by Brian DeChesare Comments (14)

How to Beat the Intellectual Yet Idiot (IYI)

How to Beat the Intellectual Yet Idiot (IYI)

Can you summarize an entire year in one word?

That might be a stretch, but it’s possible if you can use one phrase.

Many phrases come to mind for this past year (2016), but my pick would be:

Intellectual Yet Idiot (IYI).

Nassim Taleb coined the term, and, shortly after that, IYIs kept popping up everywhere, sort of like herpes after too many one-night stands.

All the pieces had been in place for a long time, but it took a formal definition and a viral article to make the concept of “Intellectual Yet Idiot” go mainstream.

The bad news is that if you want to work in finance, technology, or other industries that recruit students from “elite universities,” you’ll have to deal with IYIs as gatekeepers and co-workers.

But the good news is that there are ways to beat them, which is a big part of what this site will focus on this year:

Defining the Intellectual Yet Idiot

You can read Taleb’s satirical piece, but here’s my quick summary of the characteristics of IYIs:

  • Education: Almost always attend “elite universities,” such as the Ivy League or Oxbridge. NOTE: Most students at these schools are not IYIs, but a decent percentage qualify.
  • Industries: Tend to have experience mostly in academia, the government, “think tanks,” and the mainstream media.
  • Skin in the Game: None. They advocate for or against policies from which they never feel the negative effects, making such advocacy meaningless.
  • Media: Like The New Yorker and TED talks (ugh).

Meet Bob: Giving the IYI a Personality

Let’s go further and make the IYI into a real character. I’ll call him Bob, and he is based on a real person I met in investment banking a long time ago.

In addition to an undergraduate degree from a top school, Bob had three Master’s degrees and an MBA.

He won a position as a post-MBA associate in investment banking, stayed there for a year, but left when he decided it wasn’t the “right fit.”

(Back then, you could get into IB despite having no relevant experience.)

Bob attempted to start his own company at about the same time I was starting this business.

He seemed mystified that I could set up the entire site, promote it, and get traffic (I spent less than 30 minutes per day on it).

He kept saying that he could not “get his company off the ground” because he didn’t have a computer science degree or a background in programming.

I explained that you didn’t need a computer science degree to get started and that barely any technical knowledge was required.

Also, even ~10 years ago, there were so many books and resources that he could have learned the basics on his own if he needed them.

His response:

“Well, that works for you because you’re doing something small. But I am thinking big. I need to hire a team of engineers to do this!”

He eventually got some funding, but the company didn’t make it.

Like most IYIs, he was afraid to get his hands dirty.

He wanted to rely on his degrees and certifications to get other people to do the hard work while he… “managed them?”

Oh, I also caught him looking at TED talks a few times.

OK, But How Many of These People Will You Encounter in Real Life?

IYIs have grown exponentially over the past few decades because the government and academia have grown at unprecedented rates.

Just as one example, the U.S. military’s budget in 2015 was 1.8x higher than what it was in 1960, but its education budget was 10x higher; “administrative positions” at colleges and universities grew by 60% between 1993 and 2009, at 10x the rate of tenured faculty roles.

IYIs subsist in universities and the government, but they still pop up in investment banking, other fields of finance, and even at tech companies.

Also, many of these companies approach recruiting from an IYI perspective: They place an inordinate emphasis on your degree(s) and academic results.

So, whether you like it or not, you’re stuck with IYIs as long as companies maintain an unhealthy obsession with degrees and grades.

How to Beat the IYI in Three Steps

The worst way to beat IYIs is to challenge them to a head-on competition.

Instead, you should use a “side door strategy” where you get similar results by taking a different path.

This strategy means that you will probably not go from a non-target school to Goldman Sachs and KKR.

But you could still win roles in real estate, corporate development, credit funds, and even private equity if you do it the right way:

Step 1: Train Yourself to Focus on Results and Skin in the Game

Regardless of where you rank on the IYI/non-IYI scale, you should do the following to focus less on theory and more on results:

  • Do sales and marketing. The most successful people tend to be excellent at selling, whether it’s products or ideas. You’ll learn more about persuasion in a part-time job selling knives door-to-door than you will in all the university classes on this topic, combined.
  • Gain experience that offers immediate feedback. This might be in sales, stock trading, publishing articles to an audience, or starting a side venture. Team sports might even qualify.
  • Get your hands dirty. Find jobs or activities where you have to do something instead of sitting around in a committee debating minutiae. For example, organize events, get people to show up, and collect money from them.
  • Get skin in the game. If you believe in a company’s growth story, invest your own money in it; if you think you’re good at sales, ask for a higher commission and a lower base salary.

To be clear, I’m not saying you should abandon traditional work experience and sell knives for your main summer internship.

Think of these as “side quests”: Activities or school-year, part-time jobs you could use to improve yourself.

They won’t get you to Level 99, but they may help you get there more quickly.

Step 2: Plan Your Path into the Industry Through the Side Door

Your goal might be to work at a company like Google or Facebook, or it might be to work at a large investment bank and then get into private equity.

But if you don’t have brand-name credentials that make the IYI recruiters salivate, you’ll have a tough time doing this.

Instead, you should consider paths into these industries that get you similar results but without the pedigree/prestige nonsense:

  • Technology: You don’t need a Computer Science degree from an elite school to get in; do a coding boot camp and join a smaller company, or do sales at a newer startup. Startups always need help selling.
  • Investment Banking: If you just want to “do deals,” the easiest and most viable alternative is real estate, especially on the lending side.

Another alternative is corporate development, though you’ll probably need another job first.

  • Private Equity: The trick here is that credit-related buy-side roles are often easier to get than equity roles, particularly if they’re industry-specific.

For example, it’s much easier to win real estate lending buy-side roles than it is to win traditional PE roles because the supply/demand dynamic is more favorable.

It’s also feasible to move from a credit rating agency to private lending firms or other buy-side credit roles.

Finally, corporate development is arguably the best alternative to PE: They care far less about prestige and pedigree and far more about your skills.

And One More Thing: At the undergraduate level, search funds offer a great alternative to private equity because the work is similar but fewer students know about them. An upcoming article will cover that industry in-depth.

  • Hedge Funds: Again, the trick is specialization. Don’t go for roles at Bridgewater or Och-Ziff doing long/short equity; work in turnaround consulting or a credit rating agency, both of which are feasible to get into from non-target schools, and then move to a smaller, distressed hedge fund.

Step 3: Knock Down the Side Door to Get In

Some of the suggestions above are based on upcoming interviews; here are a few examples of readers who moved in “through the side door” using these strategies:

Example #1: Non-Target School to Real Estate Investment Banking

This story is already on the site: The student was from China, did a Master’s in Finance at a non-target school, and then won a real estate brokerage internship.

Then he leveraged that to win real estate investment and hedge fund internships, and eventually a full-time IB offer.

He used a double major in “Business Analytics” to stay in the U.S. and get an allowance for 29 months of work experience (now it’s 36 months), and focused exclusively on real estate groups to win offers.

Non-IYI Tactics: Relentless networking, industry specialization, and a clever trick to gain more work experience.

Example #2: Consulting/Engineering to Venture Capital

This one is from an upcoming interview, but one reader moved from a mixed engineering/consulting background into venture capital.

To do so, he skipped the CS degree from an elite school and instead learned programming via boot camps and online courses (after already having some business experience).

He used those skills to join a tech startup, and then networked his way into a VC role from there.

He didn’t have the traditional brand names or experience that firms look for (i.e., no IB or MBB consulting experience), but that didn’t matter because he created the conditions that allowed him to be in the right place at the right time.

Non-IYI Tactics: Self-study, networking, and refusing to give up despite the lack of “credentials.”

Example #3: Commercial Real Estate to Real Estate Private Equity

This one is another story on the site: The reader here went to a semi-target school, won an off-cycle IB job, got his offer rescinded, and then found a CRE brokerage role through networking.

Then, he kept networking, stayed in touch with a recruiter, and leveraged his CRE brokerage experience to win a RE PE role.

Non-IYI Tactics: Networking, showcasing his real results in the brokerage job, and thinking creatively to get out of a rescinded job offer.

Example #4: Internal Transfer to Corporate Development

This one is in the “upcoming” category, but one reader broke into corporate development at a Fortune 100 company with no transaction experience at all.

He did attend a target school, but he missed the recruiting train for IB.

He made a move into corporate development by working in an analytical role, meeting a lot of people in different departments, and then going through a full-blown networking effort for IB first, including crash courses in financial modeling.

That didn’t work, but when he saw an internal role open up at his company, he applied and beat out other candidates to win the offer.

In another upcoming story, a reader moved from a non-target school to a corporate finance rotational program at a F100 company.

Then he used that experience to move into corporate development, which was one part of his “rotation”; he extended it into more of a full-time role.

You earn less in corporate development than you do in PE (~50-60% of what mega-fund Associates earn), but the hours and lifestyle are much better, and the work is arguably more interesting.

Plus, you’re still making $150K+ in your mid-20s…

Non-IYI Tactics: Self-study, internal networking, and making reality negotiable.

Example #5: Investor Relations to Equity Research

This last one is another published story: Coming from a complete non-target school, the reader hustled his way into sales at a Fortune 500 company and then transferred into investor relations.

The role became terrible after a while, so he networked his way into a Big 4 position and then equity research at a boutique followed by an “In-Between-a-Bank.”

He succeeded because he did what IYIs are often unwilling to do: He got his hands dirty, cold-called a lot of people, and killed it in his sales role first.

Non-IYI Tactics: Sales skills, networking, and compromise.

About That Side Door

If you want to beat the Intellectual Yet Idiot and IYI thinking from recruiters, do the following:

  1. Learn the Skills Independently – If you can’t do this already, you won’t make it too far in technology or finance. And there are so many resources these days that you have no excuse not to learn on your own. If you don’t have the right experience or degree, who cares? Fake it until you learn it!
  2. Get Results – If you do sales and constantly beat your quotas, you can probably move anywhere else at the company. If you program and teach programming well enough, the chances are that you’ll hear about job opportunities before others.
  3. Go Through the Side Door – If you want to work on deals and earn $200K+ per year, IB to PE is one path… or you could go through the side door, work at a normal company, transfer into corporate development, and earn almost as much.

Is That IYI Still Standing?

Do everything above, and you can win many of the jobs we write about here and beat IYI candidates and recruiters on your way to the top.

Do it right, and they might not even be standing by the end.

And if they are, just introduce them to the deadlift.

It will crush them – guaranteed.

For Further Reading:

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Hi Brian,

    Great piece as always – never a dull moment on M&I!

    If you had to advise someone who is bent on joining an IB and is firm-agnostic, what side doors will you recommend? Actually, I have developed a step-wise plan based on this article and the Tim Ferris’ article you referenced.

    Background: foreign physician, Ivy-league master degree in health sciences, currently working in international healthcare development, has applied to top US-MBAs but planning for the possibility no school offers me admission. I don’t have any PE ambitions whatsoever so this is not an attempt to get into PE. I need IB skills and credibility to attain my long-term goals.

    Thank you for your support and I look forward to reading your thoughts.

    Omot.

    1. If you’re already applying to top MBA programs, that is the best option for getting into IB. You’ll probably have to do a pre-MBA internship to have a good shot, though.

      If you don’t get into a top MBA program, it’s going to be very, very difficult to move from that background into IB. Maybe think about something else related to transactions, such as real estate brokerage, or think about applying to life sciences VC firms that need healthcare experts.

  2. Hi Brian,

    I have been attending IBD BB/EB networking events all week, made some contacts who were willing to go for coffee later but frankly I don’t want to go for coffee let alone work with them.

    Would I be foolish to trash their contacts or should I bite my tongue and pursue anyways in hopes they connect me with a decent human being eventually?

    1. If you really hate the people that much, don’t bother with banking. There are some firms where people are a bit more human, but they’re the exception rather than the rule. Aim for corporate finance roles instead if you want a saner work environment and better culture.

  3. “Even at tech companies”

    Lol San Francisco is FULL of IYI’s. You know the type I’m taking about:

    The Google PM that rails against income inequality while stepping over the homeless guy on his way to Starbucks…

    The (male) Facebookers who call themselves “feminists” and tell anyone that didn’t vote for Hillary Clinton that they’re a “rape apologist”…

    The worst in my mind though is, I’m sad to say, Marc Benioff. By far the loudest IYI-SJW, the guy makes a stink about everything – from Black Lives Matter, to Transgender Bathroom Rights, to the Male/Female “Wage Gap” – all from the privacy of his own personal soapbox, in his $40 million Hawaiian compound.

    1. Well, at least Benioff successfully started and ran a huge company… I have definitely seen the hypocritical attitude toward homeless people in SF before, which is reason #578 why I don’t live there.

  4. Great article, solid way to kick off the year. From the article it seems everyone might have a little IYI in them (or have had at some point). I know I did. Great read!

    Starting a side venture is the point to note for me. Any interviews (old stuff/links) on that?

    Thank you.

    A

    1. Thanks! Yes, it happens to everyone. I even admit to watching a few TED talks before…

      For starting a side venture, we have a few articles on bankers who quit to start businesses or join startups (and then my own story as well):

      http://www.mergersandinquisitions.com/quit-finance-online-business/
      http://www.mergersandinquisitions.com/bitcoin-startup/
      http://www.mergersandinquisitions.com/investment-banking-to-tech-startup/
      http://www.mergersandinquisitions.com/investment-banking-to-sales-tech-start-up/

  5. You mention “he doesn’t deadlift” but then don’t refer to that in the article again. I deadlift, along with squat, bench etc. Can you elaborate on this a little more?

    1. That comment was mostly a joke, as I don’t think deadlifts relate to your career too much (or maybe they do…), and it was a reference to Taleb’s ending in the original article.

      But the broader point is that lots of IYIs do exercise such as jogging, running, bicycle machines, etc., all of which are fine, but never do real weight-lifting, which is the most important part of staying in shape, at least if you exercise at the gym.

      So, once again, the appearance of work without doing the hard work.

      I tend to do the opposite and do almost entirely weights.

  6. Great article. Pedigree certainly caries its weight, but most employers will notice experience, initiative and hustle.

    Most of all, work on those deadlifts!

    1. Thanks! Yes, you just have to find the right employers who appreciate all of that… plus the deadlifts.

  7. Brian,

    I am a freshman Economics major at a non-target university in one of the major financial hubs in the U.S (New York/Chicago/Houston/San Fran) and have a question regarding recruitment. During the first few weeks of my freshman year, I cold called/emailed my way into a search fund and completed a 3-month internship (Sept. – Nov.). I’m currently working as a Financial Assistant for the senator of my state and will be joining (KPMG/Deloitte) as an accounting intern this summer. This summer internship will give me the opportunity to be in the downtown area where all the banks are and will serve as a great networking opportunity. For the first time, a BB will be conducting an information session at our school and the main talking point will be their sophomore program. Since I am eligible and already have great relationships within the BB (1xAnalyst, 2xAssociate, 1xVP and 1xMD), how can I leverage those relationships and my presence near the bank over the summer for an accelerated interview?

    A bit more about myself, I am part of the IB club at my school which is bringing in this bank for the information session and I have a leadership position within the club. I am also the Director of Finance for the student government. I just wrapped up with the first semester at the non-target with a 4.0 and will be transferring into Finance (Business School) at the start of Fall 17′. How can I use my deep connections within the firm to get an accelerated interview? I’ll be meeting many of the guys at the BB for coffee/beer during my summer.

    Thanks,
    NT

    1. Just ask them for it directly. If you already have the relationships, you have nothing to lose. Say that you’re very interested in completing a summer internship as a sophomore, and you have relevant experience at a search fund. You’re interested in knowing if the bank has accelerated interviews for this program since the firm is your #1 choice and you would commit to it right now if you had the opportunity.

      Maybe wait until the information session takes place and then ask them (assuming it’s reasonably soon).

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