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I've noticed it too. I think many of us believe that the size of the financial sector is extremely disproportionate to the value it adds. It drains talent by of

by freyr 14y ago

I've noticed it too. I think many of us believe that the size of the financial sector is extremely disproportionate to the value it adds. It drains talent by offering smart people salaries that other industries can't afford. It gambles with the economy recklessly, but the public pays the debt when their gambles turn sour. And on, and on. But let's face facts. I'd love to think everybody's really here to "change the world" and "create value." But the biggest stories in tech entrepreneurship focus on silly, time-wasting apps that are sold for millions. Does that really make any more sense than giving a guy a million dollar bonus for designing a high frequency trading algorithm? If we don't expect more from our community, we can't really criticize theirs.

minimax 14y ago
"It drains talent by offering smart people salaries that other industries can't afford." Bullshit. The difference is that in finance (trading, at least), good technology is seen as a competitive advantage that makes a meaningful impact on P&L. When financial companies do well they tend to share the love in the form of cash bonuses. This is a strategy other industries could adopt but choose not to. Also one other nit, there are only a few companies (the megabanks) that are big enough to have a government backstop if they blow up. There is a whole world of smaller outfits doing business without any such guarantee.
- freyr 14y ago
  The mean salary in New York City's finance industry rose from $80,000 in 1981 to $360,000 in 2011, while average New York City salaries rose from $40,000 to $70,000. You may be right, but I just don't think there are a lot of tech companies that could offer a mean salary of $360,000 and remain profitable. Especially small to medium size companies. Compare that to hedge funds, which were basically printing money and could pay their small staffs extremely large salaries (and even larger bonuses).
  - rayiner 14y ago
    Google and Microsoft are in the same ballpark of profitability per employee as say Goldman Sachs or Morgan Stanley. The difference is that financial firms take pride in how much they pay their employees, while tech firms do things like collude to depress employee wages.
    - wtvanhest 14y ago
      This couldn't be more true. I got an offer at Intel after working there for the summer. A finance company asked what they were paying and decimated Intel's offer. Upon telling Intel the recruiter at Intel demanded to know where I was going. Luckily I wasn't going to Apple, Adobe (or one of the other companies they allegedly had illegal no competes with or I would have no job at all.
      - roel_v 14y ago
        'decimated', as in, paying you ten times less?
        gd1 14y ago
        Nine tenths as much to be correct. From wiki: The word decimation is derived from Latin meaning "removal of a tenth". A cohort selected for punishment by decimation was divided into groups of ten; each group drew lots (Sortition), and the soldier on whom the lot fell was executed by his nine comrades.
        roel_v 14y ago
        Ah yes, my favorite pet peeve - descriptivism vs prescriptivism in linguistics. Lives have been wasted arguing about this exact interpretation of decimate, my position is that 'decimate' in a 2013, Western context means one of the definitions posted above - i.e., significantly reduce in number, not by 10%.
        wtvanhest 14y ago
        If you are going to pull out a dictionary, make sure to read both definitions. :) decimated: past participle, past tense of dec·i·mate (Verb) Verb 1) Kill, destroy, or remove a large percentage of. 2) Drastically reduce the strength or effectiveness of (something): "plant viruses that can decimate yields".
  - kasey_junk 14y ago
    You are not wrong about the amount of money to be made in the finance industry, but when talking about those salaries you have to be very careful. Hedge fund managers make orders of magnitude more money than their employees. Investment banks work much like law firms, if you are a partner or partner track you can make tons, but frequently that is built on the back of average paid employees. What would tech company compensation look like if we included Brin/Cook/Zuckerberg? There are lots and lots of small shops out there that have good but not idiotic compensation packages. The tech companies could (should?) match them if it weren't an ingrained part of the culture not to.
    - bearmf 14y ago
      Well, total compensation, say at Google, can be around 200k for senior guys. A lot of people in finance are making less than that and so people do leave for software jobs. As I have said before, really huge compensation levels in finance exist for VP-level people. Please keep in mind that "VP" in finance means something like "pretty senior", he might no be a manager at all. These guys have around 5 years experience and if all went well for them they can be making around 300k. These would be hard to match en masse while avoiding a situation when of two engineers doing the same job one is paid X and another 2X.
  - JumpCrisscross 14y ago
    I don't think any of our tech guys ever earned $360k. That's for the traders.
rdouble 14y ago
It drains talent by offering smart people salaries that other industries can't afford This is repeated a lot, but the skills of financial wizards are orthogonal to what most tech companies need. It's also not the case that the tech industry can't afford to pay people high salaries.

by freyr 14y ago

minimax 14y ago

"It drains talent by offering smart people salaries that other industries can't afford." Bullshit. The difference is that in finance (trading, at least), good technology is seen as a competitive advantage that makes a meaningful impact on P&L. When financial companies do well they tend to share the love in the form of cash bonuses. This is a strategy other industries could adopt but choose not to. Also one other nit, there are only a few companies (the megabanks) that are big enough to have a government backstop if they blow up. There is a whole world of smaller outfits doing business without any such guarantee.

freyr 14y ago
The mean salary in New York City's finance industry rose from $80,000 in 1981 to $360,000 in 2011, while average New York City salaries rose from $40,000 to $70,000. You may be right, but I just don't think there are a lot of tech companies that could offer a mean salary of $360,000 and remain profitable. Especially small to medium size companies. Compare that to hedge funds, which were basically printing money and could pay their small staffs extremely large salaries (and even larger bonuses).
- rayiner 14y ago
  Google and Microsoft are in the same ballpark of profitability per employee as say Goldman Sachs or Morgan Stanley. The difference is that financial firms take pride in how much they pay their employees, while tech firms do things like collude to depress employee wages.
  - wtvanhest 14y ago
    This couldn't be more true. I got an offer at Intel after working there for the summer. A finance company asked what they were paying and decimated Intel's offer. Upon telling Intel the recruiter at Intel demanded to know where I was going. Luckily I wasn't going to Apple, Adobe (or one of the other companies they allegedly had illegal no competes with or I would have no job at all.
    - roel_v 14y ago
      'decimated', as in, paying you ten times less?
      - gd1 14y ago
        Nine tenths as much to be correct. From wiki: The word decimation is derived from Latin meaning "removal of a tenth". A cohort selected for punishment by decimation was divided into groups of ten; each group drew lots (Sortition), and the soldier on whom the lot fell was executed by his nine comrades.
        roel_v 14y ago
        Ah yes, my favorite pet peeve - descriptivism vs prescriptivism in linguistics. Lives have been wasted arguing about this exact interpretation of decimate, my position is that 'decimate' in a 2013, Western context means one of the definitions posted above - i.e., significantly reduce in number, not by 10%.
      - wtvanhest 14y ago
        If you are going to pull out a dictionary, make sure to read both definitions. :) decimated: past participle, past tense of dec·i·mate (Verb) Verb 1) Kill, destroy, or remove a large percentage of. 2) Drastically reduce the strength or effectiveness of (something): "plant viruses that can decimate yields".
- kasey_junk 14y ago
  You are not wrong about the amount of money to be made in the finance industry, but when talking about those salaries you have to be very careful. Hedge fund managers make orders of magnitude more money than their employees. Investment banks work much like law firms, if you are a partner or partner track you can make tons, but frequently that is built on the back of average paid employees. What would tech company compensation look like if we included Brin/Cook/Zuckerberg? There are lots and lots of small shops out there that have good but not idiotic compensation packages. The tech companies could (should?) match them if it weren't an ingrained part of the culture not to.
  - bearmf 14y ago
    Well, total compensation, say at Google, can be around 200k for senior guys. A lot of people in finance are making less than that and so people do leave for software jobs. As I have said before, really huge compensation levels in finance exist for VP-level people. Please keep in mind that "VP" in finance means something like "pretty senior", he might no be a manager at all. These guys have around 5 years experience and if all went well for them they can be making around 300k. These would be hard to match en masse while avoiding a situation when of two engineers doing the same job one is paid X and another 2X.
- JumpCrisscross 14y ago
  I don't think any of our tech guys ever earned $360k. That's for the traders.

rdouble 14y ago

It drains talent by offering smart people salaries that other industries can't afford This is repeated a lot, but the skills of financial wizards are orthogonal to what most tech companies need. It's also not the case that the tech industry can't afford to pay people high salaries.