If you've been watching the news over the past few months, you've no doubt heard that a number of Wall Streeters are headed west to Silicon Valley. Take Ruth Porat, for example. The long-time CFO for Morgan Stanley just became the first female CFO at Google. Or look at Anthony Noto, a top technology banker for Goldman Sachs, who also jumped ship when he recently accepted the role of CFO for Twitter. And there are countless more names, representing some of the country's biggest financial and business minds, all headed to the tech industry. I read about it almost daily, it seems.
What's going on to prompt this exodus?
1. There's a tech boom going on. Again.
I've been in Silicon Valley a long time. I remember the 1990s, when everyone and their grandmother flocked west to join the internet boom. Today, in 2015, we're seeing another boom--and again, people are headed west for the apparent gold rush.
The thing is, we know what happened around the year 2000. The bubble burst. So you might wonder why savvy Wall Streeters are drawn back to a tech boom when they, like me, have seen it collapse before. Well, the answer is simple: This boom is different, and they're smart enough to see it.
2. This boom is sustainable.
In the '90s, the boom was spurred by the internet itself, by the raw promise of technology that hadn't yet had an opportunity to embed itself in the world. Any company with an idea was getting funded, regardless of business model. Some worked, but many more did not. They were tech companies for the sake of technology.
Today, however, we are all fully connected in a world of ubiquitous network access and mobile devices. We see the power of technology, data, and data-driven algorithms to optimize every industry, across the board. And that is why this tech boom is clearly more sustainable than the last one--because real businesses with real revenue are being created, and they touch everyone. Just look at companies like Uber, Airbnb, Splunk, Zendesk, and HubSpot. These are technology companies impacting transportation, customer service, hospitality management, marketing, sales, and so on. They are literally changing the ways we live and work--and they will continue to do that for a long time to come.
3. Smart people go towards growth.
During the '90s boom, the same people who wanted Wall Street careers for the sake of money ran to Silicon Valley to get rich quick. Today, however, Silicon Valley is attracting the serious people on Wall Street, people who recognize the sustainability of the businesses out there. For them, the attraction isn't about greed--it's about opportunity. Most of them are already working with technology or dealing with its impact in their own industries, and they see the transformations going on everywhere. They realize that many investment banks are becoming data-driven technology companies, employing fewer bankers overall. Wall Street is not growing. Silicon Valley is. They're going where they can be part of the long-term picture.
So how does all this affect you?
To put it boldly, there is not a reader of this article whose business or organization is not being affected already by this latest tech boom. You know that we are all becoming increasingly interconnected by technology, whether we're in health care or retail or entertainment or manufacturing. Now you need to ask yourself: How do I react?
Bottom line: You need to be thinking about how your business can be more like a Silicon Valley company.
- Are you getting the right people? As you watch the Wall Streeters being lured over to tech companies of all sizes, take a look at your own workforce. Do you have a solid mix of savvy financial experts and technical gurus? Do you present an employment brand that demonstrates opportunities for real growth? Can candidates see how you embrace the internet of everything?
- Are you being innovative? Get in the mindset of a hungry tech-boom company making plans in a Silicon Valley garage. If you were your own competitor, how would you beat your company? Go back to the white board and think about the innovations with the greatest potential to affect your industry. Are you capable of crafting these innovations? If not, think about what you need to get there.
Remember that tech companies are hiring top financial talent right now because they're only going to get bigger--and Wall Streeters are on the move because they want in on the action. If you want to ensure your own sustainable place in the boom, be sure you are equally prepared to grow.