Photo: New York Social Diary
Jim Simons, the billionaire founder of Renaissance Technologies, recently gave a speech at MIT. The guy who introduces him, says, “I can say this. Having visited their offices enough, it’s the best physics and maths department in the world.”
Simons talks more about what it’s like to work at Renaissance than we’ve ever heard.
In the beginning of his speech, Simons relays an anecdote that later becomes very funny.
He says, “I went to the institute for defence Analysis in Princeton University, where they did secret government work and paid quite a lot and you could spend half of your time doing your own mathematics and half of your time doing their work, whatever their work was. [He pauses] It involved computers… Well, it was secret, I don’t want to talk about it.”
Then he begins speaking about his firm. He says people ask him, what’s the secret?
Simons says, “Of course I’m not going to tell you the various predictive signals –Unless… No, I’m definitely not. [Laughter erupts] That’s even bigger secrets than those at, down there [the defence Analysis at Princeton].”
Here’s his more serious answer:
“Have an open atmosphere. The best way to conduct research on a larger scale is to make sure everyone knows what everyone else is doing… The sooner the better – start talking to other people about what you’re doing. Because that’s what will stimulate things the fastest. No compartmentalization. We don’t have any little groups that say. this is our system and we run it we get paid because of it. We meet once a week – all the researchers meet once a week, any new idea gets brought up, discussed, vetted, and hopefully put into production. And people get paid based on the profits of the entire firm. You don’t get paid just on your work. You get paid based on the profits pf the firm. So everyone gets paid based on the firm’s success.”
In sum, the secret it:
“Great people. Great infrastructure. Open environment. Get everyone compensated roughly based on the overall performance… That made a lot of money.”
Another great moment in the speech is when Simons says, “I disparage some for whom model-making was a part-time hobby.”
And when he points out, “Why don’t we have enough teachers of maths and science in the public schools? One answer is well, if they knew the subject well, they’d also know enough to work for Google or Goldman Sachs or God knows where.”
Via Paul Kedrosky
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