SWE in Trading, Startups, Big Tech — What’s the Difference?

Software engineers (SWE) are some of the most coveted roles for any company these days. With that, being a SWE often means that you are spoiled by the number of choices you can make. Where should you go, how do you maximize your compensation, what are your goals? These are all questions we’ll analyze in each of the 3 main areas we’ve identified for SWE careers.

Why does it matter what I choose?

This is an excellent question, and there are classically a few tradeoff questions. Usually, it goes something like:

1. If I choose A, then I will be good for jobs in industry A, and it will be harder for me to do jobs that are not related to A. E.g. If you choose a job in trading, it may be hard to do startups or big tech.
2. But I have time in my career, who cares? You’re not wrong, if you have that risk tolerance then it doesn’t matter.

To address the first question, while transitions between industries can be hard to make, generally for SWE you can do it with some studying for interviews and prioritizing showing off the skills that each respective industry is looking for. We’ll talk more about this later, but being a good SWE usually means you can be flexible with your skillset and move around.

And the second question, you’re not wrong. What I’ve heard from older people is a lot of “micro-optimizing your life doesn’t matter in the long run.” While this is easy to say after the fact, I understand the pain in the moment, when you think earning 100k more now vs next year is going to change your life (more Michelin stars meals and bottles at clubs I bet, right?), but in reality, it’s probably not going to. In the longer run, aka 10+ years, your trajectory is way more important than missing out on 50k post-tax in a few years.

Alright, now with these two questions out of the way, let’s actually take a deep-dive into each of the categories.

SWE in Trading / Quant

Finance is one of the most competitive industries there is, and it doesn’t help that people are super motivated by greed and will pretty much die over money. What that means, is for the most part, SWE in Trading is going to be a tough business. You should expect 10 hour work days (that’s 10 hrs of work, not a FAANG 8 hr work day where 3–4 hrs is coffee and lunch), lots of rigor and scrutiny in code, scrappy work a lot, and competitive fire from all your teammates.

Pros

• Usually over-the-top compensation. Expect 20–200% more than FAANG. To give you perspective, a senior SWE might make 300–400k in mid-size to big tech companies, but someone in trading with 2–3 YOE can easily make 500k, and upwards to 700–800k depending on the firm + negotiating offers. However, the big asterisk on the trading offers, as good as they seem, is the bonus is only guaranteed the first year, and subsequent years you really have to work for it. Even more important, is that, e.g. you get a 300 base / 400 bonus offer. You have to remember your compensation is actually 300 + 400*P(you survive the first year). If you make it 11 months and 3 weeks in, and then get fired, then poof your 400 and you only made 300 that year with 60–70 hour weeks. Make sure that the probability of failure is accounted for if compensation is important for you.
• It’s also important to mention that compensation usually increases over time, so it’s usually hard to really want to leave if money has always been important to you, because it’s without a doubt that they will pay you well enough to not go back to tech, and likely keep you from joining another firm as well.
• Extremely smart co-workers. If it’s important to you that people beside you can identify NP-hard problems and scrutinize code in a variety of ways in terms of performance, you might find trading a good place here. People are most definitely smart, but it really depends how you value that. AFAIK trading doesn’t have anything against brilliant jerks, unlike the trend that’s happening in tech, so you might have to deal with weirdos or snobby people. But still, if it’s important that you have a sort of academic elitism in the workplace, then trading seems like a good choice.
• Exposure to finance. Honestly this is a pretty team-dependent category, because most SWEs don’t work in the front office, so you’ll never see trading strategies in place. Even those who work in the front office might not see anything that they can learn — after all, it’s not your job since you’re a SWE and not a researcher or quant — so I wouldn’t expect to join a firm and then be able to start your own fund after you leave. Especially if you leave without any non-competes, it’s almost certain that you have no real edge learned from the workplace.

Cons

• Work life balance. It’s really what you make of it, so if you don’t really care too much about having true work and “life” separation, whatever that means to you, then this is a whatever category. But you should know that you are expected to put in the hours and put in hard work. No free lunch, e.g. no 2–4 hr work days and meeting expectations that you might be able to do in tech.
• Lack of traditional tech career development. In big tech, there’s this idea of L3/4 being a junior engineer and all you really have to do is be able to code. L5 is where you establish yourself as a leader, able to lead teams of 3–4 people, find some cross-team impact, and have strong communication skills to advocate for projects to lead. This is an area that is seldom concentrated at quant funds. After all, your goal is to make sure the systems work and trade as efficiently and effectively as possible. There is usually a lack of mentorship and leadership opportunities, which possibly means that coming out of quant, it’s going to be hard to get back into the swing of big tech senior eng criteria. Again, there’s an asterisk here though because if you don’t care about those things, then trading is great, since you don’t have to deal with other people, and obviously if you end up doing large-scale projects that require multiple people and you lead, then obviously you will have to demonstrate more senior skills. But generally the rubric for career development in tech is quite different from quant, where they value more language mastery, low latency, and correctness; big tech is generally more about “impact,” and then intangibles in mentorship, leadership and direction.
• Poor dev tooling, documentation, dev experience. There are a variety of factors that contribute to this, but 1) they are not a tech company, so a lot of developer experience and standards are not held to a high regard 2) they move extremely fast, so it’s hard to have good code quality and documentation and 3) whether the firm is large or small, it’s unlikely you have dev-ops teams or people dedicated to helping the SWEs do their job more smoothly. It’s just not prioritized in the game of making money.

Since there are so many firms these days, it’s useful to separate them into categories to further evaluate tradeoffs:

• Good WLB, more like big tech: Two Sigma and Jump fall in this category. Although they have teams that do more intense work, for the most part, you can expect to work 8–9 hrs a day and actually have pretty chill options like WFH or taking breaks to hang out in the office. Downside is that comp is not as good as killing yourself at sweatshop level places, but hey at least you potentially have a life?
• Sweatshops: I know there are places in between, but it gets hard because funds at the end of the day want to make money. Some companies that fall here are boutique companies generally (small funds). These places will often offer high comp, but will you make it to the end of the year to see that in your pockets?

Startups

There are startups in every corner of the planet now, so it’s hard to categorize these as one, but generally these are early-stage companies, with uncertain futures, depending on the stage obviously (pre-seed? Series B? Pre-IPO? etc). Startups are great for finding personal interests and potentially fulfillment (if its a problem you really care about), freedom to do what you want (for the most part, obviously if you choose the right problem and team, and ignoring business stuff because that can be pretty out of line of what you want to do), and finally, because everyone cares about comp to some extent, it does punch you a lotto ticket to potentially 10–100x depending on what stage you’re in. It is important to state that startups are still risky because it is extremely team-dependent, especially on founders, and the problem space is usually new so it hasn’t been battle-tested or proven yet.

Pros

• Potential to work on super cool problems. The tech stack may or may not be bleeding edge, but the problem space is usually being explored in a novel way.
• If you have good founders, you can learn a lot from them. Evaluating good founders is a whole nother story, but it’s important to have founders who are invested in your growth, help your personal interests, and are very capable people themselves.
• If you join early, you can see career growth extremely fast, e.g. you can get promoted every 6–12 months, which is unheard of normally in big tech. You usually will start “higher up” since titles are whatever in startups, it’s just about getting stuff done.
• If your company does well, you will as well. Doesn’t really need to be said, but if you have a significant stake in the company and it does well, then you’re going to have a great sense of accomplishment, as well as a good paycheck.

Cons

• Poor to average compensation initially. Disregarding stock, which is paper money by the way because there are many years to IPO, you have to rely on your cash comp to keep yourself alive. If this is a blocker, then this generally will prevent someone from joining a startup. But in 2022, typically 160–170k base in competitive cities will be normal, and lower in “less competitive cities.” Which btw, is by no means a bad salary by any standard, but we’re talking about tech here where going to big tech and closing your eyes for 3–5 years means you’re making 300–500k…
• Uncertainty about the future. No matter how convincing the CEO is, you have to be aware that any startup is pretty much destined to fail, especially the earlier it is in the journey. While this has no bearing on most factors such as learning and experience, it will obviously make your stock worthless, and potentially disappoint you in achieving your big shot goals of making a successful product.
• Learning is mostly self-driven. This can be good or bad, but for most people, not having some sort of default push is going to make it difficult for them to grow. Usually in a bigger tech company, you have career guidelines, so at least you’re forced to go some path and it will leave you in a decent place.
• Ton of work, not all of it is glamorous. While you will work on problems that you care about, since that’s the goal of the startup, you will inevitably have to do some “janitor work.” E.g. if you need to do user authentication, then someone has to set up OAuth2, or if you need to store information, now you have to think about databases (this can be a good thing for system design btw), or if you’re trying to make deals with other companies, now you have to learn negotiation skills. You’re likely going to have to do things you don’t want to do all the time. Some of them will be useful skills, and some of them are just necessary evils that need to be done to make progress on the project.
• Lack of tech infrastructure. You’re doing something from ground up, don’t expect dev tools and things to help you when you code. You are the only one helping yourself really, so if you want a dev tool, you’re the one making it.

Big Tech

Finally, let’s visit the mecca of SWE and where most people try to end up. Big tech is not an all-perfect solution, but it’s probably the best balance of WLB, career progression, and pay-per-hour. You will be treated well, by both the company and people around you, and generally you will find a cozy home here. This can potentially be bad for high-achievers who might be limited by the corp bars and restrictions, and being forced to work on more specialized areas can be bad for breadth (e.g. abstractions away from how things actually work).

Pros

• Good pay, probably the best dollar/hour, but definitely not the top dollar in absolute terms. If you manage your time well, you can work very little hours and still get at least 200–250k a year. That seems like a dream, but it can become unsatisfying for a lot of people.
• Good career progression. You won’t be forced to do super-hard problems, but you will be pushed gently along the career progression of the company. There are always mentors available that you can look up to, and people you can mentor as well. There are defined expectations at each level, which at least places a standard for what type of engineer you are and what your strengths are. There are also archetypes usually to give you an idea of what your potential can be.
• Potential to impact millions of customers. If you work at a FAANG and you work on consumer-facing products, you will inevitably influence the product experience of millions of people. That can be very fulfilling and exciting for people. There is a downside to working on such high-impact projects though, one being oncall, which can affect WLB as you may be pinged in the middle of the night and need to fix something. The more difficult obstacle to impacting a lot of people is that there are often lots of regulations, restrictions and hoops you have to pass through in order to launch anything. This can range anywhere from team approval, legal approval, all the way to running many experiments and slowly releasing features, and also colliding with the many other teams that are trying to impact the same audience as you.
• Excellent tooling and dev-support. With so many people in the company, there is actually focused support for the developer experience, with entire teams or orgs working on things such as compilers, tooling, continuous deployment, linting, code IDEs, etc. This usually results in a very enjoyable developer experience that will be hard to beat with standard VS Code or vim settings.

Cons

• Coast culture. If you’re able to meet expectations and only work 3 hours a day, why work more? That’s a question a lot of people face in big tech, and there’s a meme going on about “code or coast,” and many have answered “we coast.” This is more frustrating for people who are trying to achieve more but their teammates are not helping that along.
• Lack of fulfillment. This applies to most jobs that aren’t startups or personal projects, but big tech is notoriously known for giving people very meh projects and having people feel extremely unsatisfied with what they are doing. A bright side is that if the company is large enough, you can usually switch teams, and given the scale of the company, there is bound to be at least one team that aligns with your interests.
• Politics. There’s a big culture of respecting each other’s opinions, and when it comes to project decisions, making a choice can often get very opinionated and heated, which slows down decision making. The idea is that everyone’s voice should be heard, but then what if people collide? Then the meeting is over, and we need more time to “align,” and the process repeats. There’s also a lot of work that people do in convincing others that their work is good, rather than actually making the work good. This is more true in product than systems/infra.

Closing Thoughts

Everyone has different goals, so it is really up to you for what career you choose, and nobody can tell you otherwise. As we have already mentioned, in the long run, it really doesn’t matter what you choose now. Nobody is going to penalize you 10 years from now if you wasted a few years at a company that took the soul out of you, or a startup that didn’t end up working. As long as you understand what you’re getting yourself into and that is ok with you, that is all you need. The goal of this article is not to endorse any career paths, although I think it will be useful to dive deeper into comparing certain industries side-by-side, such as trading and big tech, and see what someone looks like who wants to do one or the other.