Mathematicians aren't just for Wall Street any more
Business Week has a terrific new article this week titled "Math Will Rock Your World" that asserts that mathematicians are the new force behind many new business opportunities and ideas. And the effect is showing up in the job market already.
The article goes on to note that much of the application of mathematics is happening in marketing and advertising. Google already uses powerful mathematical systems to model, price, and adjust its text advertising. Harrahs is building similar systems to target, market to, and compensate gamblers in its casinos. But the big message is that with on-line companies collecting terabytes of data about consumers, businesses are turning to mathematicians to unlock the insights in those data vaults.
Having just read "The Equation That Couldn't Be Solved: How Mathematical Genius Discovered the Language of Symmetry" (Mario Livio), and marveling at how Galois' group theory and symmetry underly everything from Einstein's theory of relativity to the biological selection of mates, it's nice to see business starting to value mathematical knowledge again. When I worked at building operating systems for large parallel processors built by BBN in the 1980s, I remember taking a trip down to Dupont to see a scientist using one of our machines to tackle the Traveling Salesman problem, a classic mathematical challenge that tries to optimize the cost of visiting many different cities among different cost paths. He explained the business value to me this way: "Dupont spends about $2 billion a year on transporting materials and products. If my software improves our cost by 10%, we save about $200 million every year. That buys a lot of fancy computers."
If I had one piece of business advice to the new mathematicians joining businesses, it would be to emulate the guy at Dupont. After all, he summarized the goal, business justification and return on investment for his million dollar project in three simple sentences. The fact he could do that proved he was smart to more people than a blackboard full of equations ever could have. And, if this article is any indication, if your company doesn't fund you, you'll have your pitch ready for a venture capitalist who will.
The rise of mathematics is heating up the job market for luminary quants, especially at the Internet powerhouses where new math grads land with six-figure salaries and rich stock deals. Tom Leighton, an entrepreneur and applied math professor at Massachusetts Institute of Technology, says: "All of my students have standing offers at Yahoo! (YHOO ) and Google (GOOG )." Top mathematicians are becoming a new global elite. It's a force of barely 5,000, by some guesstimates, but every bit as powerful as the armies of Harvard University MBAs who shook up corner suites a generation ago.
Math entrepreneurs, meanwhile, are raking in bonanzas. Fifteen months ago, Neal Goldman of Inform sold his previous math-based startup, a financial analysis company called CapitalIQ, for $225 million to Standard & Poor's (MHP ) (like BusinessWeek, a division of The McGraw-Hill Companies). And last May two brothers, Amit and Balraj Singh, sold Perabit Networks -- a company that developed algorithms for genetic research -- to Juniper Networks (JNPR ) for $337 million.
The article goes on to note that much of the application of mathematics is happening in marketing and advertising. Google already uses powerful mathematical systems to model, price, and adjust its text advertising. Harrahs is building similar systems to target, market to, and compensate gamblers in its casinos. But the big message is that with on-line companies collecting terabytes of data about consumers, businesses are turning to mathematicians to unlock the insights in those data vaults.
Having just read "The Equation That Couldn't Be Solved: How Mathematical Genius Discovered the Language of Symmetry" (Mario Livio), and marveling at how Galois' group theory and symmetry underly everything from Einstein's theory of relativity to the biological selection of mates, it's nice to see business starting to value mathematical knowledge again. When I worked at building operating systems for large parallel processors built by BBN in the 1980s, I remember taking a trip down to Dupont to see a scientist using one of our machines to tackle the Traveling Salesman problem, a classic mathematical challenge that tries to optimize the cost of visiting many different cities among different cost paths. He explained the business value to me this way: "Dupont spends about $2 billion a year on transporting materials and products. If my software improves our cost by 10%, we save about $200 million every year. That buys a lot of fancy computers."
If I had one piece of business advice to the new mathematicians joining businesses, it would be to emulate the guy at Dupont. After all, he summarized the goal, business justification and return on investment for his million dollar project in three simple sentences. The fact he could do that proved he was smart to more people than a blackboard full of equations ever could have. And, if this article is any indication, if your company doesn't fund you, you'll have your pitch ready for a venture capitalist who will.
Technorati Tags: Yahoo, Harrahs, Mathematics, Venture Capital, Analysis, Communication, Google, Dupont, Marketing, Business
posted by Carl Howe at
4:22 PM
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