On Open Floor Plans

Way back in 2006, I was working for a startup, originally called Sharefare and later renamed to Ludi Labs. When I first joined Sharefare, we had an old office space in Los Altos. It was a "traditional" office space, divided up into offices, with only two large open areas. One was the front reception, and other was a break room area. While there, we had around ten engineers. We would put 2-3 engineers per office. It worked pretty well.

After I had been at Sharefare a few months, we received another round of funding, but it came with a catch. Our board wanted us to hire a "real" CEO, since our CEO/founder was a very technical guy, not an MBA type at all. Our CEO came from Under Armour, you know the sports apparel maker. He was an east coast guy, who I'm sure we paid a ton to relocate to the Bay Area. When he arrived, we were running out of space in our little old office in Los Altos. So he decided that one of his first priorities would be getting us a new office. He had a vision for the new office -- the floor of the Wall Street stock exchange. He wanted an open floor plan that would encourage collaboration and keep everyone energized. So we moved into a brand new office (we were the first tenants) with a completely wide open space.

Now I always attributed this hubris to our CEO being an east coast guy who had never really been around engineers. You see, engineers do not work well in hectic, loud environments like the floor of the Wall Street stock exchange. A very large part of their job is thinking, and people running around making noise does not help an engineer think. Lots of other folks have written about what kind of environment does work well for engineers, so I won't go too much into it. I'm just here to tell you what does not work.

The open floor plan is complete fail. The most obvious problem is the noise. First, most companies have some non-engineers who work for them. Some of these non-engineers really need to do a lot of talking to do their job. They need to be on the phone ordering office supplies, or talking to potential business partners, or screening new hires. These people constantly generate noise. Put that in an open floor plan, and there is always noise. This is a constant drain on other folks, like engineers and designers, whose work requires them to think a lot.

The next problem is that engineers and designers, do indeed need to talk sometime as well. Sometimes this is talking about work stuff, but there is also a lot of non-work stuff that engineers talk about. Maybe they are debating closures in Java or the merits of Python vs. Ruby. You want engineers who bullshit about stuff like that. Or maybe they are just talking about the Super Bowl or Lost. There is value in this too (y'know that whole "team building" thing.) Anyways, when you are in an open environment where noise is already problem, then it really discourages this kind of engineering conversations. If you are lucky enough to need to talk to your fellow engineer when it is relatively quiet in the office, you may be reluctant to engage him/her because you want to relish the peace. If instead it is during a typically noisy time, you will ask yourself if whatever topic is really worth talking about if it means shouting over the din. Instead of encouraging collaboration, the open floor plan does the opposite.

Back to Sharefare... It did not take long for everyone to realize that the open office was not working. First, we tried to put the engineers and non-engineers at opposite ends of the office. We had a handful of real offices that were intended for execs. Instead they were kept open, so that people could use them for longer phone conversations. I personally spent a lot of time in those rooms, doing phone interviews with potential new hires. Finally, the CEO came clean and admitted that the whole thing had been a bad decision on his part. He bought everyone Bose noise canceling headphones, supposedly out of his own pocket. This was his high point of popularity with engineering. Now when you walked into the office, everyone constantly had the Bose headphones on. I think this also hurt collaboration. I know I am personally less likely to try to start a conversation with somebody with headphones on.

Anyways, that was our failed experiment. It seems like the idea has been picked up more and more in the Valley. A lot of companies are opting for this configuration. I think some do it as a cost cutting measure. You can spend a lot less on furniture with an open floor plan, and you can pack in a lot more people in a given space. Others claim that it is all about encouraging collaboration. Again, my experience is that it will do the opposite. Still others do it because they want to break away from the traditional cubicle environment. To those folks I would say: "function over form." An ugly office full of productive engineers is better than a stylish office full of miserable engineers.

Recession and The Valley

Are you a programmer who recently moved to Silicon Valley? Are you nervous about what things will be like now that the greater economy has gone pear shape? Then listed to this old man tell you all about his experiences in the last recession in the Valley.

I moved to the Bay Area in 2000, right as the last great recession was getting started. Like this recession, it was happening in an election year and it really hurt the incumbent party. I started off working at a very small start-up in San Francisco called InternetElements. They had a cool idea. Allow any bank or even large organization provide the tools to their members to buy and sell stocks. Remember that back then the stock market was really hot, much more so than it has gotten in the last few years. New companies sprung up all the time and went IPO. Everybody bought into the IPO and made crazy money. It was great.

Anyways, once the stock market started tanking and IPOs disappeared, nobody had much stomach for InternetElements' idea. I was employee #4 there. Our CEO basically told us that we had cash in the bank to make payroll up until a certain date. This was about a month before that date. There were talks going on to get us either some more money or do a merger with another company that had more money, but neither of those worked out.

I started looking for a new job. This was fall of 2000, so things weren't too bad just yet. I didn't have much experience, but I had a degree from a (among the tech world) well known school. So that opened doors for me. I found a new job two weeks before the old one was set to die, and started at the new one on the Monday after InteretElements stopped promising to make payroll. The two founders of the company continued on trying to salvage their company, but there were no hard feelings at all.

My next company was called RMX. I would work there for the next two years. It was also a start-up, but was sort of a spin-off from Chevron. I was there throughout the recession. When I first started, we were expanding pretty quickly. They had hired a lot of consultants to build the initial site and needed to replace them with full-time employees. There was also a grand vision of a big company with an large and intricate org chart.

That vision died pretty quick. Soon the hiring stopped, and then some layoffs started. Tech companies everywhere were struggling. We knew there would be no additional rounds of funding. So we had to become profitable to sustain ourselves. Our management were great. They explained everything in detail at all times. We met as a company every Friday morning. Management talked about how much money we had in the bank, what our burn rate was, and what kind of sales prospects we had.

We worked really hard at RMX. We closed deals with new customers. We drastically cut costs by replacing licensed software with either open-source or in-house built software. By the spring of 2002 we were profitable with about $4M in the bank still. Everybody felt pretty good about themselves. We had survived the recession, even when it got amplified by the aftermath of 9/11. Or so we thought...

In May of 2002, our board of directors voted to shut us down. The reasoning? Even though we were profitable, the recession had changed the landscape they thought. Our ceiling was much lower, even though our risk was also now very low. We weren't a worth investment, so decided to liquidate us.

Half of the company was laid off within a week of that. The other half was kept around. We had customers and contracts with those customers that required us to help them transition to not using our service. Basically each customer got a copy of our code so they could run our service for themselves, on their own hardware. So all of the engineering folks were needed for the transition, but obviously sales and marketing folks were not.

Everybody laid off got one month's pay as severance. Everybody who was not laid off and staid until the end got one month's pay severance, and got a bonus for staying to the end. I was one of those folks. It was a pretty good deal in some ways. I had a job, while it was understood that I would look for a new job. However it was pretty depressing. Half the folks in the company were gone, including a lot of friends. Everybody still working knew their own end was in sight. The closer it got, the more stress people felt.

I wound up staying until the very end. We had a big party on the last day. It was nice, but it was pretty upsetting for me. After two years with a start-up, I had a lot of emotional investment. I was too shook up by it to even say proper good-byes to everyone.

The next week I went on unemployment! I had COBRA papers ready to file when my health insurance ran out. And I did a lot of job hunting. I felt a lot of desperation to find a new job and took the first offer that came my way. That was a mistake in hindsight. I wound up only going one week without a job.

The new job was a contract and it was doing code in C#. I was intrigued about learning a new language, as I had only done Java, Perl, and a little C++ previously. I was a total gun-for-hire at this job, and I was not used to that. I had been an integral part of a start-up for the three years prior to that, and I did not adjust well. Luckily after four months, I found a job at Yet Another Startup: KeepMedia, now MyWire.

The worst of the recession was over in 2003, but things were not peachy. I started working at KeepMedia in February and we launched that summer. It was a great company, and I was back in the kind of role I liked. Things did not take off like we wanted. I think that had more to do with the business plan then the economy, but who knows. We never had any layoffs or anything like that there. But we did everything on the cheap, and I do mean cheap. Our biggest expense was an Oracle database. We were scared to put people's credit card numbers in a MySQL database.

Anyways, that was an interesting experience too. It was a stat-up that started in a recession. What was a little different about KeepMedia is that we were funded by a single person, Louis Borders. We did not have a certain amount of money in the bank and there were no plans to seek VC funding. That would have been tough to get anyways at that time. But there was still huge emphasis on saving money at all costs. We were very creative at doing that. I learned a lot of valuable lessons by having such constraints placed on the systems I built.

I wasn't at KeepMedia very long. That's a long story in itself, and I hated to leave. However, by the time I left, the recession was officially over in The Valley. Let me summarize some lesson that I learned back then:

1.) Start-ups are still start-ups. They are no better or worse just because there is a recession going on.
2.) However, if you are at a start-up, it becomes even more important to know what the heck is going on.
3.) You should still be picky about your job. Don't let the recession force you into a job you hate. Now the recession can force you into that situation, i.e. you are running out of money, etc. But don't put yourself into that situation artificially.
4.) If you do find yourself in a bad position, don't be afraid to make a change.

That covers the professional side of things for me. When it comes to personal things, honestly the last recession did not affect me negatively. Rent prices dropped a lot during that recession, mostly because they were way too high before it. I never took a pay cut and I never had any money in the stock market other than my 401K. So in many ways my buying power actually increased during the recession. Now if I had been unemployed for a long stretch... well obviously that would have been a lot different.

Will this recession be even worse? I actually don't think it will be worse for The Valley, just because the last one was so bad. This one looks like it will be worse for the country at large, and maybe it will last longer. The last recession was four years solid in The Valley, though maybe less elsewhere.

Mint

Congrats to Mint for winning the TechCrunch40 Top Company award. I was recruited by Mint's VP of Engineering, David Michaels, earlier this year when Ludi Labs was winding down. I was very impressed with their technology. I was impressed with their business model, too, but what do I know about business models? I'm a lot harder to impress when it comes to technology. Apparently their business model is indeed pretty good. Seems like a killer combination: technology, business model, and now lots of press...

Hiring at Startups

Let's take a break and enter the echo chamber for a moment... I was reading TSS and saw this blog on hiring at startups. It was somewhat interesting, though kind of "duh"-ish. Then I read a response from Don MacAskill, the CEO of SmugMug. There was one thing in here I had to completely disagreewith:

Hire for passion first, talent second.

Now I'm certainly no CEO, but I have been at my share of startups. I've also done a lot of interviewing and helped hire (and not hire) many people at said startups. There is no way I could agree with this statement. It reminds me of when sports broadcasters talk about "chemistry" people. It's a bunch of garbage.There is no substitute for talent.

I have worked with enthusiastic people who everybody loved. These were people willing to do whatever you asked them to do, work ridiculous hours, you name it. But they weren't good programmers. You know what happens? They struggle and it puts a drain on everybody else. Everybody else tries to help them out and cover for them, because they like the person and the person needs help.

I've also worked with very aloof, but brilliant people. These are the kind of people who you can go weeks without saying more than a few words to them. But they always deliver, and always deliver on-time. Often they over-deliver, i.e. they provide extra features that weren't asked for, but are immediately useful to everyone. But they keep to themselves, they don't run their mouths at company meetings, etc. Give me one of those people over two or three "passion first, talent second" sorts.

It's funny, just earlier I had been talking to a friend of mine about "geek syndrome" a.k.a. Asperger's Syndrome. This "syndrome" often suggests a correlation between highly logical intelligence and social "shortcomings." I would guess that such people would often fail the "passion" test.

Now I do have to give props to Mr. MacAskill for following up the bubbly-over-brains point with a much better one:

Passion for the job, not passion for the company.

He stole this from Google's Kathy Sierra, but at least he gives her credit. This is definitely true, and in some ways qualifies his previous false proposition. I'm still not sure if he would hire somebody who didn't care at all about SmugMug's business, but loved to code and was extremely good at it.