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"I would be surprised if there were any new industry in the history of capitalism that distributed its economic rewards to its employees as widely as Silicon Va

by dmmalam 13y ago

"I would be surprised if there were any new industry in the history of capitalism that distributed its economic rewards to its employees as widely as Silicon Valley has." Wall street has been distributing most of it's profits to employees in the form of bonuses for decades. Though unlike SV, it get criticised heavily (a lot unfairly IMHO) for it. Having worked in both, I feel they are full of the same 'type' of people.

loganfrederick 13y ago
Having worked with both, they are not quite the same type of people. You might find some similar personality traits (ego, intelligence, and/or arrogance). But there is one major difference: The typical Silicon Valley worker is much more capable of creating a product or service than the average Wall Streeter. This is anecdotal, but the i-bankers I have worked with and met generally have a limited skillset which boils down to Excel spreadsheet manipulation, 10K reading, and Powerpoint presentations. The skillset of Silicon Valley employees crosses a wider intellectual range (CS, statistics, math, art+design, EE, other hard sciences). Their knowledge is also deeper in a wider breadth of fields and can put their knowledge to work.
- dmmalam 13y ago
  Yea, I did mean personality traits, and moreso sale/trading/asset management than pure i-banking/PE. However while the typical wall steeter used to be a liberal arts major, it has heavily shifted toward STEM. At most i-banks, something like a third of headcount are tech. Even many of the front office are engineers, though again moreso in trading/asset management. Nowadays a large part of the competitive advantage comes from better software - a classic example of 'software eating the world'. Anecdotally some of the brightest people I've known were at BGI (now Blackrock), and they all had deep knowledge in finance, math, stats, tech and old school boys club company politics. [my old boss read math cambridge with stephen hawking and created the first and now biggest by AUM electronic portfolio management system for index funds, grinold & kahn literately [1] wrote the book on active portfolio management, etc] [1] http://www.amazon.com/Active-Portfolio-Management-Quantitative-Controlling/dp/0070248826 http://www.amazon.com/Active-Portfolio-Management-Quantitati...
  - Tycho 13y ago
    What is the name of that electronic portfolio management system?
    - dmmalam 13y ago
      It's a proprietary in-house system.
rayiner 13y ago
Yeah, this quote is totally off base. Finance, consulting, law, and accounting all distribute company earnings very widely (often, entirely) to the people who do the actual work. These companies also tend to have much flatter structures than Silicon Valley tech companies. The greenest associate at a big NYC law or consulting firm probably has just a few levels above him to the managing partner or CEO. The structure is instead broad and flat, with potentially hundreds of partners or managing directors leading their teams with high levels of autonomy. Pay spreads are also narrower. I don't have numbers for consulting, but many NYC law firms are 5:1 or less top to bottom for partners, and around 30:1 for highest earning partner down to greenest associate (and many of these scales are lock-step, meaning everyone at the same level of seniority is paid the same). Finance is of course broader (thanks to huge bonuses for traders), and my impression is that consulting and accounting are narrower. The pay spread at Yahoo between Marissa Mayer and the most junior programmer is more like 250:1, and even within the ranks of executives the spread is probably more like 50:1. The deep irony of these professions is that while they are a major part of the capitalist system, they are personally mostly free from that system. It takes very little capital to run a services businesses like these, which means there is no need to bring in shareholders, which means that the money of the business stays with the workers rather than being diverted to investors.
- michaelochurch 13y ago
  Thank you for this. Lawyers and bankers actually have a sharkish will to negotiate for themselves. They're good at what they do, they're powerful allies and formidable enemies, and they know it. People don't often try to take advantage of them, even when one is senior and the other's a greenhorn. They know better. In 7 years, that junior you tweaked is going to be partner-level somewhere and might end up surprising you how well he does. Most programmers work for old-style Theory-X companies where you have to be a manager to get a fair shake-- because we, as a group, suck at advocating for ourselves and get taken advantage of in a way that just wouldn't happen to most lawyers or bankers. The same is true of most of these Silicon Valley "startups". You gotta differentiate between companies that are small because they're elite niche operations (which are some of the best places to work) and companies that are small because they're shitty. Many of these "startups" are the latter.

by dmmalam 13y ago

loganfrederick 13y ago

Having worked with both, they are not quite the same type of people. You might find some similar personality traits (ego, intelligence, and/or arrogance). But there is one major difference: The typical Silicon Valley worker is much more capable of creating a product or service than the average Wall Streeter. This is anecdotal, but the i-bankers I have worked with and met generally have a limited skillset which boils down to Excel spreadsheet manipulation, 10K reading, and Powerpoint presentations. The skillset of Silicon Valley employees crosses a wider intellectual range (CS, statistics, math, art+design, EE, other hard sciences). Their knowledge is also deeper in a wider breadth of fields and can put their knowledge to work.

dmmalam 13y ago
Yea, I did mean personality traits, and moreso sale/trading/asset management than pure i-banking/PE. However while the typical wall steeter used to be a liberal arts major, it has heavily shifted toward STEM. At most i-banks, something like a third of headcount are tech. Even many of the front office are engineers, though again moreso in trading/asset management. Nowadays a large part of the competitive advantage comes from better software - a classic example of 'software eating the world'. Anecdotally some of the brightest people I've known were at BGI (now Blackrock), and they all had deep knowledge in finance, math, stats, tech and old school boys club company politics. [my old boss read math cambridge with stephen hawking and created the first and now biggest by AUM electronic portfolio management system for index funds, grinold & kahn literately [1] wrote the book on active portfolio management, etc] [1] http://www.amazon.com/Active-Portfolio-Management-Quantitative-Controlling/dp/0070248826 http://www.amazon.com/Active-Portfolio-Management-Quantitati...
- Tycho 13y ago
  What is the name of that electronic portfolio management system?
  - dmmalam 13y ago
    It's a proprietary in-house system.

rayiner 13y ago

Yeah, this quote is totally off base. Finance, consulting, law, and accounting all distribute company earnings very widely (often, entirely) to the people who do the actual work. These companies also tend to have much flatter structures than Silicon Valley tech companies. The greenest associate at a big NYC law or consulting firm probably has just a few levels above him to the managing partner or CEO. The structure is instead broad and flat, with potentially hundreds of partners or managing directors leading their teams with high levels of autonomy. Pay spreads are also narrower. I don't have numbers for consulting, but many NYC law firms are 5:1 or less top to bottom for partners, and around 30:1 for highest earning partner down to greenest associate (and many of these scales are lock-step, meaning everyone at the same level of seniority is paid the same). Finance is of course broader (thanks to huge bonuses for traders), and my impression is that consulting and accounting are narrower. The pay spread at Yahoo between Marissa Mayer and the most junior programmer is more like 250:1, and even within the ranks of executives the spread is probably more like 50:1. The deep irony of these professions is that while they are a major part of the capitalist system, they are personally mostly free from that system. It takes very little capital to run a services businesses like these, which means there is no need to bring in shareholders, which means that the money of the business stays with the workers rather than being diverted to investors.

michaelochurch 13y ago
Thank you for this. Lawyers and bankers actually have a sharkish will to negotiate for themselves. They're good at what they do, they're powerful allies and formidable enemies, and they know it. People don't often try to take advantage of them, even when one is senior and the other's a greenhorn. They know better. In 7 years, that junior you tweaked is going to be partner-level somewhere and might end up surprising you how well he does. Most programmers work for old-style Theory-X companies where you have to be a manager to get a fair shake-- because we, as a group, suck at advocating for ourselves and get taken advantage of in a way that just wouldn't happen to most lawyers or bankers. The same is true of most of these Silicon Valley "startups". You gotta differentiate between companies that are small because they're elite niche operations (which are some of the best places to work) and companies that are small because they're shitty. Many of these "startups" are the latter.