I don't know, I disagree that they're not solving really interesting problems. My first jobs out of college were at hedge funds, pretty much by accident, and I got the chance to work with a ton of really smart people -- many of whom were math or engineering PhDs -- in a very challenging environment.

One two-person team I got to work with was doing something resembling stat-arb, and was pushing about $250 million of trades in the last 10 minutes of the market. Beyond getting to be hands on with some crazy math, building a system to make that happen isn't exactly trivial.

Fair point. At a quant hedge fund, you do get to work with some awesome people, and you learn a lot from after-work conversations.

Are they less interesting? It's not obvious to me.

Hedge fund work tends to be more quantitative than most startup work, and tends to focus on different issues (less UI, latency vs scaling, minimizing transaction costs vs minimizing EC2 costs). Having looked at both hedge funds and startups, I'd say the work can be interesting at both.

To make a completely loaded comparison, I think programming a computer to beat the market is much more interesting than building a facebook/twitter "me too" site.

To make a less loaded comparison, I also find algorithmic trading more interesting (as a technical problem) than connecting $LOCAL_SELLER to $LOCAL_BUYER in $LOCAL_MARKET, or solving the problem of crappy restaurant websites (both of which I think are great business models).