One summer I thought I had the ultimate dream job. During the day I created software that accessed some of the world’s largest financial databases and provided traders with real-time data and analysis for trade ideas. At night I worked with the CTO on a side project that analyzed huge amounts of transaction data to identify arbitrage opportunities. We figured that if we could start finding enough of these opportunities, we could present them as trade ideas to the bosses. So we wrote scripts, and at night, after everyone else left the office, we installed them on their computers and ran the scripts in parallel to try and crunch through the massive amount of data we had access to. This was fun. Really fun. And even better, the CTO was an awesome guy who taught me a lot about programming.
They also paid well. Really well. Even more than my friends received working 100 hour weeks at I-Banking jobs. In retrospect, no college student should ever have been paid that much (on the bright side, the savings were enough for Art.sy’s initial funding).
But that summer it meant I could go out to nice dinners with my girlfriend, and never worry about paying for drinks at expensive clubs. It meant I could afford fancy clothes, an iPhone, and plane flights to Asia. Having always worked in labs prior to that job, it redefined how I thought about money.
So what is wrong with this picture? I had an extremely fun and challenging job, working with awesome people, that let me afford an incredible lifestyle. It was a dream come true.
But at the end of the summer, the CTO brought me into the corner office and closed the door. I had worked with him all summer and this was my last day, so I was expecting a performance evaluation. Instead, after some chit chatting, he asked me a question:
“Have you ever wondered what value we create here?”
Value? This wasn’t what I was expecting at all.
“Not really.”
“I’ll tell you. We increase the liquidity of the secondary bond market. We shave basis points off of spreads.”
I’ll never forget that question. It turns out that our CTO was saving every penny and had plans of leaving as soon as he had enough cash to pursue his dream.
He didn’t care about the fancy clothes, the clubs, or being a master of the universe. All he cared about was how he would add value to the world. At this point, my story starts to sound cliche, but it was a cliche I needed to experience in person because it radically changed my perspective.
“How am I creating value?”
I realized that the programs I had spent all summer writing were great, if they could make people money and save them time. But if all it resulted in at the end of the day was slightly more efficient markets, well, what was the point of that?
I was so caught up in the fun and camaraderie of my job, so high with the rush of money, I never considered such a simple question.
This probably won’t change the minds of people who have already chosen career paths. But to any students who are thinking about their futures, I hope my story illustrates how easy it is to get swept up by short term pleasures, and how important it is to always ask this question when making important decisions.
Efficient markets -> lower transaction costs -> greater access to the markets by everyone. Why is that un-noble? Isn't Art.sy doing the same thing? By creating a place to buy & sell art online you're making the market more efficient and are, in turn, opening it up to more buyers and sellers.
To any students reading this, go do what makes you happy. Work in a field you find stimulating. Everything else will sort itself out.
Great thoughts, Carter. Your CTO sounds like an awesome guy to work with.
Thanks, Brad. He was awesome. And even more ironically, he left the job to
pursue a completely non-technical career.
I agree that is creates some value. And I'm certainly not saying it's by definition an un-noble pursuit.
But my point is that I lost sight of what matters to me and became focused on superficial things that I don't think would have led to long-term happiness and fulfillment.
Art.sy is not saving the world, but our goal is to create a fundamental change in the way art is bought, sold, and appreciated. We envision a dramatically different future where artists can pursue their passions more sustainable, and where everyone else will be more inspired by original art.
I know it sounds like a sales pitch, but we really believe it. It's a very different cause from pushing spreads just a tiny but closer together and shaving off huge amounts of profit. I think part of the financial bubble was caused by too many people focused on pushing together those spreads and not on creating fundamental value. And why not? Because it didn't pay as well.
Agreed.
I once worked at D.E. Shaw (well, a subunit up in Cambridge MA) and the lead engineer on the project once confided in me that he thought the goal of an online brokerage account was useless, because it didn't make the world a better place. In fact, he didn't think that the stock market made the world a better place.
I was appalled – first of all, it's entirely clear to me that efficiently figuring out what ideas are worthy of capital and what ones are not is a HUGE boon to human happiness and standards of living. Compare how the Soviet Union allocated capital to how markets do it.
Second of all, if you don't think that a firm is making the world a better place, and that your work has any value, why are you doing it?
The vague concept of value is more closely associated to big ideas than small ones. I imagine if you wanted to make a big difference in the financial world, you'd need some fancy AI that would build a map of valuable things to invest in based on how connected some industry is to other industries.
For example real estate is connected to construction, logging, home improvement, cars, roads. Computer chip industry is connected to the web, phones, communication, robots, AI, cars, GPS (which is connected to cars and logging), satellites, entertainment, cameras, education and on and on. Simplification but you get the idea, an activity that affects a larger percentage of other activities deserves more investment.
If such a system was widely used, long term investment decisions would be very different. It's one thing to have an internet bubble that had huge benefits even though it burst, it's another thing to have a real estate bubble which is an environmental disaster and makes minor changes to where a person lives (but major changes to their self-esteem).
All the people that worship real estate don't get that houses are a technology, and one that's becoming obsolete. In 30 years more mobile houses made from new materials would make land values less relevant and houses depreciate in value like cars. This is when millions of people would supposedly pay off their mortgages.
An obvious waste of human effort.
But an AI that would tell the difference is a huge leap. Not only a leap in technical difficulty, but one in social re-organization and mindset. That's why most of the hyped up big things like startups are evolutionary small steps. What people do with twitter used to be done with a few more clicks with email, facebook is a minor rearrangement on blogs, forums that was just executed in a way that attracted a large audience.
So what you'll be working on with art sales is also a small step, just like optimizing financial mechanisms. Etsy is a minor change from eBay. Your art trading site would be an even less obvious difference from etsy it seems. What you seem to value in your own life is a good social circle, that's what you had in your financial job, until a tidbit of perspective spoiled it, and that's what you'll have in your startup.
As far as value, I'd say both are even technologically, but social benefit to the lives of those involved may be more important, it's just not measured by our empirical data culture.
Copying this in from Hacker News where a lot of debate was going on (link: http://news.ycombinator.com/item?id=1242877)
1. I am not implying a moral obligation to do some jobs over others. Nor am I suggesting a framework to judge the value of some jobs over others. If I had known this was going to be read by so many people (over 2,500 in the first few hours), I would have spent more time making sure my message was communicated more clearly. I'm sorry for giving some people the wrong idea.
2. My point is actually very simple and I expect the vast majority of Hacker News readers already get it: for people considering what jobs to do, especially young college students, be wary of focusing on the value of fun and money. Fun and money can be very distracting when you are young and haven't experienced so much freedom before. However, the decisions you make when you are young can have consequences for the trajectory of your whole life. Always think about what will give you long-term and enduring happiness and satisfaction. Often, I think long-term happiness is connected with a cause greater than your own immediate satisfaction. Hence the consideration of value creation.
It's obvious advice, but I hoped my story would make it more digestible for college students.
Let's see now. You wrote some code at night. It paid for toys, eating out, and trips. What value were you creating? Who the hell cares? The value was in the dinners and the tickets to fly across the ocean. You were creating value for yourself. Any time you are outearning the I-Bank folks, I say bravo.
awesome thoughts
Hi Carter,
I couldn't find your email so I thought I'd ask here. Would you grant me the permission to reprint this article in the upcoming issue of Hacker Monthly?
Please contact me if you need more clarification. Thanks.
You might find this essay by Paul Graham interesting. (replace “value” with “wealth”)
http://www.paulgraham.com/wealth.html
“What leads people astray here is the abstraction of money. Money is not wealth. It's just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth. Wealth has been getting created and destroyed (but on balance, created) for all of human history.”
Thanks, Erik. That's a wonderful quote from PG, and it certainly gets at the
heart of the issue.
Once you know how you would like to create value? Found means to achieve your aspirations is another story
Put a reminder in your calendar to ask this question every Monday morning.
good article.I tried translate it to Chinese version.