It's like so obvious, if you've spent any time at all working for one of these places. Or heck, even interviewing with them.
Here's what it all boils down to: aside the quants, the genuinely alpha traders, and few other wonky actuarial types, most of the grunts (you know: the "analysts"... and the vast majority of the IT types) don't seem to be there, or to have any other propelling motive in life, other than: (1) the above-average salary, and (2) once you're in, you're pretty much guaranteed to do alright -- as long as you're willing to fit in, never even think of rocking the boat, and be ready and willing to continually supplicate your superiors at all times.
Hence the ridiculously subdued style of dress (the dainty dress shoes, the blue and bland off-white shirts), and the curiously submissive demeanor of about 80% of the people you'll meet working there.
Oh, and that drug test, that everyone snickers about below their breath? Including your hiring manager? As everybody knows, it certainly isn't there out of any concern that you'd be abusing intoxicants (after all, you're more than welcome to get shitfaced on alcohol every night of the week -- which most nights you'll find yourself more or less needing to, to drown out the pain, and there sheer inanity of what you're asked to do).
It's there as a gesture of supplication and obedience -- nothing more. Getting you to drop your trousers, whip our your gear, and provide a "specimen" upon demand -- just because your superiors told you to! -- isn't an unfortunate side aspect of drug screening; it's the true purpose of the ritual -- the very end goal, in itself.
BTW: the point about drug testing applies to the handful of cool, geeky, "Agile" companies that adhere to this ridiculous practice, too.
In fact, a certain company by the name of Pivotal Labs comes to mind.
So -- anyone from Pivotal reading this? You're more than welcome to share your true thoughts about your employer's urine fetish, here and now -- safely and anonymously! On the off chance that upper management might actually care what you think about the topic, and perchance, take you seriously.
But heavens, don't do this while your frontline manager is standing nearby! You might get... caught!
This is the first that I've heard of Pivotal Labs requiring drug testing.
That makes me really sad - I thought the tech industry was free of this incredibly invasive, offensive, and counterproductive[0] practice.
Do you know any other tech companies that have these policies (particularly startups)? I wonder if this is an outlier or just a commonplace practice I've been unaware of.
[0] Because not all drugs remain detectable for the same amount of time, drug tests simply encourage use of drugs that are tougher to detect (if you use cocaine, amphetamines, DMT, or heroin on a Friday, it will all be gone from your system by Monday). Marijuana sits at the far other end of the spectrum - depending on the means of testing, it can be detectable weeks after use.
My understanding is that it is not uncommon for VCs to push their companies to start drug testing. Can't vouch for exactly why that is, but it seems to be something that happens.
Why do these VC's have shares in drug testing company's I can think of only a handful of job (outside of DV/TS clearance) that should be allowed to test there employees train drivers, airline pilots and so on.
Your MD doesn't have to have drug tests and they have access to the whole damm candy store.
I was a grunt developer at 'one of these places,' and my experience was in complete contrast to your description. I was never in any way required to 'supplicate' my superiors. My input was evaluated on content and how well I argued, not on my lack of seniority.
My colleagues were lively, extremely competent and collaborative. They were far from bland office drones who only got excited at March Madness brackets or whatever the stereotype is.
A lot of them definitely read HN, and that brings me to the most memorable frustration, which was the inability to respond to comments about what it was like to work at the company.
I work in finance, and I have an aesthetic love of finance. I just find it interesting. But most people who work in it have no interest whatsoever. They just want money. This means that it tends to be a joyless environment full of assholes, who think of the world in winner/loser terms.
What do you find so aesthetically pleasing about it?
Is it the mathematics/model building. Portfolio allocation mean-covariance? Different hedging schemes? Black-Scholes model? Different numerical methods?
Is it the system design? Use of FP to model different contracts or concurrency and distributed trading systems?
Or is it the statistics and back-testing?
Personally, I like the aesthetics a bit but mostly I love the thrill of gambling and watching the market tick and the aesthetics of CNBC money-honey's.
There exist several organizations which have the general template: Hello, academic high achiever. You've spent your entire life in a series of meritocratic competitions. You're socialized to seek the validation of decisionmakers above you, by hewing exactly to their published rubrics. This is gives you a powerful sense of self-worth, brings you status with your peers, and makes your parents feel like you've finally made it.
And now you're graduating from undergrad. And there's a wild, crazy world out there. And many processes in it are not judged by meritocratic competitions.
#%(& that noise. Come do our program. It's like everything you've ever done in life, except this time you'll be paid. Here's the application form, format for the essay, and description of the interview.
For a certain psychograph of young people, surrogate teachers at surrogate schools offering surrogate classes after surrogate admissions processes are incredibly compelling. (I rush to say that I fit this to the nines after graduation. My first job was an academic appointment and my second used exactly the above playbook to sell a job opportunity I would never have had any interest in as a quasi-study abroad option.)
Wall Street has a few features that make it very attractive to ambitious young people:
1) The money. The potential to make $500k-1m/year before 30. The odds of getting to that stage aren't high, because of the culling at each step, but are probably better than making comparable money through a start-up exit.
2) Substantive responsibility. It depends on what precisely you do, but my brother is a year in and has a ton of autonomy and responsibility in his particular area. You can get this in Silicon Valley, but most of corporate America will not let a 24 year old do anything important.
3) Exit options and signaling. If you want to be a venture capitalist, the highest-probability route is through an NYC bulge-bracket bank. A stint at Goldman/Morgan Stanley/etc almost guarantees admission to a top business school, and from there a wide range of careers in corporate finance/development.
The only salient aspect of the article is the bit about risk: it is true that the folks on Wall Street generally aren't risk takers. They often make big bets, but with other peoples' money, and in any case if they are not successful there's a soft landing for them at Harvard or Wharton.
>The banks care less about their qualifications than their work ethic. Being a Rhodes Scholar doesn't make much of a difference when you're a young banker. More of it is being willing to stay at the office for 120 hours a week.
This is very, very true. In my experience, investment banking is by no means a particularly difficult thing to do, given enough capital to play around with. Quants aside, the concepts that are used (take, for example, "mezzanine capital") are mostly buzzwords used to give a professional air to really very simple processes/ideas. It is a far cry from the serious, dedicated abstract thought demanded by fields such as software engineering/machine learning/data science etc.
However, what large financial institutions need are people who are extremely assiduous to small details, have a work ethic in which 7am-11pm hours creating powerpoints are no big deal (and have good sounding qualifications to impress investors).
> Quants aside, the concepts that are used (take, for example, "mezzanine capital") are mostly buzzwords used to give a professional air to really very simple processes/ideas.
This is incredibly accurate. Aside from the guys who come out of MIT and Caltech to do quantitative analysis, almost everything on Wall Street is smoke and mirrors hiding what are incredibly simple ideas. Even a lot of the ostensibly esoteric and complex products (that a lot of the Wall Street guys don't understand!) hide a really simple core concept once you peel back the layers of jargon.
It is a far cry from the serious, dedicated abstract thought demanded by fields such as software engineering/machine learning/data science etc.
99% of software work is straightforward too. Here's a form for entering data. Here's a report for formatting data someone else entered. Every website is just these two concepts that have been around since the 60s. Don't kid yourself that a "full stack developer" or a "rockstar ninja" is anything special.
How necessary are the 7am-11pm hours really? Could the banks do just as good of a job if they hired more people who worked 40 hour weeks? (Increased salary costs notwithstanding)
I work at a law firm specializing in IPO. I had the same thought in mind when I joined.
Hiring more people does help but there will still not be 40 hour work weeks. In many instances, some people in the team has built up the knowledge on a particular part of the deal that it is difficult to outsource since it would be much faster for the person to complete the work themselves.
Hiring more people also means that the information is diffused around. If one person working on a deal it means that he knows 100% about the deal. If 100 people is working on the same deal, efficiency would greatly decrease as knowledge management becomes important (lots of emails).
Thanks for the info! Is the demand for detailed knowledge 16 hours at a time, or is it more like being "on call" for when a client suddenly gets a wild idea and wants numbers to be run for it?
From interviews by folks on Wallstreetoasis.com, this is my understanding of the hours. Some days they may have 2-4 hour breaks (gym time / internet time), then have to crunch in the evening when a client, or an internal-facing client (such as a Managing Partner) comes back.
In my short time at a small consulting firm (Management / C level), this was also the case.
Many times my long hours were due to "deliverables" (PowerPoints, documents, etc.) being in a choke point based on an Analyst, Consultant, etc.
E.g., waiting on numbers to finish a presentation.
However, much of the time, their is ALWAYS something to do, and much of it is very much face-time (butts in seats = working).
Sounds like they need oil-rig hours. 2 weeks on, 1 week off. Or something to that effect. Make people work insane hours, but give them 2-3 months of vacation a year.
I'm going to disagree with the other posters. At least in investment banking, the hours are driven by the pace of corporate transactions. Mergers and divestitures are fragile things, and there is a tremendous incentive to get them done as quickly as possible. Investment bankers are at the service of their clients, and when the client wants someone to run the numbers on some idea on Thursday evening so he can have them for a meeting Friday morning, the bankers have to get it done. And that work has to be done by the people who have intimate knowledge of the deal, not some night-shift crew. Companies paying tens of millions of dollars in bankers' fees demand a certain level of service.
"Working insane hours is a sign of commitment, of willingness to sacrifice for the job; the personal destructiveness of the practice isn’t a bug, it’s a feature."
> However, what large financial institutions need are people who are extremely assiduous to small details, have a work ethic in which 7am-11pm hours creating powerpoints are no big deal (and have good sounding qualifications to impress investors).
The problem is Wall Street is sweeping up a THIRD of Ivy league graduates. This no doubt causes harm to US economy. Can you imagine what a young really bright scientist/engineer can do putting in 120hr/week at a stretch? They probably couldn't produce something amazing soon but learn enough skill that they can be producing something that really adds value to the society. But that's not happening because Wall Street sweeps up so many.
Goldman Sachs 2011 net income was $162,913 per employee. Average pay was $367,057. It's harder to get data on Google, but it looks like the mid-career median salary is $141,000. Google's Gross Profit (Total Revenue less Cost of Revenue) was $24.7B in 2011, and GS's was $24.5B. At the same time, Google had 32,467 employees to GS's 35,700. Yet, the Google net income was $9.7B compared to $4.4B on the GS side. The difference seems to be made up entirely by the difference in employee compensation.
Google's success doesn't and won't carry America's economy. And most of google's top paid employees are programmers.
It's the success of companies that design/make things that will carry America's economy. And these companies are losing their top prospects to Wall Street. Not a good trend.
> I talked to one guy who's a former Goldman Sachs guy who left to go to the tech industry who said the adage in the tech world now is "be wary when the pretty people show up."
I have never heard it put quite that way before, but I know that if I ever see someone in a suit, I start distributing more resumes. The same goes for an all-hands meeting scheduled for Friday afternoon.
The beautiful people just don't talk to nerds without some compelling reason to do so. (And they don't consider new episodes of Doctor Who to be compelling.) So when they do, you have to find the hidden motive. If you can't find it, the motive is to screw you somehow.
In my anecdotal experience, if they talk to me at all, it's usually to say some subset of the following: "We lost the contract, sold/merged the company, and now your office will be closed down, all of you are fired, and whatever work it is that you do is getting tossed in the trash. You get no severance pay. If you had options, they aren't worth anything as of this moment. If they are worth something, the IRS will want 300% of whatever you get from them because that way the company can save 0.5% on its own taxes. Vacation will not be paid out, since you don't have any. Remember how we merged it with sick leave and trimmed 33% to make it flexible leave? You will be getting your COBRA packets shortly, giving you the option to pay $4000 a month out of the $600 you will get from unemployment to continue having health insurance in lieu of food and/or shelter. Have a good weekend."
So yeah, be very, very wary. In fact, you might just want to prep for the bad-news meeting by stashing a current copy of the employee emergency contact list in your car and walking in with an already-active audio recorder.
I think it's ironic that almost all other industries actively discriminate on the basis of appearance, and yet the tech industry is the one under attack for being prejudiced.
I think one reason for this is that anyone who complains against an industry discriminating in favor of attractive people looks like a loser.
The portrait of the college grad painted in the article is consistent with what I’ve seen as an undergrad at Harvard in econ and CS circles.
> [College students want money, structure, and sex appeal.]
But I’ll add another motivation to the laundry list, that draws smart grads to selective/prestigious programs (including Harvard, Goldman, Google, and even YC): Smart grads want to be surrounded by other smart grads, because they want to build peer relationships with future co-founders and business partners.
Yes most of the graduates from the top 10 universities and probably 100% of the ones who go for IB are not insecure.
The only ones are the 1% for come from poor backgrounds and managed to get a place on merit and who haven't learnt to fake it and are conflicted about changing social class
Pet peeve: 120 hours a week is 17 hours a day, leaving 7 hours for sleep assuming literally nothing else is done. While those kind of numbers are often used to sum up the lifestyle of "wake up at 6, get to work at 7, get breakfast, lunch, dinner, drinks with work, get home at 10, go to sleep, repeat," even that ridiculous schedule puts you at 15 hours a day, or 105 hours a week, assuming you treat weekends the same as weekdays. To hit 120 hours a week, you'd have to be arriving at work at 5 and leaving at 10 every day (or 7 and 12, etc.), and that counts all meals and breaks as work hours. No one I've ever met works that many hours (and I went to college with a lot of bankers). There may be the occasional day like that, or the odd week where you push 120 hours (but primarily based on one or two all nighters), but no one regularly spends 71% of their total week working, unless you count any non-leisure as work. It's simply not possible.
Wall Street is NOT building up America but is instead weakening America by causing a Great Brain Drain from every other vital industry. It is a cancer that's eating away America. Because America is losing the brightest kids who could've really shined and played vital leadership roles in other industries, I feel American industries are falling behind.
Some quotes from the article that you should remember:
1. "so many kids who could seemingly do anything choose to work 120-hour weeks"
2. "something like a third of Ivy League graduates going to Wall Street"
3. "They're not just getting finance-minded kids but they're getting the smartest kids from all fields."
4. "give us two years of your lives, don't see your friends, chain yourself to your desk, but we will give you this glorious life where you're making many times what you could ever imagine."
These are kids really really smart, socially adjusted (enough to be accepted by Ivy League), and hard working. If they entered science/medicine/engineering/etc, they would've added great positive impact. Probably not immediately but eventually years down the line. And now they are abandoning these vital industries that actually produce something for an industry that is basically pushing papers around and printing money in the process.
Seriously, WHY would anyone choose to enter a field where you have to work up the ladder (or spend years in grad school and in poverty life) and possibly live in some small towns with a hope of making a few million a year salary ONLY near the end of your career, when you can enter Wall Street and live in NYC (great city but really only for the super rich) and start making 6-7 figure salary/bonus almost from the beginning?
Other major economies do not have Wall Street equivalent and so their top engineering/science graduates don't join finance but instead actually enter the vital industries. And these smart kids actually produce something that is tangible. I think we are already seeing the effect of this trend showing its result slowly.
I know we live in free economy society and all that but I think we need to find a way to 'regulate' how the wall street recruits.
Lastly, I believe the ratio of liberal-arts majors entering Wall Street is way lower than the article seems to suggest. From what I hear, overwhleming majority of the graduates entering Wall Street after graduation are science/math/engineering majors.
Ivy-league grads go into finance because it's an industry that really values their particular pedigree, and is willing to pay for it. Engineering, on the other hand, really doesn't. Engineering companies aren't paying $200k bonuses to kids just a few years out of an Ivy-league school. Indeed, it's pretty hard to set yourself apart, as an engineer, in a way that allows you to earn even twice as much as another engineer of a comparable level of experience.
Thus, the complaint that Ivy-league grads flock to banks is confused. If the banks are correct that Ivy-league grads are the best and the brightest, to the point where it's justifiable to almost not recruit at all outside a small set of "target schools," then the young kids are quite justified in going into an industry that appreciates their qualifications in a way science and engineering don't. On the other hand, if the banks are wrong about ivy-league grads being so much better than everyone else, then nothing much is lost that they go into banking!
> Ivy-league grads go into finance because it's an industry that really values their particular pedigree, and is willing to pay for it.
OTHER industries value the Ivy-league grads just as much. It's just that the budget doesn't allow paying at the rate to compete with Wall Street. That's the problem.
Google and Facebook generate more than $1 million of revenue per employee, quite comparable to Goldman and substantially above Morgan Stanley. The money is there, at least in tech, just more of it goes to shareholders and less to compensating employees.
Why do banks pay out so much more of their revenues out in compensation? Because investment banks are service businesses and not product businesses. Their product is their professionals, and they create brand by composing entry level classes mostly with Harvard, Yale, Princeton, Wharton, and Columbia graduates. They place tremendous weight on this criterion. Other industries, say tech companies, are much more willing to hire from the top public schools, people with foreign degrees, or even people with no degree.
Top Google engineers can make millions in stock grants. Even if you're not the best of the best, get promoted a couple times and you get a very respectable salary and stock grants that (in this market) add up very quickly. I know at least a couple mid/late-20s engineers that are like "Yeah, I'll stick it out for another 5-10 years and then move to Portland or Seattle and retire."
I hear stories of people in google never getting a promotion in 7 years as a software engineer. Or getting frustrated with promotions because everyone is overqualified for their position with PhDs and so on for positions such as a sales manager and so on. How does one become a top google engineer in their mid/late 20?
It happens. I think the longest I knew was someone who was there 11 years without being promoted. I also know folks who are promoted reliably every 2 years, all the way up from SWE 3 to Distinguished Engineer. My personal story was in the middle...I was promoted while at Google, but I didn't particularly want to climb the corporate ladder in a big company.
As for tactics - they aren't actually all that different from what you'd need to manage a successful startup. Get yourself put on a big, important project, and execute successfully on it. How do you get yourself on a big important project? Make yourself an expert within a department in one area, so that when that project is looking for people, they really need to have you. For me that area was Javascript, although I also picked up a lot about all aspects of the search stack from working on a bunch of projects (this is the "success begets success" phenomena: if you're an expert in one area, you can leverage that to get your pick of projects, which you can use to become an expert in more areas). It also helps to have a good relationship with your manager, and to pick a manager who is "plugged in" to Google's priorities and aware of the top priorities and opportunities around.
... Because apart from medicine, no other field pays a market rate. What's the salary at Boeing or Lockheed or a life sciences company or a research lab? It's all creamed off by management, the talent never sees it.
Wall Street does not overpay technical people. It pays fairly. Everyone else underpays.
I'm from the UK and going to be doing an internship at an investment bank this summer, I do Comp Sci at university. Here are some of my thoughts and motivations.
Banks recruit ALOT of people and have offices across the country, they are very accommodating to your needs.
Applying for a bank seems much less intimidating than applying to a big tech company. The view is that only the very best even have a shot at interviewing at a company like Google/Amazon/Facebook, this puts people off.
Banks are at every school actively recruiting.
Banks host events like hackathons and advertise them. Amazon also do this in our area to be fair to them, but that one is usually after the academic year. Banks host theirs round about November time, and competing can allow you to skip portions of the interview process.
The offices are stunning and the entire place (Canary Wharf) has a feeling of being important when you're a kid in jeans who has never had a real job, and lots of important looking people are walking about in their expensive suits.
They pay very very well.
One other motivation that is personal to me but slightly different. I don't really want to work in banking. I want to run my own business, but I'm not ready to do that yet. I feel if I work at a company like Google that I'll never want to leave, and that's not how I want my life to be. So a bank is a great option. It's good money, I'll learn a lot, and it's a respected name, and I will never be so happy with my field of work as to never want to leave.
When I say other economies, I meant places like China/Japan/SKorea. Their top science/engineering graduates have NO choice but to enter science/engineering fields. I think a lot of it is due to language/culture.
Please stop bringing up Google/Amazon/Facebook. These are not the true engines of a nation's economy. The true engines imo are companies like GM/Boeing/Tesla who design and make things at cheap enough cost to be competitive. And these companies are losing top prospects to Wall Street.
You are wrong about people working at Google not wanting to leave. Many of those people want to and do leave to start something on their own. But again, I don't really care about such 'high' tech companies. I'm worried about other industries like medicine/science/engineering in America losing the competitive edge due to top young prospects joining in Wall Street instead.
Tesla are recruiting quite well and have their pick of a lot of the best graduates. They only employ 6000 people though, so their recruitment won't be huge.
I can only talk about this from a UK perspective because that's where I have experience in this. Most companies like that do not actively recruit, they don't come to my university and talk to me. They don't host student events. And often, even when they do come talk to me, they send HR people. I'm not interested in HR people, I'm interested in technology. I want a technologist to come talk to me, I want a decent conversation and want to feel like I'd fit in if I went to work there. A HR person is fine to come along, introduce themselves and give a talk about the culture etc, but I want some tech insight.
Banks recruit very pro-actively and very early. They do this much better than any other company. They'll be at 2/3 events in my university. If I send them an email it will most likely be replied to within 30 minutes. They do everything to make students comfortable with them.
And yes, people at Google might want to leave. But I'm concerned that I wouldn't, and that's a risk I don't want to take.
> when you can enter Wall Street and live in NYC (great city but really only for the super rich)
This is a common misconception, but not true. It's not true on an absolute scale (many people in NYC survive on what are modest salaries elsewhere) or on a COLA-adjusted scale (NYC has a salary-adjusted lower cost-of-living than many other "cheaper" cities).
> and start making 6-7 figure salary/bonus almost from the beginning?
Even when you factor end-of-year bonuses into the equation, an entry-level I-banking job pays about as much as Google or Facebook would pay an engineer right out of school. The hours are also a lot longer than at Google (not to mention less flexible).
It takes a long time to work your way up to even half of seven figures, and that's if you get there (the vast majority burn out, change professions, or have their careers stagnate).
> Even when you factor end-of-year bonuses into the equation, an entry-level I-banking job pays about as much as Google or Facebook would pay an engineer.
Problem is programmers entering Google/Facebook are most often programmers who studied CS in college. Many graduates entering Wall Street are science(physics,math,chemistry) and engineering (non-CS engineering) majors.
I wouldn't mind not having enough programmers working for google/facebook but I do mind losing science/engineering graduates to finance jobs when instead they could be learning the ropes in other vital industries.
>These are kids really really smart, socially adjusted (enough to be accepted by Ivy League), and hard working. If they entered science/medicine/engineering/etc, they would've added great positive impact.
IMHO I believe the kids the banks are stealing from science/medicine/engineering/etc, are not kids that would truly follow those paths. Personally once I found IT I didnt want to leave and nothing was going to deter me from it. Not even a big salary from another industry (I'd take a fat IT salary though).
Sometimes these kids are so smart they just choose a smart degree with no hopes of pursing a career in that field. I lived next to a very smart and talented guy getting his MBA at Emory. He was some sort of risk accessor for a company but imagine my surprise when I learned he had a Mechanical Engineering BS, he told me he never wanted to do Engineering he thought it was a good degree to have instead of a straight Business Major.
I want to point out IT is not the true engine of America's economy. The true engines to me are companies like Boeing/GM/Tesla/SpaceX who make things that other economies want to pay money for.
I don't want to spend a lot of time working on each point within your post. However I do think you discount the value that finance brings. Access to capital and efficient distribution of capital are tremendously powerful.
Describing what finance does as just pushing paper is like describing the startup community as just writing useless code.
I agree finance matters. I do. But not to the point where they can and do sweep up a third of Ivy League graduates. Would you honestly say Wall Street is vital enough that they deserve a third of Ivy League graduates?
And I want to make it clear I don't consider Facebook/Google/Twitter as vital as GM/Boeing/Tesla/SpaceX.
I don't care if Facebook/Google/Twitter don't end up with top brains. But I am concerned GM/Boeing/Tesla/SpaceX are not getting the top brains as much as they should.
Why do you think those particular companies deserve a larger share of good employees.
Boeing hasn't been innovative in a while now. They make most of their money off of sales of their older models and defense contracts.
GM isn't doing so well these days and has moved most of their manufacturing overseas. Not exactly a win for the American economy. Consumer automobiles isn't exactly a growth industry right now.
Tesla and SpaceX are promising, but still small. I don't think they have that much trouble hiring. Due to their reputation and high compensation levels, they can easily compete with Wall Street for the best and brightest engineering minds.
So the question remains, why these particular companies? Are you really just talking about old-school heavy industry companies in general? Why not other sectors, like electronics, medicine, and IT?
GM, Boeing, Tesla, none of these companies would exist without the financial industry. There would be no such thing as large enterprise because no one person or institution can take on that much risk other than the government and we've seen what happens with centrally planned economies.
So, yeah, finance is more vital than any other business.
This is a pretty broken argument. Those companies also wouldn't exist without the steel industry, or the construction industry, or the electronics industry, etc. etc.
> These are kids really really smart, socially adjusted (enough to be accepted by Ivy League), and hard working. If they entered science/medicine/engineering/etc, they would've added great positive impact.
I agree that students may be able to have a stronger impact as a doctor, scientist, etc. But this is more a criticism of K-12 education, not the wall street industry! I've never heard of a high schooler thinking "should I grow up and be a doctor, or should I be an investment banker?" What I have heard is "I'm smart but not very good at math, so I'll major in business." We do NOT have many students choosing investment banking over STEM during their junior year of college in the midst of recruiting. These decisions are being made during senior year of high school when they're thinking about what to major in.
> And now they are abandoning these vital industries that actually produce something for an industry that is basically pushing papers around and printing money in the process.
Basically pushing papers around and printing money? Are you kidding me? If investment banks are so useless, why would essentially all large corporations (including Apple, Facebook, Yahoo, etc.) hire investment banks to assist in raising debt and equity or to facilitate mergers and acquisitions? By suggesting that investment banks are "printing money," you've shown that you aren't well-informed on the industry.
If your criticism is coming from the recent financial crisis, then sure, the investment banks due deserve some of the blame. But anybody who says investment banks are exclusively responsible and refuses to point out the mistakes by credit rating agencies, insurance companies, the federal government, and even US citizens needs to find an objective source and study the events leading up to the crisis.
> I know we live in free economy society and all that but I think we need to find a way to 'regulate' how the wall street recruits.
Is someone being harmed? Given that the students entering investment banks are fairly intelligent and coming out of prestigious universities, they are also intelligent enough to find another job if they don't like working at the bank. All of these banks also have well-structured internship programs, giving the students an opportunity to test the experience. Yes, the lifestyle can be very difficult for two years. But it's a trade-off; students work very hard in exchange for a high salary and great exit opportunities.
> Lastly, I believe the ratio of liberal-arts majors entering Wall Street is way lower than the article seems to suggest. From what I hear, overwhleming majority of the graduates entering Wall Street after graduation are science/math/engineering majors.
That is certainly not the case. STEM may be a majority of the graduates entering fields like high-frequency trading, but STEM is a very small minority of the students entering investment banks. And investment banks are much larger (in terms of # employees) than HFT. I'm not defending high-frequency trading -- I agree it's billions of dollars being spent on something that's socially unproductive. But it's inaccurate to make a blanket statement about "wall street" and apply it to any finance-related career.
> But this is more a criticism of K-12 education, not the wall street industry!
No matter if K-12 system is doing its job or not, Ivy League should not be sweeping up a their of Ivy League graduates.
> By suggesting that investment banks are "printing money," you've shown that you aren't well-informed on the industry.
Yes I apologize. I was just venting my frustration. But are the finance companies THAT important that they deserve a THIRD of graduates from Ivy League graduates? And what's the point of working with debts if your company can't compete on the global scene because your products are not as good as others'?
> Is someone being harmed?
I think so. I think the health America's economy and competitive is being harmed by Wall Street sweeping up a third of Ivy League graduates, not in a speed one can see easily but slowly happening for sure.
> But it's inaccurate to make a blanket statement about "wall street" and apply it to any finance-related career.
Again, I'm sorry if I seemed to be making blanket statement about all finance-related careers. But Wall Street (and finance industry in general) should not be sweeping up a THIRD of Ivy League graduates.
There was an article maybe a decade ago in the Economist (I've never been able to find it since) claiming that being the hot industry for new Harvard Business School grads to join was, based on past performance, a solid countercyclical indicator: the MBAs started to join just as the industry had already peaked and trouble was on the horizon. IIRC it ended by observing that now (ie. then) they had started to go to Wall Street. I don't know if that's still true, or was actually ever true, let alone if anything similar is true of Harvard first-degree holders, but I thought I'd leave it here. ;)
Last comment: I majored in PoliSci. If I went back and did it all again, I'd recommend consulting (good pay, exposure to a lot of verticals). Banking would be tempting purely for the pay. I may not have worked banking hours, but I didn't come near a banking paycheck (my hours divided by stereotypical banking hours > my salary divided by a standard banking salary). Wall Street pays better than anywhere else for the background of their recruits, and the difference is so stark that unless you are a big firm consultant, the economically smart decision is banking.
That said, I'm happy where I am now, working on growth and customer acquisition at a really cool YC company, where I actually want to work all the time. I wouldn't be here had I chased banking dollars.
I'm genuinely curious -- what do these recruits actually do while working these massive hours? Is there really 80-120 hours of desk-based work to be done, or does office politics or fraternizing play a role in those hourly figures?
I've worked for banks to 15 years or so, but always on the sales and trading side, rather than the investment banking side. In general, I like the industry. However, I've come to believe that the 90 hour analyst work week is hazing, pure and simple. It doesn't really matter what they're doing. Being a banker is a pretty plum job and it simply weeds out people who don't really want the job that badly. The other aspect is to gauge your personality & fit under adverse conditions, though the adverse conditions are artificial and arbitrary.
On trading desk the analyst/junior guys typically will work like 6:30 through 7:30, which is not that much more than anyone else. They will be required to get lunches, coffee and other assorted errands. Again, this too is a form of hazing.
My friends in finance definitely make it sound like hazing to me, just like you said. I have a friend whose boss had to talk to him about going too easy on the new analyst, so he had to toughen up and make the analyst's life harder just because.
In some ways it baffles me that anyone would voluntarily choose such a lifestyle for a payoff that doesn't seem worth losing so much of your youth over.
On the other hand, it amazes me how humans can do things that other humans consider insane. We're a flexible species, which I guess can be both good and bad!
A lot of data analysis, generating and printing out statements, research, using excel to analyze portfolio positions and build models etc.
There are various markets around the world that people trade in, and you are bound by the hours they are open -- unlike most coding activities. For example, someone where I worked had to stay up until 3am to participate in Japanese sovereign bond auctions.
Investment banking gets a pretty bad reputation in the media, and there are many misconceptions about the industry. I don't think this article was terrible, but I do disagree with a few of the points. For the record, I'm an undergraduate student at a non-Ivy but huge feeder into investment banks.
> They're going because they hate risk and are terrified about what to do next and Wall Street has figured out a way to calm their anxieties.
This is somewhat accurate, but it doesn't seem different from other careers. Not all of friends know exactly what they want to do when they graduate. So it's logical for them to pick a job that is well-paying, will continue to exist for at least a few years, and offers good exit opportunities. For this reason, most of my intelligent friends in computer science are looking to work at Google, Amazon, Facebook, etc. Similarly, most of my intelligent friends in finance are looking to work at premier investment banks (or premier consulting firms like McKinsey, Bain, BCG, etc.).
> So they created the two-and-out program. The idea is you're there for two years and then you move onto something else. That let them attract not just hardcore econ majors but people majoring in other subjects who had a passing interest in finance and didn't know what else to do.
This is absolutely correct; it's well known that you'll stay for 2 years and then move on to another finance world (Private Equity, Hedge Fund, Venture Capital) or perhaps business school. But the way the article describes this feature makes it sound as an evil trick. Maybe I'm the only one who gets that vibe, but I think this is a great feature for students who aren't yet ready to commit to a career (again, not exclusive to finance).
> And it's amazing, anecdotally, how often you see college seniors deciding between making huge money on Wall Street or making almost nothing with Teach For America.
I had a conversation with a TFA rep a few months ago, and he told me that my school was the largest feeder into TFA. Yet, I have never met someone deciding between investment banking and Teach for America -- obviously two very different career options. The TFA rep also said the major with most students applying to TFA was Accounting, which makes sense because the entry job for an accounting student is not as high-paying or "exciting" as the entry investment banking job.
> Being a young banker seems like an incredibly miserable existence. The people you follow are beyond unhappy.
Yes, some of my friends who did investment banking internships (it's near impossible to get the full-time offer without an internship) ended up being miserable. However, some enjoyed the internship very much, and they return for full-time. Again, this isn't unique to banking. I'm had an engineering internship at a top tech firm, and I haven't enjoyed it as much as I expected either. Nevertheless, some of my friends in similar roles at other tech firms are probably enjoying their experience.
> I talked to one guy who's a former Goldman Sachs guy who left to go to the tech industry who said the adage in the tech world now is "be wary when the pretty people show up."
This is not common. I'm majoring in Finance and EE, so I'm one of the few people who would potentially be making this decision. If we're talking about choosing between banking at Goldman Sachs and working on the acquisitions team at Google, then sure, that's a legitimate argument. But the only time students are making the decision between being a software developer at a tech firm and being an investment banker is when they apply for college and decide on their major.
Overall, I didn't think the article was horrible, but there were a few things I wanted to clarify. And although I don't plan on working for an investment bank, I hate to see the career ridiculed by misconceptions. I saw in another comment that it doesn't really take intelligence to work at an investment bank or it's not really difficult to do. Please don't insult a career if you've never really experienced it. Some bankers may not be very smart, but others are ridiculously intelligent and great at their job.
TfA is pretty much a gimmick to pad resumes of business/law school applicants. Schools do not enjoy the TfA newbie teachers coming in, acting like they are saving the shool, and then disappearing after a couple of years.
TfA it serves a similar purpose as these 2-year finance jobs: resume padding for the next hop. TfA just has less salary.
I went to an Ivy League school that served as a large feeder for Teach for America. At least one year, Teach For America was the single largest employer of graduating seniors.
Unlike GP, I would say that at my school, TFA and I-banking attracted students with similar credentials, at least on paper (same majors - economics, poli sci, histories, etc.). I can't speak to their motiviations or if any students were considering both, but I will point out that TFA uses the same recruiting timetable as the investment banks and consulting firms, as well as many of the same recruiting strategies, so TFA does appear to view themselves as competing for the same pool of applicants to some degree.
I agree that TFA largely serves as a resume pad - some people do TFA because they want to teach in the long run, but many (I think the majority) view it as a "stepping stone" to law school or business school, and TFA certainly doesn't make any attempts to quell that belief with their recruiting.
TFA also has questionable results - here is one op-ed written by a former TFA fellow who explains some of the problems with the program[0].
Teach for America receives a lot of money from political groups and individuals who oppose unions, because (for better or for worse), they essentially undermine teacher unions in their districts and reduce their power.
Teach for America certainly started off with very nobles goals - they may still have the same goals today, but whether the actual net impact they are making is a positive one is less clear, and is a very political question.
> Yes, some of my friends who did investment banking internships (it's near impossible to get the full-time offer without an internship) ended up being miserable. However, some enjoyed the internship very much, and they return for full-time.
The experience as a banking intern is a far cry from what the experience is as a full time analyst, at least psychologically. The internship is a 10 week sprint, you're not really expected to be producing much of value, it's during the summer when things are significantly slower, and the group is careful not to grind you down too much, because they still want you to accept the full time offer. Once you're a real analyst, they ride you hard, and there's no end in sight. That pain is just your life now.
> This is not common
Sure, it's still not terribly common, but it was pretty much unheard of pre-crash. I know several who have made the jump. And the decision isn't strictly developer vs banker, later stage tech companies have pretty substantial finance and biz dev divisions. Banking to biz dev used to mean you were 2nd tier and couldn't land a PE or hedge fund job (or couldn't take the pressure). It's getting much more attractive now.
And thus the classic joke (told poorly by the first source I could copy):
"""
Satan offers incredible wealth to a man in exchange for his soul. The man replies, “B-b-b-but, won’t I have to go to Hell?” Satan says, “Oh, don’t believe what you’ve heard, Hell isn’t that bad. Here, take a look.” And it’s all cocktail receptions and long lazy lunches at fancy restaurants. So he sells his soul. Later, when he dies, he goes to Hell, and sure enough, it’s all flames, pitchforks and eternal agony. The man protests to Satan, who replies – “Oh, that was our summer program.”
"""
Its not an evil trick, but it is playing on human emotion, and our inherent decision weighting when presented with uncertainty and risk.
You look at what its like being a college grad, realize how much trepidation there is about graduation and finding a job, and you shape an offer that:
a) Lets you get rid of that uncertainty very early (compared to normal hiring cycles)
b) Makes the "commitment" not seem very severe.
c) Alludes to financial stability (another big source of uncertainty, particularly with how big college loans are now)
d) Promises to make future risks less severe (good references from a prestigious job)
The only thing it doesn't really cover on top "What I Want from a Job" lists is "will I enjoy the work?", and most new grads are still so inexperienced that they have no idea what kind of work they would actually "like".
It still amazes me a bit how much of life and getting people to do what you want basically boils down to uncertainty / risk mitigation. You don't need an active carrot or a stick, you just need to change the landscape so your choice is the only, or obvious, low-risk choice that makes them feel more "secure".
In some ways, YC even plays to this, as it offers guaranteed initial funding (lower entry risk), a beachhead to a wide range of funding sources (lower future risk), and low commitment risk (you've only got a small window of 3 months). They may even have ways to lower the pre-decision uncertainty or to make YC more competitive with other options that I just don't know about / recognize.
The problem with two-and-out is that you are hiring people who have no skills, aren't given the time to really learn skills to sufficient depth, and then they are passed onto clients to do alleged value-added work. Stories like Monkey Business or The Management Myth make this case better than I can in an HN comment. I highly suggest both books.
Haha, you've got Apple and their no-hire cartel, Google dodging their taxes, Intel working people to death... The tech industry doesn't have clean hands either.
The people who stick around Wall Street are the people who fit the stereotype. The others are people like my brother, who went to Stanford, wanted to learn something, and had a passing interest in finance. They paid him well enough to set him up to be able to take a pay cut (on a total comp basis, not hourly) for a better lifestyle, and gave him a ton of really valuable training. After 2 years, he moved on to private wealth management, and loves it. He may not be a stereotypical example, but he didn't go to Wall Street in a risk averse move. He went because it let him learn while being paid well.
> They're going because they hate risk and are terrified about what to do next and Wall Street has figured out a way to calm their anxieties.
Isn't it a bit far-stretched. It's clear to me they're going because it's by far the most lucrative path. It's not surprising that 1/3 of ivy grads are looking to make as much money as they can.
> Being a young banker seems like an incredibly miserable existence.
When I graduated, many of my school mates went to work in the financial industry (not investment banking though) and they didn't look miserable to me. Retrospectively, it looks it was a good career choice.
This article sounds biased. It'd be interesting to have a more objective account about this type of jobs.
>> A lot of kids graduated with a degree in sociology or English literature and feel they don't know any skills that will help them get a job.
PoliSci major here. You don't have any skills you learned in school that can help you get a job. However, if you went to a good school, you should at least be able to demonstrate that you can learn fast, which is one of the more useful skills out there. A lot of jobs require skills that simply aren't taught in school, so being self motivated and a quick study can be more valuable than anything.
I talked to one guy who's a former Goldman Sachs guy who left to go to the tech industry who said the adage in the tech world now is "be wary when the pretty people show up."
Also, working for TFA in the Mississippi Delta after living in LA, NYC, or SF, you can easily save a ton of money simply because staples and housing cost so much less (my roommate at UCLA did Mississippi Delta, and while he probably could have made more somewhere else, his savings after 2 years were pretty impressive - although that may have been a skill unique to him).
People always talk about the money, but specifics are tough to come by. What is the typical salary for a first-year I-banker? How about the median for the ones who make it to year five and year ten?
This guy has a fairly good understanding of entry-level finance culture but no clue about the Valley.
You get the sex appeal and allure of the tech industry
Lolwut. Sex appeal? Maybe Mad Men's Michael Ginsburg was on to something.
Now it's people who are well adjusted, good looking graduates of elite institutions. It's gone from weirdos in pocket protectors to the guys who used to go to Wall Street.
Carpet-baggers. And they aren't any better (or worse) looking. Same with bankers. On average, they're average looking. What they are is more assertive, while engineers tend to be meek doormats. True-blue engineers don't get driven out because business people are better looking, but because they're more assertive. Blaming it on "pretty people" is refusing to take responsibility. Gates, Jobs, Bezos, and Ellison are average-looking at best.
Ok kids, so here's what the analyst program is really about. When you're in school, deadlines are easy to meet and well-tested. If you miss a deadline that 20 of your peers made easily, then either something bad happened or you fucked up. People coming out of school tend to have a "deadlines is deadlines" mentality, because they've spent 16 years in a world where almost all deadlines were well-tested and could be met by anyone with a work ethic (and a stable home, and no health problems, but we're sampling from the upper-middle class here). The difference, in business, is that many deadlines are untested and arbitrary. Some deadlines you absolutely have to meet. Most are just some guy's opinion, and as long as you aren't personally responsible for the miss, it doesn't matter.
Soft-side finance and biglaw have larger-than-normal proportions of deadlines that actually matter and want to put people through a wringer to see who has the unconditional (again, "deadlines is deadlines") work ethic and who doesn't. In some businesses that are heavily relationship-based, having at least one person on the team with an unconditional work ethic can be a lifesaver.
It's bad for tech that it answers to such people, though, because the sorts of people who tend to have an unconditional work ethic are a disaster in any line of business that requires vision. It's the tradeoff between subordinacy, strategy, and dedication (pick two). People who are subordinate and dedicated (unconditional work ethic) will never be strategic, which means they'll be poor at choosing what to work on. They're great in analyst positions and maybe as VC-funded founders (because the VCs are the true executives) but absolutely useless in decision-making roles.
> In previous lives, I've worked as a tennis-camp counselor, a juice bar barista, and a Biblical slave for a bestselling author. (Long story.) I've also written for magazines like GQ, Esquire, ESPN: The Magazine, and SPIN. I live in Berkeley, California.
Interesting the author has no finance experience ever, which makes me question his motives.
Here's what it all boils down to: aside the quants, the genuinely alpha traders, and few other wonky actuarial types, most of the grunts (you know: the "analysts"... and the vast majority of the IT types) don't seem to be there, or to have any other propelling motive in life, other than: (1) the above-average salary, and (2) once you're in, you're pretty much guaranteed to do alright -- as long as you're willing to fit in, never even think of rocking the boat, and be ready and willing to continually supplicate your superiors at all times.
Hence the ridiculously subdued style of dress (the dainty dress shoes, the blue and bland off-white shirts), and the curiously submissive demeanor of about 80% of the people you'll meet working there.
Oh, and that drug test, that everyone snickers about below their breath? Including your hiring manager? As everybody knows, it certainly isn't there out of any concern that you'd be abusing intoxicants (after all, you're more than welcome to get shitfaced on alcohol every night of the week -- which most nights you'll find yourself more or less needing to, to drown out the pain, and there sheer inanity of what you're asked to do).
It's there as a gesture of supplication and obedience -- nothing more. Getting you to drop your trousers, whip our your gear, and provide a "specimen" upon demand -- just because your superiors told you to! -- isn't an unfortunate side aspect of drug screening; it's the true purpose of the ritual -- the very end goal, in itself.