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Engineer as Business person

November 3, 2005

I admit as an engineer by training and to some extent by nature, I always found Business to be intimidating. I capitalized the word business on purpose to make a point. I'd always found the concept like a foreign country, a proper noun, a structured discipline shrouded in mystery. While there is a concept of capital B Business, I realized a while ago that it's business (with a little "b") that's really important.

When I was an engineer in the R&D department of a large company I had many interactions with the business side of the operation. On multiple occasions I remember thinking, "why are we doing X when it seems like we should be doing Y?" but then I would admonish myself "well I'm not a Business person, there must be some reason for X that I don't understand". Time and again though it seemed like my 'layperson's' gut feel was correct. Not always but I was correct enough to think that perhaps I wasn't completely crazy.

I was always interested in the business side of things so I decided to do some reading and research on the topic. I read autobiographies of luminaries, "business for dummies" style books, early startup "how-tos", and other texts originally trying to understand Business. While the material was mostly new to me I felt as if I'd read books like these before. Some books were trying to tell you how to "build something" while others were focused on "the process", analyzing every nuance of it as something that existed in and of itself. Some texts were thick with jargon and acronyms requiring serious effort to decode. I was filled with a strange sense of déjà vu. This array of books seemed similar to the array of books available for technology, right down to the self aggrandizing use of cryptic jargon.

Slowly it dawned on me, engineers and business people aren't that different. In fact the disciplines have enough parallels to be almost amusing once examined in that light. Like individuals that use overly obtuse or nebulous language or concepts to try and win arguments. "No you don't understand, it's the *new economy*!"... yes but how are you going to make money? It reminds me of a cliché "if you can't dazzle them with brilliance, baffle them with B.S.", something I've seen in both disciplines.

There are also differences. Primary among them is the type of resources the practitioners of the two disciplines are most used to dealing with. The business person is usually more concerned with people as their resource, whereas an engineer is usually more familiar with processes involving inanimate objects (bits, bytes, steel, concrete) but I still argue that the overall problem solving methodology is similar.

I've said many times in conversation that engineering school isn't about the material. Ask me now to derive Maxwell's equations or to do fourier transforms by hand and watch me break out into a sweat. I've forgotten almost all the rote material I learned in school. What I have retained, what I believe to be the important lesson of engineering school, is how to think about problems methodically and creatively. Learning how to approach problems, to gather the necessary resources, understand an issue from first principles these are the mental patterns that are the primary education you get in engineering school.

Interestingly, the same sorts of mental patterns are just as useful when applied to the complex system of business as they are to designing a computer or writing a piece of software. Business is about finding efficiency and about building a system that turns raw inputs: labor, ideas, capital into revenue and profit. The elements aren't always as physically tangible as in engineering but the overall shape of the problem is the same. Both disciplines involve building and analyzing complex systems. They both have raw materials, inputs and outputs. I think both also have some of the same weaknesses where individuals can become lost in thinking about "the process" rather than the problems and their solutions.

As mentioned in a previous post, it's like the debate I've heard for startups on whether you need a business plan or not. The question itself implies the problem of process versus analyzing the problem at hand. People get wrapped up in the idea of a Business Plan, with the right sections: Executive Summary, Competitive Analysis, Break-Even Analysis etc.. All companies have a plan for generating something of value, in other words a plan for doing business. That's not to say formalizing it isn't useful in some cases, especially when trying to sell your ideas for funding. Those with money to invest are usually looking for information in a form that they can easily digest, but getting wrapped up in the process is a sure way to lose track of the problems you're facing and the solutions that you need.

The idea of engineer as business person can be borne out by a simple observation that was described in an essay by Paul Graham, How to Start a Startup, just look at the fortune 500 list. It is interesting how many of the CEO's are technical or have some kind of engineering or math background. These CEO's are not always the founders and it's not just technology companies. Walmart's CEO has a Mechanical Engineering degree. I'd love to go through the whole list and breakdown the distribution of degrees but time doesn't really permit. I did do the top 10 CEOs and as of this writing they include, 3 Engineering degrees, 4 MBA's, 1 History degree, and two I couldn't find easily. That's already at least 30% of the top 10 being engineers.

When I originally imagined my career path I had considered pursuing an MBA. I thought learning about this mysterious thing called Business would allow me to start a company, something I'd always dreamed of doing. Instead I've decided to go ahead and launch my company now. The reasons for my choice are based on many factors such as timing, the market, and the availability of certain technologies but also because I lost my fear of business. Sure there are esoteric and arcane aspects of Business, but the problem at the root of business "how to make money" is one I think I understand. For the rest, I intend to use one of my engineer's mantras: "if I don't know it, I'll look it up". I believe a logical and methodical approach to problem solving is really at the heart of most successful startups. I can always pick up another book on Business if I need it.