> Note to entrepreneurs: this is a feature; there are lots of young and ambitious professionals who would love to use their skills in a less rigid environment. Start something other than a web application company and capitalize on this.
A lot of this is because of the structure of the industries. Software is as pure intellectual capital as it can get, outside of tenured professorships. As a result, the firm's entire capital base exists in the minds of its employees, and this gives them enormous bargaining power.
Hardware companies take significant physical capital to start, so employees can't just leave and do their own thing. That's why you don't see a flood of ambitious youngsters going into hardware. They can't - not without venture capital and a network of suppliers.
Same goes for financial companies - sorta. In finance, the primary capital base of a firm is its reputation and network of dealmakers. When you're just starting out, you have nothing here, which is why newbie I-bankers work 16 hour days and only get paid in the high 5-figures. But once you've been at it for a couple years, you've built up a network, and those clients are yours, which is why experienced I-bankers rake in the dough and have nice working conditions. They simply have more bargaining power.
| Hardware companies take significant physical capital to
| start, so employees can't just leave and do their own
| thing. That's why you don't see a flood of ambitious
| youngsters going into hardware. They can't - not with
| venture capital and a network of suppliers.
I suppose you meant 'not without'. This is still largely true, but there are also FPGAs and HDLs and simulators: you can do your R&D and prototyping with fairly low costs (and take VC funding by the time you're ready to market and manufacture a product).
You still have a significant point in this respect, however, and what I meant was more along the lines of entrepreneurs could do something to address the problem of "I didn't spend 4-6 years studying engineering to write PHP, MySQL and Javascript" -- ideas that appeal to those who want to solve harder problems (and perhaps problems related to hardware, but solved in software). If you look at openings at places like Intel you'll see they also employ a great deal of people in software functions (from compilers to data mining/machine learning (for manufacturing)).
There are lot of problems outside of social networking / advertising / web content (not that these are bad problems to solve, no offense intended to anyone) that take low capital to get into yet are complex enough to attract a pool of talent that has fewer options.
In finance, the primary capital base of a firm is its reputation and network of dealmakers. When you're just starting out, you have nothing here, which is why newbie I-bankers work 16 hour days and only get paid in the high 5-figures. But once you've been at it for a couple years, you've built up a network, and those clients are yours, which is why experienced I-bankers rake in the dough and have nice working conditions.
I'm sorry, but I've worked on Wall Street, and you couldn't be more wrong.
I-banking analyst positions are for mediocrities full of empty ambition. Workhorses who'll suck up the shittiest tasks and say, "Give me more." Anyone smart who is interested in finance tries to find a hedge fund that'll take him as a quant or trader... or to get an MBA first, Analysts do not usually have these sorts of options; they endure the miserable lifestyle because they, by and large, are not especially talented or qualified people, and they simply wouldn't otherwise be eligible for the exit opportunities (top MBA, private equity) made available by this path.
Third- and fourth-year bankers do not have their a personal client base... not even close. Additionally, it's logistically difficult to "steal" clients; investment banking is an oligarchy and I think it's extremely difficult to start an independent investment bank. It would also be extremely unlikely that a client would switch loyalties based on the movement of a peon VP. Finally, investment bankers don't have decent working conditions until they attain Managing Director level, and that takes about 10-15 years. Your odds of success as a serial entrepreneur over 15 years would be much higher than the odds of making MD before washing out.
The primary capital base of a banking firm is partly its reputation, but largely the money itself, since even the vanilla operations of banking are costly and risky.
A lot of this is because of the structure of the industries. Software is as pure intellectual capital as it can get, outside of tenured professorships. As a result, the firm's entire capital base exists in the minds of its employees, and this gives them enormous bargaining power.
Hardware companies take significant physical capital to start, so employees can't just leave and do their own thing. That's why you don't see a flood of ambitious youngsters going into hardware. They can't - not without venture capital and a network of suppliers.
Same goes for financial companies - sorta. In finance, the primary capital base of a firm is its reputation and network of dealmakers. When you're just starting out, you have nothing here, which is why newbie I-bankers work 16 hour days and only get paid in the high 5-figures. But once you've been at it for a couple years, you've built up a network, and those clients are yours, which is why experienced I-bankers rake in the dough and have nice working conditions. They simply have more bargaining power.