“I left Goldman Sachs after 13 years. This is my lesson from Silicon Valley”
I left Goldman Sachs in 2017 after a thirteen-year career. Since leaving Wall Street, I’ve been working in Silicon Valley at a company called Databricks, the lakehouse company (a large software company). I have learned a lot in my five years away from Wall Street and can offer three pieces of advice that the financial industry can learn from the technology industry:
1. Reward failure: Broadly speaking, Silicon Valley is culturally designed to fail quickly, while Wall Street is designed to never fail. Trying new things and testing new ideas is the “modus operandi” in technology. While conservatism is important on Wall Street given risk and regulations, there is ample opportunity for “newness” and innovation in finance. For example, many parts of Wall Street still operate in the same way as ten years ago with little change. This applies particularly in areas such as investment banking. Innovation is only born out of an ability to try and test new things, and sometimes fail.
2. Fine tune incentives: Unlike Wall Street, compensation for revenue roles in Silicon Valley has few surprises. Generally, target earnings levels are communicated in advance at the start of the year and are formally formulated, with specific KPIs driving behaviour. I see three advantages of this for Wall Street: 1) less politics, 2) tailor individual incentives to solve targeted problems, and 3) separate alpha from beta – you know who is able to hit core KPIs rather than to take advantage of rising tides of a particular asset class.
3. Encourage honesty: In technology, employees are empowered to speak up. No matter how junior, I’ve seen people freely question decisions, publicly challenge leaders, and openly provide feedback up and down the chain. I think Wall Street leaders need to do a better job of fostering an environment where honesty is encouraged and rewarded. There are 17,000+ innovative fintechs out there competing fiercely with established players right now. Sincerity can no longer be curated by politics or silenced by hierarchy.
I am convinced that starting my professional life at Goldman Sachs was the best thing that happened to my career. To this day, Wall Street provides enormous growth and opportunities for the motivated and ambitious. Bringing in some new ideas from technology can make it an even more rewarding place to work.
Junta Nakai is global head of financial services and sustainability at Databricks
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