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Why founding a three-person startup with zero revenue is beer than working for Goldman
Sachs.
The average salary at Goldman Sachs in 2005 was $521,000, and that’s counting each and every trader,
salesperson, investment banker, secretary, mail boy, shoe shine, and window cleaner on the payroll. In 2006,
it was more like $633,000.
In the summer of 2005, I took one look at my offer le.er and the Goldman
Sachs logo above it, another look at my sordid grad student pad, and I got
on a plane to New York within the week. I packed my copy of Liar’s Poker for
reference.
There were other characters in this drama. The sales guys were complete
tools, with a total IQ, summing over all of them, still safely in the double
digits. The traders were crafty and quick-wi.ed, but technically
unsophisticated and with the a.ention span of an ADHD kid hopped up on
meth and Jolly Ranchers. And the quants (strategists in Goldman speak)?
Mostly failed scientists (like me) who had sold out to the man and suddenly found themselves, after making
it through two years of graduate quantum mechanics, with a bat-wielding gorilla peering over their shoulder
(that would be the trader) asking them where their risk report was.
Everything is quantifiable
Wall Street is inward-looking and all-consuming. There exists nothing beyond the money game, and nothing
that can’t be quantified into dollars and cents.
The odds-on favorite was a young analyst, who’d employ the Kobayashi[1] technique to get the tiny
greasepucks down. After sweeping the field with 26 burgers eaten, he’d leave the styrofoam cup containing a
congealed scum of burger grease and bun and pa.y bits floating on top, as mute testimony of his victory. The
trading floor smelled like the inside of a deep fryer for the whole day.
Wall Street is even simpler than religion. Your entire worth as a human is
defined by one number: the compensation number your boss tells you at
the end of the year. See, pay on Wall Street works as follows: your base
salary is actually quite modest, but your ‘bonus’ is where the real money
is. That bonus is completely discretionary, and can vary anywhere from
zero to a manifold multiple of your base salary.
Without that number though, your privileged place in the New York hierarchy goes away. Gone is the house
in the East Hamptons. Gone is the $2mm duplex on the Upper West Side. Gone is your kid’s $25K/year
pre-school.
And that’s why Wall Street has that roach motel property: people check in, but rarely check out. By the time
you’ve been through a couple of bonus cycles and seen that wad of cash hit your bank account in
mid-January, you can’t imagine a life without it. And that’s exactly how the senior management at the Wall
Why founding a three-person startup with zero revenue is better than working for Goldman Sachs. | AdGrok
If Wall Street investment bankers were dogs, they would flaunt their expensive collars and leashes as marks
of status, not realizing their true purpose.
Not that we were terribly appreciated. In fact, we were basically the trader’s li.le bitches, and any quant
who’s honest with himself realizes that. In time, we quants developed knee callouses from genuflecting to
service the traders, on whose profits our livelihoods depended.
The only time we shone as stars was when some particularly hairy deal came up, and a befuddled trader
came by, dropping off some thick bond indenture document, and asking for help.
Peering into these deals was kind of like the zoomed-in penetration shot in a cheesy porn video: you could
barely tell which end was up, which part was which, or, more importantly, who exactly was screwing whom.
The quant aspect didn’t really ma.er at the end, as one lacrosse-playing Penn graduate would agree on price
via phone with another lacrosse-playing Cornell grad, and life would resume its speedy course to another
deal.
The sad truth is: quants were the eunuchs at the orgy. We were the ever-present British guy in every
Hollywood WWII film: there to add a touch of class and exotic sophistication, but not really ma.er much to
the plot (and maybe even conveniently take some bad guy’s bullet).
But things weren’t all bad! At its best, when the markets
presented an apocalyptic Boschian landscape of damned
souls torn asunder by hellish tortures, every Goldman
grunt, sargeant, or general would close ranks and form a
Greek phalanx of greed. Unlike almost every other bank on
the street, Goldman could actually calculate its risk across
desks and asset classes, out to five decimals. The partners,
who had most of their net worth wrapped up in Goldman
stock, had tense meetings and came up with a plan to save
the foundering ship. Favors were called in. Clients
squeezed. Risks very quickly hedged and positions
unloaded. Despite the mayhem (and all the promises of
drama in Liar’s Poker) I rarely saw anyone lose their cool for longer than two seconds. We bled, but others
died, and you felt fortunate to have a front-row seat on the biggest financial show in a generation.
Now I log into our online bank account and nervously contemplate our
balance which, like the heart monitor on a terminally-ill cardiac patient,
just barely beeps above zero and is always decreasing. I sign up for
trials of online services and make lengthy mental tradeoffs between the
$30 and $50 per month plans. We work out of a cramped one-bedroom
apartment, and have to time bathroom visits not to coincide. Some days, it looks like we’re going bust within
the week. Some days, it looks we’re going to be the next Google.
You see, starting a product from an empty text buffer is very different from keeping a well-oiled money-
machine running. I’ve had apocalyptic fights with the other founders that almost ended in fisticuffs. I’m
watching my four-month-old daughter grow up via Skype. These jeans I’m wearing will likely fuse with my
skin at some point if I don’t take them off. I haven’t seen a paycheck or a loving woman in much too long.
You know what I regret most though, going from Goldman to this?
The Goldman meat grinder doesn’t really need me. It doesn’t really need you either, gentle reader. That
feel-good saying that made the rounds on Twi.er a couple months ago is actually totally right: go out and write
your own story, or you’ll just be a character in someone else’s.
References
1. ^ Kobayashi (en.wikipedia.org)
2. ^ launching (adgrok.wufoo.com)
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