“I have always considered it despicable to grovel for your life as if life were a favor. If you cannot live the way you want, there is no point in living” ― Reinaldo Arenas
As of the close of business today, Knight Capital Group, my former employer, is not out of business. Far from it. They're going to fight many more days- to the chagrin of it's peers on wall street. If you think my wall street buds, some of whom are also former employees of KCG are relieved- that 1,400 similarly backgrounded employees don't have to worry about finding new jobs- think again.
Here are three meetings I had today-
Meeting One (UX Director, J):
When I woke up this morning the news was out that over the weekend a few competitors and clients had decided to invest $400 million in KCG. Knight has to pay back the vampire squid(GS) $440Mln by Wednesday night. To make things even more ironic, my other former employer, Jefferies was the largest investor and put in $125mln. Expect a decent sized media outlet to have the story out tomorrow
decrying the fact that Goldman was not only advising Knight on their possible sale but also will probably make lots of dough on their little bail out. A $400mln investment is chicken scratch to GS. It was, however, half the capitalization of a pre-disaster Knight.
On Wall Street, the least exciting thing that could have happened to Knight was a bail out by Private Equity, followed in lameness by a bailout of a consortium of strategic firms (which was what happened). Wall street wants max pain. We want a take-under, like a cash take out at $2 of BSC. Finality. Or even better, we want to see blood on the walls, everyone walks away and the stock goes below $1 and is trading on "option value" (which means it only trades at more than .01 because just in case). It's in our nature. It's boring when firms go on existing after something like this. It's in the DNA of a wall street guy to want to see others fail. This way we can pick the firm apart and get all the talent. Like buzzards. It's even more boring when Goldman gets involved because they're just so much more informed and powerful than everyone else.
I met J this morning at Starbucks downtown. I met him through a mutual friend who is actually a self loathing wall street dude but with a good spot and a good heart (who told me he had "the chills" when we were talking about my idea, even though I have personally moved into the more self serving territory that my idea is fine and all but it's the intention behind it and I'm not sure exactly what the user is going to want). J was a really friendly guy, working for a company who's founder I met easily seven years ago and thought he was a pretty average guy -not the charismatic and passionate person who writes to you now! Upon meeting him I did what any groveling wall street guy does and immediately asked him for a job- and upon being asked if I could bring in business and saying no- he respectfully gave me his card and smiled in the other direction. Seven years, magazine covers, and a few hundred employees later, I'm no closer to being able to help this guy professionally and dear lord this company is going places and doing things despite the fact that traditional wall street has been predicting their demise since it was formed. J was extremely helpful, the kind of guy I'd love to recruit one day if what I create has so many users that he couldn't resist. He represents the best of the NY tech scene, guys who are happy to collaborate, give advice, and hope others succeed. He hopes I can help add some value to the problem for individual investors, because he likes seeing fixed the right way, so everyone wins. I never saw this kind of altruism in finance, unless it was established before the meeting that the kid has a brother, uncle, or father who was in a place of possible influence at a hedge fund.
Meeting Two (Part time VC dude M)
M is a part time VC guy who I met at a former firm. He's a lovely chap with a great personality and dresses British and talks Yiddish (but turns on the tech talk at will). His day job, and ability to put himself into new seats on wall street are about as solid as it gets. He's got his fingers in a multitude of pies. When he told me about an investment he made three years ago that made a 18x return (as in, he got mailed an actual check) I almost choked on my food. I ignored my conditioned first instinct to be jealous and hate on him for "being lucky", "embellishing" or something like that, and immediately gave him the high five, and honestly was so damn excited for him AND that I knew someone who actually had that did that. On wall street, someone else's success is generally seen with scorn. Our egos immediately fight against their achievements by attributing them to one or more of the following camps:
Lucky Sperm Club (as in, prep school and golf club)
I Remember Him When He Was A Clerk/Ops Guy He Was Just At Right Place/Right Time
He Is a Chimp whose clients are dumber than him -- or -- just like him cause he gets them drunk
He's Not That Good, Bro.
While people on wall street wither, I might ask if you can think of any entrepreneurs who actually created something and are successful being described as any of the above. Is luck a part of the great successes of our time? Please, half of us are lucky we don't get creamed while crossing the street checking our iPhones. Luck has a major role in everything- anecdotally, the founder whose first company paid my friend 18x in three years only began his startup which is involved with sports after he was unable to compete anymore professionally due to a major injury. He worked tirelessly and stoked his fire by staying around his fellow athletes and compiling content. As the saying goes- the harder you work....
Meeting Three (Strategic Engagement chick, G )
We grew up with G, but she's more of my brother's friend than mine by far. She worked for what was once the most important company in the world until they decided a few weeks ago that her entire department was no longer necessary in the big apple. G needed a few supplies and advice for her hastily thrown together spiritual tourism trip to Bali and Thailand (she'll be gone for 12 days to clear her head, which is slightly fewer than my 85 was, but who's bragging...). We talked about her future and she's got a fair share of interesting job opportunities already and is already up to her ears in consulting work before she leaves. Anyone on wall street that talks this way after being let go is full of complete shit. She's also considering doing her own startup, and has been for years. Unlike me, she keeps names, ideas, pretty close to the vest. I respect that. I've been sharing some of the salient points of my idea with people who are helping me. What I've learned is that there's nothing so blindingly unique about my idea, it's just that no one is executing it well and in a way that people might actually engage it.
G has choices. Knight doesn't. They're 70% owned by their saviors. Their shares are diluted to hell (basically it means their stock stays here 75% off prices from a week ago- if they're lucky- for very long time). It's going to especially suck for everyone working there with comp, morale, the shame of working there. Maybe the haters were right, maybe there really was no point in it living.
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