Bill Porter in Conversation with Howard Anderson
William A. Porter, SF '67, Co"Founder & Chairman Emeritus, E"Trade Financial Corporation; Howard Anderson, William Porter Distinguished Senior Lecturer of Entrepreneurship, MIT Sloan
Description: Some of the lessons Bill Porter picked up as a 13"year"old ranch hand in Colorado seem to have lasted a lifetime. When his boss told him to drive over a treacherous mountain pass into town for some chicken feed, Porter said he could not yet drive. He was told, "Just do it." And when he faced taking a team of horses out to pasture for the first time, he got the same advice. Porter says he learned from those experiences: "There are risks involved, but so what? What's the worst that could happen? You might have to get another job."
This formative time helped shape a career that began with Navy service, then many years devising products for different industries. After a stint at Sloan, Porter decided he "didn't like his job." He was eager to "go commercial" with several promising new inventions, including an exhaust gas sensor, and a remote access back pack camera, and so started his own company. He struggled to raise capital, and had to "bet the farm." Finally "things were going swell," says Porter. Then came the crash of 1974, and his one big contract fell through. It wasn't fun telling his 250 employees he couldn't pay them, recalls Porter.
Undaunted, he pulled his company through the downturn, and finally sold it to Warner Communications. Then came Porter's 'lightbulb' moment. He became fascinated by the possibility of analyzing and predicting trends in the stock market. At around the same time, he bought an Apple II computer, and discovered he could pull down stock quotes at night online, freeing him of newspapers and the monthly brokerage statement. Porter thought, "Why isn't somebody doing this right?" In the early 80s, with his "legally blind programmer" and $15 thousand, he started a company called Trade*Plus _ ushering in the era of online stock trading. By Porter's account, the company expanded so fast that it couldn't keep up hiring and training employees. In the 1990s, this company was renamed the E"Trade Group, and Porter in his own words, "became pretty wealthy."
Porter has given generously to MIT, funding a new building at Sloan with the long"term goal of helping the business school become more effective in marketing the "neat new widgets" coming from the Institute's scientists and engineers. He has a few words of counsel for students and entrepreneurs: the "very best field to get into" is life sciences, and the best source of funding is "your own money," followed by that of your friends and family. Venture capital financing, says Porter, should be your very last resort.
About the Speaker(s): William A. Porter, Jr. served as President of E" Trade Group Inc. until October 1993 and its Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary until March 1996. Porter has held numerous senior management positions, including Chairman of Trelleborg Rubber Company; President of Tretorn Shoes; President of Commercial Electronics Inc. He founded E*TRADE Group Inc. (formerly Trade*Plus) and served as its Chairman from its inception to December 1998. He also founded E*TRADE Securities, Incorporated in 1992. Porter founded International Securities Exchange Holdings Inc. (formerly International Securities Exchange Inc.) and served as its first Chairman. Mr. Porter serves as Chairman Emeritus of E*TRADE Financial Corporation (previously E Trade Group Inc.
Porter received a B.A. in Mathematics from Adams State College, an M.S. in Physics from Kansas State College, and a Masters of Business Administration in Management from the Massachusetts Institute of Technology, where he was a Sloan Fellow. Howard Anderson, founder and former president of The Yankee Group, has 30 years of experience in the operations of a high"technology market research firm. He is also a co"founder of Battery Ventures, a venture capital firm in the Boston area, and, most recently, YankeeTek Ventures, a high technology venture capital firm in Cambridge.
Anderson was recently selected by Network World as one of the 25 most important people in communications. He has presented keynote addresses at both Comdex and Network Interop. He is also a contributing columnist to Forbes Magazine. He earned a B.A. in Economics from the University of Pennsylvania and an M.B.A. from the Harvard Business School.
Host(s): Sloan School of Management, MIT Sloan School of Management
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