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That largely hasn’t proven true historically. Whole swaths of high paying jobs in finance are gone or greatly diminished. From pit trader to analyst they’ve bee

That largely hasn’t proven true historically. Whole swaths of high paying jobs in finance are gone or greatly diminished. From pit trader to analyst they’ve been replaced with computers. Maybe the machines won’t come for venture/angels but I certainly won’t bet on it.

formercoder 7y ago
There’s a relationship between how liquid a market is and how easily it can be automated. There are very few humans on treasury desks, but M&A is still highly relationship driven. No algorithm is going to convince a CEO to sell their company or buy another.
- cheez 7y ago
  Yet...
- wavefunction 7y ago
  Who needs CEOs when it's machines all the way down? Presumably two or more AIs will have some method of reaching consensus.
- 0xB31B1B 7y ago
  Thats not an accurate view of what automating M & A is going to look like. The future is CRMs, more data transportability, and generally improved tooling will change the 1 deal/month capacity of your rain maker M&A team of 8 to a team of 3 doing 6 deals/month. You don’t need to replace the whole flow with computers to add automation.
  - formercoder 7y ago
    Completely agreed, that liquidity spectrum still holds though. Closer to 100% of treasury trading than M&A can be automated, but tools can certainly increase the efficiency of the M&A process and reduce headcount if demand doesn’t grow in kind.
- ChuckNorris89 7y ago
  Exactly. SV likes to brag how their tools are disrupting collaboration, reducing the need for physical presence and increasing automation is making jobs redundant but big money deals are always done in person, with a handshake at a dinner in a fancy restaurant. No amount of tech will ever disrupt this ritual.
  - kasey_junk 7y ago
    Relationships were central to pit traders as well. Doing deals in the steam room was a cherished & central ritual. It didn’t save them when the bots came.
- wayoutthere 7y ago
  M&A is being increasingly automated too. There are simply too many companies out there to run off of relationships alone. Pre-merger due diligence is mostly automated already.
neltnerb 7y ago
Won't the venture funds just own the machines and use them to concentrate wealth even better? Automation inherently strongly favors capital over labor, so whomever has the money when automation revolutionizes an industry is the one that makes the profits. With no value judgment intended, that's just kind of obvious right? Machines are capital and owned by someone who makes money from them instead of paying for labor.
- perl4ever 7y ago
  "Automation inherently strongly favors capital over labor" That's an odd thing to say. If machines and programs are capital, which seems reasonable, the more automation there is, the more capital, which drives down the returns and makes labor relatively more expensive. Isn't this obviously happening in a world where savings accounts pay 0.01% but it costs $120/hr to hire a plumber? Maybe it would be better to say that the extremely low returns on capital favor automation, which favors the people who make the highest wages. That's obviously? not the same as capital vs. labor.
  - neltnerb 7y ago
    What I mean is that if we assume automation reduces the number of people required to complete a job, those that remain have a high pay rate. Agreed? This continues as technology gets more sophisticated until the only people left producing things and making money are those that own the tools that do the job. It only costs $120/hr to hire a plumber because of artificial barriers to entry and a guaranteed market. A better example might be a typist who previously had a solid middle class job taking notes and dealing with faxes because their boss didn't have a cheaper way to do it. That is what I mean by favoring. Eventually Bezos just owns a machine that runs everything he controls and needs no employees. Eventually. Don't doubt he would if he could. Your statement contains the core of it though -- systems that favor the people who make the highest wages are in an unstable equilibrium where eventually very very few people make all the wages.

formercoder 7y ago

There’s a relationship between how liquid a market is and how easily it can be automated. There are very few humans on treasury desks, but M&A is still highly relationship driven. No algorithm is going to convince a CEO to sell their company or buy another.

cheez 7y ago
Yet...
wavefunction 7y ago
Who needs CEOs when it's machines all the way down? Presumably two or more AIs will have some method of reaching consensus.
0xB31B1B 7y ago
Thats not an accurate view of what automating M & A is going to look like. The future is CRMs, more data transportability, and generally improved tooling will change the 1 deal/month capacity of your rain maker M&A team of 8 to a team of 3 doing 6 deals/month. You don’t need to replace the whole flow with computers to add automation.
- formercoder 7y ago
  Completely agreed, that liquidity spectrum still holds though. Closer to 100% of treasury trading than M&A can be automated, but tools can certainly increase the efficiency of the M&A process and reduce headcount if demand doesn’t grow in kind.
ChuckNorris89 7y ago
Exactly. SV likes to brag how their tools are disrupting collaboration, reducing the need for physical presence and increasing automation is making jobs redundant but big money deals are always done in person, with a handshake at a dinner in a fancy restaurant. No amount of tech will ever disrupt this ritual.
- kasey_junk 7y ago
  Relationships were central to pit traders as well. Doing deals in the steam room was a cherished & central ritual. It didn’t save them when the bots came.
wayoutthere 7y ago
M&A is being increasingly automated too. There are simply too many companies out there to run off of relationships alone. Pre-merger due diligence is mostly automated already.

neltnerb 7y ago

Won't the venture funds just own the machines and use them to concentrate wealth even better? Automation inherently strongly favors capital over labor, so whomever has the money when automation revolutionizes an industry is the one that makes the profits. With no value judgment intended, that's just kind of obvious right? Machines are capital and owned by someone who makes money from them instead of paying for labor.

perl4ever 7y ago
"Automation inherently strongly favors capital over labor" That's an odd thing to say. If machines and programs are capital, which seems reasonable, the more automation there is, the more capital, which drives down the returns and makes labor relatively more expensive. Isn't this obviously happening in a world where savings accounts pay 0.01% but it costs $120/hr to hire a plumber? Maybe it would be better to say that the extremely low returns on capital favor automation, which favors the people who make the highest wages. That's obviously? not the same as capital vs. labor.
- neltnerb 7y ago
  What I mean is that if we assume automation reduces the number of people required to complete a job, those that remain have a high pay rate. Agreed? This continues as technology gets more sophisticated until the only people left producing things and making money are those that own the tools that do the job. It only costs $120/hr to hire a plumber because of artificial barriers to entry and a guaranteed market. A better example might be a typist who previously had a solid middle class job taking notes and dealing with faxes because their boss didn't have a cheaper way to do it. That is what I mean by favoring. Eventually Bezos just owns a machine that runs everything he controls and needs no employees. Eventually. Don't doubt he would if he could. Your statement contains the core of it though -- systems that favor the people who make the highest wages are in an unstable equilibrium where eventually very very few people make all the wages.