4 ms·

Wouldn't fintech be the ultimate distillation of this? You (often) don't have any product, you just have the money, and the purpose of the engineering is to in

by biztos 6y ago

Wouldn't fintech be the ultimate distillation of this? You (often) don't have any product, you just have the money, and the purpose of the engineering is to increase its amount. Seems like a powerful motivator as long as everyone's getting a sufficiently motivating cut. OTOH, third prize is you're fired.

tboyd47 6y ago
The positive aspect of money is that people focus on creating valuable products instead of on navel-gazing / politics / whatever. Fintech kind of places the cart before the horse in that regard, don't you think? I wouldn't really know - I have never worked for a fintech project.
- biztos 6y ago
  I also haven't worked in fintech so I'm speculating. You want to make software that adds value either way. But this way the value is directly generated for your employer, with no customer in the middle. I'm not saying that eliminates other influences, certainly I think (and have heard) this leads to workplaces dominated by strong and often eccentric personalities, which has its downsides. But insofar as a programmer is motivated by creating value, and by value we mean money here, I can't think of a way to be closer to it without being independent.
  - LB232323 6y ago
    I work in fintech. You are right, money is the product. The personality cliché in finance is the risk taking one. Men are more frequently found in riskier professions, including dangerous jobs like oil drilling. Some fintech companies actually do produce a software product for finance. However, many of them work for banks or funds to generate capital gains beyond a wage or salary. Regardless of personalities, the most important factor is profit. Everything else is secondary. It is not as flashy or famous as big tech companies, but this profit is paid in bonuses that far exceed the highest salaries for tech workers. If you work for Netflix, maybe you get a free subscription. If you work for a restaurant, maybe you get a free box of takeout at the end of the day. If you work in the business of money, your incentive is large bonuses.
    - biztos 6y ago
      Thanks, that's very interesting. Can you recommend any sources (blogs, whatever) for info on what it's like to work at such places? I've always found it intriguing but I'm not sure if I have the right personality or skills or (very complicated) geography to make it worth trying.
      - eru 6y ago
        The best first resource for any interest about the inside of finance is Matt Levine's column Money Stuff. He's currently on a break, but he has years of backlog you can read.
        biztos 6y ago
        I get his newsletter and enjoy it very much. Definitely recommended even just on the strength of his writing and his wit!
    - eru 6y ago
      > Regardless of personalities, the most important factor is profit. Everything else is secondary. It is not as flashy or famous as big tech companies, but this profit is paid in bonuses that far exceed the highest salaries for tech workers. Depends a bit on what part of fintech you are working on. There's lots of rank-and-file employees whose good salaries actually mostly depends on competition from tech companies. With a low-risk lifestyle mostly comparable to said tech companies. To get the crazy bonuses, you need to move closer to the traders and some of the quants (or get very lucky). But generally those people work a lot harder and longer. I've worked in tech companies (like Google and Facebook) and in those low-risk fintech roles (at eg Bloomberg and Goldman). It seems that the finance industry as a whole seems to be moving away from the heroic model with enormous bonuses to the tech company model with good salaries. The latter is cheaper and more predictable, and it fits the organisations as more and more work becomes automated. (That observation is about companies like eg Goldman and only meant to capture an average. They still have plenty of individuals pulling heroics; and there are still plenty of hedge funds and similar on the old model.) As another example, take high frequency trading market makers. They generally don't have any human traders at all, because humans would be way too slow. So their very nature forces them to become closer to tech companies in organisation.
microtherion 6y ago
In many fintech endeavors, the participants have different time horizons and different payment schedules, so there seems to be a pretty persistent trend for the short term participants to take their money upfront and leave the long term participants holding the bag. I don't think it's accidental that investment bankers, the people who should be most savvy in valuing complex securities, get cash bonuses, while software engineers get options which take years to vest and in pre-IPO companies may not even be readily traded once they vest.
- eru 6y ago
  In one notable transactions, investment bankers got their bonuses as toxic assets. That was a genius move. It got those assets of Credit Suisse's balance sheet, looked good in PR, and receiving bankers were happy because those assets were worth more in the end than they looked like during the height of the panic when the transfer happened. https://www.bloomberg.com/news/articles/2012-01-26/at-credit-suisse-toxic-bonuses-turn-into-gold https://www.bloomberg.com/news/articles/2012-01-26/at-credit... As for software engineers: there's a tax dodge in them getting stock options in pre-IPO companies. But in my one startup job, I negotiated a cash bonus, because we couldn't agree on how to value the options they were originally offering. (Basically, I thought they were next to useless, and the company obviously pretended otherwise.) While Google, Microsoft etc are hiring, a software engineer who accepts a bad deal in options only has herself to blame. (Stock options can also be a good deal. But they are hard to value.)
  - microtherion 6y ago
    > investment bankers got their bonuses as toxic assets. Good point, but it boggles the mind that those bankers got bonuses AT ALL in 2008 (CS had to be bailed out by the Swiss government that year).
    - eru 6y ago
      If you are in trouble, you need the best people you can afford. If anything, it should perhaps boggle our mind more anyone got bonuses in eg 2007 that weren't clawed back later. In general, I don't think bonuses by themselves are a problem. It's just a different way to structure total comp. And if you restrict bonuses, you just force banks to pay higher base salaries instead. To make banks behave better, I would suggest abolishing (government-backstopped) deposit insurance. That way depositors will keep a sharper eye on their banks, and hopefully pro-actively move their funds to institutions with a reputation for low risk and transparency. (Depositors who want to simulate the current regime could just pick a bank that for their money that invests only in short term government debt.)

by biztos 6y ago

tboyd47 6y ago

The positive aspect of money is that people focus on creating valuable products instead of on navel-gazing / politics / whatever. Fintech kind of places the cart before the horse in that regard, don't you think? I wouldn't really know - I have never worked for a fintech project.

biztos 6y ago
I also haven't worked in fintech so I'm speculating. You want to make software that adds value either way. But this way the value is directly generated for your employer, with no customer in the middle. I'm not saying that eliminates other influences, certainly I think (and have heard) this leads to workplaces dominated by strong and often eccentric personalities, which has its downsides. But insofar as a programmer is motivated by creating value, and by value we mean money here, I can't think of a way to be closer to it without being independent.
- LB232323 6y ago
  I work in fintech. You are right, money is the product. The personality cliché in finance is the risk taking one. Men are more frequently found in riskier professions, including dangerous jobs like oil drilling. Some fintech companies actually do produce a software product for finance. However, many of them work for banks or funds to generate capital gains beyond a wage or salary. Regardless of personalities, the most important factor is profit. Everything else is secondary. It is not as flashy or famous as big tech companies, but this profit is paid in bonuses that far exceed the highest salaries for tech workers. If you work for Netflix, maybe you get a free subscription. If you work for a restaurant, maybe you get a free box of takeout at the end of the day. If you work in the business of money, your incentive is large bonuses.
  - biztos 6y ago
    Thanks, that's very interesting. Can you recommend any sources (blogs, whatever) for info on what it's like to work at such places? I've always found it intriguing but I'm not sure if I have the right personality or skills or (very complicated) geography to make it worth trying.
    - eru 6y ago
      The best first resource for any interest about the inside of finance is Matt Levine's column Money Stuff. He's currently on a break, but he has years of backlog you can read.
      - biztos 6y ago
        I get his newsletter and enjoy it very much. Definitely recommended even just on the strength of his writing and his wit!
  - eru 6y ago
    > Regardless of personalities, the most important factor is profit. Everything else is secondary. It is not as flashy or famous as big tech companies, but this profit is paid in bonuses that far exceed the highest salaries for tech workers. Depends a bit on what part of fintech you are working on. There's lots of rank-and-file employees whose good salaries actually mostly depends on competition from tech companies. With a low-risk lifestyle mostly comparable to said tech companies. To get the crazy bonuses, you need to move closer to the traders and some of the quants (or get very lucky). But generally those people work a lot harder and longer. I've worked in tech companies (like Google and Facebook) and in those low-risk fintech roles (at eg Bloomberg and Goldman). It seems that the finance industry as a whole seems to be moving away from the heroic model with enormous bonuses to the tech company model with good salaries. The latter is cheaper and more predictable, and it fits the organisations as more and more work becomes automated. (That observation is about companies like eg Goldman and only meant to capture an average. They still have plenty of individuals pulling heroics; and there are still plenty of hedge funds and similar on the old model.) As another example, take high frequency trading market makers. They generally don't have any human traders at all, because humans would be way too slow. So their very nature forces them to become closer to tech companies in organisation.

microtherion 6y ago

In many fintech endeavors, the participants have different time horizons and different payment schedules, so there seems to be a pretty persistent trend for the short term participants to take their money upfront and leave the long term participants holding the bag. I don't think it's accidental that investment bankers, the people who should be most savvy in valuing complex securities, get cash bonuses, while software engineers get options which take years to vest and in pre-IPO companies may not even be readily traded once they vest.

eru 6y ago
In one notable transactions, investment bankers got their bonuses as toxic assets. That was a genius move. It got those assets of Credit Suisse's balance sheet, looked good in PR, and receiving bankers were happy because those assets were worth more in the end than they looked like during the height of the panic when the transfer happened. https://www.bloomberg.com/news/articles/2012-01-26/at-credit-suisse-toxic-bonuses-turn-into-gold https://www.bloomberg.com/news/articles/2012-01-26/at-credit... As for software engineers: there's a tax dodge in them getting stock options in pre-IPO companies. But in my one startup job, I negotiated a cash bonus, because we couldn't agree on how to value the options they were originally offering. (Basically, I thought they were next to useless, and the company obviously pretended otherwise.) While Google, Microsoft etc are hiring, a software engineer who accepts a bad deal in options only has herself to blame. (Stock options can also be a good deal. But they are hard to value.)
- microtherion 6y ago
  > investment bankers got their bonuses as toxic assets. Good point, but it boggles the mind that those bankers got bonuses AT ALL in 2008 (CS had to be bailed out by the Swiss government that year).
  - eru 6y ago
    If you are in trouble, you need the best people you can afford. If anything, it should perhaps boggle our mind more anyone got bonuses in eg 2007 that weren't clawed back later. In general, I don't think bonuses by themselves are a problem. It's just a different way to structure total comp. And if you restrict bonuses, you just force banks to pay higher base salaries instead. To make banks behave better, I would suggest abolishing (government-backstopped) deposit insurance. That way depositors will keep a sharper eye on their banks, and hopefully pro-actively move their funds to institutions with a reputation for low risk and transparency. (Depositors who want to simulate the current regime could just pick a bank that for their money that invests only in short term government debt.)