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NYC’s Top Talent is Being Squandered

Written By: Brian Wang 22 June 2010 Other Posts By: Brian Wang

Bubble or not, the NYC tech industry is blowing up.  It seems every day there is a new NYC tech startup being talked about.  Foursquare, Hunch, Gilt Group, Boxee, Square – they are reshaping and creating entire industries.  The energy and excitement is incredible.  If you have any finger on the pulse of NYC tech, it’s impossible to avoid the impression that there is a major sea change going on.  Naturally, there is also a growing awareness among college students of tech startups in NYC.  Yet despite all of the attention, the mindshare of top college students is still overwhelmingly owned by the giants of Wall Street and corporate consulting.   Let’s examine why.

I believe the biggest obstacle in NYC tech’s battle for students’ hearts and minds is a combination of the prestige factor and the common uncertainty among students of what to do with their lives.  For many people, but especially for students at top schools, respect and admiration from peers rank very highly.  This isn’t surprising at all – most of these kids have spent their lives performing better than their classmates and being praised for it.  When you’re constantly receiving approval for being at the top, that sort of attention takes a lot of priority in your career aspirations.  Prestige becomes a prime motivator.  This effect is amplified when students find themselves unsure of what careers they should pursue.  In the absence of a calling, so to speak, chasing prestige is an easy default.

In New York, money is the most direct proxy for prestige and one of the surest paths to riches is working on Wall Street or in consulting.  The convenient thing about both is that you don’t need to be a business major or an Excel jockey to get a job in those fields.  Often times, sufficient academic pedigree and sharp interview skills are all you need.  For directionless students, the allure is undeniable.  As a result, droves of fresh graduates from top schools move into their shoebox Manhattan apartments every summer with starry-eyes and the expectation of making it big in the concrete jungle.  There is a certain sense of pride in many of their voices when they say, “I work for Goldman Sachs/McKinsey.”  At schools like Penn, one is often left with the impression that obtaining a job in finance/consulting is the ultimate goal.  The indoctrination and herd mentality there is overwhelming and sadly, I too fell prey to it for quite some time.

But with jobs that are commonly described as soul-crushing, what are the costs involved?  I’ve spoken to managing directors and partners that are at the top of their totem polls, but still wonder what their true callings are.  Sure, they are well respected and have built materially comfortable lives, but there is a palpable sense of emptiness in their careers.  I don’t think this is a rare occurrence.  It’s not hard to imagine that many graduates are on that path today.  We have a population that is high on material wealth but low on fulfillment.  I’m convinced that this is not what these people really envisioned their lives to be.

It doesn’t have to be this way.  During my time at Penn, I met tons of people with boundless talent and creativity.  These are people with the raw ability to change the world in huge ways.  Yet when they see their peers interviewing with Goldman Sachs and notice the sea of navy blue suits shuffling across campus every year, it’s hard to resist the herd mentality.  Worse yet, they are simply not aware that they have far more options in their careers!  As a result, there is a huge funnel for value extractors but what we really need are builders. As Charlie O’Donnell points out, the startup world has to increase visibility and awareness, especially in the face of the NYC corporate recruiting machine.

My message to college students and those currently on Wall St/Big Name Consulting: take some time and seriously consider your options.  A career in finance/consulting is highly lucrative and will open many doors for you, but be honest with yourself and ponder if it will lead to an ultimately fulfilling life.  How you define “fulfilling” is up to you, but if it overlaps at all with using your talent to build something valuable, on your own terms, then consider founding or joining a startup.  You have so much potential to do something great; Goldman Sachs can live without you.

Note: I’m friends with many people in finance and consulting and spent some time in the latter as well.  Yes, I make sweeping generalizations here.  Yes, there are plenty of people that genuinely enjoy these fields.  And yes, there is some value generated by them, though arguably more in consulting than finance.  But all else being equal, I believe startups provide greater net-net benefits for both the founders/employees as well as society.

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  • http://foundersblock.com Mariya

    Brian, have you read this article that addresses the tech vs. finance recruiting engines?

    http://www.thisisgoingtobebig.com/blog/2010/6/17/outflanked-not-outspent-the-real-story-of-recruiting-for-tec.html

  • http://twitter.com/brianmwang Brian

    Mariya,

    Indeed I have. In fact, I reference it toward the bottom of this post :)

  • http://wordpress.com/susanxzheng Susan

    Great article Brian – gaining mindshare among students and young professionals is integral to growing the startup industry from the bottom up

  • Barry

    I would maintain that consulting is still a great first job for anyone looking to break into any sort of business capacity (obviously includes starting a company). You will be hard pressed to pick up quite the same combination of analytical skills, learning how things work (or, more frequently, not work) in the “real world,” and yes even building those oft-ridiculed “soft skills” of credibility, communication, and management anywhere else.

    That having been said, I agree that the startup world needs much higher visibility, and that those of us lured into consulting need to be much more aware that it’s just a starting point, not a career. I fear that all too often, people stay the finance/consulting track due to complacency, forgoing their passions, or not even bothering to figure out what those passions are. Because let’s face it, if you were able to make it into the prestige machine in the first place, it’s not too hard to stay on, get a cushy promotion + raise + bonus, have your MBA paid for, and become pretty well set up to be a moderately-important cog.

    If I had to recommend consulting vs. startup straight out of undergrad, I’d go with consulting almost every time, but with the caveat to stay true to your passions!

  • http://twitter.com/brianmwang Brian

    Barry,

    I agree with much of what you said, except for a couple of points:

    - Consulting is indeed a great first job out of school and it arms you with valuable skills and experience. *However*, I’m not convinced it gives you any advantage for starting a company beyond potentially domain expertise and crafting pitch decks. The fact of the matter is, there are so many unknowns that simply can’t be solved by crunching data through an Excel model or analytical package. The one goal of a startup is to find product-market fit and a scalable, repeatable business model and that’s something you simply can’t be taught without doing it yourself.

    - If you really want to do a startup at some point, there is no better time than during/immediately after college. More traditional work experience has its benefits for sure, but the amount of knowledge and experience you gain from doing a startup is arguably denser within that same typical 2-3 year first job. As you rightly point out, it’s far too easy to get comfortable before discovering your passions and then you end up being bound by golden handcuffs. While in or immediately after college, you’re used to living cheaply…

  • Ash

    Interesting post, Brian – your sentiments are certainly echoed by Chris Dixon and others. However, one might argue that the skills that you develop as a consultant are very applicable to the startup realm:

    - Learn basic business skills: project management, analytical thinking, and financial evaluation are necessary skills in any business
    - Obtain domain expertise: it is growing progressively more difficult to launch new ventures without a level of expertise in the particular area; consulting can provide you with a breath of opportunities, but also allow you to dive deep in a particular area of interest to reveal unaddressed needs
    - Develop leadership skills: you learn to inspire and manage a team, which translates into effective management of your employees. You learn to communicate effectively, which translates into effective communication with clients, partners, and investors. You learn to engage senior clients, which translates into engagement with investors and advisors. As Barry notes above, these “softer skills” are critical for a founder.

    Experiences tend to be what you make of them. Consulting can be a soul-crushing, valueless experience or an enlightening opportunity to learn the fundamental tenets of running your own start-up.

  • http://twitter.com/brianmwang Brian

    Ash,

    Somehow I knew you were going to chime in with a note like this :)

    Let me comment on a few things:

    - When you’re first starting out as 2-3 guys working out of an apartment, how critical is project management compared to the millions of other things a founder needs to be doing, ESPECIALLY if they’re non-technical? As for financial analysis, it’s surely important, but I would argue that it isn’t terribly important for a startup in its earliest stages because all that matters in the beginning is achieving product-market fit. That’s all that matters.

    - Agreed on domain expertise, but obviously mileage will vary depending on your consulting firm, what staffing needs are, etc

    - Inspiring and managing a team of 1-2 other people? Again… where are the priorities for a startup? But regarding the otherwise “softer” skills, yes, I agree that they are definitely valuable.

    I want to make it clear that I don’t think consulting is valueless proposition at all. I believe they can result in very polished, analytically-minded individuals. However, I am still not convinced that the trade off of 2 years to do it is worth it if you *know* you want to do a startup. The best way to learn how to run a startup is to DO a startup, period. For me, the argument ultimately comes down to:

    - Golden handcuffs
    - Direct startup experience vs. consulting as preparation to do… a startup
    - Drag coefficient theory by the CEO of Expedia and Kayak

    Something else that has yet to be mentioned is the alternative of working for a startup straight out of school. This reduces risk for the employee but has huge upside in terms of allowing you to wear many different hats, working on small, agile teams, and gaining direct experience in the industry. I think if there’s any optimal middle ground, it’s this.

  • Barry

    Out of all the arguments / counterarguments, I think the biggest point to emphasize is your last one. There definitely needs to be more emphasis / visibility on working for established startups as an option.

  • http://blogs.howstuffworks.com/2010/06/24/interesting-reading-518/ Interesting Reading #518 – iPhone4 problems, Android stampede, Quintillion-op computers, Robot babies/olympics and much more – The Blogs at HowStuffWorks

    [...] NYC’s top talent is being squandered – “In New York, money is the most direct proxy for prestige and one of the surest paths to riches is working on Wall Street or in consulting. The convenient thing about both is that you don’t need to be a business major or an Excel jockey to get a job in those fields. Often times, sufficient academic pedigree and sharp interview skills are all you need. For directionless students, the allure is undeniable. As a result, droves of fresh graduates from top schools move into their shoebox Manhattan apartments every summer with starry-eyes and the expectation of making it big in the concrete jungle. There is a certain sense of pride in many of their voices when they say, “I work for Goldman Sachs/McKinsey.” At schools like Penn, one is often left with the impression that obtaining a job in finance/consulting is the ultimate goal…” [...]

  • http://www.thisisgoingtobebig.com ceonyc

    I don't really think prestige plays into it as much as you think. I was a finance guy and while some people think its cool to go to Goldman Sachs or a private equity firm, just as many people automatically assume those people are douchebags. If you go to NYU Stern, perhaps these are seen as prestige positions, but for *a lot* of people in NYC, money doesn't necessarily equal prestige. Ask anyone trying to make it on Broadway, or who works in the entertainment profession. Prestige is saying you work for CAA and what celeb you rub elbows with–not how much you make.

    When I started my company, everyone I knew was envious and thought it was the coolest thing to be doing something on my own. Everyone whose family owns the local corner store, deli, funeral home, or car dealership in NYC respects entrepreneurship as a legit calling. Only a very small percentage of the overall student body is going after Goldman b/c it's Goldman. Most are going, as I stated, b/c they really don't know any better and it's easy.

  • http://twitter.com/brianmwang Brian Wang

    Charlie,

    I think you make a fair point. Perhaps I should emphasize that I'm speaking primarily from my experience at Penn as well as from from the experience of other graduates from Harvard, Princeton, Yale, etc. If I could reword the title to this post, it would really be “Top graduates moving to NYC are wasting their talent by chasing prestige”, but that's a mouthful.

    I still contend that money = prestige in a city like NYC on the macro scale. As diverse as NYC is in its different industries, power and prestige have been located generally in downtown Manhattan, at least up until recently. Sure we've got entertainment, advertising, and fashion… but Wall St. is (was) king, IMO.

    In any case, the commentary is really focused on graduates that want to move to NYC and on their perceptions of what prestige means.

  • Yuriy

    I'm a current student who happens to be an ex-finance major that switched out & pulled a bit of a u-turn in life after enjoying an internship at an internet start-up (& hating all finance related things in general).

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