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.
> 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.