Building a new company is hard. There will be many ups and downs, and there will be plenty of doubters along the way. The bigger your goal, the bigger the doubters and the more naysayers will come your way.

4 months ago

Latest Post Closing the Opportunity Divide by Edwin Marcial public

Building a new company is hard. There will be many ups and downs, and there will be plenty of doubters along the way. The bigger your goal, the bigger the doubters and the more naysayers will come your way.

I remember when we were a small startup in the late 90’s working on building ICE. We were pitching an energy company on using our electricity trading platform when the company representative we were meeting with asked "Why should we work with you? You’re not Microsoft." That really stuck with me.

At the time, we had about 5 people and built a very early version of our trading platform. It was built by me and a couple of other engineers.  This comment fired me up. As a kid who grew up in Spanish Harlem in New York City in the 70’s and then in Miami, Florida in the 80’s, it was just a challenge that made me even more determined. Today, ICE is not Microsoft, but it is the "Apple" of the financial markets industry.

About a year later, we got our first big break - Goldman Sachs (GS) was interested in investing in our business. They wanted us to build an energy trading platform with a focus on world oil markets. By this point, we had grown to about 10 people, still 3 engineers. Early in the discussions, we had an all day meeting in New York City with several Goldman Sachs senior managers and analysts. In the middle of the day, the lead of the initiative - I don't remember his name but he was a tall German guy, so I'll call him Hans for now - took me aside and said to me: "This is going to happen; the only question is whether you will be here when it does."

I knew exactly what he meant. He believed in the business vision they (GS) had set out – he just wasn't so sure I was the guy to execute the technology long term. Again, I took this as a big challenge and it made me focus and work that much harder to succeed. I went on to lead ICE technology for 18 years. Over that time we had a very successful IPO, became a Fortune 500 company, and acquired the New York Stock Exchange. I lost track of ‘Hans’ after about a year or so.

A few years later ICE was growing fast, we had survived to take much of the US energy trading business in the wake of Enron's collapse, and had a huge IPO in 2005. By 2006, we were now competing head-to-head with the New York Mercantile Exchange (NYMEX) for the global share of the world oil trading market. We were taking market share away from NYMEX who had made some noise about building their own electronic platform, but had preferred to keep their markets "open outcry" while we challenged them with our electronic platform. In the spring of 2006, as we continued to take market share, NYMEX threw in the towel on their own electronic platform and decided to partner with the Chicago Mercantile Exchange (CME). CME at the time was one of the largest financial market operators in the world and their electronic trading platform (Globex) was considered the gold standard of exchange trading systems. NYMEX announced they would be moving their energy markets onto Globex. Upon announcing the deal, then NYMEX CEO James Newsome said in an interview "ICE Technology is suspect". That day ICE stock dropped 25% as investors didn't think that the relatively new ICE platform would be able to compete head to head head-to-head with 20+ year old Globex running NYMEX's markets.

This was also a time when high speed algorithmic trading was becoming prevalent in our markets. Up to this point we had largely focused on building functionality and markets into our platform. We but were far behind when it came to platform scalability, throughput, and sheer speed. As CTO, this was a direct challenge to me and my team. I called a closed door team meeting of all of the technology team, and put Newsome's picture and his quote on a big slide. I told my team that we were going to build the fastest trading platform in the commodities industry. Over the next few years we went on to do just that, and within a few years we were running circles around Globex relative to platform performance.

As an entrepreneur, there are always going to be doubters, naysayers, and challenges to you as you build your business. The question is, "How will you respond?"

Photo by Mike Kononov on Unsplash

Edwin Marcial

Published 4 months ago

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