Wall Street Talent Is Moving to Silicon Valley

Paul Graham says this often, and I am paraphrasing here:<p>They did a study at harvard, and they figured out that MBA&#x27;s flock to the wrong industry right before it dies. It was bonds, equities and then silicon valley in the 90s.<p>It was an interesting anecdote which I have heard often, but now am certainly curious enough to try and dig up that article&#x2F;study.<p>edit: The author seems like an accomplished person, and I don&#x27;t want to paint in the tech v. finance differences, but to highlight what camp she is from, take a look at the first sentence describing Mor Assia:<p>Mor advised Israel’s global telecommunications billing giant, Amdocs, to choose the right verticals for diversification in their technology acquisitions and launched offerings like Billing for Dynamic Pricing to create new growth opportunities.[0]<p>I mean, sure, I parse JSON data to codify the new web standard leveraging agile tooling like visual basic to fast-follow with a GUI interface which is deployed into our cloud based infrastructure to track the IP address, but I wouldn&#x27;t write that down in the 2nd sentence of my biography.<p>[0]<a href="https:&#x2F;&#x2F;www.iangels.co&#x2F;team&#x2F;mor-assia&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.iangels.co&#x2F;team&#x2F;mor-assia&#x2F;</a><p>edit: I can not find the video clip. My memory is that the study was done by Harvard Business School, and it found that MBAs were categorically picking the wrong industry. The examples cited by the speaker, I am 90+% confident it was pg restating it, were going to wall street to trade bonds with Michael Milliken right before he went to jail, Silicon Valley right before the bubble burst and one other which I would guess to be real estate or M &amp; A post KKR, but that is just complete conjecture. Don&#x27;t take my word for it, and I don&#x27;t want to misquote PG quoting some study, but I am fairly confident for what it is worth.

I&#x27;ll stick my neck out on this and say, the author is right and these are the people who are ruining Silicon Valley. Take a look around at the big named &quot;innovators&quot; and you&#x27;ll notice that they&#x27;re really &quot;iterators&quot;. People building a &quot;business&quot; around a small, incremental improvement in an previously existing process. I refer to this as the HFT, hedgefund incremental approach. Let&#x27;s pick up nickels in front of bulldozers while the getting is good(1). Get enough money before the bulldozer hits you. This seems like the premise behind AirBnB, Uber, Square, and every other unicorn. Can&#x27;t wait 3 minutes to order your food at the cafe? Billion dollar business! Can&#x27;t wait 4 minutes and chat with your companion while you wait for your dinner check to arrive? Billion dollar business! Creating electricity from small, safe, pollution-free hydrogen power cells? Eh, maybe a few hundred milli tops. Not worth it.<p>It&#x27;s this kind of quick buck thinking around simple, non-inventive iterations on existing models that are actually <i>killing</i> the Valley. The Valley should be for big ideas and wild bets. Not bets on people to do your laundry for you.<p>These Wall Street&#x2F;finance people need to pack up and go back east.<p>(1) This was the idea behind Long Term Capital Management (LTCM). We all know how well that worked out.

Before Silicon Valley gets all flattered, consider:<p>&quot;Soifer has long studied the proportion of Harvard MBAs who pursue careers in finance; when more than 3 in 10 head for Wall Street, it&#x27;s time for investors to sell, he says.&quot;[1]<p>I used to work on Wall Street. I left because of this issue writ large. There are quite a few pieces of research claiming this trend is a negative indicator.<p>[1]<a href="http:&#x2F;&#x2F;www.cnbc.com&#x2F;id&#x2F;45030885" rel="nofollow">http:&#x2F;&#x2F;www.cnbc.com&#x2F;id&#x2F;45030885</a>

Seems like a good a time as any to break out my favorite anti-MBA story.<p>I took a Masters CS class some time ago, and for our final class project, not knowing anyone else in the class, I got lumped in the &quot;leftover&quot; group with a working engineer and a Wharton MBA student. We meet up the day before the project is due to integrate each of our individual pieces together into a final submission and the MBA candidate shows up empty handed. Turns out he had spent his time trying to &quot;schmooze&quot; the answers&#x2F;code out of the professor and the TA, who, to their credit, had stood firm. Guess who spent that entire night writing that dolt&#x27;s portion of the project from scratch.

I was expecting to see a &quot;(1999)&quot; in this headline.

There&#x27;s a glaring error, which makes me doubt the credibility of the rest of the article. Mary Meeker joined KPCB as a partner, not an analyst (<i>huge</i> difference). And this was 5 years ago, so it&#x27;s old news.

We don&#x27;t need them. We have automated, or are in the process of automating most of traditional finance anyway. They can come here, but they won&#x27;t find jobs unless they are willing to put in the time to learn and be competent technically.<p>I&#x27;m not holding my breath.

&quot;Talent&quot;

California is completely out of water. I really doubt that many people are foolish enough to mover there by choice.

A dozen top financial people from Wall St. have taken up financial jobs in Silicon Valley, and this is news?