Synamedia is in a death spiral thanks to leadership in finance. They do not understand the business or the importance of “industry related experience” or “subject matter expertise” so they’re laying off skilled, experienced developers to replace them with the lowest cost engineers they can find in India. This has led to problems with quality, delivery and execution. There was hope that Paul would put a stop to this but unfortunately he does not understand the business either so he is letting the leadership in finance drive the company over a cliff. Paul keeps saying “there are skilled engineers all over the world”, which is true, but sadly Synamedia is not looking for “skilled” - they are only looking for “cheap” and that is destroying the company. If Abe and team don’t wake up and put a stop to this soon they will not have a company left to sell.
18 replies (most recent on top)
"The developers need to understand that they exist to build products that the business can sell. The business doesn't exist because of them, rather they exist because of the business. "
THIS ^^^^
Some deck chair re-arranging needed!
Discussions on the Titanic how going down might be averted
Synamedia needs to look at its business model. Selling to service providers is so last century; they don't spend money. However, their customers do. They need to find solutions to subscriber problems (ott aggregation with search and recommendations...) and go straight to them and charge them and skip the providers. But, management needs to see the business value in that. They seem paralyzed when it comes to identifying value. They really thought that they were going to relive the NDS "glory" days after the Cisco divestiture. Seems it wasn't Cisco sales not trying to sell the product, but rather they couldn't sell it either.
The developers need to understand that they exist to build products that the business can sell. The business doesn't exist because of them, rather they exist because of the business. They need to be more entrepreneurial. What problems can they solve that the business can then sell to make a profit? But unless the new management gives them a seat at the table as to how to turn around the business, they are going to be left to fend for themselves.
But there are no "quality products, on schedule". There are some products that no one is buying.
I agree about there being no point replacing experienced developers with cheap inexperienced ones.
But we need to
- stop working on products that no one buys
- break up the monolithic monsters
- cut costs - radically
and these will probably lead to large numbers of the subject of this forum.
@2shi+19mUM0m6 - there is actually a third option - reduce costs but preserve a core of developers with relevant experience to develop products in the video and security fields. The original poster never said anything about “do nothing”, that came from follow on posts. The original post had to do with a management team that thinks they can replace experienced developers with inexperienced developers and still release quality products on schedule. Synamedia needs to reduce costs. They need to reduce their product line. They also need to understand what they want to be when they grow up and structure the company accordingly (talking about skills, not eventual numbers of employees). There are too many layers of the executive leadership team who have no relevant industry experience to understand how to do this. The question isn’t “should Synamedia reduce costs and lay people off” the question is “can you replace all your experienced engineers with developers with no industry experience and have any hope of releasing new, or sustaining old products”. This isn’t about making hard decisions on the product line and size of the company, it’s about a management team that thinks they’ve found a way to maintain the product line and company size, while reducing costs. They haven’t. They’re making the problem worse.
Interesting thread with two schools of thought
- There needs to be cost reductions now
- Do nothing. Preserve the development team and given long enough they will produce a saleable product
Seriously, you'd have to be an id–t (or in the dev team) to prefer 2.
Anyone got any better ideas?
the realignment after the Cisco divestiture has failed and the company has entered the turnaround phase, hence a new CEO. Some hard decisions will have to be made. Jobs will move to cheaper cost centers or be eliminated, products could be shuttered (ivp) or sold off (cdvr). Remember this is a business and the purpose of a business is to make money. You aren't making any. Nothing personal.
And they’ve been building a whale for many, many years. What has suddenly changed now that will make people want to buy it?
Permira aren’t going to sit still for much longer.
Yes, you are going to die a slow death. It's a fact. You are building products nobody wants. Your product/solutions people have no vision, no drive, and wouldn't recognize a good idea if it bit them in the a–. Your engineers, some of them talented, are building a whale. Too much technical complexity throughout the system and too expensive to deploy to be profitable. Management, not technical enough to realize the problems being created (and in the words of one former "director", managers arent supposed to be involved in the details anyway), are spending too much time focusing on 9 block assessments of all you, and far too busy playing politics to save their own hides and fatten their bonuses.
Realize this... there won't be better days. Look at the industry you're in. Look at the trends in video, look at your competitors, and then look at what you are building. Look at who is leading.
What is your plan? Figure that out before you start worrying about Synamedia, because you don't matter to them. You are a means to an end. Just holding down the line until they can identify someone cheaper. That's the business value that matters the most.
So that's clear - you're saying "just give it a bit longer and the experienced developers will finally make a saleable product". If that's true, then why haven't they done it already? They've had many years, haven't they?
The argument about the size of the development team is valid but the current finance strategy has nothing to do with reducing company size. BeePee and CeeS believe they can increase the number of developers by replacing experienced engineers in higher cost regions with inexperienced developers in India. They are not addressing the problem with product line - they foolishly think they are increasing the ability to develop new products while reducing costs. What they are doing is gutting the company of engineers with industry experience and replacing them with developers with no industry experience and thinking the only thing they have done is reduce costs. They think a developer with no experience is a valid replacement for one with experience. If the company wants to stay afloat they need to stop work on products that have proven not to sell and focus their efforts on something new. That’s going to be hard to do with engineers that have no industry experience.
@1fed+19mUM0m6 I think you missed the point. This isn’t about the quality of the development team - it’s about the size of it. Probably about four times bigger than it should be, based on sales achieved so far. It’s not credible to suggest that all that’s needed is a bit more time then suddenly they will produce something that is saleable and suits the market. If they were going to do that it would have happened already.
@wjd+19mUM0m6 - the problem with finance’s strategy is they believe they can replace experienced developers in the US, UK and Israel with inexperienced engineers from India and it won’t impact development or product quality. It’s a strategy borne out of ignorance. If the goal is to develop new products to sell to improve the revenue stream then they’re sawing the limb they’re sitting on by getting rid of the engineers who can help develop those products. The lack of traction and profitability with the existing product lines has more to do with poor management and bad product strategy than it has to do with developers.
@wjd+19mUM0m6 We need to protect the core of the company otherwise it will never succeed. India is bad value and has no experience of the industry. Abe knows this.
OP (are you in Israel btw?) - I think the thrust of your argument seems to be that there should be no cuts in development - is that right? All that's needed is a bit more time?
The problems with this point seem fairly evident: a vast army has been labouring for many years and so far nothing has really sold enough to keep the army fed watered, never mind actually making a good profit.
So I'm intrigued - whose fault is this? Is the product, in fact, brilliant, but let down by poor sales, product marketing and delivery? Perhaps the customer is to blame?
But whatever - it hasn't sold in anything like the numbers that are needed.
So what do you think needs to change? What would be the correct number of developers? which region should they be in? or is your only measure of success that a large number of people are given interesting things to build, with no concern for profitability?
Looking forward to some constructive and realistic responses.
If I was Abe I would be more interested in booking a Virgin Galactic flight just about now.
Lets not forget that we are dealing with Private Equity here and wall to wall Investment Professionals. Bit of history required: Suggest a Google of Permira and AA. As the Sunday Times summarised a few years ago about the AA's recent history " Private Equity flogged this motoring association to the stock market in 2014. It was hobbled from the start. The buyout barons loaded the AA with £3.3 bn in debt and extracted hefty dividends before selling it. The shares once traded above 400 p but are now below 50 p. Membership has fallen from four million in 2014 to 3.19 million. Although still cash-generative , it will take decades to clear the debt pile at this rate. Avoid this stock. 46 p."
Fast forward to 2020
“The board believes that the company needs a more sustainable capital structure and requires a significant amount of additional new equity in order to reduce the group's indebtedness and to fund future growth,” it said.
2021
Stock price now 34 p and less than a million members as of July 2020 ,, pip pip
The Finastra mafia strikes again