4 ms·

You lost me. The founders of Garmin had a killer idea, well ahead of its time, and they're terrible people for not lavishing the resulting riches on some lucky

You lost me. The founders of Garmin had a killer idea, well ahead of its time, and they're terrible people for not lavishing the resulting riches on some lucky schmo who happened to be a talented electrical engineer living in Kansas at the time? You fail to appreciate that, while many people could have done the same job as your father's friend, it took a singular amount of vision and balls to build a company around a satellite network which wouldn't even be functional for another 4 years. If GPS failed, got axed by the gov, whatever, those guys would have been ruined while said friend would have walked away scot-free. People always seem to forget these points when bemoaning how undercompensated engineers--who after all, do all the "real" work--are.

amackera 17y ago
You forget that their "singular vision and balls" would be useless if no engineers every actually implemented it. The point of stock allocation is to get people to do the work that needs to be done, and it's risky because at the time of hire the engineer doesn't know if the idea will be successful. Generous stock allocation, in my mind, is a token of good-will to the engineer and a recognition of the importance of the engineering phase of the project.
- abossy 17y ago
  If the engineer felt it was a bad deal, I'm sure he wouldn't have taken it.
  - argv_empty 17y ago
    Assuming, of course, there were good deals being offered.
    - gommm 17y ago
      So in this case, it's the law of supply and demand...
      - jcdreads 17y ago
        Which is among the reasons an engineer might balk at moving from San Francisco to Olathe, KS.
  - hga 17y ago
    All I can say is that he knew it was a bad deal and he nonetheless took it. One aspect was that he was having trouble finding interesting projects to work on. The JDAM precursor where he teamed with a major aerospace firm was I think lost due to politics. Simple GPS systems were a step or three down from that but were nonetheless more interesting than the other work he had been able to find for some years previous to that (losing the JDAM precursor contract was a last straw sort of thing).
- Tichy 17y ago
  "it's risky because at the time of hire the engineer doesn't know if the idea will be successful" How is it risky to the engineer, as long as he gets paid? Job security, maybe, but that is hardly worth a lot.
  - nostrademons 17y ago
    The problem is that as an engineer, he's depending upon his track record of past products to make sure he can get his next job. If the company fails, he suddenly has 2-5 years on his resume at a company that nobody's ever heard of, with a product that nobody uses, and the only thing people know about it is that it failed. Not exactly the best recommendation. And even if your bosses give you a great recommendation, it can sometimes still hurt your career. After all, the company failed. Maybe these bozos recommending you were idiots too, and the fact that you were working for them means that you were also an idiot. This attitude is thankfully pretty rare in Silicon Valley, but it can be quite common in other parts of the world. Early employees actually run more resume risk than founders do, because if the company fails, the founders can at least put "Founder & CEO" on their resume, but the engineers can only put "Software Engineer, company you've never heard of."
    - Tichy 17y ago
      Company you've never heard of - doesn't that apply for most companies? I still don't think that risk is comparable to losing the family fortune. Anyway, it is all in the upfront negotiation. If engineer is unhappy with the conditions (ie not enough stock options), he should leave. To complain afterwards is lame (oh, they made a shitload of money - if only I had negotiated for more stock options...).
    - randallsquared 17y ago
      it can sometimes still hurt your career. After all, the company failed. So? Every for-profit company I worked for from early 2001 through 2008 failed. Who blames the programmers for the failure of a company? In my experience, virtually no one.
dasil003 17y ago
I agree, but I think you're still conceding too much to "fairness". I'm all for minimum wage being livable and basic working condition standards, but beyond that I don't believe anyone in the professional class is overcompensated or undercompensated. A person is only worth as much as A) someone is willing to pay them, or B) the amount of money they can make from starting their own business. People can cry 'til their blue in the face about how undercompensated they are, but if that's really true they should take their skills and build a profitable business. I say this because engineers do create tons of value, but we need to put our money where our mouth is and do it ourselves to increase our market value rather than whining about history.
lsc 17y ago
ruined, really? my understanding is that usually venture-backed companies like that are not started by loans co-signed by the founders, but instead started by investors. If that was the case, the founders/managers running the place would have walked just as free as the Engineer would have; the investors would have just lost the money they invested. (the entire system is biased towards letting people 'just walk' - unless you are so small that you need to personally co-sign your loans/leases/etc... like I do.) I mean, I'm not saying a employer who pays people salary instead of stock options is evil; I mean, as long as everyone knows the score ahead of time, that's fine. (In fact, that's what I do with my employees. The downside of this is that as you can't attract people who are as experienced or otherwise desirable as you could with options, and people leave you for better paying gigs as they gain experience sooner than they would if they had stock options.) I'm just saying, the way most (not small-time) corps are structured, the founders have an opportunity to protect their personal assets in case of corporate bankruptcy. And even in the case of small companies like mine (I have a corp, but the protection means nothing; nobody gives me jack without a personal co-sign. I'm tiny.) American bankruptcy laws are pretty liberal, assuming it's business debit, and not tax debit, so sometimes you can still walk. (I do know several people who were 'ruined' by screwing up their taxes enough to get a giant, long-term debit.)

amackera 17y ago

You forget that their "singular vision and balls" would be useless if no engineers every actually implemented it. The point of stock allocation is to get people to do the work that needs to be done, and it's risky because at the time of hire the engineer doesn't know if the idea will be successful. Generous stock allocation, in my mind, is a token of good-will to the engineer and a recognition of the importance of the engineering phase of the project.

abossy 17y ago
If the engineer felt it was a bad deal, I'm sure he wouldn't have taken it.
- argv_empty 17y ago
  Assuming, of course, there were good deals being offered.
  - gommm 17y ago
    So in this case, it's the law of supply and demand...
    - jcdreads 17y ago
      Which is among the reasons an engineer might balk at moving from San Francisco to Olathe, KS.
- hga 17y ago
  All I can say is that he knew it was a bad deal and he nonetheless took it. One aspect was that he was having trouble finding interesting projects to work on. The JDAM precursor where he teamed with a major aerospace firm was I think lost due to politics. Simple GPS systems were a step or three down from that but were nonetheless more interesting than the other work he had been able to find for some years previous to that (losing the JDAM precursor contract was a last straw sort of thing).
Tichy 17y ago
"it's risky because at the time of hire the engineer doesn't know if the idea will be successful" How is it risky to the engineer, as long as he gets paid? Job security, maybe, but that is hardly worth a lot.
- nostrademons 17y ago
  The problem is that as an engineer, he's depending upon his track record of past products to make sure he can get his next job. If the company fails, he suddenly has 2-5 years on his resume at a company that nobody's ever heard of, with a product that nobody uses, and the only thing people know about it is that it failed. Not exactly the best recommendation. And even if your bosses give you a great recommendation, it can sometimes still hurt your career. After all, the company failed. Maybe these bozos recommending you were idiots too, and the fact that you were working for them means that you were also an idiot. This attitude is thankfully pretty rare in Silicon Valley, but it can be quite common in other parts of the world. Early employees actually run more resume risk than founders do, because if the company fails, the founders can at least put "Founder & CEO" on their resume, but the engineers can only put "Software Engineer, company you've never heard of."
  - Tichy 17y ago
    Company you've never heard of - doesn't that apply for most companies? I still don't think that risk is comparable to losing the family fortune. Anyway, it is all in the upfront negotiation. If engineer is unhappy with the conditions (ie not enough stock options), he should leave. To complain afterwards is lame (oh, they made a shitload of money - if only I had negotiated for more stock options...).
  - randallsquared 17y ago
    it can sometimes still hurt your career. After all, the company failed. So? Every for-profit company I worked for from early 2001 through 2008 failed. Who blames the programmers for the failure of a company? In my experience, virtually no one.

dasil003 17y ago

I agree, but I think you're still conceding too much to "fairness". I'm all for minimum wage being livable and basic working condition standards, but beyond that I don't believe anyone in the professional class is overcompensated or undercompensated. A person is only worth as much as A) someone is willing to pay them, or B) the amount of money they can make from starting their own business. People can cry 'til their blue in the face about how undercompensated they are, but if that's really true they should take their skills and build a profitable business. I say this because engineers do create tons of value, but we need to put our money where our mouth is and do it ourselves to increase our market value rather than whining about history.

lsc 17y ago

ruined, really? my understanding is that usually venture-backed companies like that are not started by loans co-signed by the founders, but instead started by investors. If that was the case, the founders/managers running the place would have walked just as free as the Engineer would have; the investors would have just lost the money they invested. (the entire system is biased towards letting people 'just walk' - unless you are so small that you need to personally co-sign your loans/leases/etc... like I do.) I mean, I'm not saying a employer who pays people salary instead of stock options is evil; I mean, as long as everyone knows the score ahead of time, that's fine. (In fact, that's what I do with my employees. The downside of this is that as you can't attract people who are as experienced or otherwise desirable as you could with options, and people leave you for better paying gigs as they gain experience sooner than they would if they had stock options.) I'm just saying, the way most (not small-time) corps are structured, the founders have an opportunity to protect their personal assets in case of corporate bankruptcy. And even in the case of small companies like mine (I have a corp, but the protection means nothing; nobody gives me jack without a personal co-sign. I'm tiny.) American bankruptcy laws are pretty liberal, assuming it's business debit, and not tax debit, so sometimes you can still walk. (I do know several people who were 'ruined' by screwing up their taxes enough to get a giant, long-term debit.)