Morning Coffee: Second tier student's revenge on Goldman Sachs after rejection. Dangers of the 5 hour working day
Plenty of students don't get accepted by investment banks. Research earlier this year by Financial News found that Morgan Stanley received 96,000 applications for 1,300 internships in 2019 (including 15,500 applications for 300 positions in Europe), that Citi received 22,400 applications for 256 jobs in Europe, and that Goldman Sachs received nearly 270,000 graduate and intern applications in total. Being rejected by an bank is the norm.
Not everyone turns that rejection into a positive form of revenge, however. Or into a company that's growing at a rate of 230%+ a year and has already surpassed $40m in revenues.
It was after being rejected by Goldman Sachs that Mark Newman set up Hirevue, the digital interviewing platform now used by banks everywhere (Goldman Sachs included) as part of their recruitment process. Between 2002 and 2004, the Financial Times reports that Newman was studying business at Westminster College in Salt Lake City. He wanted to work for Goldman Sachs (which has a large office in Salt lake City), but at the time Goldman 'only interviewed candidates from more prestigious institutions' and so Newman's ambitions were frustrated.
Newman turned that frustration into Hirevue, whose USP is that many thousands of candidates can now be interviewed effortlessly by computer programs, irrespective of where they study. Hirevue screens candidates' responses to interview questions using artificial intelligence that matches them to existing high-performing employees based on 15,000 traits, including choice of language, breadth of vocabulary, eye movement, ability to retain information and 'valence' (emotion) . Human biases, including those for elite universities or middle class accents are overruled by hard evidence.
At least that's the theory. The reality is that human biases are so strong that Hirevue can't always overcome them, Hirevue CTO Loren Larsen told the FT. Humans will look at a candidate and say, "I don’t think that person’s a 95; I think they’re terrible’,” Larsen added. "People tend to trust their own judgment over others’ and over algorithms.” That's annoying but Newman may not mind. - Now aged around 36, the man Goldman Sachs didn't even interview left the company he founded in 2017 and is leading a comfortable life as an investor.
Separately, working five hours a day is great but it might be so great that you become demotivated at work. This is the takeway from the Wall Street Journal's scrutiny of some start-ups that urged their employees to compress work hours (no office gossip, no fanciful web browsing, no family conversations) so that they could leave three hours early each day. One had to limit the approach to the summer months only. “We lost the startup culture,” said the CEO. “Everyone’s outside life got so much better, at the expense of their passion for the work.”
UBS would really rather than Iqbal Khan forgot his criminal case complaint against Credit Suisse's spying antics. Best to forget the whole thing and move on. (Reuters)
BlueCrest Capital Management is suing two ex-partners, 43 year-old Alex Codrington and 46 year-old Russell Hartley. In February 2018 it paid them bonuses of £23k before allocating £3.5m of deferred bonuses to them in April. They resigned two weeks later. (Sunday Times)
BlueCrest allocates its partners 'special capital' that can be invested, but only on the grounds that the recipient remains a limited partner at the time of vesting. BlueCrest says Codrington and Hartley gave assurances they wouldn't resign, and then did. The fund is now trying seeking damages of £7.4 million from the two men, including nearly £3.5m in special capital provided for 2018 and £3m in damages related to funds that could have been provided to other limited partners. (Law 360)
The Financial Times' Masters in Management ranking (for students who take a Masters course straight after leaving university) says the MiMs with the highest post-graduation salaries now come from the Indian Institute of Management. If you graduate with a MiM from the University of Calcutta you can earn $134k in salary three years later. (Financial Times)
The Vision Fund's $5bn to $7bn losses on WeWork are just the start. There's also Slack Technologies (down 38%), and the rest. (Bloomberg)
The UK's Financial Conduct Authority wants, "to make a major investment in data analytics to give our staff more effective tools to do the job”. (Financial News)
Commerzbank's shareholders think the bank's cost-cutting doesn't go far enough. (Bloomberg)
Citi's Latin American chief Jane Fraser has been made its president. This also makes her the first in line to succeed CEO Michael Corbat. (Financial News)
Barclays beat Citi in the U.S. for investment banking in the third quarter. (WSJ)
'He spoke about genitalia and then failed to immediately understand the gravity of his words.' (Bloomberg)
Partners at London law firm Freshfields to be fined 20% of their annual profit shares if they engage in 'conduct protocols.' (RollonFriday)
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