Tyranny of the Minority

Grand slam for free market capitalism. Whenever one group of people finds an arbitrage opportunity to make a lot of money, another group of people will inevitably claim that the gains are ill-gotten or achieved through malintent. How many times has the “protection of minority rights” covered up the inefficient distribution of capital/power/freedom. Thank god we have people like Equity Private to come bat against the big boys of journalism. Just goes to show how phenomenal user generated content and other “web 2.0” ideas can check the tyranny of the minority, so to speak.

Can We Get the Ball Rolling?

We continue the long, slow, and circuitous route of trying to start this venture. Coming from a banking background, the most frustrating part is that we have not ground out the details. I understand what the overall vision of the Company is (though that too is still subject to change and may be the subject of another post) but I want to see progress and definition in writing; business plans, roles & responsibilities. Only then will I feel comfortable that progress is being made. Is this normal? Is this how most entrepreneurs think? Rajesh Jain believes that the entrepreneur should be a visionary and not be fully focused on the bottom line. If the idea is innovative enough, the money will come. He has 16 more years of experience on me and I am just escaping banking, but I feel like the innovation is only half the battle. Reading tech and VC blogs has taught me that many people have excellent ideas but you have to ultimately translate that into a model that can generate cash quickly or generate market share quickly – which will ultimately generate cash.

Maintaining Innovation

A little background on what we are trying to do. Initially the concept, as I understood it, was to license a piece of software that had been developed in the U.S. for exclusive resale in India. With that in mind we would basically be a sales and marketing driven organization. As I run the idea by more and more people, I have come to realize that to really make the organization interesting and worth working for, we need to have a stake in the innovation of the product and also the ability to adapt it to local market conditions. It seems that the other partners are confident we are going to be able to play the innovation game but for me it is very important that we lock this into the structure of the Company. I understand that I am being vague and will continue to do so until there is more clarity and the point of operation becomes tangible.

Back at It

Finding the time to write is tough. . . . buuuut, now that I’m unemployed that may change – may because I’m kind of a, you know, procrastinator. The plunge has been taken and I just walked out of my extremely fancy offices in Nariman Point for the last time. I feel free, but there are a few downsides for the next couple of weeks. I am trying to start a “telecom services” firm with a few partners. The Chairman (though we are not sure what the structure of the firm will look like yet) is in the process of starting two business (one of them being mine) and is currently employed at a large telecom firm. The future CTO is also working and has been traveling a lot lately. Now that I have time on my hands I need to be the one who pushes both of these folks to get the ball rolling. . . . I don't think I will be able to sit at home all day reading tech blogs. . . .though to some of you that would be the life.

Escaping the Corporate – why Investment Banking is the Devil’s Work

"I Quit!" I wish it could have been as dramatic as that, but it went off more smoothly. I think it is only because Investment Banks realize that maintaining an alumni network will win them goodwill and business. Unlike NYC, of course, where leaving is a sign of disloyalty and is punished by a 30-minutes-until-you-need-to-vacate-the-premises routine. The escape has been made, ladies and gentlemen, and there is no turning back. To all my friends and former colleagues, this article on The Ten Reasons You Should Never Get A Job by Steve Pavlina will give you some perspective. So now that I'm gone, I want to document life on the other side. The ups, the downs, the ins, the outs, and pretty much whatever the hell I want to write about. Before I get to talking about how tough it is to start a business from scratch (my next post . . . maybe, it's not like I have a boss now), let me give one last perspective on my time as a banker . . . . .

 

Investment banks have created a recruiting system that lures smart, well intentioned, college students in, and traps them so they cannot leave. A combination of a turbo-charged lifestyle jump (high salary) and what I like to call the "prestige factor" explain most of this trap:

1. Senior level corporate employees regularly direct campus recruiting sessions and convince the young crowd that their "work culture is collegial" and that you can "grow with the firm" - or any other number of soft lies that divert attention away from the 80-100 hour weeks you will be working. These great sound bytes trick you into thinking that these firms have a jovial, cushy, and fun culture. At the junior level you will have no part of a "collegial" work atmosphere, neither will you "grow iwth the firm" unless it is wider. You work all the time and don't have a say how long or why.
2. Junior level corporate employees realize how bad life is their first year out of college. They will maintain the illusion that the senior level employees set because the only thing they have left is this "prestige factor." Imagine, after working like a monkey for weeks with no respect from your colleagues, you show up to a campus recruiting event where 200 eager young students are looking at you thinking you are a god. Honestly, it's the little things that matter, right?
3. The “Asian” factor. For some reason, Asians (typically FOB's) tend to give bankers some sort of superhuman status. The number of times that aunties and uncles (as well as their daughters) have raised their eybrows in delight is quite amazing. It is an ego booster that helps retain "talent."
4. The salary at an Investment bank is probably ~30-50% higher then any other job straight out of school. On a per hour basis, though, it roughly equals out. Also, you adjust to a higher income lifestyle where you have little time to spend a lot of money. Bankers become trapped because they cannot downgrade to a "less pay but more time to spend" lifestyle.

Finally, these two factors create a self-enforcing cycle. The more demand for these positions there are, the more students become attracted to it. Competition breeds competition. It is so smart, it's scary that bankers came up with this.