Bright lights, big City – How startups can compete with the banks for talent

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This is a guest post by Adam Wynne: founder and Geek-in-chief of StreamScience. He co-founded a startup in Cape Town, South Africa, in 2000 and exited in 2004. In 2005 he came to London and worked in the IT dept of a prominent investment bank for a year, and then as a quantitative analyst for another four. He has now given it all up to found StreamScience and is Entrepreneur-in-residence in his second-bedroom.

Working on a trading floor in an investment bank taught me two things: to deliver things that work, as quickly as possible; and to avoid the Cos lettuce at the canteen salad bar (I once found a live worm in it covered in salad dressing, inching for its life – true story). Now I’m not going to lie to you: these past 5 years have given me some delicious problems to work on, and have rewarded me handsomely for doing so, so why, you might rightly ask, would I give it all up for the tumult, terrors and triumphs of founding another startup? “Fortune and glory, kid. Fortune and glory.”

When working at the bank, most of my colleagues were highly educated (PhD’s and France’s Grandes Ecoles graduates) and highly intelligent. Some of them had been academics in their previous lives and had given it all up for the golden handcuffs of bonuses and the promise of working on hard problems. Often times, the hard problems would dry up or fail to materialize (or happen infrequently enough to be ignored), so eventually it became more about the bonuses. When comparing the remuneration for finance vs. non-finance technology jobs, the disparity is significant for jobs with similar levels of responsibility and required ability (in my experience around 2x).

So how exactly does one compete with that level of compensation when hiring developers/CTO’s? For one thing, you need to make peace with the fact that there are some people you simply will not get. There are plenty of money-driven people in banking whether for need or for greed. You will not hire these people.

Never the less, during my tenure, I noticed some chinks in investment banking’s rather shiny armour. You need to play to your strengths:

  • Flexibility: the bank I worked in was monolithic in its structure. There were rigid rules in place for everything (including technology stack) and trying to change things goes over like a pork-chop at a bartmitzvah. One could not work from home at our bank, and thus a whole host of talented moms would leave finance (usually permanently), once they’d given birth.
  • Fame: you will not (bar the most high-profile quants and traders) get known for anything in the outside world, when working at a bank. The greater populace will never use your products and your professional interaction will be with a very limited subset of people. When non-finance people ask you what you do, and you tell them, their eyes glaze over before you can say “relative value arbitrage”. Fame usually leads to opportunity and is not to be underestimated.
  • Fulfillment: this is a big one, and the older I get, the more I understand it. I have always said that life is too short for boring work and whilst I concede that there are some exciting tech projects going on in banks, I think for the most part, the work is much more tedious than startups. The promise of building something from the ground up and seeing it through to value generation for customers is an enlightening feeling.
  • Fast: life is like a box of chocolates in that it makes you fat and eventually runs out. Not sure where I’m going with this, but the point is: the inherent battle for survival in a startup forces you to up your game, try new things; and have your fingers on technology’s binary pulse. The pace of iteration is frenetic and not for the faint of heart – but things get done quickly or not at all.
  • Flearning: it has been my experience that you will never learn as much as you do in a startup. Not only are you exposed to non-technology domains, but also get to interact with people with cutting edge skills (whether it be in house, or in open source communities). Banks are not likely to be on the bleeding edge of technology (ours was on IE 6 and Windows XP as of late 2010).

Often times in London, graduates are looking for coding experience before entering the banking arena and startups are an ideal place to get it. The startups get the benefit of super keen employees and the graduates get to learn the craft of coding from the senior members of the team. It was my experience that most people in banks with non-finance experience were better technologists.

As to remuneration: owning a significant equity share of a startup with a moderate exit will more than likely result in life-changing money; but it is beyond the scope of this article as to whether a startup employee (as opposed to founder) is privy to this upside.

In my opinion, the startup future looks bright for London (despite what some people might think). The ecosystem is evolving quickly with communities like Techhub, Bootlaw, OpenCoffee, SeedCamp and more. Silicon Milkroundabout is portentous of startups being seriously considered alongside a career in finance. With a couple more high profile exits in the press, it should start to give the UK’s copious talent pause for thought.

image by Harshil Shah