1) Jobs are investment banks and asset management are not risk free and not conservative. There is almost zero job security and - as seen - you won't know you were fired until the day you are. With small startups CEOs will communicate things much better and you can usually see things coming. Case in point, Lehman UK had a fairly succesful business, however all their cash was pooled in Lehman US. So on Sunday they got a call that their cash was no longer available, so they had to put a profitable business in administration.
2) They are not risk free, because your bonus depends on your performance (not in all segments, but in many your performance is directly measurable in money). No one cares about salary - it's all about the bonus.
3) You do gain a broad skill set working in finance. It probably looks very narrow and simple from outside, just like programming would look to a non-programmer.
4) On one hand, in a startup you create something tangible and in finance you are just a glorified broker. On the other hand, startup valuation is very chaotic and many startups would not exist if there were no bubbles. In finance it is very clear what you and your company are paid for and how much it costs.
Agreed. I don't think any of my friends considered their jobs "predictable and secure" when they started. And in many cases the huge bonuses they received last year wil cushion the fall. Let's just hope they haven't become to accustomed to a certain lifestyle.
Let's just hope they haven't become to accustomed to a certain lifestyle.
We're all accustomed to a certain lifestyle, and most folks fall on tougher times at least once or twice in life, and have to downgrade their spending. I'm not suggesting folks here are a couple of paychecks away from being homeless, as I assume we're all of at least average intelligence and have some savings, good health insurance, and don't consider debt a fun hobby...just that we're all pretty spoiled, and we all probably have some expenses we wouldn't hang on to if our own personal revenue took a dramatic turn south.
But, I agree. I hope that folks who work in volatile industries (like finance, or our very own home turf, technology, to give another example) are thinking ahead when times are good, and have an understanding that times will not always be good. (You guys who missed the first bubble know that, right? We will see another crash in tech. Don't imagine human nature is so dramatically different this time around, or that enough of the folks who experienced the first one are still around and taking part to impart wisdom to prevent it from happening again. It'll look different, because it won't be played out in the public markets, and the names will mostly be different...but it'll come, and not every high flying Web 2.0 company will survive it.)
This guy is really ignorant. It's the same mentality that thinks the valley is impervious to bubbles and inflation.
What? Really, "you get the satisfaction of knowing you aren’t a complete tool bag every time you wake up in the morning."... They may have lost their jobs, but you lose at life.
Just to be fair, however, he's young. I think most of us have been there. We've taken the path less trodden (self employment, working at a startup, etc.) and we've had doubts. In order to counteract those doubts, we need to act as if the "other way" is stupid, that we're better, and that we're doing the right thing.
I think that's what this guy is doing. He's young, he's confident (to a point), but he lacks the wisdom and ability to reflect that comes with age.
So while it's easy to call him "ignorant", a "douche bag", or whatever - he's not willingly being any of those things. He's young, cocky, and exuberant - like most of us were.
(Of course, when /we/ were acting the same way, we were probably getting called out the same way too.. so this process might actually be necessary to develop that wisdom ;-))
I think that's what this guy is doing. He's young, he's confident (to a point), but he lacks the wisdom and ability to reflect that comes with age.
All of the things you mention occurred to me by the time I was 19. There's a difference between young people who are sprinkling their brains with alkaloids[2] at raves and the young people that are sprinkling their brains with DHA, creatine, and glutamine.
I also realize that there's a delicate balance I have to reach with regard to confidence. It's not easy to reach this balance, because on the one hand, young people are treated like second-class citizens (in some circumstances), but on the other, you need to have a lot of balls to do a startup, to charge what you sholud be charging, and claim the work you do is as good as that of an older adult's. This is especially true because claiming you are equal is taken to mean arrogance, even though the evidence for the alleged inferiority of the young is lacking. In objective contests like chess, war, athletics, hacking, and mathematics, there are many very proficient people who are very young.[1] This is not the case in established corporations, politics, or the job market. Finally, people always want to feel superior to others, and while they can't express this desire for superiority by being racist or sexist, they can do so by discriminating based on age.
Sometimes behavior that is acceptable in a male 50-year-old CEO is considered unacceptable in a female of the same age or a young guy (there was a Harvard Business School study that showed something to this effect; it was a case study of a CEO that has to make certain decisions. The male was considered to be "tough but fair" or something, while the woman was considered a bitch. The case studies were identical but for the gender of the protagonist). So, would you say he's being arrogant if he were 50?
Now, is Sam being a douche? I don't know, but I do know not all young people are the same.
[1] Fidel Castro, Alexander the Great, Octavian, Bobby Fischer, Steve Jobs, Bill Gates, Woz, most athletes (for many reasons), Reimann, etc.
[2] NB: I'm not talking about caffeine or ritalin.
Edit: I didn't mean to get on your case, petercooper; you seemed to have said things in good faith. I guess you touched a nerve...
This guy is really ignorant. It's the same mentality that thinks the valley is impervious to bubbles and inflation.
Yup - More than that - he thinks his limited value system applies to everyone.
Maybe he's never considered people do those jobs because they like them, because they are good at it, because it's dynamic, because it's lucrative, because they think it's an essential part of our society?
You know, similar reasons that people do startups.
Sure it's dynamic and lucrative, but I think the last few months have shown that shilling securitized high risk mortgages is anything but an essential part of society.
You can point at the current financial crisis, but there is absolutely no doubt that financial services are a fundamental part of society.
The current crisis owes a lot to greed, poor governance and ignorance (not only of the bankers, but the stockholders, pension funds, etc, etc, etc - i.e. everyone)... Even so, this isn't unique to the financial industry.
Wow Sam is getting crucified - this is even worse than when something about Co2scats makes it on Hacker News.
Here are my thoughts:
-I don't think I've ever heard of investment banking careers described as safe. When there's no deal flow, investment bankers are the first to go. If jobs could have finance betas (not software/website betas), investment banker would be around a 3.0 or higher, an accountant would be around a ~1.0, a nurse would be a 0.50 and a mailman would be a 0.25 (people have no idea how hard it is to get fired or laid off from a government job - reassignment is your friend).
-Market volatility, like a recession or oil prices affects nearly everyone directly or indirectly.
-You can "network" at any job, but I agree that it's probably easier to make friends faster at a startup due to the nature of the business. There's certainly myriad counterexamples, however.
-The tool bag line just made me laugh.
-Anecdotally, I think he's right about having a broader based skill set. Having had over 30 jobs (not a typo, I've worked since age 12) I've never picked up more useful skills in a shorter period than while at a startup. This could obviously vary.
-If you absolutely need to raise money as a startup, I think you're in one of the worst situations as capital is already drying up and people/institutions are becoming risk averse. Not good for startups.
-If you don't need to raise money and have enough savings/revenue to last for a year or two, I'm not sure if you're any better or worse off than anyone else. I'd like to hear what everyone else thinks on this.
-If you're young, without a family, sans serious medical conditions and geographically apathetic I'd argue you're better off working at an interesting startup for very cheap (stipend & equity & food & rent?) than you are taking a way-below market-compensation desk job. Why? Upside.
The lack of capitalization within the post and ping pong rub-in certainly doesn't help the cause, but I'm sure Sam has already figured that out. At least he inspired some interesting conversation; I've really enjoyed this thread.
Edit: Andr had some of the same points I did and posted before me. We've obviously both had a lot of exposure to the fun filled monkey business of finance.
In this case can Sam be forgiven being young and naive? So far it seems he has only experienced lifes "ups" and is surrounded by people who have yet to fail (in any significant way) with ego/attitude to match that such lack of hubris brings, hence the mentality.
> (not sure how this works when a bubble bursts, haven’t been around long enough).
Well, after the last .com bubble burst, there was a lot less ping-pong with the CEO, and a lot more "You want fries with that" going on, as I understood it.
Problem is, it takes a lot longer to find work as a post-doc than as a programmer. The money may run out on predictable, yearly intervals, but what do you do once it's gone? Get a faculty position? (Because we all know that's easy.)
I could understand if you just wanted to write some thoughts down as quickly as possible (hi AIM), but normally those are converted in to rough drafts and then in to finalized copy.
I didn't sit back, and chuckle when I saw 20,000 people potentially lose their jobs. Even if you don't like Wall Street, you don't want to see that many people looking for work all of a sudden.
Of all the career paths that I know of, finance and technology are the two that probably hold the greatest appeal to me. I might have gone into finance when I was younger but it just wasn't on my radar.
As others have commented, there are far more similarities (between finance careers and the startup world) than there are differences. Some of my closest friends are investment bankers and portfolio managers. They have a deep interest in the world around them, are wicked smart and do what they do because it gets them juiced like nothing else.
I'm definitely not wicked smart but the other two characteristics apply to me so I can relate to their chosen path and don't revel in the sh*t that's hitting the fan right now.
There is no such thing as a conservative banking job at these companies. All of these firms have strongly cyclical business, resulting in aggressive hiring and regular layoffs, and think nothing of canning an entire department if they don't need it any more. Also, at higher levels, the odds of being sacked out of the blue for political reasons increase greatly (e.g. new VP arrives, fires the next tier of management and brings his friends from his last company).
Also, if you work in IT you risk being made the scapegoat for some failure outside your control (note the rating agencies trying to blame the subprime crisis on bugs in their ratings code). And if you do get canned, it's merciless - I've seen it happen to people on holiday, people who have just signed mortgages, and so on. These people are escorted from the building by security and then forgotten.
You also have to contend with the risk of burnout, one of the reasons why there are relatively few employees above the age of 30.
You have to do exceptionally well to receive the grand salaries and bonuses, as these are heavily skewed towards the minority of top-ranked employees. Plus, for every 'master of the universe' there are 10 people in compliance, legal, audit, helpdesk, facilities, hr, IT, back office, etc slaving away.
Going into wall st is an aggressive career choice.
Are you guys not paying attention or what? The financial industry is NOT going under. It's doing fine. It's doing what coders would call a refactoring, and it is nowhere near to collapse. And the developers at those industries are certainly not getting laid off. Don't react based off 24pt headlines, first think about the real situation.
And YouNoodle is a slimey business. It may be successful, it may make a lot of money, but I still don't like this parasite businesses who contribute nothing of real value, and get created solely by marketing gimicks.
And a word to Sam: lay off the uppity behaviour till you have had a down. Nobody wants to watch a move where things just go up all the time, it's the middle of the movie, where the hero is doing wretchedly that is the heart of the story.
Well of course you are -- right now. But what happens when the finance shock ripples through the rest of the economy, and tech investments dry up? Or when tech purchases stop? Or when job losses in banking, real estate, construction and sales (coupled with high energy costs) lead to overall drops in consumption, which in turn leads to drops in advertising budgets?
It's still way too early to be whistling past the graveyard.
For me personally I have a couple side business so I'd be OK.
But even if our startup whittled and died tomorrow; I've acquired more skills in 3 months working at ticketbumblerstumbler than I did in two years working at my old job.
Our burn rate is less than 3k a month; we're not whistling past anything.
"you can sell your soul to an enormous investment firm and they, in turn, will make you rich with not very much risk involved"
This has merit.
Most of the world is chasing a dollar, if not for survival then in the pursuit of a decent, good or great life. Glory and vanity plays a large part especially for high net-worth individuals. Fear too, for attaining some type of status amongst one's peers. Startups are no different in that respect. But, 'Selling your soul' is more likely to occur on Wall Street. If you want your soul, then 'do the right thing.'
I know that this is bogus on so many levels but I'm just saying that the perception is that foreign competition puts pressure on companies to layoff and offshore and then wall street is in the bleachers going wild when layoffs are announced.
after hearing feedback from everyone on hacker news and other places, i’ve decided to pull this post as it was misinformed and inflammatory. sorry if i made you mad!
It wasn't that bad. I liked it because it was genuine. It's like being at uni and seeing all the kids taking corporate finance with $ signs in their eyes, impervious to their surroundings, as though nothing else mattered anymore, they'd found their raison d'être and were busy submitting those graduate applications to every corporate finance firm possible. Such individuals are the ones you probably were thinking about in your post.
Any chance we get an enlightened rewrite of the article that will serve to correct misconceptions that all startupers can’t distinguish between finance and banking. It won’t make me love my banker anymore today. He's sitting on his fat ass conservative banking job riding the credit crunch!!
Other than the chortling about people losing jobs, I agree with this guy.
Finance and portfolio folk really create little.
They are gamblers in the basic sense: their highest goal is gaining as much as possible in return for as little as possible - the cheapest, easiest way.
It is a curious thing that as many of us grow, the less interested we are in that mindset. Our eyes start to open to the costliest, hardest way.
It's not to be found in investment banking, finance, and the market any more than it is playing the lottery.
2) They are not risk free, because your bonus depends on your performance (not in all segments, but in many your performance is directly measurable in money). No one cares about salary - it's all about the bonus.
3) You do gain a broad skill set working in finance. It probably looks very narrow and simple from outside, just like programming would look to a non-programmer.
4) On one hand, in a startup you create something tangible and in finance you are just a glorified broker. On the other hand, startup valuation is very chaotic and many startups would not exist if there were no bubbles. In finance it is very clear what you and your company are paid for and how much it costs.