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Founding a startup with zero revenue is better than working for Goldman Sachs
- AmberShah 16y agoAs it turns, my kid likes to eat. So, in my oh-so-unique case of having, uh, responsibilities, it would be better for me to have a paying job (even at Goldman Sachs) than to found a startup with zero revenue. Of course, that's assuming they are XOR, which they are not.
- jrockway 16y agoDon't worry about it. People feel the need to justify every decision they make to the world. The author of this post didn't want to work at GS, he wanted his own company. But he gave up a couple hundred thousand a year to do that, and people made fun of him, so he felt he needed to justify it. Obviously, there are plenty of people happy collecting their large paycheck every two weeks, or there would be a lot of startups and not a lot of Goldman Sachs.
- runjake 16y ago| Obviously, there are plenty of people happy collecting their large paycheck every two weeks, or there would be a lot of startups and not a lot of Goldman Sachs. Or their fears and lack of confidence/desire for security overrule their happiness.
- thornad 16y agoWhich is exactly what he is doing, justifying and using a third party: "Hey , my kid has to eat" Blind leading the blind.
- jrockway 16y agoYeah, true. I will break the trend and say that I have little-to-no interest in having my own company, and that I like programming and making money. Working for the bank facilitates this.
- rdouble 16y agothere would be a lot of startups and not a lot of Goldman Sachs. There are a lot of startups and there is only 1 Goldman Sachs...
- jrockway 16y agoThat's quite a literal reading of my statement there. What I meant to convey was the number of employees that Goldman has (a lot), and how many similar companies there are (BAML, JPM, Citi, ...). A lot of people have chosen the "peon at a big bank" position, and it's probably not because they think that it will make their life less enjoyable.
- xyzzyb 16y agoOr even peon at a big university. Better hours, less pay.
- unohoo 16y agoi view such stories (emphasizing on controversy) more as link bait than anything else. There are several folks who are perfectly happy working @ GS and other big firms. Dont make bold and brash statements simply for the sake of it. Its a 'To each their own' world out there.
- daychilde 16y ago> with the attention span of an ADHD kid hopped up on meth and Jolly Ranchers Well, I'm very disappointed to find this. 1. One of the more common (and certainly well-known) medications for ADHD is Ritalin, which is methylphenidate. It's mildly related to meth. The long story short is that giving meth to someone with ADHD would not cause them to be able to focus less; rather, to be able to focus more. 2. Studies have shown that sugar does NOT cause hyperactivity in children, whether or not they have ADHD. I'm saddened to see these incorrect stereotypes about ADHD. As an adult with ADHD, it's part of what makes my life harder than it has to be.
- mrtron 16y agoGive him a break and substitute cracked out for hopped up on meth. I also would guess the medical dose of ritalin is anywhere near the recreational meth dosage, but I don't know. What studies show that sugar doesn't cause hyperactivity in children? Anecdotal evidence and extensive field work with my brother's kids has shown me otherwise. You feed them a ton of sugar at the carnival and they go wild and then crash a few hours later.
- cjg 16y ago"a ton of sugar at the carnival" - it's the carnival not the sugar. http://en.wikipedia.org/wiki/Hyperactivity#Sugar_consumption http://en.wikipedia.org/wiki/Hyperactivity#Sugar_consumption
- daychilde 16y agoA quick search found this: http://www.medicinenet.com/script/main/art.asp?articlekey=52516 http://www.medicinenet.com/script/main/art.asp?articlekey=52... As far as "giving him a break" - why doesn't he give me a break and not perpetuate inaccurate and hurtful stereotypes?
- mrtron 16y agoPlease don't take a tiny offhand comment that has nothing to do with the key point of the essay as a personal attack on you. That comment there isn't hurtful or perpetuating anything about you.
- d_c 16y agoThat's quite interesting: " At the risk of getting sued, let me throw you geeks a bone and part the Goldman veil a bit. The Goldman Sachs risk system is called SecDB (securities database), and everything at Goldman that matters is run out of it. The GUI itself looks like a settings screen from DOS 3.0, but no one cares about UI cosmetics on the Street. The language itself was called SLANG (securities language) and was a Python/Perl like thing, with OOP and the ORM layer baked in. Database replication was near-instant, and pushing to production was two keystrokes. You pushed, and London and Tokyo saw the change as fast as your neighbor on the desk did (and yes, if you fucked things up, you got 4AM phone calls from some British dude telling you to fix it). Regtests ran nightly, and no one could trade a model without thorough testing (that might sound like standard practice, but you have no idea how primitive the development culture is on the Street). The whole thing was so good, I didn’t even know what an ORM really was until I started using Rails and had to wrestle with ActiveRecord. The codebase was roughly 15MM lines when I left, and growing. I suspect my retinas are still scarred by the weird color blue SecDB was by default. "
- etm117 16y agoI think that is one of the more thorough accounts of that system I have seen published. All in one paragraph no less.
- antongm 16y agoThanks. I haven't seen many published accounts by SecDB. When I joined, there was literally zero. I now note there are some descriptions on Wilmott and the like. Seems like word is seeping out. All of my description is on the Web in bits and pieces.
- yummyfajitas 16y agoI've had a number of people tell me this system is why GS won the financial crisis. During the financial crisis, GS knew their positions and their risks. They could also calculate the side effects of proposed trades as quickly as their computers could calculate it. This meant the people at the top could actively plan what to do next during the day. In contrast, MS and JPM can only get information like this a few hours after the end of the day, and supposedly Citi just can't calculate such things without massive effort.
- hubb 16y agothat was very well written. "It got to the point that some papers had no authors, and had apparently written themselves. So it goes. No longer with the firm." slightly vonnegut-inspired?
- antongm 16y agoYes! Glad someone spotted it....
- edanm 16y agoDo you mind enlightening me? I've only read a few of his works but don't recognize it.
- blakeweb 16y agoBreakfast of Champions. Just open the first pages and you'll see it all over.
- nollidge 16y agoWhich part is BoC? I recognize "so it goes" from Slaughterhouse Five.
- blakeweb 16y agoI stand corrected--"and so on" is what he uses over and over in BoC. "so it goes" is from Slaughterhouse Five. Thanks.
- jmatt 16y agohttp://books.google.com/books?id=8Rvbn07LhvMC&lpg=PP1&dq=breakfast%20of%20champions&pg=PP1#v=onepage&q&f=false http://books.google.com/books?id=8Rvbn07LhvMC&lpg=PP1...
- sspencer 16y agoHe's not the only one. Every time I see that it morphs in my head to Und so weiter.
- jakevoytko 16y agoQuick tip: hover over the numbered footnotes for some great asides.
- gojomo 16y agoIndeed; I love the footnoting style -- look and content -- and will surely copy it for something I write someday.
- Psyonic 16y agoRead anything by David Foster Wallace than. Not only was he brilliant, but he made copious (perhaps obscene) use of this technique in his writing.
- saturdayplace 16y agoThe Django Advent also had a nice footnoting system, which I've stolen for a project of mine. (example: http://djangoadvent.com/1.2/everything-i-hate-about-mingus/ http://djangoadvent.com/1.2/everything-i-hate-about-mingus/ )
- mseebach 16y agoAn oddly appropriate (yet completely unrelated) quote from another article currently on the frontpage: > For all things (that are things I know) there exists a Context in which that thing I know is false
- brown9-2 16y agoI'm curious about the author's opinion of Liar's Poker, especially the line I got on a plane to New York within the week. I packed my copy of Liar’s Poker for reference. I'm surprised that anyone would read Liar's Poker and think of it as a reference to Wall Street on an inspiration to work there. The "gorilla" culture described by Michael Lewis at Salomon Brothers in the 80s sounds very close to what the author experienced at GS in the mid-2000s. At the end of the book, Lewis leaves the firm after slightly more than a year, regarding his pay as obscene for the work he did and wondering about the utility and usefulness of the trading he did. So, how could anyone read Liar's Poker and come away from it wanting to work on Wall Street? Or does obscene bonus pay blind people to all the negatives? I don't think Michael Lewis ever intended the book to inspire people to work on Wall Street.
- arethuza 16y agoIn The Big Short he mentions that although he never intended Liar's Poker to inspire people to work on Wall Street. However, that's precisely how a lot of people have treated it - he mentions he gets a lot of requests from people who read Liar's Poker and want tips on how to get started on Wall Street.
- bambax 16y agoYes. From the introduction to The Big Short (page XV): "I hoped that some bright kid at Ohio State University who really wanted to be an oceanographer would read my book [Liar's Poker], spurn the offer from Golman Sachs, and set out to sea. Some how that message was mainly lost. Six months after Liar's Poker was published, I was kee-deep in letters from students at Ohio State University who wanted to know if I had any other secrets to share about Wall Street. They'd read my book as a how-to manual."
- yummyfajitas 16y agoWhen I visited Egypt, my flamboyantly gay chain smoking guide had a similar experience. He tried to dissuade me from climbing up "Moses Mountain", as it was locally known. Him: I tried it once, about a year ago. I was showing some healthy mexican girls around, and they decided to climb. But it was so steep, and they just kept walking! After a few hours of pain I just stopped, and shivered on the side of the mountain. It was the worst day of my life. Me: Sounds awesome. Only 50 egyptian pounds? Him: It wasn't awesome. I don't recommend it. I'll sleep in the van. Michael Lewis didn't enjoy Solomon Brothers, just as my guide didn't enjoy a 3 hour stroll up a 1500m hill. Both assumed that an accurate description of the experience would dissuade others. Both simply failed to appreciate the diversity of human preferences.
- dragoon 16y agoFalse dichotomy. It's fine to work at a place like GS as long as you don't get sucked in by the culture. Build up savings, and then launch your startup... the savings have to come from somewhere, no?
- fred-r 16y agoNerd erotica.
- klon 16y agoFavorite quote: "But things weren’t all bad! At its best, when the markets presented an apocalyptic Boschian landscape of damned souls torn asunder by hellish tortures, every Goldman grunt, sargeant, or general would close ranks and form a Greek phalanx of greed."
- rchi 16y agoWhat's interesting is that stories like this have been around for decades but never deterred young ivy league grads from joining Goldman when the industry is popular. Now so many people is quick to criticize the finance industry. Although it's true that the bailout was a great crime, I don't see how lobbyists, pharmaceutical executives and advertisers are much better. These guys get paid millions too...at least Goldman doesn't screw with people's mind.
- forensic 16y ago>at least Goldman doesn't screw with people's mind. ??? That's a pretty sizeable portion of their business.
- hugh3 16y agoWhat's interesting is that stories like this have been around for decades but never deterred young ivy league grads from joining Goldman when the industry is popular. If you look, I'm sure you can find stories about how any possible profession or industry sucks to work in. And most of those other professions and industries don't pay $500K+. With a PhD in physics I could have just as easily gone into quant-land as academia. And while academia is great, it has its own set of sucky problems. Is it really worth the 400+ thousand dollars a year I'm effectively "paying" in order to work there instead of GS? It's a helluva luxury good.
- dpapathanasiou 16y agoThe things he hated about Wall Street are just as prevalent in SV, too. Instead of worrying about whether or not he went to an Ivy school, his concern now might be: does he have investors with the "right" pedigree for his startup? Face time with traders and MDs is replaced by hoping that all the "cool" tech blogs are writing his startup (no? writing a few troll posts on the startup's blog should fix that). Etc. Or, he could choose to forget all that and just build his company. But if that kind of petty and superficial stuff got under his skin before, I don't see why it's going to be any different for him now.
- HectorRamos 16y agoMy favorite quote is actually a footnote: "If doing a startup is like rolling a boulder up a hill, then working at Goldman Sachs is like rolling it down the hill: you just have to stay out of the way of the boulder."
- VolatileVoid 16y agoSo. This is funny. I actually work at Goldman, work in the system he talks about, and have been doing so for 5 years. You can get numbed by the experience of working here, but you don't have to be. I've become friendly with some of the best hackers I know, and for us, finance always takes a backseat to writing amazing code. Sometimes we succeed. Sometimes we fail, but we try to never say, "Meh. Good enough." Wall Street is like any other business. Don't over-glorify working for Google and not Goldman: tech companies are in it for money too; so are startups. At least on Wall Street people tell you they're doing it for the money. It's easier to detach that way and remember that what you're doing is just a job.
- YiddishPolice 16y ago"Wall Street is like any other business. Don't over-glorify working for Google and not Goldman: tech companies are in it for money too; so are startups. At least on Wall Street people tell you they're doing it for the money. It's easier to detach that way and remember that what you're doing is just a job." You may try to justify what you do that way, but it's just cognitive dissonance. "Wall street people" tend to make money in rent seeking ways, destroying or merely transferring real value. At least at Google you could be creating value, growing the economy in sustainable ways, and increasing real GDP.
- jrockway 16y agoI also work at a bank, but don't like people who think it's just a job. They make my life more difficult and make it harder for the bank to make money. Our department doesn't hire people like that. (Also, pretty much nothing in the article applies to most banks these days. Sure, someone may have a burger-eating contest from time to time, but it's not like it's work-sanctioned. It's just a bunch of dudes with too much testosterone. There are bonuses, but it's silly to count on them for anything. Ask for the amount of money you want as your base pay -- they'll probably give it to you. Then enjoy the 20% or whatever as a fun extra.)
- ericd 16y agoIt's very much not silly to count on the bonuses. 20% extra? Try 100-300% or more in most of the positions on the trading floor. As you rise in the ranks, it's much, much more. The bonus at every level above Analyst is easily larger than the base, which, as Antonio says, is generally not that impressive. This is true at every big bank on Wall St. Among my friends, we represented every large investment bank in NYC and many of the smaller hedge funds, so I'm sure it's representative. Not sure how compensation is in the IT depts. at those banks, though, if that's what you're talking about. IT is probably not representative of why people go to work on Wall St, though, since it's viewed as a cost center in most banks, and it's not what Antonio is talking about in the post.
- mcyger 16y agoJust to provide a balanced viewpoint: I've worked in corporate America (Fortune 5 company), dealt with banality and bureaucracy, banged my head against the wall over and over again, left, started my own company, grew it to millions, sold it, semi-retired. I love startups and the details of this blog, however, when you want to see your kids, sleep in the same bed as your wife, and have a paycheck deposited in your bank account every other Friday, there's nothing better than working for an established company.
- eru 16y agoOff-topic: Is it common to get paid every fortnight in America?
- rdouble 16y agoYes.
- eru 16y agoAnd you still get checks?
- forensic 16y agoNo.
- blakeweb 16y agoIt's mostly "direct deposit" -- electronically from the company's account into yours, appearing on the day it's supposed to in your account. But people still call it a paycheck.
- jrockway 16y agoIf you want. Most people opt for direct deposit, though.
- benmathes 16y agoMost places auto-deposit into a financial account of your choice if you like. Payroll has some historical legislative accidents tied to it, so it's a little slow to change.
- jakarta 16y agoI wonder if the massive amounts of income he made at Goldman helped provide a safety net for launching his zero revenue startup.
- ableal 16y agoWell, I got from the adgrok.com "about the team" page to his sailboat page ( http://svmoksha.com/ http://svmoksha.com/, good reading). I presume he's quite familiar with the traditional definition of a boat as a hole in the water one throws money at ...
- antongm 16y agoOh, God yes. Thanks for reading the sailing blog. And that's about the cheapest, smallest boat one could non-suicidally ponder a circumnavigation in, by the way. And even then owning it and sailing it is like taking a cold shower and tearing up $100 bills (to quote the old joke).
- antongm 16y agoEh, no. I'll echo statistics 101: the mean of a distribution is pretty meaningless when it's a very skewed distribution you're talking about. Those average figures don't apply to me. And I joined GS at precisely the wrong time. Right at the peak, going into the trough.
- nightlifelover 16y ago"There were other characters in this drama. The sales guys were complete tools, with a total IQ, summing over all of them, still safely in the double digits. The traders were crafty and quick-witted, but technically unsophisticated and with the attention span of an ADHD kid hopped up on meth and Jolly Ranchers." Ok it seems perfectly possible to make a lot of money while being a complete idiot. I'm getting an MS in engineering and since I was studying the last few years I don't have any money (except about the minimum which is required for a living) What worries me most is that many engineering jobs are not well payed, even though they require skilled people. So I wonder how I could turn the hard work I did (and still do) to get my degree into money.
- ams6110 16y agoDon't take that description too literally. I really doubt you get to be a trader at GS without having a good brain in your head. Sales is more about working and building relationships than sheer intelligence, but to do it well still requires a lot of work and talent in that direction.
- gaius 16y agoEQ vs IQ.
- nightlifelover 16y agoHeh it was written by somebody with a PHD in Physics or so.. but my point was that a lot of highly intelligent people are loosely paid (for example think about a lot of post-doc positions in academia) while some other less educated people get a lot of money it seems..
- ams6110 16y agoOh absolutely. My father had a PhD in chemistry, was very intelligent, but never made more than a modest middle-class income. He worked in academia. If a high income means a lot to you, academia is a hard place to find it unless you are one of the few superstars that bring in a lot of grant money. At if you are, you are mostly a salesman anyway.
- known 16y agoAn average salary of $633,000 turns you into a paranoid because of job security fear.
- hugh3 16y agoOnly if you're dumb enough to live like you're earning $633,000 a year. If you lived like you're earning $100K and put the rest into a savings account, you could quickly overcome all your financial worries. I doubt anyone is that clever, though, especially if you're surrounded by other folks earning $633K and feel the need to keep up. Entire industries exist for the benefit of those who make $633K and can't think of any sensible way to spend it.
- mdda 16y agoI don't see why you doubt that anyone who earns $600k is clever enough to live cheaply : Banks prefer to hire smart people... But there's also an element of management preferring their employees to live at/above their means to some extent, just so they have to keep putting in the hours... (This is really true : I employ sales people in a trading room, and it's easy to see that they react to financial pressure by making more money).
- jone11 16y agoI love this article and after working nearly five years in big brand advertising, I have to agree that the startup way is the better way. Ad agencies may not be identical to Goldman, they have their own fallacies mind you, but the big lumbering giant feeding money does sound quite familiar.
- nearestneighbor 16y agoIn fact, we were basically the trader’s little bitches, and any quant who’s honest with himself realizes that. I wonder what it is that traders do that they can't be replaced by software? How do they manage to generate more value than quants?
- Psyonic 16y agoSoftware doesn't have a frat buddy working at the bank across the street.
- astrofinch 16y agoWhy is that advantageous? Trading is a zero-sum game, right? So how does having an alliance with a competitor help out much?
- Psyonic 16y agoBecause plenty of deals are negotiated off the market.
- astrofinch 16y agoWhat sort of deal? What could the advantage be of negotiating a deal off the market? Deals are zero sum, right? If you and I make a deal where an item is transacted for above market value, or below market value, one of us is going to lose out as a result.
- SkyMarshal 16y agoI think it's a matter of being book smart vs being street smart. There's still room for both.
- neurotech1 16y agoI was staying with a lady who worked at Goldman Sacks in San Francisco. She said the 12-14 hour days, writing market reports were normal for her. I'm guessing there was limited schedule flexibility for her. I'm not surprised people would rather found a start-up.
- davcro 16y ago> The average salary at Goldman Sachs in 2005 was $521,000 Wow. New title suggestion: "Working at Goldman Sachs will earn you enough money to found a startup with zero revenue."
- deleted 16y ago[deleted]
- mkramlich 16y ago> Founding a startup with zero revenue is better than working for Goldman Sachs until you have bills that come due. then the difference becomes very apparent!