EDA is fun. Innovation is fun and not many businesses require as much innovation as EDA. Working in an EDA startup in particular was (and still can be) a lot of fun because the ratio of innovation to meetings, company politics and the rest is much higher.
But one effect of this has been that too many people want to start EDA companies. It is not as bad as Web 2.0 companies, and with the current freeze in EDA investment it is over for the time-being and maybe forever.
One piece of advice I remember seeing, I forget where, is never to do a job that has significant non-monetary compensation for doing it. Too many people will want to do it for those other reasons. Everyone wants to open a restaurant, write a book, and be an actor.
The company where my son works in San Francisco advertised for a graphic designer on craigslist. They took the ad down again after over 200 people had applied for the job. They took the ad down after…four hours. Too many people want to be graphic designers because they think it is cool, or arty, rather than because it is a profitable business to which they are especially well suited.
The person sitting next to me on a flight to Chicago once told me that he was in the concrete business. He had a dozen concrete plants in towns you’ve never heard of in unfashionable parts of the mid-West. The economics were simple. A town can support one concrete plant but not two. Consequently the owner of a concrete plant has a sort of monopoly. Sure, a contractor can buy concrete from another plant, but that is one town over, perhaps an additional 50 miles round trip for the concrete truck, a cost that makes it non-competitive. His plants returned over 30% of their capital every year. Concrete is far more profitable than EDA and partly because it is so boring.
If that guy was our Dad and we inherited the business, I’m sure we could all run it. But we don’t even consider businesses like that because technology is more exciting. EDA is not badly paid by any means, but considering just how hard it is and how much training and knowledge is required it is not that well-paid either.
I’ve read (but not verified) that one very well paid group of consultants are people who do Cobol programming. Everyone wants to program next generation web applications using AJAX and Python, not some crusty programming language designed in the 1950s. How much further from the trendy cutting edge can you get.
Bill Deegan, a friend of mine, does the equivalent in the EDA world. Not the sexy EDA algorithms for him, he creates and maintains the build and Q/A systems without which the programmers don’t have a product. Usually his clients bring him in when the build system has been ignored by the hot-shot programmers for so long that they can barely build their product never mind release it to a customer. He describes it as like garbage collection (the kind with a truck, not recovering unused program memory). It’s not glamorous but it needs to be done, and done well, and just like garbage collection, things get really messy if it isn’t. You won’t be surprised to know that he is rarely idle.