Sunday, August 10, 2014

What to do when your company runs out of money

With the recent Crytek news, and many, many similar stories out of the tech and games industries in the past I was urged by some folks to give my counter example of how to plan for the worst...

I started my career over 10 years ago at Ageia Technologies, a crazy little start up with a crazy little idea of building a chip designed to accelerate physics for video games (and a few other industries as well). The idea never caught on very widely, and the advent of GPGPU would have been the final nail in our coffin if it wasn't for NVIDIA acquiring us in early 2008.

At some point we started to all get concerned about running out of money, and while my details might be a bit fuzzy I want to say about 9 months before acquisition our management held a company meeting where they laid out the situation to us and presented their plan for keeping us from all jumping ship immediately. They set aside like 3 months of salary for every employee and drew a line in the sand. If we didn't get acquired or somehow start turning a profit by a specific date everyone would be laid off and we would get the 3 months severance. If we did pull through one way or another, that 3 months of cash would be given to us in the form of a bonus, which is ultimately what happened.

We still did have a round of layoffs, and some of those folks actually ended up at NVIDIA before acquisition, but what this plan really did is it took the risk out of being loyal to the company. We knew we would keep getting pay checks all the way up to the last day, and if we got laid off we would get quite a nice severance package that would carry us to our next gig.

So I don't want to talk specifically about Crytek and what is going on there, I don't really know their situation, but I know Ageia was really caught off guard by Havok FX and later Cuda hitting the scene on top of it generally being a tough sell getting people to buy yet another board for their computer, but our management cared enough for the people, and understood their value to come up with a plan to protect the people that built the company.