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Corporations are Designed to Bleed You Out
Level 1 - NGMI
Welcome Avatar! We’ve covered basic office politics before (source) but never really explained why corporations are designed as large machines. Honestly, a bit disappointed we never wrote this post in the past since it becomes painfully obvious only after you have built something yourself.
This will either be *upsetting* or it will be *enlightening*, depending on how you take in the the information.
Part 1: Giving You No Skills
Ever wonder out loud “Why am i learning nothing useful” this is by design
If you’ve worked on Wall Street or even in accounting, you know that the initial tasks you are given are worthless.
A well trained 16 year old could do the tasks. On Wall Street you are copy pasting balance sheets, income statements and cash flow numbers into an excel sheet. You’re not building complicated financial models (despite all of those wasted hours going through “Training the Street”).
This is not because the firm is foolish, it is because they are smart. Your first 2 years you’re simply a glorified excel monkey who works 80 hours a week. This gives you one and only one skill *using excel fast*.
Now think about it. If you wanted to start a Company, would excel be a useful skill? Nope.
Why would copy pasting millions of numbers into spreadsheets be valuable for a start up? It wouldn’t be. Start ups have a distinctly different issue. They need customers. By putting you into a role where you’re staring at a computer all day, you’re doing absolutely nothing that teaches you how to make a sale, find customers or even make a basic advertisement.
Why Teach Excel in the First Place?
Pretty simple honestly. They want you to learn how to catch mistakes and do quick math. That’s really the goal. After 2-3 years (potentially 5 years!) of staring at nothing but numbers and presentations, you’re a master at checking for errors. By the time you’re 27 years old or so (call it 5 years on the job) you can look at a single presentation and see any glaring error within minutes. That’s the real value you’re adding if we’re being honest.
The main concern for a major company is *brand damage*. Since the brand is already established they want to make sure their image is maintained. You’re being trained to protect their image and protect them from being embarrassed in front of a new or existing client. That’s it.
What are They Searching For
While you are learning to be an expert in catching errors, they are actually looking for something entirely different. Can you instill confidence and become likable.
This is an entirely different skill. It has nothing to do with aligning logos or doing numbers in excel. The entire firm is evaluating each employee for likability and trustworthiness. This is why the vast majority of people will never, ever make it to a revenue generating role.
If you are not likable inside the company, they assume that you will not be likable outside of the Company in a client facing role. This makes logical sense. If people don’t like being around you on a daily basis, this is a good tell for if they will like being around you in a long-term client facing role.
No Skill Development After 5-Years
Ever wonder why the vast majority of people make it to “Vice President” in their late 20s to early 30s? Surprise, Surprise, it is also by design.
On the internet everyone is a multi-millionaire online guru by age 28-32. In the real world, the vast majority are slowing down physically and most are seeing that ticking time bomb that says “do you want to have kids”. Companies know this.
They know that you will likely have kids, buy a home and "settle down” around this range.
Pretty genius isn’t it? By the time you’re being considered for a revenue generating role your expenses are going to sky rocket. Once they sky rocket it is near impossible to turn it off since you can’t default on a mortgage or tell your child “sorry can’t get braces!”
Low Quality Example of What You’re forced to Make and Check All Day
Part 2: Testing the Waters
Now that we can all agree that aligning logos and copy pasting numbers is not a useful skill for any business start up, we can move onto the testing phase.
Assuming you are likable and have the interpersonal skills that could generate revenue (sales) in a client facing role, they begin to test the waters.
At this point you are taken to meetings where you get to see a live sale and they even put you on the phone to go after low quality leads!
Get ready to leave tons of voicemails and be “left on read” in social terms on an hourly basis.
First Shock! Your first time going to real meetings… you’re shocked to find out… a lot of those pitchbooks are never even opened. That is right. All of those logos and charts you were making? A huge amount of them (probably in the 90% range) are never looked at by anyone except you and the other people who reviewed it. You were literally producing garbage.
Assuming you can get past this stage without having a mental breakdown, you move onto the next stage.
Filtering: You will get questions “hey have you bought a home yet” “hey heard you got engaged” “Hey is baby #1 doing well?”. Variations of this are not small talk. The top brass want to make sure you’re completely stuck and immobile before they open any serious clients to you.
The reality is that the cold calling is going to generate a meaningless amount of money versus the existing client base. They just want to make sure that you’re going to be handcuffed to your chair before you get to take over one of the easiest clients on the book.
Sales example: Say there is a client who LOVES your product. They would never switch as long as someone picks up the phone. This is likely your first client since the top brass doesn’t have to deal with the boring back and forth of sending invoices and quarterly updates. This is called a “Don’t mess it up” client. If you can’t even make wide open layups on a 6’ rim with a child sized ball, you’re definitely not going to be able to deal with the more demanding people.
Study This to Understand How You are a Line Item in Excel
They run an economic P&L on you. Yes. You are just a line item.
If you lose the firm money you’re gone. Also. If you don’t have high fixed costs in your personal life, you are a potential liability since you can leave at any time.
Think Like a Business Not a Friend: If you think for even 0.0001 seconds that your co-workers are your friends or “family” you’re dead. Cooked. Broken. No recovery.
The real thought process is this from top to bottom
Is this person going to make us more money? Yes or no.
If yes, what will the profit margins be on this person?
If you pass both of them go to step 3 which is “is he tied down”
If he is *not* tied down, you *MUST* pay him as little as possible so he can’t save enough to leave
If he *is* tied down you can pay basic market rates (more flexibility)
This calculation is made based on: 1) mortgage yes or no, 2) kids yes or no and 3) any other fixed costs they can tie to your name
Congrats! You’re Making Some Money! Now at this point you’re likely in your early 30s. You’re generating revenue and you’re learning some basic stuff about how to actually run a business. You learn *client retention*.
Read that 10 times if you have to. You are primarily learning *client retention* not client sourcing. If you have a few of those 1/100,000 cold calls go through and convert that would be your first experience in sourcing.
Part 3: Getting to Mid-30s
At this point they know that your body is slowing down. There is no way you’re going to have the energy of a 20 year old to go out and take risks. While there is always a “chance” the chances decline and it is rare for someone to leave after this age band.
The money you’re making is too good to leave and your expenses have spiked now that you have a wife and kids.
Teach You Sales - Give You Stock: This is when it gets really complicated. The goal here is to take some risks on you. They are willing to introduce you to higher up people who will give out some of the sauce/secrets on how to source business in their particular industry.
This is because you’ve proven to be incredibly good at maintaining the client base and even had some success with your “dialing for dollars” approach.
But wait. Don’t get too excited. They begin to vest your stock!
Oh you wanted cash? Not so fast.
Don’t you believe in the future of the company? Aren’t you so indebted to the firm for teaching you so much? Don’t you believe the entity will grow? One team one dream right? Right….
The Vest: Everyone knows the rough numbers, if you make it to a real revenue generating role you’re looking at around $1,000,000 in total compensation. With a massive catch. Of that about ~40-50% will be deferred. You’re free to cope and change the percentages but we’ll use 50% just to make the math easier. This means in Year 1 you get $125K of the $500K deferred, in year 2 you get another $125K… so on and so forth.
By the time you’ve done 4 years you’re now giving up approximately $2,000,000 if you were to quit.
This looks fine. It assumes you never have a bad year. You’re always making $1M and you’re simply collecting that stock year after year after year.
Ah yes. There is still a real chance the stock is worth next to nothing which has occurred many times from Lehman to First Republic to SIVB.
The Company Man Transition is Complete: At this point the firm has got you locked up like ADX Florence. Want to quit? Okay sure, that’ll be $2,000,000 you have to leave on the table. Oh want to join a competitor? They have to be willing to match $2,000,000 worth of vestung stock. Good luck!
Bitterness sets in even for the most optimistic people at this point. It’s why you see a lot of extremely negative middle aged men. They have the tools to start something but at this point they would have to risk their marriage, their kids future and on top of that their financial stability/lifestyle they are now accustomed to.
Part 4: Start Now
The message of this whole thing is to start now. Anyone who thinks they are “underpaid” in a non-revenue generating role will get the biggest wake up call of their lives. They will suddenly realize that if there is no existing client base they are worth $0 in the open market. That is right. Their positions, their skills and their tasks have absolutely nothing to offer if starting from ground zero.
This isn’t a bad thing. In fact it is a good thing. You will learn how to sell a lot earlier which makes it 100x easier to secure promotions at your W-2 in the first place! Funny how that works. By trying to start something yourself you will learn 1) the value of an existing customer base and 2) what really matters to the firm.
This is excruciatingly important. By knowing what truly matters to a firm you can work 50-75% less hours than your peers… yet secure that promotion every 3-years. The firm will recognize that you’re always going all out on what matters and it is hard to even notice the stuff you’re ignoring (since no one cares anyway).
Jungle Existing Base Example
At this point we’ve got enough of an audience to say that a real product will get enough views for a kick start. If a toothpaste company can hit a million dollar valuation and hundreds of other people can secure $5-10K in monthly income it means the scale is already there. Sure. We’ll get scammers trying to bite off the community (has happened once each year) but they will be the random rotten apples in a massive farm. Largely noise.
Ask Yourself the Hard Questions
Is your position actually generating revenue and profit for the firm? If not, why do you believe you should be paid more? It doesn’t make any sense and in many cases is a painful realization. Better to learn now versus at age 40 once you’ve finally seen how the corporate system works.
Don’t be too hard on yourself though. Once you realize what really matters to the company you’ll feel extremely confident in your work. You will cut corners on stuff that doesn’t matter and shine brightly when the lights are on. Cutting your hours down by 50%+ without losing that “amazing” $10K extra on your bonus check!
On that note… Back to the tent.
Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce. We’re an advisor for Synapse Protocol 2022-2024E.
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