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Article is totally absent of any substantive suggestions to "fix the problem". The real issue is that if you look at the risk-adjusted reward of doing or worki

by asanwal 16y ago

Article is totally absent of any substantive suggestions to "fix the problem". The real issue is that if you look at the risk-adjusted reward of doing or working at a startup, it doesn't compare well with working on Wall Street. And then there are those who say, let me do a few years on Wall St and then I'll pursue the startup thing. What happens during that time is they lose their entrepreneurial edge (they become corporate dull) or they take on a lifestyle (nice house, cars etc = high fixed costs) which makes startup life less feasible. Of course, in startup land, you have your occasional stellar upside scenarios a la Zuckerberg, but if economics is the main motivator, Wall St is a logical, rational choice esp if you work to live (and not live to work). I say all of this as an NYC startup who feels this pain at times (although I think it is overblown and more of an excuse). I just don't think bellyaching about it achieves much.

Jd 16y ago
The title is a suggestion. Discourage your friends from putting their energies into creating financial products of dubious value and instead encourage them to engage in substantive work that makes a clearly positive contribution. Yes, yes, I know you want a secure source of income. Well, try think about ethics first, if not only.
- asanwal 16y ago
  These generalizations about finance being unethical are misguided and misinformed. A bank/VC that gives a loan/investment to small business/startup. That's finance. Hardly unethical. Allowing people to get a car today while paying for it over time (instead of paying upfront). Hardly unethical. Yes, there are bad actors in finance as there are in every space. Don't the Zyngas and others of the world via their offers engage in "ethically questionable" tactics?
  - mousa 16y ago
    A lot of the financial industry though today works so many layers above actual loans it's hard to see how they contribute and even harder to see why they make so much more money than everyone else. I'm not an expert, I'm sure there is some justification, but it's not obvious to most people and that's why, sometimes, we the laypeople wonder.
    - asanwal 16y ago
      I agree with you to some degree. There is a lot that happens well out of public (and sometimes regulatory) purview. I just think views that "finance is bad" or "startups are the best" are myopic, don't advance the discussion and ultimately fail to realize the inter-related'ness of all these different forces. Ultimately, we live in a pretty free agent society and if Wall St can pay more (no matter the reason), the rational engineer whose primary motivation is money should take that job. There is nothing wrong with that. The engineer who is motivated by money and other factors (building something valuable, being his/her own boss, etc) also has avenues a la doing a startup.
      - rbarooah 16y ago
        This would be true if the losses from the last crash hadn't been socialized. If the financial industry had actually had to bear the consequences of the risks they take in the same way that entrepreneurs do, the decisions would be rational. As it is, the finance sector is protected by the government whereas startups are not.
        asanwal 16y ago
        When the collapse of Facebook presents systemic risk (or the illusion of system risk depending on your perspective) to the US, I'm sure it will get a "bail out" as well.
        rbarooah 16y ago
        Seriously? You're saying that it's fine for the financial industry to hold the country hostage when they fail because there's equal opportunity for other industries to do that too if they too can become large enough?
        asanwal 16y ago
        Not justifying it, but when people think the whole system could break down, crazya$$ isht happens. The rightness or wrongness of what was done is not what I was getting into. Merely commenting on your point as to why the "finance sector is protected by the government whereas startups are not".
- larsberg 16y ago
  It's not even about a secure source of income. Unless you're a founder, simply low-single-digit employee number doesn't give you enough equity to beat even a low-end finance job. Simple math: if you do your business, 9-to-5 only, you'll be in the 150-200k range within 5 years of graduation. If you decide to manage and make it up a rung or two, join a financial startup, or just make "tech lead/architect" double that income. Unless you're a founder, having a five-year startup exit strategy that pays out similarly to the income you could have obtained in a straightforward manner in finance is a microsoft/google/facebook/twitter-style long shot. And, the latter two haven't even IPO'd yet to allow full vested share liquidity... All my friends consider it a fairly soulless industry. Though they joke about patent troll/NPE firms in the way most techies joke about financial firms.
richcollins 16y ago
It's easy to fix the problem. Stop the government from stealing money and giving it to the banks.
- med555 16y ago
  Please explain how the government is "stealing money" for the banks. That is completely absurd. Monetary policy keeps the system in check to stabilize the economy.
  - rbarooah 16y ago
    How does a massive bail out 'keep the system in check'?
    - billybob 16y ago
      On the contrary, it encourages disfunction. "Let us remove the consequences of your failures." Gee, I wonder if that memory will make them so grateful that they'll be more careful next time? Sure. It's not like their whole industry is about predicting risks and rewards based on past experience. Bah. The mistakes will be repeated and the bailout question will arise again. And it will be worse next time. We should have had the guts to say "fail and die." It would have sucked, but not as much as crushing debt and a sequel.
      - mdda 16y ago
        Exactly. GM should be dead by now.
      - achompas 16y ago
        You guys are hilarious with your chests puffed out screaming about death to the financial players who were in trouble. Have you considered the massive negative shock to liquidity that would have resulted? Goldman Sachs, JPMorgan Chase etc. deal with an inordinate amount of the world's liquid assets. If they had failed, the problems wouldn't have been a few quarters of negative GDP growth--we could have seen the collapse of financial markets everywhere along with prolonged global depression. Should we have had the guts to deal with that too?

by asanwal 16y ago

Jd 16y ago

The title is a suggestion. Discourage your friends from putting their energies into creating financial products of dubious value and instead encourage them to engage in substantive work that makes a clearly positive contribution. Yes, yes, I know you want a secure source of income. Well, try think about ethics first, if not only.

asanwal 16y ago
These generalizations about finance being unethical are misguided and misinformed. A bank/VC that gives a loan/investment to small business/startup. That's finance. Hardly unethical. Allowing people to get a car today while paying for it over time (instead of paying upfront). Hardly unethical. Yes, there are bad actors in finance as there are in every space. Don't the Zyngas and others of the world via their offers engage in "ethically questionable" tactics?
- mousa 16y ago
  A lot of the financial industry though today works so many layers above actual loans it's hard to see how they contribute and even harder to see why they make so much more money than everyone else. I'm not an expert, I'm sure there is some justification, but it's not obvious to most people and that's why, sometimes, we the laypeople wonder.
  - asanwal 16y ago
    I agree with you to some degree. There is a lot that happens well out of public (and sometimes regulatory) purview. I just think views that "finance is bad" or "startups are the best" are myopic, don't advance the discussion and ultimately fail to realize the inter-related'ness of all these different forces. Ultimately, we live in a pretty free agent society and if Wall St can pay more (no matter the reason), the rational engineer whose primary motivation is money should take that job. There is nothing wrong with that. The engineer who is motivated by money and other factors (building something valuable, being his/her own boss, etc) also has avenues a la doing a startup.
    - rbarooah 16y ago
      This would be true if the losses from the last crash hadn't been socialized. If the financial industry had actually had to bear the consequences of the risks they take in the same way that entrepreneurs do, the decisions would be rational. As it is, the finance sector is protected by the government whereas startups are not.
      - asanwal 16y ago
        When the collapse of Facebook presents systemic risk (or the illusion of system risk depending on your perspective) to the US, I'm sure it will get a "bail out" as well.
        rbarooah 16y ago
        Seriously? You're saying that it's fine for the financial industry to hold the country hostage when they fail because there's equal opportunity for other industries to do that too if they too can become large enough?
        asanwal 16y ago
        Not justifying it, but when people think the whole system could break down, crazya$$ isht happens. The rightness or wrongness of what was done is not what I was getting into. Merely commenting on your point as to why the "finance sector is protected by the government whereas startups are not".
larsberg 16y ago
It's not even about a secure source of income. Unless you're a founder, simply low-single-digit employee number doesn't give you enough equity to beat even a low-end finance job. Simple math: if you do your business, 9-to-5 only, you'll be in the 150-200k range within 5 years of graduation. If you decide to manage and make it up a rung or two, join a financial startup, or just make "tech lead/architect" double that income. Unless you're a founder, having a five-year startup exit strategy that pays out similarly to the income you could have obtained in a straightforward manner in finance is a microsoft/google/facebook/twitter-style long shot. And, the latter two haven't even IPO'd yet to allow full vested share liquidity... All my friends consider it a fairly soulless industry. Though they joke about patent troll/NPE firms in the way most techies joke about financial firms.

richcollins 16y ago

It's easy to fix the problem. Stop the government from stealing money and giving it to the banks.

med555 16y ago
Please explain how the government is "stealing money" for the banks. That is completely absurd. Monetary policy keeps the system in check to stabilize the economy.
- rbarooah 16y ago
  How does a massive bail out 'keep the system in check'?
  - billybob 16y ago
    On the contrary, it encourages disfunction. "Let us remove the consequences of your failures." Gee, I wonder if that memory will make them so grateful that they'll be more careful next time? Sure. It's not like their whole industry is about predicting risks and rewards based on past experience. Bah. The mistakes will be repeated and the bailout question will arise again. And it will be worse next time. We should have had the guts to say "fail and die." It would have sucked, but not as much as crushing debt and a sequel.
    - mdda 16y ago
      Exactly. GM should be dead by now.
    - achompas 16y ago
      You guys are hilarious with your chests puffed out screaming about death to the financial players who were in trouble. Have you considered the massive negative shock to liquidity that would have resulted? Goldman Sachs, JPMorgan Chase etc. deal with an inordinate amount of the world's liquid assets. If they had failed, the problems wouldn't have been a few quarters of negative GDP growth--we could have seen the collapse of financial markets everywhere along with prolonged global depression. Should we have had the guts to deal with that too?