3 responses to “Bottom of the Design Curve with No Budget”

  1. Jed Sutherland

    Many startups seem to be run by people whose expertise is in something other than technology (venture capital, accounting, marketing). This is not to say that the “I have a dream” techie entrepreneurs are guaranteed to succeed either.

    What the non-techies seem to lack is a good understanding of what products they can actually sell. They’re looking for ways to keep the revenue numbers looking good. Hence the desperate scramble to find new products that build on products already in place.

    One company thought to expand their business by reworking a product that was typically sold to industrial customers and aiming it at the Walmart/Home Depot customer. Couldn’t be done because the pricing/performance model is completely different for consumer products. But much time was wasted.

    Another problem seems to arise from poor project management right at the kickoff and then not knowing when to say stop.

    Engineers caught in this Catch-22 have my sympathy.

  2. Mikeinthedirt

    EE=emergency engineering.

  3. Dwight Chew

    I have two stories from my career to give to you.

    When I was in a military R&D company, the physicists basically ran the technical side of the company. We would set the budget for a project and start the mechanical and electrical design parameters working with the scientists.

    As scientists are known to do, they tend to try 1 idea after another until they reached a consenus on how the project was to proceed. During this trial and error approach, they burnt thru my design and engineering budget in no time and left me with no time for my staff to do any detailed design work. Since this was a military project with a fixed price contract, engineering had no option but to sit in front of firing squad every time a monthly budget review came up.

    So, the next project I set up the budget differently. The scientists had their own preliminary design budget which was dedicated to their design needs only. Any layout work or trial and error enginnering was charged to that account number.

    When the scientists burnt through their fun money, they were the ones that had to answer to management why they were overbudget and showed no project progress. They learned quickly that you don’t run a large dollar contract program like their college research projects. My detailed design and engineering budget was still intact waiting for design information from the scientists.

    The 2nd story happened just when the airlines just started to have phones in the seats. After a project proposal with the client, a nice young program manager decided on the plane trip back from the east coast that the company could do the project for a certain fixed price. He used the phone in the seat to call the client and give him the price. The client knew a good deal when he heard the price and agreed to the fixed price.

    Once our engineering department saw the project plan and budget, we were in absolute shock. The budget had no G&A added in, no project management budget, a timeline was too short, etc. We had just enough budget to do a half ass mechanical design.

    To fabricate the design, we had to rummage through our “scrap piles” for left over unused material for the machine and weld shops. Not the best way to do things.