Monday, June 22, 2015

Startups, both Real and Wannabes

Word has reached me that the division I last worked in at 3M is being shut down. The division was rather unique for 3M in that it was quite small and built from scratch. Normally "new" divisions are made from combining divisions, dividing divisions, shuffling parts of division around or any combination of these options. In all cases, there is already an infrastructure available to some extent, including existing lab equipment and lab space, administrative personnel and all the regulatory support that is needed. This division however, was built from scratch, one researcher at a time. We moved into previously abandoned lab space and had to purchase all the equipment needed to get the lab up and running.

But it all came crashing down when the executive VP overseeing the division gathered everyone together and announced the shutdown. Some of my former colleagues are being assigned to existing divisions while others are "unassigned". One of my colleagues had for some time compared it to being in startup, although having worked for a startup (arguably two), I assured him that it was quite different. This shutdown is a perfect example of a real and significant difference between a real startup and a wannabe in a large corporation. The startup that I worked for, Envoy Medical had been in operation for 7 years without any sales prior to my joining it and it was another 7 years before it sold its first product. That is 14 years of living on angel funds, venture capital and whatever other funding sources the company could get money from. If the first investors didn't want to invest any further, the company was free to look for other investors. This is in direct opposition to 3M shutting down their division. The executive VP, the sponsor of the new division, decided to pull sponsorship and there was nothing the division could do. No one would dare ask another executive VP to sponsor them due to the great risk of ending their career right on the spot.

While I feel for my former colleagues who are unassigned, my heart really goes out to the undergraduate student that was helping me out part-time. I spoke with him last we and it still isn't clear if he will keep his job. He hasn't even graduated and may already be facing his first layoff.

Previous Years

June 22, 2012 - Towels in America

June 22, 2011 - More on Drop-In Replacements

June 22, 2010 - Poor Economic Analysis

June 22, 2010 - Full Disclosure

June 22, 2009 - It's finally time for bifocals


Anonymous said...

Was it a business unit executive, or an R&D manager who made that decision?

John said...

From my understanding, a business executive. At 3M, you have divisions, which are the basic operating units, then groups, which are of a number of related divisions, and then the CEO. While the CEO was probably consulted, the group VP made the announcement and probably the decision.

The division also had a number of unique attributes which I won't go into detail on as it would only muddy the waters of the point I was trying to make - that a "startup" in a large corporation isn't a startup at all. But those unique attributes also contributed to the demise of the division as it was not very well liked by some other divisions.

Anonymous said...

Now, your departure was part of a reduction in force. I was also in the vanguard cohort of a reduction (the plant site was closed before another owner started up a portion of it).

JR said...

I wouldn't worry about the undergraduate technician. There are always more projects to work on at 3M.

John said...

JR, I agree, but it's a heck of a rude introduction to the work world.

Anonymous said...

Sometimes it's better to have these experiences early, at a time in life when you can recover from them. The lessons one learns can be invaluable in decision-making in later life.

John said...

I agree. I always tell any students that work for me that they WILL be laid off at some point in their careers, so plan for it. Bank some money, start building their network now, ... But to be laid off before graduating? Sheesh!