Bill Porter in Conversation with Howard Anderson
William Porter SF '67
April 28, 2010
Running Time: 53:46 About the Lecture
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.