industry analysts, they frequently take a longer view rather than managing quarter to quarter. Because private companies can be more strategic than public companies, they can choose to invest for the long run. On the other hand, those same shareholder and industry analyst forces that can drive a public company to excel do not exist for a private company. The lack of this source of pressure can sometimes lead the owners to hesitate to implement change in the face of competitive pressure.

So let’s apply the satisfaction model to the mature company.

mature_interest

In both start-up and take-off companies, the interest level for me is based on technology and engagement. By engagement, I mean the extent to which the company empowers the employee to make decisions driving the future of the company. Being hired for one’s expertise then being tapped for that expertise is one of the key sources of motivation, at least for me. This engagement is almost a given in start-up and take-off companies since the company finds good employees and set them loose on a problem. Mature companies can sometimes operate differently. At times, a mature company can employ top-down management that can strangle employee initiative. I try to avoid these circumstances whenever possible. My counsel when looking for a mature company is to find one that actively engages employees in finding solutions from the bottom-up. It is not too hard to figure out how a company thinks about employee engagement during the interview process, and I encourage you to do so.

Additionally, mature companies may realize that the very size and scope of their company can stifle innovation. In the face of this realization, experienced executives may compartmentalize innovation with the company in an attempt to isolate it from pressures that may seek to stifle change. You might see this if you ask how the company is organized. Working within one of these islands of innovation can raise interest level.

My “Interest” rating above reflects the variability in employee engagement and willingness to innovate. The very nature of a mature company can limit innovation through risk aversion and market forces driving expense control. However, more progressive companies realize that innovation does not happen by accident and will strive to remove roadblocks to engagement and innovation. Mature companies can provide and interesting and engaging experience but you may have to dig to find it.

mature_compensation

In many ways, mature companies offer many more low-risk compensation opportunities than either start-ups or take-offs. Public companies often have total compensation plans that include equity components. Private companies may also have incentive compensation programs that are almost exclusively cash-based. Benefits packages can be more robust in larger companies.

It is important to note that since mature companies have made it through their start-up and take-off phases, they are usually more stable. As I said above, public companies may tactically control expenses that can affect employment stability and compensation growth. My experience with private companies tells me that they are less prone to employment stabilities issues, but they are far from immune.

On the other hand, because mature companies tend to be lower risk ventures than their earlier stage counterparts, the opportunity for dramatic compensation growth is often less with a mature company. Mature companies allow employees to trade off risk for reward. If you are at a stage in your career where you prize employment stability, then a mature company might be for you. Understand that your compensation growth may be lower than you would like, but that can very well be the cost of stability.

My “Compensation” rating above reflects the variability of working for a mature company. On one hand, you may experience slow compensation growth in exchange for stability. On the other, incentive compensation and benefits packages may be more robust which can yield an overall higher total compensation profile.

mature_bureaucracy

As I mention in my previous articles, bureaucracy tends to be low in start-up and take-off companies. Take-off companies are more likely to have more established bureaucracies to keep staff focused on their tasks rather than having to attend tasks in areas like HR and IT. Mature companies usually have well-established bureaucracies focused on attending to operational details that enable the company run efficiently. When working for mature companies with established bureaucracies, I live by the following rule, “There are four gods that you must appease: Audit, Legal, Finance, and IT. Don’t picks fights with them because you’ll probably lose.” There are two aspects to this sentiment. On the positive side, the bureaucracy helps the company run efficiently and protects it from risk by enforcing a certain amount of orthodoxy. This is a good thing when the bureaucracy supports the business in constructive ways like standardizing technology configuration, rollout, and support. Bureaucracies can get in the way when they impose onerous processes that can impede progress and hinder innovation. When large companies fail to innovate it is often because the business ends up serving the needs of an entrenched and inflexible bureaucracy rather than the bureaucracy enabling business progress as originally intended. The battle between Apple and Sony to capture the MP3 and music sales market, in my opinion, is instructive in this regard. Apple was able to beat Sony with the iPod because Sony was unable to get out of its own way despite having a technology lead. On the other hand, IBM was able to gauge correctly the innovation-stifling effects of its bureaucracy and create an independent business unit within IBM that created the original IBM PC.

My “Bureaucracy” rating reflects the simple fact that mature companies usually have established bureaucracies designed to impose orthodoxy. It is important that you understand the role of the bureaucracy to be able to navigate it effectively.

mature_prospects

Your prospects within a mature company can vary considerably. On the upside, mature companies can offer greater stability and job security than start-ups or take-offs. Frequently, if you are not happy in one job within the company, you can post for another. In fact, this is one of the greatest strengths of the better mature companies that actively encourage this. Multi-national companies frequently offer “secondment” or “expat” packages to qualified employees willing to relocate to new offices abroad to help get started in new markets. It is almost like working for a start-up company without the risk of job loss. These can be great opportunities to grow your career and see parts of the world you might not otherwise see. Also, if you like the job you do and aren’t interesting in branching out, then a mature company is often happy to have “sustaining” employees providing reliable support to the business.

On the downside, mature companies can appear intimidating in their processes and sheer size. Sometimes employees can end up feeling “stuck” and jobs they do not like. I am dismayed when employees get lost in mature companies and actively advise them to seek mentorship to help steer a path forward in what can sometimes feel like a daunting environment.

My “Prospects” rating reflects the variability in the opportunities offered by mature companies. At their best, mature companies can provide stable but interesting work environments where an employee can see their career mature without the risks inherent in start-up or take-off companies. At their worst, mature companies can feel like intimidating mazes that are challenging to navigate.

Final Comments

I sincerely hope you have found this four-part series enlightening and helpful. My intention has been two-fold: To help you gauge your satisfaction with your current job in the hopes that you can find ways to improve areas of dissatisfaction. Alternatively, you might find that another situation in another type of company may be more to your liking. In either case, going into a situation armed with insights and with your eyes wide open can help improve your satisfaction, avoid dissatisfaction, and help you chart a plan for career advancement and happiness. I once worked for a company in the take-off phase where the founder told me, “If your job is not fun then why bother doing it.”  These are sage words that have stayed with me for over 20 years!

Best,

Charlie

Considering Your Technology Career. Part 3 of 4: The Take-off Company

In Part 1 of “Considering Your Technology Career,” I described a model for assessing satisfaction with your current employment situation, and I urged the reader to consider what is truly satisfying in their career. Remember that the four dimensions that I chose (Interest, Compensation, Bureaucracy, Prospects) were of special meaning to me. There may be other dimensions that you wish consider that have special meaning to you. In this article, I will describe a prototypical take-off company and provide some anecdotes based upon my experience. I will then apply the satisfaction model to the take-off company. Along the way, I will discuss some more subjective elements of a take-off that you may want to factor in when considering if joining a take-off company is right for you.

Let’s go.

take_off

The take-off stage is probably the most interesting and potentially rewarding growth phase of a company. Having usually begun life as a start-up company, the take-off survives the perilous early days and has built a great product suite with a demonstrated clientele and sales pipeline. A start-up becomes a take-off usually because the founders have reached the limits of their ability to grow the company further given the financial, manpower, and technical resources at their disposal and are looking to take the company to the next level. Most commonly, that next level positions the company to go public by creating an initial public offering (IPO) or to be purchased by a larger company. In either case, the founders are seeking a dramatic leap in company growth and financial returns on their sweat equity.

So how does the prototypical take-off company take off? It’s simple; they seek investors to infuse cash and know-how to enable growth. Investors come in two main forms: Venture Capital firms and Private Equity firms. The aims of each type of investor is the same, to inject capital into a fledgling company and help it grow to a point where the investors can cash out and get a tidy return. The details of the distinction between the two investor types are beyond the scope of this article but here is an article that describes the differences between venture capital and private equity firms.

Remembering that the end game of the take-off company is to go public or get acquired, it’s important to understand how investors measure the value of the company and know that it’s grown to the point of sale or IPO. That valuation fairly simple in concept too. The purchase value of take-off company is usually measured in multiples of the annual sales revenue or multiples of the sales pipeline. So the goal of the take-off company is to grow sales and gain clients usually to the exclusion of all else and in any way possible as quickly as possible.

Why is it important for you to understand the goals of the take-off company? For two reasons. First, if and when the take-off company gets acquired or goes public, the real value of the firm lies in the equity of the company, i.e., the stock. Being granted equity in the form of stock as terms of your employment is critical if you want to get a better return for your efforts. Future compensation is the main reason that many technologists join take-off companies. In my case, I joined a take-off company shortly after they received a round of venture capital funding and they were hiring to position themselves for growth. I received a modest amount of equity. Three years later, the company was acquired, and the stock became valuable after an additional three-year vesting period. The vesting period took place during the height of the “.COM” boom and we were fortunate enough to see the stock price of acquiring company double in those three years. I got lucky by being in the right place at the right time. By the way, three years between venture capital and private equity investment and selling the company or going public is a typical expectation placed upon the take-off company by the investors.

Second, the take-off company may have to do things that are ordinarily unsavory to a technologist to make sales and grow revenue. For example, the take-off firm I joined decided that it needed to win a large key deal quickly. There were features the prospective customer needed in the product, and they couldn’t wait for the features to be delivered as part of the next major software release. Executive management made a decision to create a separate software version to expedite the development of the needed features without having to wait for the next release of the core product. The chief product architects knew that having two versions of the code would create a maintenance headache down the road and lobbied to overturn the decision. In the end, the decision was upheld, the version was created, the features were added, the deal was won, and it created the expected maintenance headache downstream. Since the goal was to generate revenue to increase the value of the company to lead to an acquisition or IPO, branching the code was the right business decision in spite of adding risk later when the code would have to be merged back into the core.

One cautionary note worth mentioning is about “IP Trolls” also known as “Patent Trolls.” IP Trolls are companies that acquire technology companies for the intellectual property usually in the form of patents. IP Trolls care only about the IP and will quickly shed the employees of the companies they acquire. If you find yourself working for a take-off company that is acquired by an IP Troll, get your resume and social media profiles updated because you will probably find yourself without a job shortly after the acquisition takes place. A quick search on Glassdoor can help you identify if the acquiring company is an IP Troll.

So let’s apply the satisfaction model to the prototypical take-off company.

take_off_interest

As I said above, many technologists join take-off companies due to the promise of making money from equity. It’s worthwhile to remember that most take-offs were recently start-ups, so the founders are still around, the products are relatively new, and the excitement level is usually high. In many cases, the investor cash places the product on the fast track for both feature and technical innovation. My experience with take-offs is that they are often fun and interesting places to work. The race to acquisition or IPO makes them fast-paced, so be ready to trade off some of your personal life for the prospect of a return on your efforts. Since take-offs are more likely to be better staffed than start-ups, you’re more likely to become part of a great technical team. I met many talented technologists from my days in a take-off firm, many of whom remain in my network of revered colleagues.

My “Interest” rating above reflects the technical, feature, and team opportunities understanding that there will be variability. The founders are still around, they’ve hired new talent (maybe even you), and the product and ideas remain fresh. I will offer a word of caution. As I said above, at times take-off companies will make business decisions to drive growth that will result in unsavory technical choices. If you’re lucky enough to stay through an acquisition or IPO, you may find yourself cleaning up after the take-off decisions. In the example above, I lived through the acquisition and was part of the team that had to figure out how to merge the various code branches back into the core. It was not a fun time but was necessary. Go into take-off companies with your eyes wide open and don’t be discouraged if the chickens come home to roost after the company is acquired or goes public!

take_off_compensation

In my opinion, compensation is the primary allure of take-offs. If you remember my discussion of total compensation in the first article, take-offs add the possibility of credible equity returns in addition to a base salary. Sometimes the salaries can be on the lower end but the take-off company is all about increasing the value of the company to sell the company or to take it public. It important that you join in the equity stake as terms of your employment. As before, the discussion of negotiating your equity stake is beyond the scope of the article. However, take-offs and startups share similar models for granting equity, so a link to an article on the topic might be helpful.

My “Compensation” rating above reflects the possibility of good returns on your effort. After all, a Venture Capital or Private Equity firm have invested in the company, and they are motivated to see the company succeed so they will get a return on their investment. They’ve done your homework for you, so you get to join them on the journey to possible returns. There are never any sure things, but the take-off company is further along the way to success.

take_off_bureaucracy

Remember that take-off companies were probably start-ups in their recent past so they will focus on efficiently removing roadblocks to success. Further, they are highly motivated by their investors to grow the business. You can expect a relatively low amount of political intrigue and bureaucracy since the employees have a unified mission. However, since the company is growing, they will insist on more organizational orthodoxy in key area so that employees stay focused on their primary mission without being distracted by other tasks. In short, human resources, IT, governance, and other “institutions”  form, so others don’t have to split their time performing those jobs. Plus, the company will need to mitigate the risks inherent in company growth by institutionalizing core services like human resources and IT. In short, you can expect to wear fewer hats in a take-off than you might normally wear in a start-up and there will be somewhat more bureaucracy to deal with in exchange.

My “Bureaucracy” rating reflects this increase in formal process and governance in exchange for your ability to keep your head down doing what is need to support business growth.

take_off_prospects

Just as with working for a start-up the experience working for a take-off can boost your career by exposing you to aspects of a business that you might not otherwise see with a lower downside risk of the company failing out from under you. While you might not get to wear as many hats and your exposure to new parts of the business might be less than those available with a start-up, the possibility of better compensation and a better team experience could very well outweigh the exposure opportunities. I found that working for a take-off provided me with learning experiences from exposure to talented people. Whereas the start-up had me doing things I might not otherwise do, working for a take-off helped propel my career forward due the learning experiences I gained working with people in disciplines different from my world of software development. It was there that I gained knowledge and experience with infrastructure and sales disciplines. Both were key to my future as a CTO.

My “Prospects” rating reflects the both the opportunities to grow in your career as well as the opportunity to gain compensation for your efforts.

What’s Next?

If a take-off company meets it growth potential and get acquired or goes public, it usual enters the “Maturity” phase where stable and predictable growth is usually the goal. In part 4 of “Considering Your Technology Career”, we will examine the “Mature” company and use the model for assessing satisfaction to explore possible sources of satisfaction and dissatisfaction.

Stay tuned!

Best,

Charlie

Considering Your Technology Career. Part 2 of 4: The Start-up Company

In Part 1 of “Considering Your Technology Career,” I described a model for assessing satisfaction with your current employment situation, and I urged the reader to consider what is truly satisfying in their career. Remember that the four dimensions that I chose (Interest, Compensation, Bureaucracy, Prospects) were of special meaning to me. There may be other dimensions that you wish consider that have special meaning to you. In this article, I will describe a prototypical start-up and provide some anecdotes based upon my experience. I will then apply the satisfaction model to the start-up company. Along the way, I will discuss some more subjective elements of a start-up that you may want to factor in when considering if joining a start-up company is right for you.

Let’s go.start-upOK, I’ll admit that I’m biased when it comes to start-up. I was employee #2 in a teleradiology startup many years ago where the founder and I developed the first all digital teleradiology system called DigiRay. From the perspectives of innovation and pure software development fun, it was the best two and a half years of my technical career as a software developer. It was a seminal moment in my career because I put myself into unknown territory. There were many aspects of the business that I had to learn quickly, and there was no place to hide. If the founder and I didn’t do it, it wouldn’t get done. I not only developed software, but I wrote parts of a patent application and application to the US Food and Drug Administration. I went on sales calls to hospitals and support calls to doctors homes late at night. The experience quickly disabused me of any latent fears that I had about my capabilities. Working for a start-up was exhilarating and confidence building. In 20/20 hindsight, I don’t think I could have advanced into a technology leadership position without having worked for TeleScan. On the flip side, our start-up didn’t make it. We were good engineers who built a great product, but sales and marketing were not our strength. Further, our shoestring budget had us chasing investment, and we just ran out of time.

Taking my anecdote as an example of a prototypical start-up, there are common threads. Start-ups are just that, companies that are starting out developing what their founders think is a good idea that will provide a benefit and make money in the process. In the case of the DigiRay product, previous teleradiology systems transmitted facsimile images to the doctor’s home for reading. The doctor still had to go to the hospital to do a “wet” reading at the imaging console to confirm the diagnosis based upon the source data. DigiRay transmitted the CT, MRI, Nuclear Medicine, Ultrasound, and X-ray source data to the doctor’s home and provided the imaging console controls on a PC to allow a “wet” reading without the need to travel to the hospital. The benefit to the patient was that the product allowed for “wet” readings sooner which could save lives. The other benefit was less travel for the doctor. Both of these features are now common in teleradiology using the DICOM standard. We were about ten years ahead of our time!

A limited budget is next feature of a prototypical start-up. Typically, start-ups are self-funded by the founders. Alternatively, there may be an “angel” investor behind the scenes who is helping to fund the company. A current trend is to seek investors via crowdfunding sources like  IndieGoGo and Kickstarter. Big money investors tend to arrive when the start-up has a demonstrated product, client pipeline, and revenue stream. In any event, money is limited, and where it exists, it’s poured into product and business development.

Finally, those that join start-ups are typically asked to wear a lot of hats. In my example, I found myself doing far more than just developing software including regulatory and legal filings, marketing and technical documentation, support, and sales. This was the allure of the job for me but might not be for everyone.

So let’s apply the satisfaction model to the prototypical start-up.

start_up_interestThe main reason most technologists join start-ups is because the proposed product and business domain is interesting. In my case, I spent the years before joining a start-up developing software for defense applications for various branches of the US military. The work was interesting, and I felt like I was making a difference. But when a colleague approached me with his teleradiology prototype and asked if I would like to join him in “productizing” it, the thought of getting into telemedicine where I could make a difference in human health was very appealing. The interest level was off the charts!

And so it is with most start-ups as reflected in my “Interest” rating above. There are enthusiastic founders and a cool idea. These are usually “greenfield” projects where a product is built from the ground up. Greenfield projects are rare in the life of a software developer. I’ve experienced such projects a handful of times in my long technology career.

start_up_compensation.pngI’ll put this simply; most start-ups can’t afford to pay premium wages. The financial promise of a start-up is not in the salary but lies in the possibility of the future success of the company. The prospect for a high starting salary is low, and I reflect that in my “Compensation” rating above. I do note some variability in the rating because salary like anything else is open to negotiation if you are extraordinarily valuable. Don’t sell yourself short but don’t price yourself out of a great opportunity if you feel passionate about the start-up.

However, there are ways to hedge your compensation bets when joining a start-up. Since you are getting in on the ground floor and accepting significant risk in helping to ensure the future success of the company, you are correct to ask for an equity stake in the company. This usually takes the form of receiving stock in the company that becomes valuable if the company succeeds. Explaining the finer details of negotiating an equity deal as a founding or early employee is beyond the scope of this article but great sources abound with a brief search.

Finally, the notion of total compensation as described in the first installment of this series can be highly variable with a start-up. Start-ups may or may not offer good healthcare and paid time-off packages. The founders decide what is offered, and there are many differing points of view.

start_up_bureaucracyIn my opinion, bureaucracies emerge as the number of staff in a company grows and the initial tight alignment of common business intentions diverge. Put another way, where there are smaller numbers of people committed to a common vision and direction, bureaucracies aren’t needed. As the company grows and the vision and direction diversifies and become more complex, bureaucracies form to impose orthodoxy and control. This is a fancy way of saying that start-ups are usually a free of bureaucracy and low on politics, and I reflect this in my “Bureaucracy” rating. In exchange for functional segmentation imposed by bureaucracies, employees are typically asked to wear many hats to make the business work. For example, in a larger company, an IT department would procure computers and configure and deploy them. Those tasks would fall on the employees of the start-up. Clearly this is a mixed blessing. In my case, I enjoyed doing a variety of technical tasks and learned a lot from it. That may not be that case for all employees.

start_up_prospectsWorking for a start-up is not only an interesting experience but can boost your career by exposing you to aspects of a business that you might not otherwise see. On the other hand, the risks are high since most start-ups fail within a few years. If you’re in a position to accept the risk that the company might not be around in a few years, then I think you will find the experience of working for a start-up interesting and exhilarating. Like I said at the start of this article, I’m biased since my experience working for a start-up was a career booster for me.

My “Prospects” rating reflects the extreme variability inherent in risky ventures. If your goal is to do something really interesting and possibly give your career a boost even if it means that you might not get rich doing it, then your prospects in a start-up are high. If, on the other hand, your intention is strike it rich, then the variability for your prospects is very high. Only you can judge why you should join a startup and estimate how the company might do. A lot of that depends on the competence and business savvy of the founders and their judgment about the market for their product ideas.

What’s Next?

If a start-up makes it past the first few years, it’s probably because the principals managed to develop a good product, build client pipeline, and a generate revenue. In these cases, the next goal for a small company is to grow the business at an accelerated pace. This is called the “Take-off” phase and frequently requires and infusion of cash well beyond the ability of the nascent pipeline to support.

In part 3 of “Considering Your Technology Career”, we will examine the “Take-off” company and use the model for assessing satisfaction to explore possible sources of satisfaction and dissatisfaction.

Stay tuned!

 

Best,

Charlie

Considering Your Technology Career. Part 1 of 4: Are You Satisfied?

As of this writing, the job market for technical talent is booming in the United States. Even though the US economy is still recovering from the economic calamity of 2008, circumstances have conspired to create a high demand for technical talent. The fear of outsourcing has driven down enrollments in domestic technology education while the pace of technology change continues to grow within US businesses. Those who embarked on a technology career during these times are now seeing demand for domestic talent while the supply of such technologists slowly catches up. As with all boom and bust cycles, this will change over time. But for now, it’s largely a sellers’ market when it comes to career mobility.

During these high-demand cycles, the technologist’s fancy turns to job satisfaction and career mobility. As my colleague Theresa Hummel-Krallinger writes, companies realize that they must compete for tech talent and are starting to wake up and smell the improving job market. In the meantime, ambitious employees assess their current positions and their prospects.  The purpose of this article is to share a model that I devised for assessing job satisfaction that helped guide me in my career decision-making.

It is my sincere hope that the reader will earnestly look at their level of satisfaction with their career. My experience suggests to me that satisfied employees are energized by their work and produce better results. Those are the type of employees that a technology leader should aspire to attract and to strive to retain. For my colleagues who might question the wisdom in suggesting that technologists assess their satisfaction with their careers for fear that these employees might be tempted to depart, I say that employees are already thinking about their positions when circumstances create dissatisfaction and recruiters knock on their door. My sincere hope is to guide technologists to make more informed career choices.

A Model for Assessing Satisfaction

Over my many years of employment in the technology sector, I’ve changed jobs a number of times. Each change was preceded by events leading to a sense of dissatisfaction. This should come as no surprise to anyone who has changed jobs through their own volition. After each dissatisfaction-provoking event, I did some soul-searching about my current situation and whether it was worth staying or leaving. In most cases, I came to the conclusion that things were not as bad as I first thought and ended up staying. In a few instances faithfully documented on my resume, I pulled up stakes and moved on. When I did ponder my situation, I considered it along the four dimensions of interest in the work, how I was compensated, the level of politics and bureaucracy present, and the prospects the job held for the future. The following illustrates those dimensions:

satisfaction

After getting past the emotional component of my apparent dissatisfaction, I thought about each of the four dimensions to try to assemble an objective view of my situation. I’m sure that many who read this article will come up with additional dimensions of their own. But these four kept resonating with me and provided a sound model for my decision-making.

Interest

Job interest is a subjective topic. For me, jobs that provided the opportunity for technical innovation are important. I’ve always been a bit of a technology wonk, and I gravitate toward the interfaces between software, infrastructure, and humans. This had lead me to interest in user experience (UX) and what is now called development operations (DevOps). I’ve also spent time early in my career building tools to support other developers. This highlights my interest in seeing the things that are developed applied to real world problems.

My interests aren’t necessarily your interests. I challenge you consider what you really find interesting in your career and your current situation. It might be the excitement of technical innovation, but it could very well be the chance to build a cohesive team, the prospects of learning from really gifted architects, working within an engaging business domain, or any number of things encounter through the course of technology development. Only you know what interests you!

Compensation

Compensation can be a dicey topic. Many people convince themselves that sub-par compensation is the main source for their dissatisfaction. In practice and having known scores of very talented technologists, I have found that compensation is rarely the primary cause for dissatisfaction. More often, dissatisfaction with other dimensions is amplified by thoughts of better compensation. I caution the reader about this because I have seen employees job-hop for pay and get themselves into worse situations because they didn’t understand the true source of their dissatisfaction. Of course, that’s what this model is all about!

When considering compensation, it is valuable to understand the market value for your role. There are many sources of salary information available that is beyond the scope of this article. Suffice it to say that it’s not too hard to understand if your compensation is equitable. However, salary is only one component of compensation. In today’s economy, it’s wise to think in terms of “total compensation.” Total compensation is a fairly recent approach where you consider all sources of income and benefits offered by your employer as a single package. This includes salary, incentives, paid time off, retirement contributions, health and other forms of insurance, and any other instance where you get a financial benefit as part of the terms of your employment. This is especially important now in an era when employers expect quite a bit from employees, and healthcare costs are rising. Not all employers are equal, and the benefits add up for both individuals and families. Viewing remuneration through the lens of total compensation allows you to balance all facets of a package. For example, a lower base salary might very well be offset by a better incentive compensation program and vice versa. You might have a young family so work-life balance in the form of paid time off, and better healthcare may be paramount. It depends upon your individual preferences and circumstances.

Bureaucracy

We all have parts of the job that we like and dislike. I have noticed that for me and many technologists, few things are more annoying than excessive bureaucracy and the related politics. Silly things like jumping through hoops to get office supplies, decent equipment, and competent support can irritate an employment experience. Admittedly, I have rarely found bureaucracy to be a primary cause for dissatisfaction. But taken holistically, it can sometimes tip the balance when considering an employment situation. Conversely, we frequently take for granted well-run bureaucracies that provide great service. I urge you to take a balanced approach when considering this dimension since every company has its challenges in this area. The bureaucratic grass is seldom greener elsewhere; it’s just different grass!

As a final note and a pet peeve of mine, please treat your administrative and support staff well. All too often these are the folks who contribute the most to the efficient operation of the business. They seldom get the credit they deserve when the business runs smoothly but sure take it on the chin when things don’t go as expected!

Prospects

Of all the four dimensions, assessing that prospects of your role within the company is the most subjective of all. As I previously mentioned, being involved with innovation is a great source of job satisfaction for me. I tie my prospects for continued employment to the company’s commitment to sustainable innovation. You need to ask yourself what matters to you. If it’s not innovation, then is it long-term stability, continuing to work with a great team, advancement up the career ladder, predictable compensation increases, short commute, amount of business travel, having a great manager, or some combination of these! Whatever it might be, remember that change is at the heart of most businesses. Today could very well end up being the “good old days”, or the future could hold the promise of better things to come. Only you can judge.

For Example

I had worked for a software company for many years. I joined right after they received a round of venture capital investment. I stayed through their acquisition by large firm and eventually became a technology leader within the division. The parent company left us alone so long as we generated revenue and margins, so the prospects for the future were reasonably bright. We had the stability of a large firm yet continued to operate as a much smaller company, and I had a great relationship with my manager. My satisfaction profile looked like this:

before1.png

We had just completed a major product uplift, and the work continued to be interesting within a range of variability from average to high (see the above length of the “Interest” indicator line). I felt adequately compensated for the position when viewed through the lens of total compensation. The raises were low, but the incentive compensation was very good so long as we performed. The bureaucracy was well-run and supportive because the team had been together for a long time and was very cohesive. The prospects were fairly bright within a range of uncertainty. In short, the averages seemed to be in my favor.

Then two things changed. First, we were placed under a new senior manager at the parent company. Second, we were looking for a modest investment from the parent company to continue to innovate the product. To make a long story short, it turned out there would be no investment from the parent to support the proposed innovation strategy and it was clear that the parent company would be calling the shots more and more. They would be taking the division in a different direction. After assessing my satisfaction once again, the profile had changed:

after1

Since innovation would be an uphill battle, my interest level dropped. I knew that we would have new direction from above so the bureaucracy and politics would rise as is common with larger companies. Finally, I saw my prospects for future advance diminish as I would be a smaller cog within a bigger wheel. I decided that it was time to seek greener pastures.

What’s Next?

I hope you will take the model described above and apply it you your situation. You just may find that you have a pretty good deal where you are now. I found that to be true most of the times I found myself soul-searching about a job change. Remember that petty annoyances at work are mostly ephemeral and evaporate after a few good nights sleep. However, if you keep coming back again and again to the notion that it might “be time” then I hope you will use the model to create your own satisfaction profile. It might guide you to a better opportunity!

In the three articles to follow, we will examine three main stages in the lifecycle of a company: The Start-up stage, the Take-off stage, and the Maturity stage.

company1

We will use the model for assessing satisfaction introduced in this article to assess possible sources of satisfaction and dissatisfaction within each of the three company lifecycle stages. My intention is to help you understand the different types of companies and to be better able to assess what might be best for you. You could very well find that your present situation is just where you want to be, or you could find that your interests lie elsewhere!

Stay tuned!

Best,

Charlie

Of Cars and Career Development

OK, I’m a car guy. Ever since I was a kid, I loved everything about them. My boyhood best friend Jimmy McGowan and I took keen delight in being able to identify cars at night by their headlight and tail light patterns. And we knew that the Chrysler 225 Slant-6 and 318 small block engines were the pinnacles of 1960’s Chrysler engineering. Turning sixteen years of age was a rite of passage because we would learn how to drive…a gateway to new adolescent freedom! When we owned our first beater cars, we learned how to tune them up ourselves as a point of pride. After all, how hard was it to gap the points and replace the rotor, condenser, cap, plugs, and plug wires on a pre-catalytic converter jalopy! Timing light? Who needed one of those when you could set the timing by ear just by giving the distributor a turn!

All these years later, I’m still passionate about cars. Even though I no longer tune up my own, I still enjoy reading about and talking about them with like-minded folks. The process of determining my next car is a particular source of excitement since I get to do research, window shop, and test drive! Well, during my most recent car search and after much research and salivating, I decided that an Audi A7 was in my future. I had done my homework and visited my friendly Audi dealer for a test drive. Of course, I fell in love with the car and drove away pondering my strategy for acquiring one of these beauties.

Now the A7 is not exactly a common car, and you don’t see too many on the road. But almost immediately, I starting seeing them all over the place. I could barely turn a corner without one popping up. What the heck happened? Did Audi start giving them away in my area? Did extraterrestrials implant a cybernetic device in my brain and start beaming visions of A7s into my head? Of course not. I experienced the Baader-Meinhof Phenomenon also known as The Frequency Illusion. Simply put, my recent experience with and my desire to own an Audi A7 biased my perception of my surroundings toward noticing A7s. There clearly were not more A7s on the road before I decided to buy one. I was merely more attuned to seeing them since I wanted to own one. My desires had shaped my perception of the world!

And so it is with career development!

Before I decided to embark on a journey leading to a technology leadership role, I pondered what I wanted to do with my career. I had spent almost 20 years as a software developer with a high degree of success. I had worked on military, medical, and financial systems and I liked technology, but I knew I wanted to put my passion for applying technology to more than just developing software. After much thought, I narrowed my career direction choices to three. First, I could earn a law degree and practice intellectual property law. After all, there is a market in the legal profession for former software folks who know their way around technology. Second, I could earn a Ph.D. and move into academia. I had tutored students and taught undergraduate labs in college and thought teaching would make a satisfying career. Finally, I could broaden my business skills and find an opportunity leading a technology organization within a business. Being a classic Myers-Briggs INTJ who not only likes the intellectual challenge of exploring a technology but likes to see that technology applied, I decided on the latter…I would set my sights on a CTO-like position.

After deciding upon my career direction, I started researching the role in more depth and discussing what it meant with those around me. Within a short time after committing to a new direction, a funny thing happened. I started noticing new opportunities to learn and talk about topics adjacent to my existing software development skills that might help build my career. The Frequency Illusion had kicked in!

At the time, I occupied and office next to the infrastructure folks. Their conversations about hardware, networking, and storage became more interesting to me, so I joined in. I was home-building computers as a hobby, so it was a natural fit. I was already helping answer technical RFI questions for the sales folks. Discussing the intricacies of sales opportunities with them became more interesting. Business discussions around procurement and budgeting that had felt a bit tedious became more interesting. And things that previous would not have appeared as opportunities for advancement seemed to almost miraculously present themselves.

A year or two later, the company I worked for had developed a new hosted solution for the core product, what is nowadays called SaaS. They needed someone to accompany the sales people on sales calls to explain the technology underpinning the offering. Ordinarily, I would not have seen this as an opportunity, and I would have shied away. Since I knew that understanding client needs were key to being a technology leader, I saw this as my chance to learn more about the sales process and client engagement. I raised my hand to volunteer. Oh yeah, and the prospect of facing off with clients scared the heck out of me but, as they say, no pain no gain! A sales person and I then spent close to a year selling the new solution. We were so successful that year that we won a sales award! I learned a lot about the business and what clients cared about throughout that year. It was one of those truly pivotal moments in my career. Further, I discovered that I really enjoyed evangelizing technology solutions to clients! Not too much later, a CTO position opened up in the company, and I applied. The rest is history.

In hindsight, it’s clear to me that committing to a career direction changed my perception and provided a new focus on opportunities that might help me achieve my goals. In short, I biased my view of the world toward the direction I had set.

Put some bias into your career development!

It continues to be my privilege to work with some incredibly talented technologists. Their skill and passion for their trade inspires me to believe that the future of software development is bright. Occasionally some approach me for career advice. The common thread of these career development encounters is that each person in their own way has committed to a direction for their career. In reaching out, they are looking for experiences and opportunities to help them grow. Maybe without knowing it, their commitment to their future has introduced some healthy bias into their perception of their world.

I urge the reader to explore what you desire in your career. At some point, make a commitment to yourself about your career passions and what you want to achieve. In doing so, you might just put the Frequency Illusion to work for you! Miraculous opportunities could very well come into focus that will help propel your career forward!

Best,

Charlie