The Great Skills Mismatch: Wall Street Quants Thumb Their Nose at Tech Startups(businessweek.com)
businessweek.com
The Great Skills Mismatch: Wall Street Quants Thumb Their Nose at Tech Startups
http://www.businessweek.com/the_thread/techbeat/archives/2009/05/the_great_skill.html
2 comments
His initial premise, that laid-off wall streeters would flock to startups, was flawed in many ways.
- the tech stack on wall street is totally different than most startups. On Wall Street it's Windows, Solaris, C++ and EXCEL. At most startups, its uh... not those things.
- most startups don't actually need statistical heavyweights. the whole "analytics" thing he is talking about is a small part of MOST startups. that kind of thing is bigger at google and paypal and after the startup is already successful and has millions of users per hour.
- the actually programmers on wall street are the last ones to get fired
- the financial risk situation is wildly different. on wall street it's $150K base + bonus. at a startup it's $60-$80K + worthless equity. To most wall streeters it's worth waiting around an extra 9 months to see if they can get another $150K job.
- the startups in NYC largely suck, anyway. it's not like actual startup programmers are flocking to them, either.
- the tech stack on wall street is totally different than most startups. On Wall Street it's Windows, Solaris, C++ and EXCEL. At most startups, its uh... not those things.
- most startups don't actually need statistical heavyweights. the whole "analytics" thing he is talking about is a small part of MOST startups. that kind of thing is bigger at google and paypal and after the startup is already successful and has millions of users per hour.
- the actually programmers on wall street are the last ones to get fired
- the financial risk situation is wildly different. on wall street it's $150K base + bonus. at a startup it's $60-$80K + worthless equity. To most wall streeters it's worth waiting around an extra 9 months to see if they can get another $150K job.
- the startups in NYC largely suck, anyway. it's not like actual startup programmers are flocking to them, either.
That's a much more sensible explanation than the article gives. My point was more superficial: the statements I quoted are contradictory, or at least oxymoronic, because software talent is largely the ability to go through learning curves.
They are indeed contradictory statements. In this case, I think he's simply wrong. I've met many startup founders in silicon valley who had worked at places like morgan stanley and goldman sachs. Fred Wilson's just upset that they aren't working at HIS startups. And why would they? The pay is bad (compared to wall street, or even working at google), the startups are dumb and there's not even much theoretical upside.
Well... since when are financial engineers supposed to be good software developers? Even if you're mega-smart, it's virtually impossible to be an expert in pricing derivatives and, simultaneously, an expert in writing code. Some quants were good at coding before they became quants, but as soon as you has some minions hacking for you, your coding skills deteriorate amazingly fast.
Most of the quants have to code themselves. Some of them have PhD/MS from the best CS departments. Very few of them have an army of "minions hacking for [them]".
That doesn't automatically mean they develop superior sofftware development skills, but I think your comment misrepresents the reality.
That doesn't automatically mean they develop superior sofftware development skills, but I think your comment misrepresents the reality.
You are right. I know some quants who have a couple of younger coders to help them with the implementation, but most of them have to code stuff on their own. Sometimes it's "quantish" code like numerical PDEs and SDEs (which is what quants should be doing), other times one has to create GUI's and such stuff which an enthusiastic teenager is more qualified to do than a PhD...
since when are financial engineers supposed to be good software developers
The context makes it clear that he's talking about the same people.
The context makes it clear that he's talking about the same people.
"President Obama says that one healthy consequence of the financial crisis will be that college grads with math skills won’t automatically want to become derivatives traders. "We want some of them to go into engineering, and we want some of them to be going into computer design", said Obama."
I look at my friends who became computer & chip designers. In their early 30s, after 10 years of hard, hard work in the unforgiving hi-tech industry, they are mostly bitter and burnt-out. Technology moves so fast that their skills will soon be quasi-obsolete. They're thinking of embarking on a new career. It's so depressing that some are even considering selling out and getting a stupid MBA...
I look at my friend who became traders. Their work is not the most intellectually stimulating ever, but they can enjoy many weekends, they have amassed enough loot that they can take a couple of years off and learn some new skills. They seem happier than my engineer friends. They go to nicer restaurants, "sleep" with hotter women. They surely won't make billions of dollars in some mega-IPO, but they will (on average) live more comfortable lives than my engineer friends.
OK, this is just an observation and I won't extrapolate any "universal laws" from this small sample of individuals. Truth be told, the world is run by jackasses. Stop trying to fight it. Unless the incentives change dramatically, smart kids will keep going into finance over engineering. For each, his own...
I look at my friends who became computer & chip designers. In their early 30s, after 10 years of hard, hard work in the unforgiving hi-tech industry, they are mostly bitter and burnt-out. Technology moves so fast that their skills will soon be quasi-obsolete. They're thinking of embarking on a new career. It's so depressing that some are even considering selling out and getting a stupid MBA...
I look at my friend who became traders. Their work is not the most intellectually stimulating ever, but they can enjoy many weekends, they have amassed enough loot that they can take a couple of years off and learn some new skills. They seem happier than my engineer friends. They go to nicer restaurants, "sleep" with hotter women. They surely won't make billions of dollars in some mega-IPO, but they will (on average) live more comfortable lives than my engineer friends.
OK, this is just an observation and I won't extrapolate any "universal laws" from this small sample of individuals. Truth be told, the world is run by jackasses. Stop trying to fight it. Unless the incentives change dramatically, smart kids will keep going into finance over engineering. For each, his own...
That's a great point about being _employed_ as an engineer, but the reality you describe is more tied to their 'mode' of work (ie, an employee at a certain type of company) than to the field itself.
There are horrible programming gigs out there, but there are also ways to achieve a happy career working in technology. Startups, independent work, searching hard for a good employer, and so on.
I have been happy as an indie developer for a few years. I bill hourly so overtime is not a big deal, I have flexible hours, work from home, meet my clients for beer, etc. I think it compares favorably to most finance jobs. The income is a fair bit higher than most salaried positions, though I'm sure some finance gigs pay much more.
Maybe one day I'll be in the soup line or in Dilbert hell, but so far it's been a great ride.
There are horrible programming gigs out there, but there are also ways to achieve a happy career working in technology. Startups, independent work, searching hard for a good employer, and so on.
I have been happy as an indie developer for a few years. I bill hourly so overtime is not a big deal, I have flexible hours, work from home, meet my clients for beer, etc. I think it compares favorably to most finance jobs. The income is a fair bit higher than most salaried positions, though I'm sure some finance gigs pay much more.
Maybe one day I'll be in the soup line or in Dilbert hell, but so far it's been a great ride.
There are many ways of making a living as a techie. Working for certain kinds of companies is a sure way of being miserable, that is for sure. Going the other way and trying to become the next Gates / Bezos / Brin, etc is another way of being miserable because the odds are ridiculously slim.
However, the area of chip design seems particularly unforgiving. I have seen people burning out very rapidly. Reminds me of that book "The Soul of a New Machine" -- you give your all when you're young, and then you find something else to do with what's left of your life...
However, the area of chip design seems particularly unforgiving. I have seen people burning out very rapidly. Reminds me of that book "The Soul of a New Machine" -- you give your all when you're young, and then you find something else to do with what's left of your life...
I'm not sure why, but it seems like the jobs closer to the metal burn people out quickly. I know maybe a dozen people who worked in chip design and compiler design and by the time they were mid 30s, none of them were doing it anymore. Most of them are now in occupations unrelated to any sort of programming. Three of them did ok, financially, so they are pretty happy. The rest are quite bitter.
Other interesting books, in addition to the excellent "Soul", are "Show Stopper!", which covers the development of Windows NT, "Microserfs" (fiction) by Douglas Coupland, and "Proudly Serving My Corporate Masters". These are centered on MS culture, but I think they are representative of the industry at large. NT in particular took a heavy toll, with apparently many divorces and strong burn out in the team.
I think it has to do with the culture in many of the firms doing this type of development. Take bright motivated kids out of school, move them close to a corporate campus where they don't know anyone outside of work, work them 70 hours a week, burn out, discard.
I'm not saying this is all by an evil design, it might just be the way things work out, but I have seen the bitter results as well.
As to the nature of the work itself, I think close-to-the-metal work is a lot of fun. Too bad the work conditions are often rocky. I doubt you'd see the same burn out effect on those in sane work conditions.
I think it has to do with the culture in many of the firms doing this type of development. Take bright motivated kids out of school, move them close to a corporate campus where they don't know anyone outside of work, work them 70 hours a week, burn out, discard.
I'm not saying this is all by an evil design, it might just be the way things work out, but I have seen the bitter results as well.
As to the nature of the work itself, I think close-to-the-metal work is a lot of fun. Too bad the work conditions are often rocky. I doubt you'd see the same burn out effect on those in sane work conditions.
I think the president was not quite aware of the words "computer design" meant. He may have just meant software or something else.
But I see what you mean and the software side is somewhat similar.
But I see what you mean and the software side is somewhat similar.
It's not the president's job to know the difference between chip design and software design anyway. He just meant "tech stuff".
"We want some of them to go into engineering, and we want some of them to be going into computer design", said Obama."
Am I the only person who finds this statement a little, um, concerning? A person might easily spend 5 days a week for a half-century working at a career, not to mention schooling. You'd better like what you're doing, especially in engineering. Is it too much to ask that we be allowed to make this decision for ourselves without our betters in Washington telling us what to do?
Am I the only person who finds this statement a little, um, concerning? A person might easily spend 5 days a week for a half-century working at a career, not to mention schooling. You'd better like what you're doing, especially in engineering. Is it too much to ask that we be allowed to make this decision for ourselves without our betters in Washington telling us what to do?
and how many techies make a ton of money in that same mega-IPO? Being a techie/entrepreneur is no guarantee of $$
That was the point I was trying to make ;-) There are a few techies who made piles of money, but most have failed, are failing and will keep on failing. The odds of making billions in a mega-IPO aren't much better than winning the lottery, LOL.
Your LOL ruined an otherwise intelligent post. Can I have my upvote back?
The idea was to try to lure some of the talented software engineers who had been laid off on Wall Street
It turns out that the learning curve was too steep for many financial engineers
How talented can they be?