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Summary:

Facebook is about to go public, making Mark Zuckerberg a mega-billionaire at the age of 28. He won’t be the first social-oriented engineer to hit the jackpot. Which leads to the question – what is the future of classic engineering and what should kids be embracing. Debate

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It is only a matter of hours before Facebook starts trading on the NASDAQ stock exchange under ticker symbol, FB. Mark Zuckerberg, its 28-year-old founder is worth $18 billion at the IPO price and if predictions turn out to be true, he be worth many times more.

The recent (and quick) monetary success of companies like Groupon makes one wonder how one motivates a new breed of engineers to think about the innards of today’s technology — chips, optical components and other unsexy stuff.

It is something on my mind for a while, and Mark Sue, an analyst with RBC Securities (a brokerage) summed it up well, when (in a note to his clients this morning) he wrote:

Should your child study their hardest and get a Masters Degree in Engineering or should they party hardy at a liberal arts school, study marketing and get a job at Yelp or a social networking start-up? Hit the thick text books and figure out optical dielectric multilayer waveguides and photo refraction or weigh in on opinions on hair salons, pedicures and lawn irrigation?

The path to success may be different, but the opportunities for some reason seem to be more in favor of the latter than the former. For all the PhDs that the optical companies hire to make their products better, it seems they can barely squeeze out 5% operating margins.

Meanwhile the lack of capital intensity can make reviewing products and services on the web more lucrative. Now some of that is related to the optical segment’s industry structure which needs to consolidate but like they say, sometimes it’s better to be lucky than to be smart.

While Sue talks about kids, I know many of my pals from the old infrastructure business have decided to opt for the new social-mobile web and are trying to build apps and stuff.  By the way, I don’t really have answers to my own questions so chime in with your theories.

  1. kurtwestphal Tuesday, May 15, 2012

    Om, IMHO, in internet time. social is the new networking.. I worry that domestic incentives and skill sets are ‘unbalanced’ and growing more so. I like Germany’s attention to craftsmanship, their manufacturing prowess, longer term (not quarterly reporting) financial perspective and now amazing startup scene. in US, slim margins get exported; technology is not considered a ‘strategic’ asset, if it doesn’t make money, even when ‘it is’ vital or crucial.

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    1. Good points all Kurt. Just as manufacturing outsourcing has hurt us in the long run, from your comment it seems you feel that even non-strategic technology export is going to have a negative impact? Just want to clarify.

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  2. Wow, great question. I’d really have liked for you to have weighed in with your opinion, though. As for me, my sense is, while not everyone can be lucky and get to success that way, anyone who tries and is dogged in their effort, can achieve success. While maybe a Zuckerberg here and an Andrew Mason there achieve success, not every start-up is successful – not by a mile. However, I’ve not seen too many (if any) people who were engineers in the so-called “unsexy” areas being out of work. I’ve lived long enough to realize that not everyone is meant to make a gazillion bucks – however, having an aspirational, higher-middle class lifestyle is accessible and achievable for most who try.

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  3. I always had friends in non Computing based technology industry like automotive engineering,Power generation etc who felt the same issue when they saw their friends in 90 and early 2000 making tons of money working in either chip design, networking etc .So my point is its pure demand and supply and it evens out in long run .Demand generally is driven from novelty and value perspective than complexity perspective .

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  4. First rule do what you’re really really good at.
    Second rule look for overlapping areas of science.
    Third rule learn to learn.

    For example: How would a biologist describe DNA evolution? In terms of is/has or differentials? Now mother nature has a good mathematical way to describe something incredible complex and sometimes smart. Why would she use a different math for smarts only?

    Point is we have siloed up areas of expertise, we are going to combine these more and more to get away from “mechanical” functioning systems.

    Answer: Biological medical math, starting with neurology/psychology and computing which will drive changes in infrastructure. On the other hand my kid wants to go into the CIA and no I will not answer why.

    PS. I don’t think marketing is easy if one has to take neurology and psychology into account in the future. If we take it as a mastery not competition[1], while a lot of CS “masters” I encounter are trained in competition.

    “Think about the ideal student. He or she focuses on learning, not grades; improvement, not appearances; competency, not competition. This person wants to understand and grow, not just prove how smart he or she is.” [1]

    1.http://medicalxpress.com/news/2012-05-psychologist-goals-environment.html

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  5. It has long been possible for a very few to make a quick but foundationless buck at some sort of finagle. Whether it’s cooking up some new Wall Street derivative or a new marketing ploy. But those are the shooting stars and are very few. And there needs to be a foundation economy for them to skim those flash in the pan paychecks from. Meaning, someone has to be making things that people need or want, and others have to be employed making other things so that each can buy the fruits of each other’s labors. The myth of the “service economy” has been the downfall of the US. Yes, overhead functions are necessary. And someone, somewhere will find a way to overinflate the importance of some overhead function like marketing and create a well paying blip. But that isn’t something you can build an economy on.
    If we keep training the rest of the world how to do foundational things by outsourcing the harder and less fun parts, there won’t be anything left to skim off of.

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  6. The “unsexy stuff” of technology is still driven by the military industrial complex. As long as America continues to believe (or wants) to be the world’s enforcer, these core ‘computing infrastructure’ products will still be driven by US companies (if not for security alone). Talent follows where the money is, but also by a sense of patriotism.

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  7. Shashi Jain Tuesday, May 15, 2012

    As someone who made the transition from electrical engineering to making social apps, a big draw of the app industry is the low barrier to entry (including low capital requirements). For me to start my own engineering firm, I would require lots of capital, industry connections and knowledge of the industry’s problems. These three things are hard for young folks to get. Knowledge of industry problems is easy for young people to get in the app industry, because they are the main users of said apps.

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