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Can Wall Street's Numerati land in tech?

Posted by: Stephen Baker on March 19

All that math brain power that Wall Street is busy shedding: Can it plug into the algorithm economy of profiling, preferences, predictions and recommendations?

I called Darren Vengroff. He’s the chief scientist at RichRelevance, a San Francisco company that helps e-commerce sites figure out what to recommend to their customers. Like Amazon’s, the recommendations are based on the statistical analysis of people’s behavioral patterns. But RichRelevance is trying to take it a step further. Vengroff worked in exotic derivatives at Goldman Sachs before moving his math smarts to Amazon in 2002. He has a phd in computer science from Brown.

So, can the Wall Street quants make the jump to Amazon, Google, or even RichRelevance?

Some could start tomorrow, he said. Some, never. While they all have a thorough understanding of probability and statistics, many lack a knowledge of software design. Smart math without good distributed software to implement it cannot produce revenue quickly enough, he said.

I asked if bigger companies than RichRelevance could afford to hire the mathematicians and count on other specialists to handle the software work. Probably not, said Vengroff: “It delays getting to market if you have to go through this translation step from mathematicians to engineers.”

Other tech destinations for the Wall Street diaspora, ones that don’t require software know-how?

He said that optimizing thousands or millions of search bids to get the best returns uses many of the portfolio modeling skills common on Wall Street. Companies like Efficient Frontier of Sunnyvale, Calif., specialize in this. But it’s hardly a job market the size of Wall Street.
(Cross-posted on TheNumerati.net)

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Reader Comments

William Gaultier

March 20, 2009 02:15 AM

Interestingly enough, we have seen quite a few statisticians, forecasters and other analyst type applying for search engine marketing positions.

It makes complete sense for Wall Street types to seek deep analytics jobs in search, web analytics, multi-channel analytics and online marketing in general.

Paul

March 20, 2009 04:19 AM

God help anyone gulliable enought to hire ANYONE from Scam Street.

Ira Sager

March 20, 2009 10:46 AM

We do need math teachers!

Daniel Tunkelang

March 20, 2009 11:20 AM

I know some incredible people who work in the financial industry, and I'm sure they could get plum jobs at software companies if they wanted to. They'd have to accept pay cuts--even in base pay--but the culture and intellectual environment might make up for it. But I've also seen people who weren't rock stars but did very well on the Street. They're going to have a tough time adjusting.

And, for what it's worth, even the financial industry isn't dead yet. I was recently pinged by a hedge fund recruiter, and apparently some of those guys are still hiring.

As for quant jocks who know nothing about software, my advice is to invest in some education. Software engineering isn't a cakewalk, but there's less of a learning curve than for combinatorics and stochastic processes. Some of the best software engineers I know are former mathematicians and physicists.

John Bailo

March 20, 2009 08:35 PM

The answer is yes...and no. Yes, the software industry is in need of brain power. No, the types of things the quants were doing were mostly smoke and mirrors covered up by fancy brainiac facades...that we don't need.

Ronette Alaniz

March 23, 2009 02:03 PM

Yes, we need the smarts out there. No, we dont't need the scams.

Joe Remo

March 30, 2009 01:03 AM

Mathematicians and physicists may produce efficient algorithms but they can't help prevent software bugs and good user interfaces. What good is a software if it is buggy and doesn't have a good front end. It explains why most software are bad since some of the best software engineers are former mathematicians and physicists.

Joe Remo

March 30, 2009 01:06 AM

Adding brilliant people to a startup doesn't equate to success. Look at what happened to Transmeta.

MIke

August 4, 2009 11:48 PM

It really effected a lot of people.
I am wondering how this is going to work out are we at the worst point or?
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In Blogspotting Senior Writer Stephen Baker and Associate Editor Heather Green take a look at how cutting-edge technologies are changing business and society. Whether its blogs or wikis, data crunching or data targeting, technology’s advances are reshaping the world that we live in.

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