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As someone who has started a business in the finance space trying to leverage technology, I take some offense to this. My business partners and I have worked o
by choffstein 14y ago
As someone who has started a business in the finance space trying to leverage technology, I take some offense to this. My business partners and I have worked our asses off over the last several years to get to where we are today: billions of dollars in assets powered by our investment models. Trust me: asking someone to give you money to put in your strategies is not easy. Unlike the start-up space, there is no "minimum viable product," "traction" metric, or even "asset" that has some intrinsic value (like a unique algorithm or brand). You either have a track record, or you don't. New strategies don't, so it's all "trust." Sure, I can show a "back-test" or "stress-test" -- but everyone knows those are bullshit anyway.
You think you know stress? Imagine knowing that every day, your models are making investment decisions for billions of dollars. Sure, it's a drop in the overall pool of assets in markets, but it is enough to keep you up at night, worried about someone's retirement or someone's college fund. Drop a few more percentage points than the market? Goodbye hundreds of millions of dollars. Yep, that's going to happen at 50 when you start your "easy life" as a hedge-fund manager.
I'm not saying my stress is greater. I'm just trying to make the point that every business has its own share of problems, and to say that being a tech entrepreneur takes any more balls than being any other kind of entrepreneur is naive.
Can we please stop, as a community, with the "woe is us, the tech entrepreneur?" It's embarrassing. Starting a business is starting a business, no matter the industry. In fact, I'd argue that we live in a golden age for tech entrepreneurship that has never existed in another industry. Imagine trying to start a bio-tech business or a manufacturing business (well, arguably "outsourcing" could be the manufacturing entrepreneur's "scale"...). There are no "seed" rounds. The assets you have to raise are probably 100x what a tech entrepreneur has to initially raise. On top of trying to build a product, you probably have to manage building and factory development, understand legal regulations for your industry, and manage tons of labor.
We live in a time where you can roll the dice and start a business in the tech space with a handful of smart people, some elbow-grease and maybe $50k in a seed round. This is a golden era.
I respect the hell out of what you are doing -- starting a business is NOT easy -- but please don't say it takes any more balls than starting a business in any other industry. It doesn't.
- savramescu 14y agoI see Dad's advice as going for something that can have more meaning to you and for which you need balls then for the safe/low risk model. It's not about stress, it's about the need of the individual to make a difference. Doing something that has been done before it's not that exciting for a 20-ish year old. But someone older will take comfort in it.
- choffstein 14y agoI am a 20-ish year old and despite "what I do" has been done before, the "way I do it" never has -- and that is plenty "exciting." There is nothing safe or low-risk about starting a hedge fund. I get your point about "having more meaning" -- but I'd argue that is true for any business endeavor, not just tech startups. If what I was doing didn't have truly personal meaning for me, there is no way I could stomach the stress. Maybe I'm overly sensitive because the article seemed to compare the easy hedge fund life to the tough tech start-up life, which I think is a gross over exaggeration in the divergent profile: I believe that they are tremendously similar.
- savramescu 14y agoI think you're reading into it too much, and you're taking it too far away from the context between Dad and Daughter. This is, and will be, their own personal experiences. For some starting a hedge fund can be seen as high-risk, when for someone that has run one for years (Dad's case) or for someone that's been around one for years (Daughter's case) it can be seen as low-risk. If Dad was an MD he would've said don't become a surgeon, do research and try to change current procedures. At least that's my take on the blog.
- choffstein 14y agoAs I said, I am likely over-sensitive to these issues; finance isn't exactly the most well-respected industry at the moment.
- inthewoods 14y ago