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I acknowledge that there are plenty of very smart people in finance (especially in quant roles). I said: There are plenty of 135+ in finance, but either they g

I acknowledge that there are plenty of very smart people in finance (especially in quant roles). I said: There are plenty of 135+ in finance, but either they go for trading and quant or even IT roles, or they move to "the soft side" at a higher level: usually at least VP. Smart people tend to avoid competing on hours. Why? Because if you're putting out a 17-hour day (which is necessary at the entry level on "the soft side") anything that is a disadvantage can (no, will) derail you. That includes being too smart for the work. So they prefer trading and quant jobs where the hours are reasonable and also where the work is more interesting and they're not as much at risk of high-IQ problems. [P]ay and career advancement are much better [in finance than software]. Absolutely. This is completely true. Any idea what we should do about this in engineering? (Or just call it hopeless and exit for finance?)

dkrich 12y ago
I don't think it's a solvable problem. People who tend to make the hiring and pay decisions are seldom those who understand the intricacies or value of good engineers. An engineer could make $500k a year, but the business case for why that is a good investment for the company has to be made, and that's where it falls apart. Most people capable of making that decision believe that somebody with a Harvard MBA is worth a particular sum because that's what the market, their experience, their network, and conventional wisdom tells them. For that same person to believe that a top engineer with or without a strong pedigree is worth the same amount would require that person to understand a lot of details that few are willing to learn. I don't think this is necessarily a setback for all engineers- it just creates different but highly lucrative opportunities for those that are able to make the business case to those who write the checks. Instead of relying on your pedigree and the fact that the market at large widely agrees what certain pedigrees and jobs are worth a lot (which is what makes top schools and PE/IB jobs so competitive), you have to convince people of your value on your own. Edit: To be less abstract- an example would be starting a tech consulting business in which you bill $200/hour. Not necessarily an easy task, but if you can show that you're worth more than that to the business, you can convince them to pay you that much.
foobarqux 12y ago
I'm not convinced that smart people gravitate to quant roles. The hours may be longer on the "soft" side but it is more prestigious and the work is less taxing and doesn't require continually learning new skills. I don't know how you can enter "soft" finance at the VP level. > Absolutely. This is completely true. Any idea what we should do about this in engineering? (Or just call it hopeless and exit for finance?) I think the ship has sailed for many people, you can't get into PE or non-quant HF mid-career. When I was younger I often thought along the lines of "if only everybody..." but I realized the hard way that it is much easier to change yourself than to change the world. When I give advice to smart kids entering college I tell them they should strongly consider targeting PE/HF: If they hate it they will know from experience and still have superlative exit ops, trivially able to land a management/executive-track job at a tech company or elsewhere.
- michaelochurch 12y ago
  When I give advice to smart kids entering college I tell them they should strongly consider targeting PE/HF: If they hate it they will know from experience and still have superlative exit ops, trivially able to land a management/executive-track job at a tech company or elsewhere. This is not a comment on what you're saying (I don't think you're far off) but it's pretty disturbing a reflection on tech that executive roles in our companies are what finance people fail into. Most tech management and VC is failed finance/business guys who failed down into those roles, not programmers who worked their way up the ranks. The latter almost never happens, to tell the truth.
  - foobarqux 12y ago
    Yup, definitely something I didn't understand when I started out which is why I make an effort to inform others in college.
swalkergibson 12y ago
I would posit that nothing can be done about this in engineering. PE, big banks, all of that money is based on information gathered from the companies before the rest of us peons get wind of any of it. John Q. Public is playing what he thinks is a fair lottery, while the wizards are pulling the levers behind the curtains. If we as engineers could figure out a legal way to "earn commissions" (read: steal from tens of thousands of people every year based on information asymmetry), then $500k is no problem. Until then, however, we are confined to, you know, actually trying to create value for people rather than extract it from the system. Pardon the cynicism, I am pretty unnerved by our whole economic incentive structure.

dkrich 12y ago

I don't think it's a solvable problem. People who tend to make the hiring and pay decisions are seldom those who understand the intricacies or value of good engineers. An engineer could make $500k a year, but the business case for why that is a good investment for the company has to be made, and that's where it falls apart. Most people capable of making that decision believe that somebody with a Harvard MBA is worth a particular sum because that's what the market, their experience, their network, and conventional wisdom tells them. For that same person to believe that a top engineer with or without a strong pedigree is worth the same amount would require that person to understand a lot of details that few are willing to learn. I don't think this is necessarily a setback for all engineers- it just creates different but highly lucrative opportunities for those that are able to make the business case to those who write the checks. Instead of relying on your pedigree and the fact that the market at large widely agrees what certain pedigrees and jobs are worth a lot (which is what makes top schools and PE/IB jobs so competitive), you have to convince people of your value on your own. Edit: To be less abstract- an example would be starting a tech consulting business in which you bill $200/hour. Not necessarily an easy task, but if you can show that you're worth more than that to the business, you can convince them to pay you that much.

foobarqux 12y ago

I'm not convinced that smart people gravitate to quant roles. The hours may be longer on the "soft" side but it is more prestigious and the work is less taxing and doesn't require continually learning new skills. I don't know how you can enter "soft" finance at the VP level. > Absolutely. This is completely true. Any idea what we should do about this in engineering? (Or just call it hopeless and exit for finance?) I think the ship has sailed for many people, you can't get into PE or non-quant HF mid-career. When I was younger I often thought along the lines of "if only everybody..." but I realized the hard way that it is much easier to change yourself than to change the world. When I give advice to smart kids entering college I tell them they should strongly consider targeting PE/HF: If they hate it they will know from experience and still have superlative exit ops, trivially able to land a management/executive-track job at a tech company or elsewhere.

michaelochurch 12y ago
When I give advice to smart kids entering college I tell them they should strongly consider targeting PE/HF: If they hate it they will know from experience and still have superlative exit ops, trivially able to land a management/executive-track job at a tech company or elsewhere. This is not a comment on what you're saying (I don't think you're far off) but it's pretty disturbing a reflection on tech that executive roles in our companies are what finance people fail into. Most tech management and VC is failed finance/business guys who failed down into those roles, not programmers who worked their way up the ranks. The latter almost never happens, to tell the truth.
- foobarqux 12y ago
  Yup, definitely something I didn't understand when I started out which is why I make an effort to inform others in college.

swalkergibson 12y ago

I would posit that nothing can be done about this in engineering. PE, big banks, all of that money is based on information gathered from the companies before the rest of us peons get wind of any of it. John Q. Public is playing what he thinks is a fair lottery, while the wizards are pulling the levers behind the curtains. If we as engineers could figure out a legal way to "earn commissions" (read: steal from tens of thousands of people every year based on information asymmetry), then $500k is no problem. Until then, however, we are confined to, you know, actually trying to create value for people rather than extract it from the system. Pardon the cynicism, I am pretty unnerved by our whole economic incentive structure.