Yes, this is what's needed. I like the line about the banks. My biggest peeve with the UK scene is that we lose so much talent to banks and consultancies, especially among graduates; anything to turn that around is a step in the right direction.
I am a Mech Eng graduate and my CV has been floating around in various databases for years, and I still get recruiters calling me and offering less than half of my current salary (and I'm no rockstar, just an ordinary worker) to go and work on something mechanical for a big engineering company. It really is a joke.
This is all tied up in the vestiges of the class system, technical people are still thought of as "blue collar" (despite being better educated than most white collar workers) and the management class will never pay us fairly - except in banking where they are quite clear about what is worth what. I gather in the US it's different, they don't have all that baggage holding them back.
However I'm sure I would have gone stir crazy with boredom by now if I worked in a bank :) (I have low boredom tolerance)
That makes me wonder about the implications. What kind of tech startups you find in the UK?
Boredom isn't likely to be a problem : Stress is.
Not that I have anything against the banking industry, it's just not for me. In Brave New World terminology it's a career for beta-pluses, not alphas.
(No offence, bank workers! Some of my best friends work in banks!)
Create something for the benefit of yourself, or create something for the benefit of all mankind, but don't create something for the benefit of some other jerk, that's just unseemly.
You can be Superman or you can be Lex Luthor, but don't be Senior Vice President of Product Management at Luthorcorp.
That got me thinking. I am quite sure this kind of mindset is present in a lot of countries, including where I live (Brazil) :-/
That can't be good.
But I still make a point of referring to my fellow software people as 'software engineers', since (1) it's how my company styles the titles[1], and (2), it reinforces the idea that we're not "code monkeys", grunting and beating on keyboards for bananas per day (not that I'd turn down fruit if offered :-) ).
[1] I work at a hardware/software company, we have an array of mechanical and electrical engineers as well.
What is closer to the truth is that nowadays "average" technical people are way more abundant than ever, mainly because there are ever more and better learning sources (books, ebooks, conferences, video tutorials, chats, forums, certification courses, crappy 2-year colleges and good universities, fancy IDEs, super high level programming languages, frameworks and libraries for everything, etc.) The learning curve is not as hard as it used to be, if you want to be an "average" technical guy.
And it's just basic economics that people (and entities composed of people, such as companies) don't like to pay a lot for something which is extremely abundant and available in their area (logically). This is because when humans are in the process of valuing things they're affected by a mixture of need, personal preference, the scarcity of the things in question, and the moment in time when this process is taking place.
I've been a "pawn" "low life" "technical monkey" developer for a while, and I actually began working as a developer from the start with a secondary hidden purpose of studying the ways companies act (because I was already an economics nerd before becoming a developer), and this is the usual result of my observations (plus studying the history of other companies):
- Technical Monkeys with NO additional nontechnical skills: They're like the average rock drummer who can keep a beat but other than that is not very useful. They will always earn a lower wage, because there's just too many of them out there: they're not especial. Wage is just another price, remember.
- REALLY GOOD Technical Monkeys with NO additional nontechnical skills: They are exceptionally awesome and productive, and will get paid accordingly, unless they work for a really stupid boss. They're like the really good session drummer that records albums for all kinds of artists, and as a hobby breaks world records for faster drum fills, longest drum solo, etc. He has no other skills but he's a absolute beast at what he does.
- And then there are those Technical Monkeys who are good (though maybe not the best) at the technical stuff AND have really good business ideas i.e. better management ideas than their bosses do. So they can manage teams AND they can speak technical monkey. They're the Phil Collins. They will either earn a good wage or start their own company.
The reason is that they pay quite a bit more than most software houses do. Notable exceptions include Google which usually can match the starting salaries but otherwise, you're pretty much guaranteed to earn less.
The bottom line is that after several years of student life, a relatively high salary looks compelling and coupled with student loans to pay off, the choice is quite clear at this particular moment for the majority of people.
Isn't there something inherently wrong with society when an industry that provides little value to society make so much money that they can afford to pay better than anyone else?
Personally I'd quite like to see the government actually tax them at decent rates, and call the bluff that they're all going to up and leave if they have to contribute to the country. The chances of that happening when the current government all made a fortune in investment and banking careers is low though.
You also seem to be assuming that there can be only two possible solutions to this problem.
But please don't let your strawmen be my burden.
If we had a group - let's call it The Party - deciding what to invest where, and they ballsed it up, then you get the Great Leap Forward (30M starving to death is half the population of the UK).
People who look favorably on these industries would probably describe the rent-collection or wealth-destroying activities of these sectors as the regrettable but minor (and maybe inevitable) byproduct effect of an activity that is, on the balance, very positive. We all have these types - high tech has patent trolls (er, innovative technology development partnerships), but nobody would say that the tech sector is a rent-collecting segment of the economy (though many would say that patent trolls are part of the legal industry, not the high tech industry).
Other people like Wooley at the LSE (quoted in the article) take a far dimmer view:
“The amount of rent capture has been huge,” Woolley said. “Investment banking, prime broking, mergers and acquisitions, hedge funds, private equity, commodity investment—the whole scale of activity is far too large.” I asked Woolley how big he thought the financial sector should be. “About a half or a third of its current size,” he replied"
http://www.newyorker.com/reporting/2010/11/29/101129fa_fact_...
It's a long article, but this is probably the strongest case for banking as rent-collection (or even worth, wealth-destruction) you'll read in the mainstream press (ie., as opposed to academic journals).
(1) not an opposition to banking per se, which he sees as immensely valuable
"an industry that provides little value to society"
* The financial services industry accounted for 10% of GDP in 2009
* It provides 4% of total employment in the UK (1 million jobs)
* It contributes 28% of the UK’s total exports of services
* It contributed £53.4bn in tax in 2009/10 (11% of total government receipts)
Source: http://217.154.230.218/NR/rdonlyres/E01CD45A-053F-4C9B-BDAA-...
Takes a lot of 50 billions to add up to 1.5 trillion. Especially when you include interest.
http://www.telegraph.co.uk/finance/newsbysector/banksandfina...
(1) The country would have been better off financially not to bail the banks out and let them burn
(2) The nationalised banks won't end up turning a profit for taxpayers in the long run anyway
Both of which could be considered shaky assumptions. See Robert Peston's analysis on this very topic for more: http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/03...
Sounds like a nice catchy statement, but what do you actually mean by this ?
UK GDP is around 1.5 trillion. Therefore we spent the equivalent of ONE WHOLE YEAR OF OUTPUT FOR THE WHOLE COUNTRY on bailing out the banks. You do not solve a debt crisis with more debt. You do not solve a financial crisis by supporting the financial institutions that caused it in the first place. Northern Rock has no assets other than a bunch of shit 125% mortgages and repo'd Barrats buy to let flats worth cents on the dollar. The idea this could turn a profit is absurd.
You must be new here.
We solve everything with more debt.
Humankind is mis-allocating some of its most talented labour to what is essentially an arms race in financial market predictive algorithms. It provides some benefit for humankind - increased liquidity in markets, but the value of the marginal liquidity is small compared to the talent that is wasted.
Salman Khan is an excellent example - he left his job as a hedge fund analyst to start Khan Academy. How many new Khan Academies would we have if the incentives were right to have talented people working on useful projects instead of the financial arms race?
Sure, the incentives are right for an individual or country to specialize in financial markets. Think bigger - an alien looking at what we're doing here on planet earth would say we're wasting a lot of our talent on stuff that just re-arranges the pie instead of making it bigger.
I'm missing quite a few things, of course, but my point is: this "algorithmic trading arms race" that you mention is basically something like 1% of what the average investment bank does (and 0% of what retail banks do).
Without efficient capital allocation, most enterprise becomes extremely difficult. Without banks, there would be no stock market. There would be no way for companies to raise large sums of money to grow faster. There would be no one keeping markets liquid, which would encourage people to stick their money under the mattress rather than invest it. There would be no way for startups to exit, and so there would be no VCs, and no angels either (or at least, much more limited ones, making maybe one or two investments to help out a friend). All of this would massively reduce the amount of capital available to work with, and decimate the business world.
Now, you might take the view that "you don't need capital to do business", but that's just a very limited viewpoint that applies in very narrow circumstances, like some small percentage of internet startups. Almost all businesses need capital to get started. There's a good reason why microloans are so successful - they provide capital that helps enterprise. Think of the banking system as an equivalent of microloans for people who need more than $100 (for example, because they need to design and sell new products, build new factories, buy stock, make strategic acquisitions, etc).
The problem is that we we loosing developers to high paying jobs in the banking industry. I.e. not your average netbank developer but the developer who can develop for those 1% you talk about.
So the problem is that the developers in talk here are the talented ones that goes for those jobs within certain parts of the banking industry that certainly don't provide anything close to the value they extract from the market.
I have no problem with them making more money. I think it's obvious why they make the choices they do.
The problem is that the part of the banking world they go to. That part of the banking industry that can pay the high salaries aren't benefitting society.
I guess for many graduates the banks seem to offer the best answer to the risk/reward question.
The challenge is how to change that mindset, in a way which doesn't just lead to all the qants leaving the industry to build another social photo-sharing app :)
The very fact that value is a subjective dynamic variable underlines the importance of not getting too focused on the actual fiscal numbers.
You can have societies where the oil industry makes up most of the value for the countries export but where the actual money does not benefit society in general.
And again I am not saying sod the bankers. I am simply questions whether they are making too much money compared to the value they provide to society.
The Great Depression in the US (which effectively wiped out a significant portion of the financial industry here) was the source of much misery and pain. Pick up a book on bond valuation and capital allocation and tell me if YOU would like to do that work for yourself. Finance is hard won and specialized knowledge. Don't dismiss that expertise.
I never said it wasn't of any value. I have repeatedly clarified that I am talking in the context of this article and about certain parts of the financial industry, namely the part can afford to pay better than anyone else. The developers working on your average netbank aren't in question here their salaries are not extreme.
All I am saying is that the kind of developers that the OP is talking about are being lost to parts of the financial industry that aren't providing value to society but primarily to themselves and I find that problematic.
That has nothing to do with my view of other parts of the banking industry.
You could make the same argument for home health care workers and cardiac nurses. Potential home health care workers aren't "lost" to the nursing industry. Society VALUES what they provide to a greater degree because it compensates them more.
You seem to be laboring under the assumption that a career in the financial services industry is a guarantee of high-income. The truth is quite different. Life in the financial services industry has its own downsides (insecurity of income, long hours, poor working conditions generally) which you seem to be glossing over to make your argument.
On my last flight to Mountain View, I sat next to a guy who left a job at Goldman Sachs (as a broker) to go do ad sales for Google. His reason: better working conditions and quality of life.
Don't assume that your choices are everyone else's. The high pay in the financial services industry is there because the work is hard and few people can or are willing to do it.
I have worked with everyone from Bofa to citibank to online trading services to private wealth. I think I have a pretty good idea about who is paid what and what they are paid for.
So again instead of arguing a strawman why not talk about what I am actually claiming.
Obviously SOME people make the choice to go do startups even though they could make more MONEY (at least initially) at an IB.
Wonder how that happened?
This have nothing to do with understanding economics or value systems. You keep repeating the same strawmen that have nothing to do with my argument.
Why don't you point to something I said specifically instead of just weaving an argument against claims I am not making.
I see a lot of finance industry bashing in between the lines of your post. You're making an argument about the choices that individuals make based on their own personal goals and circumstances. When you bemoan the choices that other people make under the guise of "what's best for society" you're making a statement that you think differently and that inevitably leads to calls for the state (or some other authority) to involve itself.
As I said, you are attacking a strawman, a position I don't hold.
I have been pretty precise in what I mean and what part of the industry I am referring to. If you can't get paste seeing ghosts then obviously you have a problem, but it's not me nor my post.
I dont think I misunderstood you there.
And that's not even thinking about Hedge Funds, Brokerages and other Financial institutions that are normally grouped into 'the banking industry'
Remember if you have an ISA or a pension you are "the stock market"...
You have to bear in mind that banks (from my personal experience and from my peers) are first and foremost profit oriented, which effectively guides their decisions. Hence, you'll not see those people working on things that directly impact retail customers.
We'll attract talent through my own devastating personal charisma, and by offering people the chance to really really piss off the people working at the proper banks.
I'll make sure to do a Show HN post when it's sorted. See you there!
Not sure what a starting salary would be, but I would bet it would be > 30k. After 5 years you would probably be on > 60k, but if you're quite specialist (in terms of finance based skills) you could be earning much more.
You're correct, £25k seems to be a ballpark figure for software houses. Looking at it statistically, average salary for Imperial graduates is something like £35k, so you can do the math and infer what the top grads are earning.
I work at a small hedge fund in London, started on £28k (actually might have been less, I literally can't remember now), after 4 years I am up to £40k, with around £5k bonus each year.
I have basically been doing CRUD of various flavours the whole time under a bullying atmosphere, utterly soul-destroying and it's got me stuck in the Stockholm syndrome scenario, my skills ground down to the point where I literally can't get another job to get out of it. Am working very hard to counter it, but it's a big job, probably another year of work to stand a chance of getting a decent software job (I'm not going to try for another internal finance job, if that sucks as much it'll be pretty impossible to bear).
So yeah, I don't recommend it, though it might just me having bad luck here.
I think very few internal jobs, finance included, are even vaguely bearable for hackers - I heard the idea that finance likes to hire overqualified people for monotonous/trivial jobs to make sure they're done right, so you have to be really careful.
[1]:http://www.chadfowler.com/2010/12/30/dead-end-jobs-are-you-s...
If you would, drop me an e-mail (see profile). My employer is hiring. Located near Moorgate. Not a deathmarch.
Edit: Hmm.. I think HN hides e-mail addresses. http://bhickey.net/contact
With 4 years experience at an investment bank you could be making quite a bit more than that, at a hedge fund you should be getting a risk premium on top of that as well.
There are various tech roles in hedge funds and in finance, and it sounds like the @throwaway___ is in a role that is considered "IT" rather than part of a quant/trading desk, which translates to no real bonus, and to not being considered a source of revenue.
This isn't Silicon Valley. Rightly or wrongly, they just want someone to come in at 9am, work through their assigned bugs and feature requests, get a sandwich at Pret A Manger at 1pm, work through some tickets and go home at 5pm. Nobody's interested in hiring "hackers", experimenting with funky languages, or doing anything remotely unpredictable. If you're on a trading desk it's a different story, but it's definitely possible to work at a hedge fund or an investment bank and get a shit deal.
Edit: Basically, it's your responsibility to maintain your skill set, by any means necessary. Your employers aren't paying you to be a well rounded developer, even if you think they should be.
I have been working on my skill set, I know C# pretty damn well, I have taught myself aspects of software engineering + computer science I didn't have, etc. etc. - it's just that there are gaps, lots of gaps and more than that, a complete lack of confidence. This stuff grinds you down so much that it becomes very hard to resurface, that's part of the problem.
I am working hard on filling those gaps, but I think it'll probably take a year before I've sorted it. I went for a bunch of interviews at other finance places recently and the gaps were exposed very clearly there, so this is based on evidence.
Anyway, I don't want to talk much more about this unless stuff starts becoming toooo identifiable.
Just grit my teeth time really, but it's hard.
At one point the people in the class who were actually going to go into engineering were asked to raise their hands - around 1/3 did.
To digress briefly, part of the reason the City likes Imperial so much is that they work you into the ground. If you can survive Imperial then you're likely to do well under city-levels of pressure.