Application engineers

Application engineers are the unsung heroes of EDA. They have to blend the technical skills of designers with the interpersonal skills of salespeople. Most AEs start out as design engineers (or software engineers for the embedded market). But not all design engineers make it as AEs, partially because, as I’m sure you’ve noticed, not all design engineers have good interpersonal skills! There’s also another problem, memorably described to me years ago by Devadas Varma: “they’ve only been in the restaurant before; now they’re in the kitchen they’re not so keen on what it takes to prepare the food.” Being an AE means cutting more corners than being a design engineer, and some people just don’t have that temperament. An AE usually has to produce a 95% solution quickly; a design engineer has to take whatever time it takes to produce a 100% solution.

AEs have a lot of options in their career path. As they become more senior and more experienced they have four main routes that they can take. They can remain as application engineers and become whatever the black-belt AEs are called in that company, be the guy who has to get on a plane and fly to Seoul to save a multi-million dollar renewal. They can become AE managers, and run a region or a functional group of AEs. They can move into product marketing, which is always short of people who actually know the product. Or they can move into sales and stop resenting the fact that when the deal closes, for which they feel they did all the work, the salesperson makes more than they do (and usually discover sales is harder than they expected).

In a startup, in particular, the first few AEs hired can be the difference between success and failure. The first release of a product never works properly, never quite matches what the market need is and is simply immature. The AE has to keep the customer happy by substituting their own expertise for the deficiencies of the tool while at the same time conveying back to engineering the improvements that are required. Most startups are attacking some sort of walled city, in the sense that there is an incumbent tool/methodology that is already in use, and the startup has to prove that they are better. In fact, not just better, compellingly better. The initial value proposition for most startups, when you look from the 10,000 foot level, is that it is riskier to stick with the existing methodology rather than trust the startup and try the new technology. Getting the customer decision-maker to that point is a mixture of technology (it has to work well enough) and trust in the AE (whatever happens, this guy is going to be there for me). Both factors have to be there to close those so-important initial orders because no matter how good the technology looks, the customer knows that the tool is not mature and might fail at any moment.

It’s been interesting looking at the downsizing of GM and Chrysler’s dealer network. It seems that part of the reason that car companies sell through independent dealers is that in the early days, nobody would buy a car from halfway across the country without a local guy in-town they trusted (and the situation got locked in place because those local guys became the richest people in town and got the states to pass laws that they could never be designed out; it almost every state it is illegal for GM to sell you a car directly). But that trust issue is just like the AE issue. Customers wouldn’t buy a car (tool) from a startup without a dealer (AE) too. It didn’t matter how good Ford’s car appeared to be in the showroom; in 1930, nobody trusted it not to break frequently (a good assumption) and they needed to trust that their investment was going to continue to be good.

AEs are really hard to find for a startup. Good AEs are pretty highly compensated, and so it is hard to match their salary, so it takes a lot of stock to makeup the difference. I did some consulting for a semiconductor equipment company once and they had an EDA product but they failed to hire a good AE since their own AEs were paid a lot less than a black-belt EDA AE and their salary policies were too inflexible. Good AEs are like gold and if you don’t have them you don’t get any gold.

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