"By now everyone knows that expected payoff of working at a start-up is the same or lower than a big company, but with much higher variability. Everyone knows this."
I actually happen to agree with the statement but 1) I think the author doesn't understand the mathematical meaning of his statement (or he would have put an AND not a BUT) and 2) It is definitely not possibly true that "Everyone knows this"
In pure probability / economics terms, if I have three payoffs:
a) 50% probability of +1, 50% probability of -1; expected value = 0
b) 50% probability of +5, 50% probability of -5; expected value = 0
c) 25% probability of +5, 75% probability of -5; expected value = -2.5
a) and b) have the same expected value, so:
-- I am "risk neutral" if I am indifferent between the a & b
-- I am "risk averse" if I prefer a) over b (lower variance)
-- I am "risk loving" if I prefer b) over a (higher variance - a gambler)
In financial terms, any investor would absolutely prefer a) over b) [the lower variance bet]. c) is obviously worse than both b/c it has a lower expected value (and it's "doubly" worse than a) b/c it has a higher variance AND a lower expected value).
If now, the argument is that startups have both a lower expected value AND a higher variability than established companies (i.e. they are like bet c)), then, if everyone knew this, the startup community would not exist not least because investors wouldn't be willing to fund it, but also b/c no one should be willing to work there.
What are the caveats?
1) People's behavior isn't always rationale (people pick c) over a) --> for example, the lottery
2) There is a fair amount of evidence that most VC's don't make any real return at all (That putting your money in stocks is on average a way better investment.) Hence, perhaps it is true that startups are like bet c).
3) That the payoff of a VC is different (and better) than that of an employee who suffers from asymmetric information (VC's get access to the "best" companies to invest in whereas workers may not), lack of diversification, being screwed on equity structure, etc. So, it is possible that for a VC, there is expected value equal to that of comparable investors, but that for an employee, on average it is worse in all ways (lower expected value AND higher variability) to work at a startup as an employee than for a larger company.
DESCRIPTION
This engineer is a full-stack developer with extensive knowledge in Python and big data technologies and will work with a team of 4 other engineers some of whom are distributed.
Qualifications:
-- 3 years minimum of Python and web experience
-- Extensive knowledge of Python
-- Knowledge of various database technologies: SQL, Redis, MongoDB, HDFStore
-- Knowledge of charting libraries like d3.js and HighCharts
-- Interest in advanced statistical analyses and data visualizations
-- Machine Learning knowledge a plus
Our dataset is increasingly large and complex as our analyses are complex and need to be done in near real-time. You work with our distributed engineering team and our CEO and Head of Business Development on product iteration.
PortfolioStrat is a cloud-based trading workflow tool SaaS Platform Portfolio Manager for hedge funds, asset managers, and other sophisticated investors. The platform helps professional investors generate investment ideas through screens and advanced analysis and visualization with statistical analyses, machine learning / data science, and other overlays. We are a team of former hedge fund portfolio managers, investment bank quants and technologists work to connect all parts of the professional investor's workflow in the cloud.
We have recently launched a beta product that has been 1.5 years in development and is backed by over 7 years of prototyping, IP, and industry knowledge. We have 10-20 hedge fund clients who have signed up to be early users of the platform and have signed a major broker to use it.
The two co-founders are looking to disrupt the entire investment workflow of a front office portfolio manager stuck on Bloomberg and Excel spreadsheets. We are closing our seed round now and have previously raised a round of friends and family capital last year.
Not asking for help / debugging yourself helps you make a leap to a better understanding of the language. You will certainly remember the next time you see that bug and over time, you build up your own knowledge so you have ask for help less. Asking for help is just short-term greedy: solves things now but doesn't help you (or your company) in the long-term.
Ha - agreed on Chrome being full of bloatware, but at least they iterate and evolve to support new standards. (Over the last 9mos or so Chrome has implemented a pretty solid version of WebRTC video for example). It almost seems like Firefox isn't even trying to keep up anymore. I didn't mention in the post itself, but the bug on Firefox that is messing us up is blocked by like four other bugs that also have made essentially no progress over many months.
I actually happen to agree with the statement but 1) I think the author doesn't understand the mathematical meaning of his statement (or he would have put an AND not a BUT) and 2) It is definitely not possibly true that "Everyone knows this"
In pure probability / economics terms, if I have three payoffs:
a) 50% probability of +1, 50% probability of -1; expected value = 0
b) 50% probability of +5, 50% probability of -5; expected value = 0
c) 25% probability of +5, 75% probability of -5; expected value = -2.5
a) and b) have the same expected value, so:
-- I am "risk neutral" if I am indifferent between the a & b
-- I am "risk averse" if I prefer a) over b (lower variance)
-- I am "risk loving" if I prefer b) over a (higher variance - a gambler)
In financial terms, any investor would absolutely prefer a) over b) [the lower variance bet]. c) is obviously worse than both b/c it has a lower expected value (and it's "doubly" worse than a) b/c it has a higher variance AND a lower expected value).
If now, the argument is that startups have both a lower expected value AND a higher variability than established companies (i.e. they are like bet c)), then, if everyone knew this, the startup community would not exist not least because investors wouldn't be willing to fund it, but also b/c no one should be willing to work there.
What are the caveats?
1) People's behavior isn't always rationale (people pick c) over a) --> for example, the lottery
2) There is a fair amount of evidence that most VC's don't make any real return at all (That putting your money in stocks is on average a way better investment.) Hence, perhaps it is true that startups are like bet c).
3) That the payoff of a VC is different (and better) than that of an employee who suffers from asymmetric information (VC's get access to the "best" companies to invest in whereas workers may not), lack of diversification, being screwed on equity structure, etc. So, it is possible that for a VC, there is expected value equal to that of comparable investors, but that for an employee, on average it is worse in all ways (lower expected value AND higher variability) to work at a startup as an employee than for a larger company.