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Bill Porter in Conversation with Howard Anderson

William Porter SF '67 Howard Anderson: April 28, 2010; Running Time: 53:46

About the Lecture

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.

Lecture Details

Location: Wong Auditorium

“It’s a case where the entrepreneur wants to build a business, and is madly in love with a great concept, and the VC wants to make a quick buck. It’s a partnership, but the guy with control is the guy with bucks. That’s not a good recipe. ... You have a dichotomy of interests. ”

Bill Porter

About the Speakers

William Porter SF '67

Co-Founder and Chairman Emeritus, E*Trade Financial Corporation

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, Inc. in 1992. Porter founded International Securities Exchange Holdings Inc. (formerly International Securities Exchange Inc.) and served as its first Chairman.

Porter holds 14 patents, having developed a number of electronic devices and processes. These include the first shoulder-mounted backpack broadcast color TV camera; the first electronic diesel-electric locomotive check-out system; the first infrared horizon sensor for satellite stabilization; and several other breakthroughs still in use today in a variety of fields.

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

William Porter Distinguished Senior Lecturer of Entrepreneurship, MIT Sloan

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 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.

About the Host

About the Host

MIT Sloan School of Management

The MIT Sloan School of Management, based in Cambridge, Massachusetts, is one of the world’s leading business schools — conducting cutting-edge research and providing management education to top students from more than 60 countries. The School is part of MIT’s rich intellectual tradition of education and research.

MIT Sloan began in 1914 as engineering administration curriculum in the MIT Department of Economics and Statistics. The scope and depth of this educational focus have grown steadily in response to advances in the theory and practice of management to today’s broad-based management school.

A program offering a master’s degree in management was established in 1925. The world’s first university-based executive education program — the MIT Sloan Fellows — was created in 1931 under the sponsorship of Alfred P. Sloan, Jr., an 1895 MIT graduate who was then chairman of General Motors. A MIT Sloan Foundation grant established the MIT School of Industrial Management in 1952 with a charge of educating the “ideal manager.”